Indonesia Presidential Candidate Jokowi Says He’d Have Market-friendly Policies

By Kanupriya Kapoor 6 June 2014

JAKARTA — The front-runner to become Indonesia’s new president, Joko “Jokowi” Widodo, has told investors that he will pursue market-friendly policies and make bureaucratic reform and infrastructure-building his priorities.

Jokowi presented a pro-reform platform for Southeast Asia’s largest economy as investment cools and the country faces hefty budget and current account deficits.

“Investors should be given enough room to broaden their investments,” Jokowi told a crowd of domestic and foreign investors at an event late on Wednesday in Jakarta’s business district.

The event, held on the day the presidential campaign officially began, was the first time Jokowi presented his economic program in public. He spoke with fund managers at a closed-door meeting last month.

On July 9, Indonesians will choose either Jokowi, the Jakarta governor, or ex-general Prabowo Subianto as president, to succeed Susilo Bambang Yudhoyono, who completes the allowed two, five-year terms in October.

Jokowi’s rise to become Jakarta governor and common touch made him an early favorite. But he faces a formidable challenge from Prabowo, who emerged as a serious contender after securing the backing of the country’s second biggest party Golkar last month.

Opinion polls show Jokowi is still ahead, but one recent survey indicated up to 40 percent of voters remain undecided.

Prabowo is seen as presenting a more nationalistic vision of the Indonesian economy. Indonesia’s stock market and the rupiah fell on news that parties backing Prabowo won a slightly bigger share of votes in the April 9 parliamentary poll than pro-Jokowi parties.

In Jokowi’s talk on Wednesday, he was less vague than earlier on his economic policies, but he gave no specifics on matters like how he would finance ports he wants to build.

The candidate’s proposal to simplify bureaucratic procedures for investment was welcomed by Sofjan Wanandi, the chairman of the Indonesian Employers Association.

“He is saying exactly what we need,” said Wanandi. “Cut all the red tape and lower the high costs like logistics to make [Indonesian] products more competitive. We hope he wins so he can implement these ideas.”

Jokowi’s team says that as president, he would address the pressing issue of Indonesia’s ballooning fuel subsidy bill, which currently leaves little budget money left for much-needed infrastructure projects.

“We’re facing a fiscal time bomb,” Fauzi Ichsan, head of Jokowi’s banking and finance advisory team, told Reuters.

“Among other options, Jokowi is considering gradually raising fuel prices and phasing out subsidies over the next four years.”

Ichsan said there is no plan to revise a law that caps the fiscal deficit at 3 percent of gross domestic product “so it’s implied that reform of the energy sector and the fuel subsidies will have to happen.”

Both Prabowo and Jokowi will travel widely in the next month to woo more than 186 million voters across the archipelago. Online campaigns are already under way and have been marked by mudslinging from both camps.

The official campaign period will end July 5, when a quiet period will be enforced by the election commission before the July 9 voting.