Aloysius Unditu – Effendy Choirie has lost count of the T-shirts, baseball caps and food packages he has given away since he began campaigning for re-election to Indonesia's parliament.
"That's the only way to win votes," said Choirie, one of more than 11,000 candidates running for office in April 9 elections in the world's third-largest democracy. "I will have to spend billions of rupiah to keep my seat. I have to do whatever I can."
Choirie and the other candidates may spend enough to temper an economic slowdown in Indonesia as political parties lay out the equivalent of 1 percent of gross domestic product to seek support from 171 million voters. That's more than three times the comparable campaign expenditures in last year's US elections, about 0.3 percent of GDP.
"Spending on the elections will provide a much-needed cushion for consumer spending," said Eric Sugandi, an economist at Standard Chartered Bank in Jakarta. "Political parties that have been collecting funds over the last four years will be spending them directly on campaigns."
After former dictator Suharto was toppled in 1998, Indonesians across the archipelago's 18,000 islands have embraced democracy. This week's elections will see 38 parties vying for 692 seats in parliament: 560 in the lower house and 132 in the less powerful upper chamber.
Presidential vote
Presidential elections are set to follow in July, with opinion polls showing that incumbent Susilo Bambang Yudhoyono, 59, is likely to be returned. In 2004, the last time elections were held, Southeast Asia's biggest economy posted its fastest acceleration in growth in five years.
The Asian Development Bank last week forecast that Indonesia's $433 billion economy will grow by 3.6 percent in 2009, down from 6.1 percent last year. That's still better than the contractions the ADB is forecasting for neighboring Singapore, Malaysia and Thailand.
Indonesia is still a "major outperformer in the region," said Robert Prior-Wandesforde, an economist at HSBC Holdings Plc in Singapore, who expects GDP growth to rebound to 4.5 percent next year from 2.5 percent in 2009.
Indonesia's benchmark stock index has risen 11.9 percent this year, making it Southeast Asia's best-performing stock measure after plunging 50.6 percent in 2008. Thailand's key index has declined 0.9 percent this year, while in Kuala Lumpur, the benchmark has risen 5.4 percent.
Clothes with photo
Choirie, 46, a member of the National Awakening Party, founded by ex-president Abdurrahman Wahid, is seeking a third term. The legislator reckons he has already spent more than 1 billion rupiah ($88,400) buying clothing printed with his image in Solo, central Java, and business cards embossed with his photo from a company in Senen, central Jakarta.
Government ministers agree the Indonesian economy is likely to get a lift from this year's campaign spending, which Destry Damayanti, an economist at PT Mandiri Sekuritas in Jakarta, estimates will reach $4.3 billion in a $433 billion economy.
"If we take a big cut, then expectations are higher," Finance Minister Sri Mulyani Indrawati said in a Jan. 6 interview, adding that the elections "will stimulate demand" and help "maintain the purchasing power of households."
Indonesia experienced an "improvement" in growth before elections in June 1999 and April 2004, particularly in domestic demand, wrote Lim Su Sian, an economist at DBS Group Holdings Ltd. in Singapore in a research report.
Following history
"Both the general and presidential elections could provide the economy with a lift if history is anything to go by," said Lim. "There have been four polls since free elections were first held in 1999 and in each case the economy fared well in the election aftermath."
Still, this year's campaign spending may not be enough to stop the Indonesian economy from slowing amid the global recession. Overseas shipments declined 32.8 percent in February to $7.08 billion from a year earlier, after plunging the most in more than 22 years in the previous month.
In the US, presidential and congressional candidates in the 2008 election cycle spent a record $4.1 billion, according to figures from the Federal Election Commission in Washington.
Advertising companies are looking forward to a pickup in election spending as well. Total ad expenditures are expected to jump 25 percent this year due to political campaigns, said Mika Randini, a manager at market research firm ACNielsen in Jakarta. Political and government ad spending increased 87 percent to 41.7 trillion rupiah last year from 22.2 trillion rupiah in 2004, when Indonesia held its first direct presidential election, according to ACNielsen.
T-shirts, sarongs
Spending by candidates on T-shirts, business cards and banners has benefited such entrepreneurs as Endang Mahmud, who runs a printing business in Cililitan, East Jakarta, and Bambang Dananto, an apparel and sarong trader from Solo.
"This is a blessing for my business," said Mahmud. Orders by political parties and legislators more than doubled, to 500 million rupiah a month in January compared with 200 million rupiah early last year.
Mahmud, who employs 10 people, has recruited 20 more on temporary contracts to finish outstanding orders.
Dananto, for his part, said he is hiring an extra 15 laborers at a rate of 100,000 rupiah a day to deliver sarongs to candidates in East Java and Central Java. "I need workers to help handle distribution and logistics," he said. "I don't care how they got the money but all I care is that they pay cash."