Stability and continuity top investors' concerns as Indonesia chooses Jokowi's successor ASEAN Business

[JAKARTA] As 204 million Indonesians go to the polls to elect their next president on Wednesday February 14, local and foreign investors are patiently waiting on the sidelines for the right signals to deploy their funds.

Top of their wish list are political stability and continuity of economic policies introduced by outgoing President Joko Widodo, market analysts said. Business time.

Over the past decade, under Widodo or Jokowi, as he is commonly known, Indonesia has maintained sound fiscal policy, they said. This allowed the government to spend massively on everything from infrastructure to education and healthcare.

Indonesia's economic and political stability under Widodos' two terms also brought the country to the attention of stock investors. According to a recent Bloomberg report, Indonesia has been the third best performing stock market after India and the United States over the past decade.

Any change in direction and economic focus will make investors think twice before continuing to invest in Indonesia, said an analyst who requested anonymity. There is a lot of money on the sidelines that will be deployed as soon as the election is over.

The analyst added: Investors hope to see peaceful elections and the next president continue the policies implemented by the current government. Everyone is hoping for a first round result because that will eliminate any uncertainty.

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For months, Indonesians have been preparing for what is considered the world's largest single-day election.

The three men seeking to succeed Widodo for the next five years are Defense Minister Prabowo Subianto, former Jakarta Governor Anies Baswedan and former Central Java Governor Ganjar Pranowo.

Before the campaign ended this weekend, two opinion polls predicted that Prabowo, 72, who is making his third attempt to be president, would get more than 50 percent of the vote on Wednesday, making him the clear winner .

Anies and Ganjar are respectively at least 27 and 31 points behind him.

Under Indonesian electoral laws, a presidential candidate must obtain more than 50 percent of the valid votes cast. If none of the three succeeds, the top two will face each other in the second round in June.

Among the trio, Prabowo pledged to continue Widodos' key economic policies and directions, particularly the development of Nusantara, the country's new capital in East Kalimantan.

Prabowo teamed up with Widodos' son Gibran Rakabuming Raka, 36, as his running mate, a move widely seen as an attempt to appeal to the country's younger and more digitally savvy population.

About half of registered voters in Indonesia are under 40; Analysts say this large group will play a key role in determining the outcome of the election.

Attract capital

Foreign direct investment will be key to Indonesia's economic growth in the coming years, particularly in manufacturing and downstream processing industries.

Under Widodo, the country has focused heavily on nickel processing to become a major player in the emerging electric vehicle (EV) sector.

Wijayanto Samirin, a senior member of Anies' campaign team, said the former Jakarta governor and his running mate Muhaimin Iskandar are very open to investors and will implement business-friendly policies if they win the elections.

We welcome investors, Wijayanto said. We will ensure that businesses, large and small, are able to realize their potential. We want to promote economic growth, equity and sustainability.

While acknowledging that investors may delay trading decisions until the election result is finalized, he noted that Indonesia's macroeconomic conditions are healthy and there are unlikely to be any major disruptions, regardless of whichever candidate is the winner.

On the rupee's outlook, Wijayanto said there would be an impact on the currency not because of the elections, but because of the fall in commodity prices, given that they account for about 60 percent of Indonesia's total exports.

The situation will be more difficult if the president-elect fails to maintain fiscal sustainability by continuing to rely on public debt to finance his spending, he added.

As Indonesia awaits the results of the vote, political observers have said the next president will face an increasingly uncertain external geopolitical climate; meet the aspirations of a rapidly growing middle class; and ensure that economic growth is more inclusive, given the rapid pace of urbanization.

Much at stake

In addition to choosing their next president, tens of thousands of candidates are competing for around 20,000 national, provincial and district parliamentary positions. Some 10,000 candidates from 18 political parties are jostling for seats in the 580-seat national parliament.

Although it will take weeks to get the full results, the public can expect to receive the first results, known as quick counting in Indonesia, based on sampling. Many private polling and survey groups are poised to deploy thousands of employees and volunteers to polling stations across the country.

The quick count has, in the past, proven to be a fairly reliable indicator of what the final result will be once all the votes are counted.