- About Us
- What We Do
- Sector Expertise
- Contact Us
Dr Harold Crouch
Indonesia is about to embark on its second democratic election in the post-authoritarian era. The ‘euphoria’ that accompanied the first election in 1999 has dissipated and public expectations are now much lower. Indeed one opinion survey suggested that more than half the voters believed that conditions were better under Soeharto. Opinion surveys also indicate that the outcome of the presidential election is still uncertain while the legislative election is likely to leave the national parliament no less fragmented than it is now.
Indonesian leaders were quick to identify some of the weaknesses in the old electoral system. New electoral rules are intended to strengthen the legitimacy of the presidency and make members of the legislatures more responsive to local needs. The most fundamental change is that the president and vice president will be elected directly in a presidential election rather than indirectly through the old People’s Consultative Assembly. In 1999 the old system produced the bizarre victory of Abdurrahman Wahid whose party had won only 13 per cent of the votes in the general election and whose presidency was short-lived.
Public opinion polls suggest that support for President Megawati Soekarnoputri’s party, the Indonesian Democracy Party of Struggle [PDI-P], has fallen quite drastically from its 34 per cent in 1999 and has been overtaken by Golkar, the party of the Soeharto regime. Increased support for Golkar, however, has not produced equivalent support for a Golkar presidential candidate. The reason is that now, five months before the presidential election, Golkar still doesn’t have an official candidate. Unlike other parties that have nominated their chairpersons, Golkar’s chairman, Akbar Tanjung, has been hampered by a 2002 conviction for fraud and a very long delay in completing the appeal process. The party was naturally reluctant to nominate a candidate who might be in jail at the time of the election. In the meantime other candidates for the Golkar nomination appeared, among whom retired General Wiranto seems to be in the lead. The Supreme Court will be considering its judgement on 4 February. The long delay has been very beneficial for President Megawati – so beneficial that some observers suspect that elements in her party might have persuaded the court to take its time. If Akbar wins his appeal, Golkar faces a debilitating struggle between Akbar, Wiranto and several other candidates for the nomination.
Parties are required to finalise their presidential and vice presidential nominations after the legislative election on 5 April. The major presidential candidates are reluctant to select their vice-presidential partners until after the legislative election reveals the level of support of each party. This consideration, rather than ideological affinity, will determine the choice. The presidential election will be held on 5 July and, on the assumption that no presidential pair wins an absolute majority, a second round between the two leading pairs will be held on 20 September. Much will depend on the alliances formed after the legislative election. It is widely expected that the PDI-P and Golkar will be the two leading parties. One strategy being considered by the PDI-P is to try to split Golkar by offering the vice presidential position to a Golkar leader such as Akbar Tanjung or Jusuf Kalla.
Whatever the outcome of the presidential election, the new government is likely to be another coalition, in which both the PDI-P and Golkar, as well as various smaller parties, will be represented. Will such a government, made up of competing parties representing competing interests, have the drive and cohesion to tackle the enormous challenges that Indonesia faces?
WATCHPOINT: The outcome of Akbar Tanjung’s appeal will be crucial in shaping the state of play in the lead-up to the elections.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
Jan 16 2017 — Portfolio Investment in Asia 2017
Jan 16 2017 — COMPARATIVE OPERATING COSTS IN ASIA 2016
Jun 16 2016 — Emerging Markets As Investment Targets