May 20 (Bloomberg) -- Indonesian presidential frontrunner Joko Widodo tapped former vice president Jusuf Kalla as his running mate for July elections, as his main opponent formed a coalition with the country’s second-biggest party.
Widodo, 52, has been finalizing his coalition for the July 9 ballot to lead Southeast Asia’s largest economy, getting the support of three other parties. His main competitor, ex-general Prabowo Subianto, 62, from the Gerindra Party, yesterday added Golkar to his alliance, confounding expectations Golkar would tie up with Widodo’s Indonesian Democratic Party of Struggle, or PDI-P.
In naming Kalla, a former Golkar chairman, as his vice presidential candidate, Widodo gains an experienced hand who can help him steer his economic changes through parliament if he wins the election. Still, the Gerindra-Golkar union could complicate that task.
A Widodo government “will face a strong opposition at the parliament,” said Yose Rizal, founder of politicawave.com, which tracks political discourse on the Internet. “Gerindra doesn’t get Golkar entirely because JK, who’s one of Golkar’s senior figures and with his own supporter base, is siding with Jokowi,” he said, referring to Kalla by his initials and Widodo by his nickname.
The Widodo-Kalla pairing is expected to get the support of 44 percent of voters, based on a survey by Indikator Politik Indonesia conducted before the announcement. The rupiah is the best performer this year among 11 major Asian currencies tracked by Bloomberg, amid expectations Widodo will accelerate infrastructure construction and curb fuel subsidies.
“The two of us will bring a movement of change to this country we love,” Widodo said in Jakarta yesterday as he announced Kalla as his vice presidential candidate. He said the decision was made after consulting the alliance partners of PDI-P, as well as PDI-P chairwoman Megawati Soekarnoputri.
“Jokowi-JK is the right combination,” Djayadi Hanan, a political analyst from the University of Paramadina in Jakarta, said by phone. “JK can complement Jokowi’s weaknesses in terms of economic and international policies, and government experience.”
Kalla, 72, a businessman and chairman of the Indonesian Red Cross Society, was vice president during the first term of President Susilo Bambang Yudhoyono. Together they lifted subsidized fuel prices in 2008, the first increase in three years. Widodo will aim to gradually reduce fuel subsidies, which act as a drag on the state budget, over four years, he said in an interview on May 3.
The rupiah was little changed at 11,418 against the dollar yesterday in Jakarta, according to prices from local banks, having earlier touched 11,342, the strongest level since April 10. The Jakarta Composite Index fell 0.3 percent, its first drop in six days.
“We’ve seen in the first term of SBY, when there was JK, policies were implemented faster,” said Soni Wibowo, a director at PT Bahana TCW Investment Management, which manages about $1.98 billion in assets in Jakarta, referring to Yudhoyono by his initials. “Subsidies need to be removed, infrastructure developments need to be continued and populist policies need to be balanced with fiscal capability.”
PDI-P, which has been in opposition for 10 years, won the most seats in the April parliamentary vote, getting 109 spots against 91 for Golkar. PDI-P’s alliance consists of the National Democratic Party, the National Awakening Party and Hanura.
Golkar did not win enough votes or seats in the parliamentary ballot to nominate chairman Aburizal Bakrie as a presidential candidate. The party has found “chemistry” with Gerindra and will join its coalition, Nurul Arifin, deputy secretary general at Golkar, said yesterday.
Prabowo’s probable running mate will be Hatta Rajasa, who resigned last week from the government as coordinating minister for the economy to focus on the presidential election. Prabowo’s coalition includes some Islamic parties as well as Golkar.
The Indikator Politik Indonesia survey, which polled 1,220 people from April 22 to 26 with a margin of error of plus or minus 2.9 percentage points, found 29 percent would choose a team of Prabowo and Rajasa.
Presidential candidates need at least 50 percent of the vote in the world’s third-largest democracy, with at least 20 percent of votes in each province in more than half of the country’s provinces. If they fall short they will face a second round election in September.
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