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Widodo Indonesia Presidency Path Complicated After Vote

Photographer: Adek Berry/AFP/Getty Images

Voters check their ballot papers while they vote for parliament members during legislative polls in Jakarta on April 9, 2014. Close

Voters check their ballot papers while they vote for parliament members during... Read More

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Photographer: Adek Berry/AFP/Getty Images

Voters check their ballot papers while they vote for parliament members during legislative polls in Jakarta on April 9, 2014.

Indonesian presidential frontrunner Joko Widodo may need to form a coalition to get elected after his party appeared to capture an unexpectedly slim lead in parliamentary voting.

Widodo’s Indonesian Democratic Party of Struggle, or PDI-P, took 19.7 percent of the votes in the nation’s parliamentary elections yesterday, based on an unofficial tally by Lingkaran Survei Indonesia. That was about half the level projected in a March poll. Formal results won’t be declared until May 9.

Because of Indonesian election laws, Widodo, 52, now may have to form an alliance in order to stand in July’s presidential election. That would limit his ability to carry out reforms in Southeast Asia’s largest economy, expectations of which have helped push up the Jakarta stock market 17 percent in the last three months.

“Instead of a small, effective coalition centered on a strong PDI-P, he now faces the prospect of a fragmented, multi-party coalition,” Marcus Mietzner, an associate professor at the Australian National University in Canberra, said by e-mail.

The biggest Indonesia exchange-traded fund fell 3.5 percent yesterday and rupiah forwards dropped 0.5 percent as the estimates by polling companies showed the PDI-P got less of the vote than investors had anticipated. Jakarta stocks have jumped this year on expectations Widodo will win in July and boost investment in the economy.

Golkar, Gerindra

“The dynamics of the presidential race itself remain unchanged,” Mietzner said. Exit polls taken during yesterday’s parliamentary voting “demonstrated that Jokowi would have won the elections with a large margin,” Mietzner said, referring to Widodo by his nickname.

A Roy Morgan poll in March had Widodo as the preferred presidential choice of 45 percent of voters, 30 percentage points ahead of his closest contender, former general Prabowo Subianto.

Among other parties in the parliamentary elections, Golkar, the party of tycoon Aburizal Bakrie, 67, had 14.6 percent of the vote and Gerindra, whose candidate for president is Subianto, 62, had 11.9 percent, according to LSI. The Democratic Party of outgoing President Susilo Bambang Yudhoyono stood at 9.7 percent, it said. LSI had monitors at polling stations during the vote count.

PDI-P collected 19 percent of the vote, ahead of Golkar with 14.8 percent, according to polling company Saiful Mujani Research & Consulting, based on results from voting booths in its survey. Other post-election surveys echoed that outcome.

‘Cooperation’

Widodo indicated late yesterday that he may have to align with other parties in order to be able to stand for president in the world’s third-largest democracy.

“We don’t want to talk about coalitions, we want to talk about cooperation to resolve the big problems of this big nation,” Widodo said on Metro TV. He was then joined in a panel by former vice-president Jusuf Kalla of Golkar, State-Owned Enterprises Minister Dahlan Iskan, of the Democratic Party, and Jakarta Deputy Governor Basuki Purnama, of Gerindra.

The result shows an absence of the “Jokowi effect” that may have come because PDI-P didn’t do a good enough job of associating him with the party, said Paul Rowland, a political analyst based in Jakarta who was formerly Indonesia country director for the National Democratic Institute, a non-government advocacy group.

Under Indonesian election rules there are two ways for a party to run a presidential candidate by itself. It needs to capture 25 percent of the popular vote in the parliamentary elections, or it needs to win 20 percent of the 560 parliamentary seats.

Two-Round Election?

“I think it would be a serious disappointment for them if they fall short of 20 percent of the seats in the house,” Rowland said. “It may mean that you have a two-round election instead of a single-round presidential election.”

President Yudhoyono, who is unable to stand again after two terms, governs with a coalition of five other parties.

Stocks (JCI) and the rupiah rallied after Widodo’s candidacy was announced last month, on optimism he would get things done on issues from infrastructure to tax collection, to bolster an economy that grew at the slowest pace in four years in 2013.

More than 185 million people were eligible to vote yesterday for the 12 parties contesting across the archipelago. It was the fourth election since the downfall of dictator Suharto in 1998.

The parliamentary make-up after the election will “still look rather ‘Balkanized’, increasing the chance that any coalition which comes into power may consist of an unwieldy group of parties, rather than just two or three with reasonably similar political platforms,” Wellian Wiranto, a Singapore-based economist at Oversea-Chinese Banking Corp., said in an e-mailed comment.

“One reason why the outgoing administration has had a rather lackluster term in office is due to the multi-party ‘Rainbow Coalition’ that it has had to maintain in the parliament, which proved to be a drag on the pace of economic reforms,” Wiranto said.

To contact the reporters on this story: Neil Chatterjee in Jakarta at nchatterjee1@bloomberg.net; Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Dick Schumacher

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