In this briefing:
- Widodo Lead Intact / VP Debate Lacks Impact / Trade Slows / Permitting Impediment / PPP Chair Arrest
- Brexit – The UK Economy Battles On
- Foreign Investment Law/Trade War/Huawei/Eu Vs PRC
- Fed Optimism Dims with Sentiment
- Fed Reflates the ‘buyside Bubble’?
1. Widodo Lead Intact / VP Debate Lacks Impact / Trade Slows / Permitting Impediment / PPP Chair Arrest
A new poll from Alvara concurs with last week’s LSI data and shows Widodo’s lead intact. A TV debate between the VP nominees was largely perfunctory, and Prabowo’s running mate Sandiaga Uno failed to use the opportunity to make up ground in the presidential race. The KPK arrested Romahurmuziy, an arder Widodo supporter and chair of the Islamic United Development Party (PPP); this reflects poorly on the president at an awkward time, but is unlikely to cause significant damage. Both exports and imports slowed precipitously in the Jan-Feb period, although capital-goods imports held up.
Politics: The 17 March vice-presidential debate featured few stellar moments, but President Joko Widodo’s running mate Ma’ruf Amin generally outperformed expectations. He commanded detail without perpetrating major gaffes. Although Prabowo Subianto’s running mate Sandiaga Uno performed with eloquence, he lacked resonance and failed to make the compelling breakthroughs that his ticket needs (Page 2). Officials in Prabowo’s campaign reiterated suspicions about inaccuracies in the voter list. To be sure, maladministration has been chronically problematic, producing inaccuracies in the list – but alleging conspiratorial intent would be far-fetched (p. 3). Widodo urged supporters to encourage voter turnout, counter hoaxes and avoid complacency (p. 4).
Surveys: The Alvara Research Institute measured Widodo’s lead over Prabowo at 19 percentage points in a poll conducted in late February and early March. This generally corroborates recent findings from the Survey Network (LSI) (p. 5).
Disasters: In Sentani, outside the provincial capital of Jayapura in Papua Province, flash flooding and mudslides killed at least 73, with 60 others still missing (p. 6).
Justice: United Development Party (PPP) Chair Romahurmuziy entered custody as a suspect on charges of graft. Investigators from the Anti-Corruption Commission (KPK) believe he took bribes in exchange for arranging senior appointments in the Religion Ministry, which PPP’s Lukman Saefuddin heads. If so, the case would mark the latest in a long line of Religion Ministry corruption scandals, and the second to embroil a PPP chair. The affair is an embarrassment at a crucial time for Widodo, but the details do not implicate the president and the KPK has refrained from pursuing Saefuddin, for now. Romahurmuziy has enthusiastically supported Widodo and he championed the VP candidacy of Amin; nonetheless, the PPP figure still lacks national prominence and his disgrace seems unlikely to materially affect the election (p. 7). Testimony from a Bekasi official sheds more light on Lippo Group practices in the Meikarta bribery case (p. 8).
Policy News: The coordinating economics minister suggested penalizing district‑level governments that lack detailed spatial plans, which are crucial for a planned online investment permitting system (p. 9).
Produced since 2003, the Reformasi Weekly Review provides timely, relevant and independent analysis on Indonesian political and policy news. The writer is Kevin O’Rourke, author of the book Reformasi. For subscription info please contact: <[email protected]>. |
Economics: The finance minister registered caution about the trade surplus recorded during February, as exports underperformed while imports fell even further. But capital goods imports have held up (p. 10).
2. Brexit – The UK Economy Battles On
The political crisis in the UK has left Brexit in shambles. Foreign manufacturers are exiting. Investment spending is contracting while London house prices are correcting fast. Despite this the UK economy has held up well, thanks to exporters and domestic consumers. UK economic activity is moderating but not as quickly as in the euro-area where heightened political tensions in Italy and France, a weakening German economy and slower additions to global US dollar GDP have taken their toll. Although Euro-area growth prospects are looking shaky economic activity should revive in 2H19. The same cannot be said about the UK economy.
3. Foreign Investment Law/Trade War/Huawei/Eu Vs PRC
China News That Matters
- NPC approves “rushed” foreign investment law
- Trump in no hurry as “China threat” grows
- Huawei struggles to build trust
- EU takes a stand: China as “systemic rival”
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.
4. Fed Optimism Dims with Sentiment
By Steve Blitz, Chief US Economist
- FOMC sees economy growing as expected, but risks no longer “balanced”
- Ending QT now underscores their concerns about slowing growth
- Swapping MBS for Treasuries when QT stops is backdoor QE
5. Fed Reflates the ‘buyside Bubble’?
By Steve Blitz, Chief US Economist:
- Central banks, led by the Fed, have restored market bullishness
- But the December selloff could still be a taste of future trouble
- A decade of low interest rates has created a powerful search for yield
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