Indications of tight presidential race for Indonesia in 2019

Indonesia’s regional elections have seen mixed results, which is seen as an indication of results for the general election being held in April next year, the Jakarta Post reports. This could lead to the implementation of populist economic policies in the lead up to the general election.

Unofficial results so far indicate a tight race between current President Joko Widodo (Jokowi) and his likely challenger Prabowo Subianto, Chairman of the Gerindra Party. Results were close in the key regions of Central and West Java, according to the Nikkei Asian Review. Although candidates backed by the ruling coalition are deemed to have won, it was only by slim margins, and the opposition gained 40 per cent and 30 per cent of the votes in Central and West Java, respectively. This is more than in previous elections and much higher than predicted.

President Jokowi may attempt to implement populist economic plans in order to win over voters, as he has begun to do already this year. As reported by Reuters, in April he took nearly US$20 billion from infrastructure projects in order to focus on social welfare. He also implemented price controls on staple goods including rice, sugar, fuel and power. This was a strategic shift from his previous focus on freeing up billions of dollars to allocate to much-needed infrastructure.

The hit to infrastructure plans may continue as many of the projects were centred around West Java, but have failed to gain the President strong support. They also tend to increase foreign debt and weaken the currency, for which Jokowi and his party have been criticised. This will not improve the currently stagnant economic growth, which if improved could see Indonesia reach the position of the seventh biggest economy in the world by 2030.