POSTED 29 Apr 2019 - 09:31

How do you see the outcome of Indonesia's 2019 presidential election affecting doing business in the country?

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What kind of an impact do you think Indonesia's 2019 presidential election will have on doing business in the country?
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Top Response

Pascal Lambert, Group Country Head, Singapore, Head of South East Asia and India, Societe Generale

The re-election of incumbent President Joko Widodo would vindicate the economic accomplishments observed during his first term. From a banking standpoint, the high credibility achieved by policymakers (Ministry of Finance Indonesia and Bank Indonesia) should provide comfort to financial markets...

Responses

Jayaprakash Jagateesan, Chief Executive Officer, RHT Holdings Pte Ltd
27 May 2019 - 10:19

We've seen that the business environment in Indonesia is not only influenced by the President, but also by jockeying between the executive branch, the legislature, local business elites and the bureaucracy.

Regardless of the outcome, the President will need significant support from all stakeholders to advance any pro-business agenda without being stymied by political horse-trading.

Should the incumbent Jokowi win the race, it will be his second and last term under Indonesia's presidential term limits, potentially changing the dynamics of his approach to instituting reforms.

Indonesia has incredible potential and I look forward to new opportunities in the country over the next five years.

Victor Mills, Chief Executive, Singapore International Chamber of Commerce
21 May 2019 - 11:21

Whoever becomes President of Indonesia is a matter for the Indonesian electorate. Nonetheless, who leads Indonesia is a matter of interest for all of us. Indonesia is Asean's most populous country, its largest economy and a key business partner for many. However much some businesses may thrive on volatility, most dislike political uncertainty. That is why foreign investors have cheered the unofficial results of this month's election. If, as expected, President Joko Widodo wins a second term, we will all be waiting to learn his priorities and his plans. Will they be a continuation of his first term? Time will tell.

Sheena Chin, Country Director, Veritas Storage Singapore
13 May 2019 - 09:57

For businesses and investors alike, a predictable outcome for Indonesia's 2019 presidential election will help to provide stability when it comes to doing business in the country. The eventual winner will need to address the economic challenges, including slower growth against the backdrop of rising nationalism and trade tensions globally. A foreign-investor friendly and pro-business stance will certainly bring cheer to businesses that are looking to expand their footprint in Indonesia. Winning the popular support of the voters and securing the final consensus regarding the outcome is key for social cohesion, given the high turnout of over 80 per cent. Ultimately, businesses will thrive when social, political and economic stability is in place.

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Dileep Nair, Independent Director, Thakral Corporation Limited
6 May 2019 - 09:56

Neither Jokowi nor Prabowo is ideal for leading an economic resurgence in Indonesia. Despite economic development featuring in both their manifestos, they succumb to populist and nationalist tendencies. But between the two, Jokowi is the better choice. Indeed, he leads in the unofficial vote tallies. He is a man of integrity who is honest and sincerely wants to uplift his people and the country. He has achieved some progress in his first term as President. But much more needs to be done, particularly in areas such as improving the infrastructure and making the labour market less rigid. Key will be for Jokowi to bring in a coterie of honest and capable ministers as part of his team. Otherwise, his dream of raising Indonesia from 73rd position to the top 40 in the ''Ease of Doing Business'' global ranking will remain just that - a dream.

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Leon Perera, Chief Executive Officer, Spire Research and Consulting
6 May 2019 - 09:42

Mr Jokowi's likely victory in the Indonesian presidential election means that economic reforms to improve competitiveness will continue. Interestingly, economic issues figured prominently in the campaign. President Jokowi is likely to continue efforts to attract foreign direct investment, build infrastructure, nurture value-added processing for locally-sourced commodities, promote special economic zones and continue civil service reform. A second term for President Jokowi will also be good news for Indonesia's vibrant ICT startup scene, an issue which featured in the presidential debates. However, the pace of economic reforms may slow, given the signs that the new legislature may enhance the weight of social conservatives in politics.

Chris Burton MD, South East Asia, Vistra Group
6 May 2019 - 09:40

The re-election of President Jokowi can be considered a validation of his policies. Indonesians have been impressed with his focus on infrastructure and the heavy spending on social programmes like health and education. Spending on infrastructure across the nation as well as government-funded social programmes is set to continue. For the economy, this will mean a continued over-reliance on state-owned enterprises (SOEs), which may soon see the establishment of a super holding company to oversee the operations of all SOEs - which are currently crowding out private investment - coupled with aggressive tax collection efforts to fund infrastructure and social spending. All in all, a continuation of business as usual: good news for investors in the country.

Pascal Lambert, Group Country Head, Singapore, Head of South East Asia and India, Societe Generale
6 May 2019 - 09:38

The re-election of incumbent President Joko Widodo would vindicate the economic accomplishments observed during his first term. From a banking standpoint, the high credibility achieved by policymakers (Ministry of Finance Indonesia and Bank Indonesia) should provide comfort to financial markets, particularly given the fiscal prudence (low level of government debt-to-GDP at 30 per cent and a small budget deficit of around 2 per cent of GDP) and credible currency and interest rate management. This should enable the new administration to confidently pursue its long-term objectives, such as the continuation of the public sector's reform and simplification, along with infrastructure programmes. The government's attention on sustainable finance and focus on renewable energy is also encouraging.

Sumit Dutta, Chief Executive Officer, HSBC Indonesia
29 Apr 2019 - 09:33

To have managed one of the most complex single-day elections in modern times - involving more than 190 million voters, 800,000 polling stations, and four levels of government - is impressive to put it mildly, and should give investors' confidence in the future of this high-potential country.

More broadly, Indonesia's economic achievements over the past five years present an excellent platform for further economic development.

Yet unlocking the country's true economic potential will require continued investment in domestic connectivity, industrial productivity and improved ease of doing business. Infrastructure spend will be at the core of this, and will require ongoing government, private and international investment. The Indonesian government has already made strides to increase the openness and transparency of its infrastructure development. The five-year runway ahead now gives the administration the time and space to invest and deliver on its promises.

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