July 21 (Bloomberg) -- Indonesia’s election commission is in the final stages of the vote count in a presidential ballot where both candidates claim victory, as police prepare for possible street protests that may spur capital outflows.
Outgoing President Susilo Bambang Yudhoyono warned the political situation could “boil” should the losing candidate refuse to accept defeat, while police are on alert with official results expected tomorrow. Steven Darmadi, managing director at Bless Tour travel agency in Jakarta, is heading for Singapore, fearing the result -- and a possible court challenge -- could spark protests similar to those in 1998 that ousted dictator Suharto.
“It’s unpredictable seeing as how both candidates won’t concede defeat,” Darmadi, 48, said. “It’s not hard to incite a riot in Jakarta when people are so impassioned about the issue.”
Ensuring a calm transfer of power is crucial for Indonesia as it seeks to assure investors the nation’s closest election in more than a decade won’t erode the democratic and economic progress of the past 16 years. Finance Minister Chatib Basri has said the next president will inherit a “fragile” economy, and growth slowed to the weakest pace since 2009 in the first quarter as policy makers struggle to contain a widening current-account deficit that weighed on the rupiah.
Former general Prabowo Subianto, 62, has disputed unofficial tallies by survey companies that show 53-year-old Jakarta Governor Joko Widodo, known as Jokowi, leading by as much as five percentage points in the July 9 vote.
“A smooth transition of power to Jokowi is important because it demonstrates that Indonesian democracy is consolidating,” said Terence Lee, an assistant professor of political science at the National University of Singapore who has been studying Indonesia since 1998. “Prabowo has vehemently refused to concede even an inch to Jokowi, so that’s the wild card that analysts are unable to play out; we’re unable to read Prabowo’s mind.”
The rupiah plunged 19 percent across May 13 and 14, 1998, as protests, sparked by soaring food and fuel prices and inflation at 45 percent, spread across the country. The uprising eventually led Suharto, then Asia’s longest reigning ruler, to step down. Since the Suharto era the country has embarked on a major decentralization of power and introduced direct elections for local officials through to the presidency.
Yudhoyono said this month that July 22 is a “critical time” and urged the election commission to involve both candidates in the vote-counting process to reduce the chance of protests. Army chief Moeldoko and national police head Sutarman, both of whom go by one name, have been called on to guard the process, Yudhoyono said in a July 11 phone call record uploaded to his official YouTube account.
Prabowo’s coalition will contest the official result in the constitutional court, the country’s highest, if its legal team gathers the evidence to do so, he told reporters July 14. Yesterday his team called on the General Elections Commission, known as the KPU, to halt the vote count, saying there was evidence of “massive” election fraud to affect the outcome.
“We demand what has been pledged by the law,” Prabowo told reporters in Jakarta. “We question this process and we could consider this process as flawed.”
The Elections Supervisory Agency, known as Bawaslu, has recommended voting be repeated in six regencies in East Java province and 5,814 polling stations in Jakarta, said Idrus Marham, secretary-general of the Golkar party, which is in an alliance with Prabowo. Bawaslu has said it ordered recounting at 13 polling stations.
A court challenge by Prabowo would mean another month of uncertainty for voters and investors in the world’s third-largest democracy.
“It has to be in line with the law,” Jokowi’s running mate Jusuf Kalla told reporters last night. “If the law says July 22, then July 22. It’s not our will. If there’s any one against it, it’s against the law.”
The KPU has scheduled the results announcement for tomorrow, Commissioner Arief Budiman said in a text message last night.
“If a clash happens, the sentiment will very quickly turn for the worse,” Dian Ayu Yustina, an economist at PT Bank Danamon, the nation’s fifth-largest lender, said in a July 17 interview, of the prospect of post-result protests. “The concern is, even if Prabowo himself concedes defeat, his supporters might not accept it.”
In a speech in Jakarta last night to officials from various parties, Yudhoyono called for a smooth election result.
“When a nation is divided it is not easy to put it back together,” he said. “We will hear the calling to guard this historical process responsibly for a peaceful and democratic election,” he said. “I call on all parties and all Indonesian people to guard the election until the last stage of the election succeeds.”
More than 3,100 police officers conducted exercises at the election commission’s office on July 19 to anticipate “chaos” after the official results, the Jakarta Globe newspaper reported last week, citing spokesman Rikwanto. Police are ready to intercept any mass mobilization and ensure the situation remains calm, Rikwanto was quoted as saying.
“It is difficult to completely outrule a repeat of 1998, but the likelihood is much smaller,” Ulla Fionna, a fellow at the Institute of Southeast Asian Studies in Singapore, said in an e-mail. “The police and the military seem more ready to maintain peace, and the outgoing president SBY would want to ensure that his last months in government are not tarnished by riots,” she said, referring to Yudhoyono by his initials.
The rupiah may rise toward 11,300 per dollar, from the 11,615 close on July 18, if Jokowi’s victory is confirmed, HSBC Holdings Plc foreign-exchange strategist Paul Mackel wrote in a July 10 note. The rupiah rose 0.2 percent to 11,594 at 8:30 a.m. in Jakarta.
An uncontested victory for Jokowi would see Indonesian markets rally further, Andrew Tilton, chief Asian economist at Goldman Sachs Group Inc, wrote in a July 10 report.
Jokowi secured 52.9 percent of the 129 million or 98 percent of votes counted, with Prabowo on 47.1 percent as of July 18, according to KawalPemilu.org, a volunteer-run website that tracked actual results uploaded to the election commission’s website.
International funds have pumped $4.9 billion into the nation’s stocks so far this year, pushing the Jakarta Composite Index to rise to near a record high last week.
“We expect some foreign investors to add on to their current investments should Jokowi win the election with no protests or violence,” Nizam Idris, head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd., said in a July 17 interview from Singapore. “Conversely, massive protests could see those large amount of current investments exit the country.”
Protests are a fact of life in democratic Indonesia, according to the NUS’s Lee. Demonstrations erupted across Indonesia in June last year as Yudhoyono’s administration raised the price of subsidized fuel for the first time since 2008.
Even so, the cost to fly to Singapore from Jakarta with AirAsia Bhd peaks for flights today. The cheapest fare for one passenger rose to 1.7 million rupiah ($146) for that day, from 564,000 rupiah on July 19, according to Traveloka.com when checked on July 18. The price drops to 1 million rupiah for July 22 flights.
Fares reflect demand and seat availability for trips on certain days, Lucas Suryanata, head of communications at the airfare search website, said in an e-mailed response to questions on July 18.
“You can’t rule out the possibility of unrest,” said Edward Aspinall, a professor of politics at the Australian National University in Canberra. “This is by far the most bitterly contested presidential succession that we’ve seen in Indonesia for over a decade now, so it wouldn’t be a good sign for Indonesia’s democracy for there to be widespread violence.”
To contact the editors responsible for this story: Rosalind Mathieson at firstname.lastname@example.org Neil Chatterjee