Foreign Investors Sell Indonesian Assets if Prabowo Subianto is Elected
A survey of the Deutsche Bank, one of the world’s leading financial service providers, showed that the foreign business community will not be content if Prabowo Subianto takes over the presidential seat from incumbent president Susilo Bambang Yudhoyono. According to this survey, 56 percent of respondents are planning to sell Indonesian assets if the electorate chooses Subianto as next president in the election that is scheduled for 9 July 2014. About 13 percent answered to buy Indonesian assets in the same scenario.
However, if Joko ‘Jokowi’ Widodo will be elected as new Indonesian president, then 74 percent of the survey’s respondents decide to buy Indonesian assets, whereas only six percent declared to sell Indonesian assets if Jokowi becomes Indonesia’s new leader from October 2014.
The survey, released on 9 June 2014, only involved 70 investors who were contacted in the months of May and June 2014. About 87 percent of these respondents indicated that the upcoming presidential election is crucial for making investment decisions with regard to Indonesia.
Subianto is generally not favoured by foreign investors due to his controversial background. He was one of the cronies in Suharto’s authoritarian New Order regime; a regime which was characterized by corruption within an oligarchic system (this system still exists today). Moreover, on more than one occasion, Subianto has been linked to human rights violations when still acting as army officer (in the 1980s and 1990s). His election would therefore be a major setback to the Indonesian reform movement.
Secondly – and at the expense of foreign interests – Subianto advocates resource-nationalism.
Indonesia’s presidential race is a race between Jakarta Governor Joko Widodo (joined by running mate Jusuf Kalla) and Prabowo Subianto (joined by Hatta Rajasa). Although most popularity polls still indicate that Jokowi is in leading position, there remains a large segment of undecided Indonesian voters. Moreover, the political party coalition that backs the Subianto-Rajasa pair is larger (Golkar, Gerinda, PAN, PPP, and PKS) than the coalition that supports Widodo-Kalla (PDI-P, NasDem, PKB and Hanura). This has led to speculation that the gap between both competitors has narrowed.