Indonesia's Deja Vu Election: What You Need to Know

(Bloomberg) -- As Indonesia’s April 17 Election Day nears, incumbent President Joko Widodo looks on course to secure a second term. His choice of an Islamic cleric as a running mate seems to have deflected questions about religious piety in the world’s largest Muslim-majority nation, helping the former furniture exporter keep the spotlight on his track record in taming inflation and creating jobs. Prabowo Subianto, the former general who lost in 2014 after a bitter campaign, is trying again to lure the nation’s 193 million voters with pledges of lower taxes and greater self-reliance in food and fuel. The president appoints a cabinet that governs together with the parliament, elections for which are being held concurrently for the first time.

1. Where do things stand?

Widodo, known as Jokowi, leads his rival by double-digits in surveys, though the gap has been narrowing. A poll conducted in March showed Jokowi with 54 percent support (down from 59 percent a year ago) and 35 percent for his rival, known as Prabowo (up from 30 percent). Among lawmakers, Jokowi has been endorsed by six parties that control about 60 percent of seats in the current lame-duck parliament, and four with none. Those include his own Indonesian Democratic Party of Struggle and Golkar, the former ruling party under Suharto, Indonesia’s longtime authoritarian leader. Prabowo is supported by his Gerindra party and four others. In Indonesia, the main parties are more personality-driven than ideological.

2. What’s Jokowi’s pitch?

The 57-year-old has worked hard at maintaining the “common man” image that helped catapult him in 2014 to the top job -- the first president from outside the political and military elite. His government’s focus on infrastructure, lining up more than $300 billion of projects to better connect the nation’s almost 17,000 islands, is popular with credit-rating companies and the public alike. He has slashed prices for everything from gasoline to cement sold in far-flung regions such as Papua and Sulawesi and stoked popular support -- and weariness among international investors -- by asserting Indonesian ownership of key resources, for instance wresting majority control of the giant Grasberg copper and gold mine from U.S. company Freeport-McMoRan Inc.

3. What are his weaknesses?

The opposition has pointed to the high cost of the infrastructure agenda and an increasing dependence on foreign investment, particularly from China. Prabowo also highlights a record public debt and ballooning trade deficit, growing concerns about inequality and low crop prices. In a country that is roughly 90 percent Muslim, Jokowi bolstered his religious credentials by picking Ma’ruf Amin, the country’s senior-most Islamic cleric, as his running mate. Prabowo’s party was supported by powerful Islamic groups in 2017 in the Jakarta governor election, which was marred by sectarian tensions.

4. Who are the swing voters?

Indonesia is a young country: about 40 percent of the voters are millennials. Jokowi has courted them with his extensive use of social-media platforms such as Instagram, Facebook, Twitter and YouTube, and at campaign events with students and recent graduates. He also has promised free education, more jobs and easier access to finance to start businesses. Prabowo is running with Sandiaga Uno, one of Indonesia’s richest men who cultivates a modern, youthful image. Women also have been a focus for presidential and parliamentary hopefuls, as more step forward to lead parties or run for office. Jokowi has assembled a cabinet with one of the world’s highest ratios of female ministers.

5. What are the candidates’ economic agendas?

Jokowi wants to transform Indonesia into a manufacturing powerhouse to reduce its dependence on raw commodities, better compete with nearby Thailand and Malaysia for foreign investment and create more jobs for the millions graduating from colleges and universities. Jokowi is relying on an expansive fiscal policy to sustain growth as Bank Indonesia has raised interest rates to rein in the trade deficit and bolster Indonesia’s currency, the rupiah. Prabowo has vowed to cut taxes on companies and individuals, to boost domestic food production through import-substitution policies, and to both restore gasoline subsidies Jokowi abolished and increase the use of renewable energy. Both candidates have visited traditional markets to interact with people selling and buying meat and produce, highlighting the importance of economic issues.

6. What are the chances of a surprise?

The race has been tightening, with Prabowo drawing huge crowds to his election rallies. One recent survey put Jokowi’s support below 50 percent, although still well ahead of Prabowo. Both candidates are going all out to woo undecided voters and encourage people to go to the polls, especially the young. Turnout is usually around 75 percent. An upset would likely cause jitters in financial markets, which don’t like surprises. A close finish could lead to a legal challenge similar to the 2014 race, when Prabowo initially refused to concede. Questions being raised by his campaign about the impartiality of the General Elections Commission and allegations of irregularities in the voter list point to a fractious outcome.

7. When will we have a winner?

TV channels will probably project unofficial results after polls close at 1 p.m. local time, but the official count could take several days. Indonesia’s seventh president will be inaugurated on Oct. 20.

8. What about the legislature?

Parties backing Jokowi look likely to hold their edge over those supporting Prabowo. But there could be fewer of them in the 575-seat People’s Representative Council: The threshold to enter has risen to 4 percent of the national vote, from 3.5 percent. Surveys indicate six to eight parties will make the cut, compared to 10 now. Supporters of the change argue it will make it easier for the president to get legislation through by reducing the scope for political horse-trading and maneuvering for posts.

9. How about the markets?

The local stocks, currency and bond markets will be closed to allow for voting, so market reaction will be delayed a day. Stocks have always fared well in the run-up to elections since the direct presidential vote was introduced in 2004, with the currency being less bullish. The benchmark Jakarta Composite Index is up 12 percent since mid-October, while the rupiah has gained 7 percent against the dollar, a sign of investor confidence in Jokowi’s re-election.

The Reference Shelf

• Indonesian politicians struggle to engage millennials.
• Will Jokowi count on populism? asks Bloomberg Opinion’s Daniel Moss.
• QuickTakes on Indonesia’s protectionist push and the 2018 market rout.
• A Bloomberg editorial on the need to grow Indonesia’s tax base.

To contact the reporters on this story: Thomas Kutty Abraham in Jakarta at tabraham4@bloomberg.net;Rieka Rahadiana in Jakarta at rrahadiana@bloomberg.net

To contact the editors responsible for this story: Stephanie Phang at sphang@bloomberg.net, Grant Clark, Paul Geitner

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