Indonesian Politics This Week: BI Slows Bill to Limit Cash; 3rd CGK Runway?; Police Soften on FPI

Indonesia Political Risk Analyst

Kevin O’Rourke

Reformasi

Thematic (Sector/Industry)

Regional‑Head Elections: Indonesia’s largest-ever round of simultaneous regional contests exceeded expectations as candidates with credibility for clean governance won election in three major provinces – West Java, East Java and South Sulawesi.  Voter turnout was high at roughly 70 percent in many regions.  In Makassar, voters rejected the unopposed mayoral candidate, a nephew of Vice President Jusuf Kalla.  The West Java governor‑elect, Ridwan Kamil, could be a contender for a presidential nomination in 2024.  Of five incumbent governors seeking re‑election, voters ousted at least two (results are pending in Papua and North Maluku).  Overall, the results show that the electorate remains engaged and votes on principle – generally favoring candidates who bring credible records for service to the public.  As anticipated since January, the results reveal little or no evidence of sectarianism driving voter preferences.  But as for analysis claiming that the results strengthen President Joko Widodo, he in fact never faced material risk (Page 2).  Politics: The Constitutional Court dashed Vice President Jusuf Kalla’s hopes of running with Widodo again for a third term as VP.  Justices set aside an appeal of term limits filed by associates of Kalla.  The question of whom Widodo will pick for his ticket is wide open again (p. 11).  Finance Minister Sri Mulyani Indrawati dismissed claims by Gerindra Chair Prabowo Subianto that Indonesia’s foreign debt is out of control (p. 12). Justice: In a case that helps assert accountability on lawyers, judges issued a seven‑year sentence to Fredrich Yunadi, the attorney of former Golkar Chair Setya Novanto.  Yunadi obstructed justice by staging Novanto’s car accident, which intended to avert the parliament speaker’s arrest (p. 13). <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>Infrastructure: Nine segments of the Trans Java Toll Road are due to commence operations by year‑end, fully linking the 1,150 kilometer road by 2019 (p. 13). Economics: Trump’s protectionism is adversely affecting international markets and pressuring emerging‑market currencies – and the rupiah has resumed its slide.  The currency sank to Rp14,338 on 28 June, and meanwhile trade data shows a far larger deficit during May, due to high oil imports (Widodo’s restoration of subsidies encourages over‑consumption).  Monetary authorities announced a policy meeting today that will likely result in the third interest‑rate hike of the year.  This will slow the economy’s nascent momentum, but the step is necessary for stability (p. 14).Justice:  Search teams identified the sunken ferry in Lake Toba (p. 15).

Regional‑Head Elections: Indonesia’s largest-ever round of simultaneous regional contests exceeded expectations as candidates with credibility for clean governance won election in three major provinces – West Java, East Java and South Sulawesi.  Voter turnout was high at roughly 70 percent in many regions.  In Makassar, voters rejected the unopposed mayoral candidate, a nephew of Vice President Jusuf Kalla.  The West Java governor‑elect, Ridwan Kamil, could be a contender for a presidential nomination in 2024.  Of five incumbent governors seeking re‑election, voters ousted at least two (results are pending in Papua and North Maluku).  Overall, the results show that the electorate remains engaged and votes on principle – generally favoring candidates who bring credible records for service to the public.  As anticipated since January, the results reveal little or no evidence of sectarianism driving voter preferences.  But as for analysis claiming that the results strengthen President Joko Widodo, he in fact never faced material risk (Page 2).  Politics: The Constitutional Court dashed Vice President Jusuf Kalla’s hopes of running with Widodo again for a third term as VP.  Justices set aside an appeal of term limits filed by associates of Kalla.  The question of whom Widodo will pick for his ticket is wide open again (p. 11).  Finance Minister Sri Mulyani Indrawati dismissed claims by Gerindra Chair Prabowo Subianto that Indonesia’s foreign debt is out of control (p. 12). Justice: In a case that helps assert accountability on lawyers, judges issued a seven‑year sentence to Fredrich Yunadi, the attorney of former Golkar Chair Setya Novanto.  Yunadi obstructed justice by staging Novanto’s car accident, which intended to avert the parliament speaker’s arrest (p. 13). 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;.Infrastructure: Nine segments of the Trans Java Toll Road are due to commence operations by year‑end, fully linking the 1,150 kilometer road by 2019 (p. 13). Economics: Trump’s protectionism is adversely affecting international markets and pressuring emerging‑market currencies – and the rupiah has resumed its slide.  The currency sank to Rp14,338 on 28 June, and meanwhile trade data shows a far larger deficit during May, due to high oil imports (Widodo’s restoration of subsidies encourages over‑consumption).  Monetary authorities announced a policy meeting today that will likely result in the third interest‑rate hike of the year.  This will slow the economy’s nascent momentum, but the step is necessary for stability (p. 14).Justice:  Search teams identified the sunken ferry in Lake Toba (p. 15).

Indonesian Politics This Week: Win for Democracy; Kalla Loses VP Hope; Trans Java Sections Due Soon