Indonesia’s Big Choice: Can Jokowi or Prabowo Restore Growth?

Indonesia is the world’s third-largest democracy, but it has had only one directly elected president. On July 9 the country’s 187 million voters will elect a successor to incumbent Susilo Bambang Yudhoyono, who is barred from seeking a third five-year term. What once looked like a shoo-in for the popular Jakarta governorJoko Widodo, 53, has turned into a neck-and-neck race with his opponent, the wealthy former army general Prabowo Subianto, 62.

选举被视为十字路口的一个国家的分水岭。群岛的9000亿美元的经济性是东南亚最大的，但经过多年的强劲增长，由于全球商品繁荣和中国主要市场增长越来越多，这已经减速了。与邻近的泰国不同马来西亚，通过建立制造基地，印度尼西亚仍然是一个商品驱动的经济性的经济多样化。该国是世界上最大的热煤和棕榈油出口国，以及铜，镍，铝土矿，锡和金以及石油和天然气的主要生产商。“我们现在别无选择，只能提高制造业和服务部门，”雅加达印度尼西亚克莱萨首都Sarina Lesmina说。

Although Jokowi, as Widodo is popularly known, is a fresh political face with the reputation of a reformer, and Prabowo is perceived as the candidate of the establishment, there isn’t much of a difference between the two candidates’ economic policies. “Both candidates boast similar platforms, but the key is who is better in executing his plans,” says Lesmina.

Indonesia’s overleveraged economy suffered a huge setback in the aftermath of the Asian financial crisis in the late 1990s. The rupiah tanked, Indonesians poured into the streets demanding the ouster of President Suharto, a dictator who had ruled for 31 years. In the end, the International Monetary Fund led a $43 billion bailout from multilateral lenders and other donors. Suharto was forced to step down and the country gradually opened up its economy to foreign investors, selling state assets as well as financially troubled companies.

The Asian crisis set in motion political reforms leading to a new constitution and free elections. The reforms, combined with the country’s emergence as a key supplier of raw materials to China, unleashed a long period of growth. Indonesia’s gross domestic product has grown at a rate of 5.5 percent or more every year since 2002, making it a darling of foreign investors. Indeed, the Indonesia Stock Exchange is Asia’s best-performing market on a five-, ten- and 15-year basis. The market’s Composite Index is up 14.7 percent year-to-date, as of July 4.

基础设施不足，劳动力市场规定和低生产率已经阻止了制造业。“问题是，印度尼西亚在该地区的同行开始变得更具竞争力，”华盛顿的欧亚集团分析师东南亚分析师Shaun Levine说，菲律宾和越南现在吸引了前往印度尼西亚的投资。尽管是世界上最大的BlackBerry设备市场，但印度尼西亚最近失去了对马来西亚的出价，因为基础设施不足，举办黑莓制造工厂。今年早些时候，三星电子有限公司一直希望建造一个植物在该国制造手机电池，转向越南，因为该国家提供了更好的投资激励措施。

In the aftermath of U.S. Federal Reserve’s announcement that it would begin tapering asset purchases, Indonesia suffered as part of the so-called Fragile Five emerging-markets countries. Falling commodity exports had helped widened the current-account deficits, and $24 billion in fuel subsidies expanded its budget deficit. As the central bank moved to tighten monetary policy, it began choking off growth. The country’s growth rate slowed to 5.8 percent last year from 6.3 percent in 2012, and it is expected to decline further, to 5.3 percent this year.

Jokowi和Prabowo均通过大规模建设基础设施来阐明大胆的增长计划。价值1500亿美元的项目 - 主要是港口，道路，铁路，发电厂和供水项目 - 可以在未来五年内加入管道。为了帮助资助他的雄心勃勃的发展计划，Jokowi计划在五年内逐步淘汰燃料补贴，并更好地控制预算，而Prabowo已承诺解决避税，以增加当前GDP的12％的税收收入至16％。

Worryingly for foreign investors, both candidates have whipped up economic nationalism during the campaign. They have talked about imposing restrictions on foreign investment, particularly in the banking sector; reviewing trade deals; raising mining taxes; and implementing an export ban on unprocessed minerals. “You need to separate election rhetoric from reality,” says Levine. “At the end of the day, they both know the country needs foreign investments. I don’t see Indonesia closing down or putting up huge barriers.”

印度尼西亚最大的私募股权集团的联合创始人Sandiaga Uno，Saratoga Investama和众多商业Tycoons支持Prabowo之一，表示，前一般一般被误解和错误引用。“他是一个民族主义者，但并非反对外国投资，”uno说。“根据Prabowo政府，印度尼西亚将寻求带来更多的外国投资，因为我们需要建立我们的基础设施，以成为更具竞争力的经济。”

The two candidates couldn’t be more different. Jokowi, an engineer-turned-entrepreneur who built a furniture business before entering politics to serve as mayor of his hometown, Surakarta, and later governor of Jakarta, is the favorite of city folks and the middle class. “He is someone who has not climbed to power through the old routes — the military, struggle for independence or family connections,” notes Manu Bhaskaran, CEO of consultancy Centennial Asia Advisors in Singapore.

“For the first time in history, we have a candidate in Jokowi who doesn’t represent the elite, doesn’t control a political party,” says Levine. “While Indonesia has elected presidents in the past, they have mainly represented the interests of the elite.” Jokowi is also seen as a better economic manager following his stints as mayor and governor. “The skills he brought to those roles can be ported over to the national level,” says Bhaskaran. “He was a genius for debottlenecking long-stalled infrastructure projects in Jakarta and got unpopular things done, like removing squatters and roadside hawkers, quietly but effectively,” he notes.

Prabowo, a scion of a wealthy family who rose to become head of the army’s commando unit, is popular among the poor and in the rural heartland. His human rights record as an army commander has been contentious during the campaign. He was dismissed from the military in 1998 after a military board found him responsible for the kidnapping of student activists at the end of Suharto’s rule. As the establishment candidate, he represents a return of sorts to the Suharto era. Prabowo heads his own small party, Gerindra, which won 11.8 percent of the popular vote and 73 of 560 seats in the parliamentary elections three months ago. He also enjoys the support of the former ruling Golkar party of Suharto, which has 91 seats in parliament.

“Prabowo represents a side of Indonesia that yearns for a strongman, a leader who will be tough and decisive, who would stand up for Indonesia and reclaim its rightful place in world affairs, someone who would restore order and respect,” says Bhaskaran. “Though in the cities and among educated middle class, Indonesians can see through the rhetoric, in the rural areas his message of ‘decisive leadership’ is resonating, and that has helped close the gap with Jokowi,” says Levine. Yet he sees no danger of authoritarian rule if Prabowo wins. “Indonesians have gone too far down the path of democracy to turn the clock back,” argues Levine.

Jokowi由前总统Megawati Sukarnoputri和她印度尼西亚民主党 - 斗争（PDI-P）支持，这是议会109个席位的最大派对。他还支持许多较小的缔约方，与PDI-P一起有38％的人民协商会议或议会。Prabowo缝合在一起令人印象深刻的派对联盟，占有62％的席位。作为精英的一部分，Prabowo更有可能削减交易，并做出必要的马贸易来搬家，而是举行议程，但Bhaskaran指出“Jokowi也向雅加达不友好的装配达成了共识建设和获得法律的诀窍。”

Markets that were pricing in a Jokowi victory have started nervously building in a higher risk of a Prabowo victory. “Once the election is over, things will settle down over time, and the country will move forward, as we saw with the Malaysian elections last year,” says Tai Hui, chief Asia market strategist forJP Morgan Asset Managementin Hong Kong. “In the heat of the elections, things can sometimes look more difficult, but eventually people focus on what the new government can do for them.”

选举是在东南亚的努力艰巨的经济增长和与中国紧张局势崛起的时候出现。在过去的两年里，日本，越南和菲律宾与中国争夺过度争议岛屿。虽然候选人都没有任何外交政策经验，但Prabowo在马来西亚的一部分在马来西亚的童年的一部分在当时的副总理阿卜杜勒·拉扎克（他继续成为总理，他的儿子Najib，现在是马来西亚的总理）。

考虑到东南亚的越来越大的地缘政治紧张局域力以及泰国最近的军事政治，“帕布沃多的出现可能不是一件坏事，”Bhaskaran说。“虽然Prabowo将采取更为肌肉的外交政策方法，但我怀疑他将改变该地区政策的推动力。”

Jim O’Neill, the former chairman of Goldman Sachs Asset Management who coined the term BRIC, is a “long-term optimist” on Indonesia, which, he says, alongside India, is one of the few large emerging economies in which the medium-term structural growth story remains intact with “fantastic” demographics. “What we need to see is stronger leadership with better governance and delivery for the masses and reduced corruption,” he says.

也可以看看 ”BNP Paribas’s Arthur Kwong Sees Indonesia, India as Asia’s Rising Stars。“