Indonesia: Electoral Pressure Builds


Professor J.A.C. Mackie

Over the last several months, in the run-up to the June elections, political attention in Jakarta has concentrated on election campaigning (which started unofficially at least three months before the month of formal campaigning began on 17 May. But the other focus of concern has been the increasingly tangled East Timor issue and on the ethnic violence that broke out in West Kalimantan in March and in Ambon in January.

The one encouraging development of 1999 could be described - by analogy with Sherlock Holmes' dog that did not bark in the night - as the fact that neither those episodes, nor the election campaign, nor the intense political mobilization generated by it have so far given rise to wider ethnic or religious conflicts elsewhere in the archipelago, as might have been expected. Perhaps the election campaign has served as a kind of safety valve by absorbing political energies which previously had no such outlet.

Most economic decision-making seems to be on hold until the political uncertainties of this half-year are resolved. The economy is not getting significantly better at a fundamental level (though the wet-season rice harvest was good this year) since almost no new investment or bank lending is occurring. While the main economic indicators like the exchange rate, inflation rate and stock market index are looking moderately good, little or no progress has yet been made on debt restructuring, as debtors are simply refusing to negotiate in the hope that they will eventually not have to pay out anything. Until that state of affairs changes, stagnation seems certain to continue.

The election outcome is still too unpredictable to call, beyond the probability that four or five parties will emerge with between about 15 and 30 per cent of the votes each (and probably of seats in parliament, although the correlation may not be perfect). The parties are Megawati Sukarnoputri's PDI Perjuangan which is generally regarded as now a strong front-runner; Golkar, which is said to be picking up stronger support than earlier expected in some parts outside Java, although weak and very unpopular there; the old Soeharto-era Muslim party, PPP; the old Soeharto-era Muslim party; Amien Rais' PAN (Partai Amanat Rakyat) and Gus Dur's (Abdurrahman Wahid's) PKB (Partai Kebangkitan Bangsa). So a coalition will almost certainly have to be cobbled together to ensure a majority of seats in parliament and effective control of the next government. Bargaining between the main parties will therefore be intense between June and August when the MPR (Peoples' Consultative Assembly, a kind of superparliament) will meet to elect a new President and determine the 'broad outlines of state policy' by November.

Habibie seems unlikely to survive as president, but cannot yet be written off entirely. A Golkar decision in mid-May, to reverse an earlier refusal to endorse him as its candidate for president, may indicate that it feels support for him is firming. The decision soon after that by Gus Dur and Amien Rais to bury their earlier personal differences and form a loose coalition with Megawati and her PDI, presumably against Golkar, PPP and other minor parties, seems to indicate that the contest is polarising around those two clusters, essentially as a Megawati-versus-Habibie (and Golkar) battle.

WATCHPOINT: Horse-trading between the parties will determine who has a majority in the MPR.


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.

Go to top