Indonesians Prepare to Vote in National Elections

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On April 9, Indonesians will vote in the fourth round of national legislative elections since the fall of Suharto’s New Order in 1998.

As the third largest democracy in the world, and single largest economy in Asia Pacific, Indonesia’s legislature is set to play a critical role in the formation of the ASEAN Economic Community (AEC) next year.

With all 692 seats in Indonesia’s National Assembly at stake, current polls indicate the Indonesian Democratic Party-Perjuangan (PDI-P) will likely wrest control of the country’s legislature from President Yudhoyono’s Democrat Party (Partai Demokrat) early next month.

Last weekend, the PDI-P’s official nomination of popular Jakarta governor Joko Widodo as its presidential candidate significantly boosted its poll standings and triggered a favorable reaction from Indonesian markets.

On Monday, the Jakarta Composite Index rose 3.2 percent, and the Indonesian rupiah rose to its highest level against the U.S. dollar since October after Widodo unofficially announced his candidacy in a speech last Friday.

Widodo, also commonly known as “Jokowi” among Indonesians, is set to be the single most popular candidate in the presidential elections this July. A former furniture businessman, Widodo rose to political prominence as mayor of Solo in Central Java before becoming governor of Jakarta in 2012.

Often compared to U.S. President Barack Obama, Widodo is well-known for successfully guiding two major public transportation projects in Jakarta to completion and moving squatter communities into low-cost housing.

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Widodo’s background and growing popularity set him apart from other candidates for the presidency – which include mostly retired generals, entrepreneurs and bureaucrats – and raise hopes that Indonesians may be granted relatively peaceful national elections this year.

After two politicians were killed in Aceh Province last month, Indonesia’s National Police Chief warned against violence and intimidation in the lead up to the national polls. Troubled by decades of violent separatist insurgency until a peace deal was reached in 2005, Aceh, Indonesia’s westernmost province, often experiences spates of political violence and heightened tensions around elections.

While nearly 90 percent of Indonesians identify as Muslim, Widodo’s nationalist PDI-P is set to dominate in national polls after the leading Muslim party PKS and ruling Partai Demokrat experienced several highly publicized corruption scandals.

Set to take charge of a remarkably young and rapidly increasing population that will soon provide the country with a so-called “demographic dividend,” the PDI-P is predicted to swoop to power on a wave of young, first-time voters.

Almost 30 percent, or 54 million, of eligible voters in Indonesia are under the age of 30, and nearly half of those will be voting for the first time this April.

Regardless of how national polls play out in April, Widodo’s popularity among Indonesians and foreign investors is unassailable. According to many analysts, a Widodo presidency would likely mean the rapid recovery of Indonesia’s economy and successful integration of the AEC.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam in addition to alliances in Indonesia, Malaysia, Philippines and Thailand as well as as well as liaison offices in Italy and the United States.

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