Jayanty Nada Shofa, Jakarta – A delay in the 2024 election would only lead to problems, including investors' distrust and disruption to the new capital megaproject, according to an Indonesian think-tank following the Central Jakarta District Court's controversial ruling.
The court on Thursday issued a ruling that ordered the General Election Commission (KPU) to postpone the 2024 election. An election postponement, however, could spark political instability. And this would be bad news for Indonesia, a country that has been trying to woo investors left and right.
"Political instability can disturb the investment climate. Now imagine if it is uncertain when the election will take place. Businesses, investors, and the banking sector will struggle to design their future investment strategies. The business world and investment climate need political stability," Arya Fernandes, a researcher at the Center for Strategic and International Studies (CSIS), told a media briefing in Jakarta on Friday.
"Political instability will only trigger distrust from both domestic and foreign investors," Arya said.
The 1945 Constitution mandates the general election shall take place every five years.
"A rigid quinquennial election schedule gives businesses time to predict future political risks. For instance, their expectations of the newly elected government," Arya said.
According to Arya, the political instability that ensued from the delay can lead to a reversal in the ease of doing business that the regulation in lieu of law on job creation promises.
"The government will also likely struggle to execute national strategic projects, namely the construction of the new state capital in Kalimantan," Arya said.
Indonesia has set a goal to attract Rp 1,400 trillion ($91.3 million) in investment this year.
In 2022, the Southeast Asian country attracted an investment of Rp 1,207.2 trillion, topping the year's target of Rp 1,200 trillion.
The government reported that Indonesia would need Rp 466 trillion to build its dream new capital in East Kalimantan. Eighty percent of the funding will come from the private sector.
Last year, the newly formed Justice Prosperous People's Party (Prima) failed to pass the verification test by KPU, hence disqualifying the former from the upcoming election. Prima then launched a lawsuit against KPU at the Central Jakarta District Court. The court on Thursday ruled in favor and urged the KPU to suspend the remaining election process for 2 years, 4 months, and 7 days.