Kuala Lumpur, Kompas – Domestic and foreign investors in Indonesia's capital markets don't care about the background of the presidential candidates who will be competing in the presidential elections on July 5. A military or civilian background will not have a significant influence on decisions by capital market investors on whether they invest capital in Indonesia. For them the economic vision of the presidential candidates are far more important.
This issue was raised by a number of capital market investors who attend a seminar titled "Investment Conference on Indonesia – Evaluating Investment Opportunities" in Kuala Lumpur, Malaysia, which ended on Friday May 14.
Kompas journalist Ferry Irwanto reports that the seminar was held to promote potential capital market investment in Indonesia among Malaysian investors and was linked with the Malaysian government's new policy which allows Malaysian investors to invest capital overseas to the value of 10 per cent of their capital market investments in Malaysia.
Malaysian analysts and capital market investors are of the opinion that the military background of an Indonesian presidential candidate will not influence them in making a decision to invest capital in Indonesia. What will influence their decision is the vision and economic platform of the candidates. They said that to date not one presidential candidate has a clear economic vision.
Waiting for a vision and platform
The analysts and Malaysian capital market investors attending the seminar, as well as analysts from the Centennial Group Manu Bhaskaran Inc, acknowledged that [former coordinating minister for politics and security and Democratic Party presidential candidate] Susilo Bambang Yudhoyono represented the most popular presidential candidate in the eyes of foreign capital market investors. They said however that not one of the presidential candidates had a clear economic vision, including Yudhoyono. According to the participants, popularity alone will not have much influence on the flow of investment into Indonesia. Their position at the moment therefore is one of wait and see.
It is the same for domestic capital market investors. According to the executive director of P.T. Danareksa, Zas Ureawan, capital market investors in Indonesia are only around 10 per cent of the total population. There is a clear demarcation [in the views of] capital market investors who are only around 10 per cent and the rest of the Indonesian population.
"The experience over the last few years indicates that there is a clear demarcation between the public's response to political conditions and decisions taken in the capital markets", he said.
"In Indonesia's capital market at the moment, what is having an influence is actually regional factors, not political factors, except if mass rioting were to occur as it did in 1998 [prior to the resignation of former President Suharto]. The weakness of the value of the composite share index (IHSG) which has occurred over the last few days was caused by regional factors, not political factors", he said.
Although domestic capital market investors also do not care very much about the military or civilian background of a presidential candidate, according to Ureawan they are hoping that there isn't opposition against presidential candidates originating from the military in the initial stages of the elections. The reason for this is that they are concerned that opposition against a presidential candidate originating from the military will result retribution being taken.
"We hope, [that the public will] let military [candidates] nominate themselves. If we oppose a president from the military, we can do this on election day by means of not voting for them. If there is opposition before [the elections] even get started, there is concern that those who are being opposed will take retribution", said Ureawan.
[Translated by James Balowski.]