Jakarta Election Fever

INDONESIA - Report 30 Mar 2017 by Cyrillus Harinowo

Indonesian politics in the past few months have been heavily influenced by the gubernatorial election in Jakarta. The incumbent governor, Basuki Tjahaja Purnama, famously known as "Ahok", has been challenged by Anies Baswedan. Ahok has double minority status; he is both Chinese and a Christian, while his contender is basically of Arab descent and is a Muslim. Therefore it is unavoidable that the battle has been divided around performance and religious issues.

The election in Jakarta is taking shape as a precursor of the presidential election in 2019. If Ahok wins the April 19, 2017 election, this will pave the way for the re-election of the current president, but if the challenger wins, it will be a lot more difficult for the current President Joko Widodo, also known as "Jokowi", in the upcoming presidential election. Therefore, President Jokowi is certainly anxious to see Ahok win the current election.

Three weeks before the election, it is still difficult to predict who will grab the seat of Jakarta’s governor. My own guess (it certainly is very much influenced by the wishful thinking) is that Ahok will win the election. However, the result will be a close call.

In the midst of such fever, the Indonesian trade balance once again reported a surplus in February. Total exports were lower than the previous month, since February has fewer days than January. However, if we consider average exports per day, February's exports were relatively stronger than those of January. At the same time exports in February 2017 were greater than the exports for the same period of the previous year.

Simultaneously, Indonesian inflation in the month of February 2017 was at 0.23%, a relatively high figure compared with the same month of the previous two years. However, year-over-year inflation was still in the lower end of the corridor. Therefore, even though there was an increase in the benchmark interest rate in the United States, the Governing Council of Bank Indonesia, at its meeting held one day after the March FOMC meeting, decided to keep the benchmark interest rate constant at 4.75%.

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