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Wiranto's rise makes markets nervous

Source
Australian Financial Review - May 26, 2004

Andrew Burrell – Sprawling across the entire 21st floor of one of Jakarta's ritziest office towers, the campaign headquarters of presidential contender Wiranto is filled with solemn loyalists plotting the strongman's campaign.

"These offices are on loan from a businessman friend of MrWiranto," explains Fachrul Razi, a top campaign strategist and a long-time ally of Indonesia's former military chief.

The "loan" of the headquarters at the Menara Imperium building – where Tommy Soeharto in his heyday would routinely land his chopper on the roof to party at the top-floor nightclub – is a sure sign that Wiranto has friends in all the right places.

On the eve of Indonesia's month-long presidential campaign, Wiranto's camp has plenty of work to do: he still trails the frontrunner, retired general Susilo Bambang Yudhoyono, by a wide margin.

But a credible opinion poll to be released this week will show Wiranto enjoying a solid pick-up in support since his surprise nomination last month as the candidate for Golkar, Indonesia's most popular political party.

The survey will confirm that Wiranto, the former adjutant to deposed dictator Soeharto, has begun his inevitable climb in the polls – his popularity has consistently been rated in the low single digits – that some believe could culminate in his swearing-in as president in October.

Wiranto's strategists are planning a television campaign next week that will emphasise his strong leadership and patriotism.

One of these ads could be particularly effective: it features 1998 footage showing Wiranto, who was military commander at the time, decked out in full regalia making a speech. Behind him is Yudhoyono, his then subordinate.

Wiranto will also travel, using a private jet, to all of Indonesia's 32 provinces, backed by Golkar's extensive machine and flush with funds from mystery donors.

Wiranto's aides are confident they still have several months to build on his popularity, convinced that the election will go to a second round in September between the top two from the initial poll on July 5.

"We have never thought that there will be only one round to the election. The assumption is there will be a second round because no one will win more than 50 per cent of the vote," says Fachrul, a former deputy chief of the armed forces.

"We are more optimistic now since we [Golkar] won the legislative election [on April 5] with 21 per cent of the vote. And we have a bigger political vehicle compared to the other candidates."

Wiranto's camp believes he can win, at most, 40 per cent of the vote on July 5, given he will have the backing of former president Abdurrahman Wahid's National Awakening Party, which won 11 per cent of the vote last month.

Indonesia's election commission has blocked Wahid from running on health grounds.

Wiranto, who has been indicted for war crimes by the United Nations for his role in the East Timor bloodshed in 1999, is not the preferred choice for president by Australia and the United States.

And, increasingly, it seems he is also not the choice of the financial markets or foreign investors, who would prefer to see Yudhoyono and his market-friendly running mate, Jusuf Kala, in charge.

What makes many foreign business people especially nervous is that Wiranto's main economics adviser is Rizal Ramli, a nationalistic former chief minister for the economy who is known for his bitter relationship with the International Monetary Fund.

Insiders believe Ramli will be restored to his old job should Wiranto win the election, imperilling any hopes of spurring foreign investment.

Wiranto's rise, and the general uncertainty in Indonesia, is already making the markets jumpy.

The belief that the election will be closer than anyone had thought is one of the factors behind the recent weakness in Jakarta's stockmarket.

"We are now seriously factoring in the possibility that Wiranto could be president of Indonesia," a leading Jakarta broker said last week. "And there is a belief that he would not be market friendly."

Back at Wiranto's headquarters, Fachrul, a retired four-star general, denies rumours that Wiranto's campaign will be largely funded from Soeharto family coffers.

This is despite the fact that Wiranto has already won the backing of the former president's daughter Tutut, whose own party failed to win enough votes for her to contest the presidential election.

"Tutut will support but will not give any money," he says.

Fachrul also scoffs at suggestions that the human rights abuse allegations against Wiranto – a UN-backed tribunal has issued an arrest warrant – will prove a factor among grassroots voters.

His record on promoting reform in Indonesia would outweigh the East Timor claims, he predicts.

And Fachrul insists that the election will be fought cleanly.

"For us, we will not undermine other candidates ... everyone has the same chance to become a winner."

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