Indonesia Leader Takes Over Ruling Party as Support Fades

Photographer: Dario Pignatelli/Bloomberg

Indonesian President Susilo Bambang Yudhoyono’s decade at the helm of Southeast Asia’s biggest economy is nearing an end as a trade deficit pummels the rupiah and the economy expands at the slowest pace in more than two years. Close

Indonesian President Susilo Bambang Yudhoyono’s decade at the helm of Southeast Asia’s... Read More

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Photographer: Dario Pignatelli/Bloomberg

Indonesian President Susilo Bambang Yudhoyono’s decade at the helm of Southeast Asia’s biggest economy is nearing an end as a trade deficit pummels the rupiah and the economy expands at the slowest pace in more than two years.

Indonesia’s ruling Democrat Party selected the country’s president, Susilo Bambang Yudhoyono, as chairman as it seek to overcome corruption probes and revive its popularity before elections.

The party’s leadership chose Yudhoyono to succeed Anas Urbaningrum at an extraordinary congress in Bali yesterday, said Transport Minister Evert Erenst Mangindaan, who led the meeting. Urbaningrum, who was named chairman in May 2010, resigned last month after becoming at least the third senior party official in less than two years to be investigated by the country’s anti- corruption agency.

Yudhoyono, who must step down after his maximum second- consecutive presidential term ends next year, may help the party regain credibility, said Kuskridho Ambardi, a political analyst at the University of Gadjah Mada. “The SBY factor is still attractive to some voters,” Mada said text message, referring to Yudhoyono’s initials.

The Democrat Party’s approval rating sank to 8.3 percent in February, according to a survey by Saiful Muljani Research & Consulting. It won 20.85 percent of the national vote in the 2009 legislative election and 148 of parliament’s 560 seats.

Yudhoyono’s decade at the helm of Southeast Asia’s biggest economy is nearing an end as a trade deficit pummels the rupiah and the economy expands at the slowest pace in more than two years. Yudhoyono will serve two years at most as chairman, Mangindaan said. Parliamentary elections are scheduled for next April, followed by the July ballot for president.

Corruption Probes

Former Democratic Party treasurer Muhammad Nazaruddin was sentenced in April 2012 to almost five years prison in a bribery case involving building projects for the 2011 Southeast Asian Games. Youth & Sports Minister Andi Mallarangeng resigned in December after he was named a suspect in a case related to a sports center in Bogor, West Java. Chairman Urbaningrum was named a suspect in the same case last month. Both men denied any wrongdoing.

Rival parties are gaining support. Former President Megawati Soekarnoputri, chairwoman of the Indonesian Democratic Party of Struggle, is leading the presidential race at 20.7 percent, followed by Golkar Party Chairman Aburizal Bakrie at 20.3 percent, according to a March survey by the Indonesian Survey Circle, the Jakarta Post reported March 18.

“If we look at the surveys, none of the popular candidates are from the Democrat Party,” Fauzi Ichsan, Jakarta-based economist at Standard Chartered Plc (STAN), said in an interview before yesterday’s meeting in Bali. “So whatever the outcome is at the congress, its relevancy to the presidential election will be small.”

Yudhoyono Victories

Yudhoyono has had some recent victories. A parliamentary committee approved his choice for central bank chief, Finance Minister Agus Martowardojo, by a vote of 46 to seven on March 26. Martowardojo’s plan to raise fuel prices was scuttled last year by violent protests including an advance on parliament.

The nomination of Martowardojo as governor of Bank Indonesia (BBRI) may be an attempt to sideline him from government decisions and “open the door for a more profligate approach to fiscal policy ahead of the election,” Gareth Leather, a London- based Asia economist at Capital Economics Ltd., said in a March 11 report.

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

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

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