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Indonesia’s Capital Votes for Leader in Race With National Reach

Residents in Indonesia’s capital vote for governor today in a race that may test support for candidates running for president of Southeast Asia’s biggest economy in 2014.

Fauzi Bowo, the current Jakarta governor backed by Indonesia’s second-biggest political party, faces challenger Joko Widodo, the mayor of a city 2,700 kilometers (1,677 miles) away who has received support from former vice presidential candidate Prabowo Subianto. Widodo topped Bowo by seven percentage points in the election’s first round in July.

The contest pits an outsider with a Christian running mate in a Muslim-majority city against an incumbent with support from Golkar, the party that former dictator Suharto used to stay in power for three decades. The winner must govern a metropolis with 9.6 million people that has no mass transit system and lags behind other regional capitals in quality of life.

“This is a transformational vote for the whole country,” said Dennis Heffernan, director of Jakarta-based Van Zorge, Heffernan & Associates, which provides business advice. “If people all over the country see that with their own voting power they can overcome the barriers set up by the establishment, it’ll be an awakening.”

President Susilo Bambang Yudhoyono, who has led Indonesia since 2004, can’t run for office again in 2014. Subianto led Golkar’s presumed presidential candidate and three others in a July survey of 1,480 respondents in 32 provinces by the Centre for Strategic and International Studies, The Jakarta Post reported.

Roads, Airports

Yudhoyono has pledged to build more roads, ports and airports to achieve average economic expansion of 6.6 percent by the end of 2014. In July, the central bank lowered its 2012 growth forecast to about 6.1 percent to 6.5 percent, from a previous estimate of as much as 6.7 percent.

The Jakarta Composite Index (JCI) has gained 11 percent this year, trailing behind benchmarks in Thailand, Singapore and the Philippines, according to data compiled by Bloomberg. The rupiah has lost 5 percent in that time, the worst performer among Asia’s 11 most traded currencies.

The governor race appears tight. Joko led Bowo by less than one percentage point, according to a poll by Indonesia Survey Institute and Tempo released Sept. 16 that had a margin of error of plus or minus 5 percent.

Jakarta ranked 181 out of 221 cities for personal safety in a survey conducted last year by advisory company Mercer that ranked internal stability, crime levels and law enforcement effectiveness. The city ranked 140 in overall quality of life, below Singapore, Kuala Lumpur, Bangkok and Manila.

About 400 Indonesian protesters clashed with police outside the U.S. Embassy in Jakarta this week in a demonstration against an anti-Islam film, throwing rocks and using slingshots. The city has seen two major terrorist attacks in the past decade, with bombings at hotels in 2003 and 2009 killing 19 people.

Transit System

Both candidates have pledged to improve the mass transit system, which has been delayed since studies were first conducted in the 1980s. Traffic gets so bad that motorists pay bystanders to join them in car-pool lanes during rush hour.

“The drivers prefer younger children, especially the female drivers,” Sumardin, a 12-year-old boy who earns about 150,000 rupiah ($12.58) per day riding in cars, said on a recent morning as he waited for work. “They are scared we will get in the car and try to rob them, so small children get more customers.”

PT Mass Rapid Transit Jakarta, a company owned by the city, plans to award the first construction contract next month for a $1.8 billion project transit system with more than 110 kilometers of rails, spokesman Manpalagupta Sitorus said in an e-mailed response to questions on Sept. 14. Traffic congestion leads to economic losses of about 12.8 trillion rupiah a year, according to its website.

A proper transportation system may make Jakarta more attractive to investors, according to Tai Hui, head of regional research at Standard Chartered in Singapore.

“No one wants to hang around Jakarta,” he said. “The culture is there, the people are nice, but the infrastructure, the traffic, is just a nightmare. A public transportation system is long overdue.”

To contact the reporters on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net; Yudith Ho in Jakarta at yho35@bloomberg.net

To contact the editor responsible for this story: Greg Ahlstrand at gahlstrand@bloomberg.net; Tony Jordan at tjordan3@bloomberg.net

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