Indonesia Political Risk Analyst

Kevin O’Rourke

Reformasi

Thematic (Sector/Industry)

Politics: Neither presidential candidate has named the head of their official campaign team, but both appear to be saddling their teams with representatives of their nominating parties, with limited regard for cohesion or skills.  Neither team will command credibility on issues of clean governance and reform.  President Joko Widodo risks damaging his image if he confers the high-profile role of campaign-team chair to a retired general (Page 2).  For the vacated post of Jakarta vice governor, figures in Gerindra and the Justice Welfare Party (PKS) are scrambling for the right to nominate candidates – presenting Gerindra Chair Prabowo Subianto with a quandary.  At least two of the three figures reputedly receiving consideration would pose governance risks for the capital’s management (p. 4).  PDI-Perjuangan figures issued conflicting messages on whether the vice-presidential nominee, the cleric Ma’ruf Amin, will meet Habib Rizieq, the fugitive head of the Islamic Defenders Front (FPI) in Mecca.  But if Widodo attempts to engage the sectarian leader, the president will further jeopardize his pluralist image (p. 5).  Golkar figures blame that Widodo’s choice of Amin for vice president is dividing the party (p. 6).Surveys: The Survei Network (LSI) swiftly released findings from polling conducted after the nomination of tickets.  An LSI analyst generated headlines by asserting that Widodo’s choice of Amin has depressed the president’s support; in fact, the data does not support this – yet.  Effects may emerge later, as voters become familiar with Amin (p. 7).Justice: The chair of the Islamic United Development Party (PPP), Romahurmuziy, faces questioning in a budgeting kickbacks case (p. 9).<table class="table table-striped"><tbody><tr><td>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: &lt;kevin.orourke@reformasi.info&gt;.</td></tr></tbody></table>Policy News: To encourage inward investment, the central bank has relaxed certain restrictions on hedging.  The change is positive, but only marginally so (p. 9).  Policymakers are still planning higher taxes on consumer imports (p. 10).Economics: Zulkifli Hasan, chair of the National Mandate Party (Pan) and speaker of the People’s Consultative Assembly (MPR), repeatedly exchanged barbs with the finance minister over the issue of debt levels (p.  11).  The proposed 2019 budget aims to reduce the fiscal deficit while growing tax revenues at 17 percent year-on-year.  The budget’s discussion of energy subsidies overlooks the contingent liabilities amassing on the balance sheet of state-owned Pertamina (p. 12).Disasters: The third major earthquake in Lombok within a month has focused scrutiny on relief efforts.  The vice president maintains that coordination is proceeding well (p. 15).

Politics: Neither presidential candidate has named the head of their official campaign team, but both appear to be saddling their teams with representatives of their nominating parties, with limited regard for cohesion or skills.  Neither team will command credibility on issues of clean governance and reform.  President Joko Widodo risks damaging his image if he confers the high-profile role of campaign-team chair to a retired general (Page 2).  For the vacated post of Jakarta vice governor, figures in Gerindra and the Justice Welfare Party (PKS) are scrambling for the right to nominate candidates – presenting Gerindra Chair Prabowo Subianto with a quandary.  At least two of the three figures reputedly receiving consideration would pose governance risks for the capital’s management (p. 4).  PDI-Perjuangan figures issued conflicting messages on whether the vice-presidential nominee, the cleric Ma’ruf Amin, will meet Habib Rizieq, the fugitive head of the Islamic Defenders Front (FPI) in Mecca.  But if Widodo attempts to engage the sectarian leader, the president will further jeopardize his pluralist image (p. 5).  Golkar figures blame that Widodo’s choice of Amin for vice president is dividing the party (p. 6).Surveys: The Survei Network (LSI) swiftly released findings from polling conducted after the nomination of tickets.  An LSI analyst generated headlines by asserting that Widodo’s choice of Amin has depressed the president’s support; in fact, the data does not support this – yet.  Effects may emerge later, as voters become familiar with Amin (p. 7).Justice: The chair of the Islamic United Development Party (PPP), Romahurmuziy, faces questioning in a budgeting kickbacks case (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: &lt;kevin.orourke@reformasi.info&gt;.Policy News: To encourage inward investment, the central bank has relaxed certain restrictions on hedging.  The change is positive, but only marginally so (p. 9).  Policymakers are still planning higher taxes on consumer imports (p. 10).Economics: Zulkifli Hasan, chair of the National Mandate Party (Pan) and speaker of the People’s Consultative Assembly (MPR), repeatedly exchanged barbs with the finance minister over the issue of debt levels (p.  11).  The proposed 2019 budget aims to reduce the fiscal deficit while growing tax revenues at 17 percent year-on-year.  The budget’s discussion of energy subsidies overlooks the contingent liabilities amassing on the balance sheet of state-owned Pertamina (p. 12).Disasters: The third major earthquake in Lombok within a month has focused scrutiny on relief efforts.  The vice president maintains that coordination is proceeding well (p. 15).

Indonesia Politics Weekly: Hedging Curbs Relaxed; 2019 Budget; Widodo Lead Intact (For Now)