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Southeast Asia

Indonesia Election 2014

Igor Dirgantara

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From November 2013 to January 2014,  Faculty of Social and Politics, University of Jayabaya (UJ), periodically conducted surveys related to the electability of the political parties and the presidential and vice-presidential candidates for the 2014 elections.

The results show that the electability of the Democratic Party and the Prosperous Justice Party (PKS) have been decreasing following corruption cases. The survey was conducted in 33 provinces by taking a sample of 1225 people which have the right to vote (aged 17 years and over. or not yet 17 years old but already married). The margin of error is + / – 2.8% and the confidence level is 95%. Population Data were collected through interviews withrespondents using techniques based on the questionnaire.

When asked whether the respondents still believe that the PKS is a “clean party”, about 66% said “not sure”. Only 15.7% of respondents believe that the PKS is still a “clean party”, the rest (18.3%) did not know. When asked whether the party of which the cadres are most involved in corruption cases, as many as 67.3% of respondents mentioned the Democratic Party. PKS came in as distant second at 5.8% and has taken over from Golkar Party. which is now mentioned as third (5.2%). When I asked respondents, the party to be selected if elections wereheld today.only 6.9% would vote for the Democratic Party. Only 2.6% would vote for PKS, much lower than their result in 2009, which was 8%.

In terms of electability, the Golkar Party remained in the top position with 18.9%. When referring to the results of a survey of various other research institutions, Golkar’s chance to win the 2014 election seems pretty open. The Golkar Party is still being followed by PDI-P with a rate of 16.8% electability. Gerindra, which in the 2009 elections ended in eighth place, according to my survey electability has now reached the level of 10.3% and is in third place.

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The high electability of the Golkar Party is apparently inversely proportional to chairperson Aurizal Bakrie (ARB), which is in a fifth position as presidential candidate, at 8.7%. This is far below JokoWidodo (Jokowi) which ranks as the first public option among the most potential candidates (15,1 %).

Jokowi is a symbol of new hope for the people. He is simple, honest and populist. Jokowi is showing togetherness between the leaders and the led. “He is one of us”. Jokowi quite successfully managed to bring himself to the public with a policy in which he often visits slums in Jakarta. If in the United States (U.S.) people were disappointed with the war on terrorism of President Bush and elected Barrack Obama, it is possible that if Jokowi steps forward as a 2014 presidential candidate, Indonesian people will chose him because of their disappointment overthe war on corruption under President SusiloBambangYudhoyono during the second period from 2009 to now.

On average, respondents said they agree that if Jokowi would run for the presidency, and would not be concerned if Jokowi did not finish the job until his term as Jakarta Governor until 2017. Only 26% of respondents would not agree. Jokowi, who is PD1-P cadre.also received support from other party voters. For example, 26% of Golkar voters would choose Jokowi, as would 33.5% of Democratic Party voters, 13.8% of Gerindra voters, 35.1% of Hanura voters, 35.1%, 26.7% of PAN voters and 59.5% of PKS voters. The passing away of MPR Chairman Taufik Kiemas of the PDI-P should open the possibilities for younger party cadre, such as Jokowi in order to get a maximum results. instead of proposing the older chairperson MegawatiSoekarnoputri as candidate.

PRABOWO SUBIANTO VS JOKOWI
Jokowi electability level surpasses its competitors. The nearest is only Prabowo Subianto (13,9%). If the 2014 presidential election took place in two rounds where Jokowi would go head to head with Prabowo. But Prabowo Subianto and Gerindra Party requires extra efforts to get support from other parties to form a coalition. For that he continued his guerrilla to garner support. Of whom he had met were Hatta Rajasa, Chairman of the PAN, and Susilo Bambang Yudhoyono, the Chairman of the Democratic Party (PD). He was also diligent in communicating with a number of leaders of other parties, including the PDI-P. As a presidential candidate, Prabowo fits the bill on a number of levels. He was Megawati’s running mate in her unsuccessful 2009 campaign, and he will have learned much from that. His reputation feeds the belief that Indonesia needs a return to assertive leadership, while his association with the former first family strikes a chord among the cross section of Indonesians who feel let down by democracy and who harbour a genuine nostalgia for the Suharto era.

It would be very interesting if the two favored public figures then do not get tickets in contestation. Other figures will be born. The names that are under them will pop up, among them, Megawati, Bakrie, Hatta Rajasa, Dahlan Iskan, Mahfud MD, Jusuf Kalla, and so on. If that happens, a new candidate will emerge. Proponents of Jokowi and Prabowo Subianto will be disappointed, some will survive to follow the motion of the party, and others will move wildly following their own logic. The figures that follow PD convention will have an opportunities. Related to the Partai Demokrat’s convention, State Minister for State Owned Enterprises, Dahlan Iskhan, still chairing the convention, followed by Pramono Edhi Wibowo, Gita Wirjawan, Anis Baswedan, and Dino Patti Djalal.  It is very likely that Democratic Party will step down from their status of incumbent in the next general election of 2014. If their kept their position as the top 3, there will still be a chance to nominate their convention winner as presidential candidate – even though if they need to do a coalition with other parties. If not, then whoever picked as their candidate will only be feasible to be a potential vice president candidate.

Currently, the candidates are not dealing with incumbent or a candidate supported by the ruling party. Even the two names, Jokowi and Prabowo, come from the opposition party. There is excitement to correct public policy or seek a different atmosphere from the color of the current ruler. These two figures represent the antithesis of SBY. Jokowi is a rustic figures, common people, not handsome, simple, informal, and so on. This contrasts with SBY; handsome, elegant, charming, and formalistic. While Prabowo represent nationalistic thinking, assertive, and pro-people – at least as his speech. This is in contrast with the image of SBY who over consider the interests of the world and foreign investors, closer to the elite, and too cautious in decision making.

All of this indirectly answers the two questions at the beginning. The 2014 presidential election is not as simple as one might imagine, especially over the spread of electability numbers of various polls. The numbers are not fully pro Jokowi. Still, there is a possible rise of surprises. First, if the Court annulled the candidacy requirement of 20 per cent to three per cent. Secondly, if there is a mistake of Jokowi as governor and his supporters. The fanatical supporter’s attitude as shown in the world of social media and the birth of Pro Jokowi movement has a weak point of its own. Third, if a figure exists that could encapsulate all the expectations of the voters. Prabowo Subianto, who has a handicap in the past, was accepted because he carries this message. This expectation is also reflected in the high popularity of Dahlan Iskan and Jusuf Kalla. Still, the popularity of the President also shows that the public wants harmony, order, and decency. On the other hand, the public is still easily swept away by advertising and traditional loyalty. The color of pragmatism is a reality that remains in any society.

PROGRAM PARTY

Based on the findings the Survey, people crave the emergence of an alternative leadership figure. The people like leaders who have a love of integrity, and who are honest. clean. populist, and have a strong commitment to the reform agenda. such as the eradication of corruption. and a good track record. The people would consider a candidate who has the ability to solve national problems, especially economic problems.

Results from various surveys taken, Prabowo Subianto, electability-wise, is by far the strongest competitor for Jokowi. According to media monitoring, including social media, that the writer did, it was obvious that Prabowo – as well as Jokowi – is the leader figure that the people are talking about. Prabowo’s popularity able to counterbalance that of Jokowi’s. The public perceive Prabowo as a firm and bold figure. Not only that, he is also considered have the capability to solve Indonesia’s chronic problems, which are corruption, poverty, and security. Prabowo is being assessed as a candidate with the clearest and definite vision and mission compared to others, especially the one that related to his “Ekonomi Kerakyatan” programme, like the one of 1 billion fund policy for every village in Indonesia if he were to be elected as the next President come 2014. Prabowo clearly supported by Gerindra party as their 2014 Presidential Candidate, whereas Jokowi, who still leads other 2014 presidential candidates’ electability, at the moment still waiting for a certainty to be nominated as his party’s, PDI Perjuangan, presidential candidate, or still waiting for the official final decision to be made by the PDIP’s chairperson, Megawati Soekarnoputri. Meanwhile, the main problem for Prabowo centers on whether Gerindra will be able to breakthrough the 20 percent parliamentary threshold required, in order to avoid being forced to do a coalition with other parties and be able to nominate their own candidate(s). Moreover, nominating Prabowo Subianto as their presidential candidate is a must for them. If Gerindra able to achieve 20 percent of legislative slots, then the next strategy, which will be crucial, for Prabowo is his eye in choosing the perfect companion for the vice president position, who would be able to widen the public’s support for him.

In general, the results of the survey show several trends:
First, there is a real possibility that the Democratic Party will be replaced as the largest political party by Golkar or PDI-P. The apparently never ending internal conflicts on the alleged involvement of some party leaders in a number of cases of corruption is hijacking the Democratic Party and this could last into next year. This is not to mention the issue of dynastic politics, of which President SBY is often criticized. Therefore.the desire of the Democratic Party by the President SBY to hold the Democratic convention later in the month of July-August 2014 could be interpreted as an effort to increase the popularity and electability.

Second,  the political map in the House of Representatives will likely become much simpler due to the decreasing number of political parties that will achieve national parliamentary seats, as the parliamentary threshold is increased from 2.5 to 3.5 percent.
Third, it is possible that the largest political party will not get morethan 30 percent. so that seats are more evenly distributed over all parties participating in the elections. Indonesian voters make their choice based more on emotion. For either party with a good image or able to improve its image, there is an abundance of opportunities from swing voters. But parties of which the image is damaged by “cases”, will likely lose disproportionally. PDI-P and Golkar Party tend to have a stable electorate.

Fourth, there is the possibility that Islamic and Islamic-based political parties (National Mandate Party -PAN, the National Awakening PartyPKB , the Prosperous Justice Party – PKS. the Crescent Star Party – PBB and the United Development Party-PPP) will be eliminated in the 2014 election. Factors are public policy mistakes made by these parties, and the absence of presidential candidates or high profile leaders. The declining of electability of Islamic parties could bring about “poros tengah” (central axis) discourse a coalition between Islamic parties, considering there are still potentials of votes from Indonesian population that are mostly Muslims.

Fifth, the 2014 election is the momentum of the transition generation. Currently only the PDI-P and the Democratic Party give ample space for the emergence of young leaders in 2014. About 40-70% of the productive age group (18-40 years) who become potential voters want change in 2014. and this is reflected in the orientation and preferences of those who like the new lc,ider figures. The Democratic Candidates convention November 2013-March 2014 has a chance to end the gerontocracy (rule led by the majority of the elderly) in Indonesia. In the 2014 general election, there will be a potential of novice voters, in which most of them consist of young people and used to using the internet, as big as 40 percent of the total voters. Therefore, campaign using “cyber warrior” and social media could be the more effective way to generate their votes.

Sixth, is the tendency of those who do not use their right to vote in the upcoming election (abstentions). This is also reflected in the considerable number of swing voters, i.e. those who do not or not yet provide a political choice (undecided voters). It is also visible in a floating mass who are disappointed in the current ruling political parties and in thetransactional politics (horsetrading). The young people are seen to have the ability and integrity, and candidates matter more than political parties.

Seventh,  politics is always concerned with probabilities. Therefore, manuvers, strategy, and the choice of political party elites will remain crucial in the 2014 election beyond the limits in the program and the issues or platforms of each party. In this context, the practice of money politics will still be used to expand support, followed by highly flexible political manuevering to serve the needs and intrests of the parties and their leaders.

Igor Dirgantara is Lecturer at Faculty of Social Politics, University Jayabaya, Jakarta, and Director Survey & Polling Indonesia (SPIN).

Southeast Asia

Infrastructure Drive, Strong Domestic Demand to Sustain Philippine Growth

MD Staff

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The Philippines’ economic growth is expected to sustain its quick pace in 2018 and 2019 as the government’s infrastructure program is rolled out, says a new Asian Development Bank (ADB) report.

In its new Asian Development Outlook (ADO) 2018, ADB projects Philippine gross domestic product (GDP) growth at 6.8% this year and 6.9% in 2019, up from 6.7% in 2017. Rising domestic demand, remittances, and employment, in addition to infrastructure spending, will drive growth. ADO is ADB’s flagship annual economic publication.

“Along with domestic demand, the government’s infrastructure investments will fuel the country’s growth in the next few years, supported by a sound economic policy setting,” said Kelly Bird, ADB Country Director for the Philippines. “We expect this growth to further lift wage employment numbers, add to household incomes, and benefit more poor families across the archipelago.”

The Philippines remained one of the strongest growing economies in Southeast Asia in 2017. Domestic investment recorded 9% growth last year, moderating from a brisk 23.7% in 2016, although growth in fixed investment in industrial machinery, transport equipment, and public construction remained robust. Household consumption grew by 5.8% in 2017, from 7% in 2016, on the back of higher remittances and employment, with the unemployment rate falling by 1.3 percentage points to 5.3% in January 2018 as 2.4 million jobs were added. Public spending rose by 7.3% last year from 8.4% in 2016.

Consumer price inflation reached 3.2% last year from 1.8% in 2016 due to strong economic growth, higher international fuel prices, and Philippine peso depreciation, but well within the 2% to 4% target by the Bangko Sentral ng Pilipinas—the country’s central bank. The country’s external debt further declined to 23.3% of GDP in 2017, from 24.5% of GDP in 2016.

Moving forward, ADB projects services will continue to drive GDP growth, along with manufacturing and construction industries. The approval of the Tax Reform for Acceleration and Inclusion law in December 2017 will augment tax revenues and provide additional fiscal space for more progressive public spending. The policy reforms are expected to yield additional 90 billion to 144 billion Philippine pesos ($1.73 billion to $2.76 billion) in tax revenue collection in 2018 and 2019, respectively.

With economic growth gaining momentum, inflation is projected to reach 4% in 2018 as global oil and food prices rise, and higher excise taxes on some commodities take effect. In 2019, meanwhile, inflation is expected to marginally decline to 3.9%.

The report notes there are external risks to the Philippines’ growth outlook from heightened volatility in international financial markets and uncertainty about global trade openness, although the country’s strong external payments position would cushion these effects.

A major policy challenge to the country’s growth outlook, according to the report, is managing the rollout of the government’s “Build, Build, Build” infrastructure program, which is expected to raise public infrastructure spending to 7.3% of GDP by 2022 from 4.5% in 2016. The report provides suggestions on ways to enhance government capacity, including strengthening coordination between government agencies and improving technical capacity of staff within these agencies, and fostering stronger partnerships between government agencies, the private sector, and development partners.

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Southeast Asia

Securing the future prosperity of the Greater Mekong Subregion

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The Greater Mekong Subregion (GMS) countries have made stunning progress over the past quarter century. Once plagued by poverty, they are now economic success stories.

The GMS Economic Cooperation Program has contributed significantly to this transformation. Since it was established in 1992 as a means to enhance economic relations and promote regional cooperation, its six member countries—Cambodia, the People’s Republic of China, Lao People’s Democratic Republic, Myanmar, Thailand, and Viet Nam—have built a platform for economic cooperation that has mobilized almost $21 billion for high-priority infrastructure projects. Foreign direct investment into the subregion has surged ten-fold and trade between its countries has climbed from $5 billion to over $414 billion.

But the subregion faces challenges to its prosperity. Further reducing poverty, climate change adaptation and mitigation, energy efficiency, food security, and sustainable urbanization remain priorities of the GMS Program. Countries also face new challenges, including growing inequalities, rising levels of cross-border migration, and the potential impact on jobs of the fourth industrial revolution.

Moreover, GMS countries have agreed to significant commitments under the Sustainable Development Goals and the Paris Agreement on climate change.

There are also emerging opportunities for the region, including incorporating new technologies in various sectors such as education, agriculture, health, and finance. GMS countries are situated at the crossroads of South and Southeast Asia, and hence they can benefit from the increased momentum for growth in South Asia.

As GMS leaders gather this week in Ha Noi to chart the future of the program, it’s a good time to consider how a new generation of initiatives can ensure the GMS Program remains relevant and responsive to the subregion’s needs.

The Ha Noi Action Plan and the GMS Regional Investment Framework 2022, both proposed for adoption at the Summit, provide a platform for countries to strengthen their cooperation through continuous innovation. These two documents will have a sharpened focus on the GMS Program’s strategic goals of enhancing connectivity, competitiveness, and community in the subregion.

Connectivity, the first objective, has been dramatically improved. More than 10,000 kilometers of new or upgraded roads and 3,000 kilometers of transmission and distribution lines have been added under the program. These transport networks have been transformed into an interconnected network of transnational economic corridors, building on 25 years of work to extend the benefits of growth to remote areas. The Ha Noi Action Plan calls for the continued expansion of these economic corridors to boost connectivity both between and within countries.

The subregion’s competitiveness is improving through ongoing efforts to facilitate transport and trade flows, enhance agriculture exports, and promote the GMS as a single tourism destination after receiving a record 60 million visitors in 2016. Looking ahead, it will be important to continue cutting red tape and to remove remaining barriers to transport and trade.

Finally, communities are being strengthened through cross-border initiatives to control the spread of communicable diseases, expand educational opportunities, protect the subregion’s rich biodiversity, and mitigate the impacts of climate change.

GMS countries have identified a new pipeline of 227 projects worth about $66 billion under the GMS Regional Investment Framework 2018–2022. These projects will expand economic prosperity by developing cross-border transport and energy infrastructure.

ADB, which has been the program’s secretariat since its inception, expects to provide $7 billion over the next 5 years for a range of projects supporting transport, tourism, energy, climate change mitigation and adaptation, agribusiness value chains, and urban development. This builds on more than $8 billion in financing provided by ADB so far under the program.

To deliver these projects and make headway on other priorities such as infectious disease control and environmental preservation, strong partnerships are vital. The GMS Program depends on the collaboration of many stakeholders, including local administrations and communities, development partners, academia, and the media.

The GMS will benefit from strengthened partnerships with other regional and global cooperation platforms, leading to new opportunities for future development.

Partnerships with the private sector will also be increasingly important, and it is gratifying to see them deepening through the GMS Business Council, the Mekong Business Initiative, the e-Commerce Platform, GMS tourism and agriculture forums, and the recent Finance Sector and Trade Finance Conference.

I am optimistic that the subregion will meet its challenges and capitalize on emerging opportunities. By working together, GMS countries can deliver rapid, sustainable, and inclusive growth for another 25 years and beyond. ADB will continue to be an important and trusted partner in that endeavor.

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Southeast Asia

Vietnam continues to reduce poverty

MD Staff

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Poverty in Vietnam continues to fall, particularly amongst ethnic minorities, who saw their rate of poverty decline significantly by 13 percentage points, the largest decline in the past decade, says a new World Bank report.

According to Climbing the Ladder: Poverty Reduction and Shared Prosperity in Vietnam, released today by the World Bank, improving income from highland agriculture can help Vietnam further reduce poverty, which has fallen by almost 4 percentage points since 2014, to 9.8 percent in 2016. Ethnic minorities – many of them living in highland areas – account for 72 percent of Vietnam’s poor, and encouraging them to grow more profitable industrial crops may improve their earnings.

“Vietnam has achieved tremendous results in reducing poverty and improving the quality of life for millions. The decline in poverty amongst ethnic minorities is encouraging, and more focused efforts on improving their incomes can further broaden their opportunities and reduce persistent inequalities,” said Ousmane Dione, World Bank Country Director for Vietnam. “The aspirations of those with less opportunities cannot be ignored.”

Outlining recent trends and patterns of poverty in Vietnam, the report proposes solutions for that untapped agriculture potential in highland areas where the poor are concentrated. Land use and cropping decisions, for example, contribute more to agriculture income differences between households. Low-income families in highland areas use their land to grow basic crops such as rice or maize instead of raising more profitable crops such as coffee, black pepper, or rubber.

Improving access to credit may help highland farmers make the necessary investments for higher-earning agricultural production. Strengthening earning capacity can help narrow inequalities between groups.  The average per capita consumption of ethnic minorities, for example, remains less than 45 percent of the Kinh and Hoa. Moreover, the poor faces a widening gap in terms of access to upper secondary education and improved water and sanitation.

At the same time, the report recognizes that 70 percent of Vietnam’s population is now classified as economically secure, including the 13 percent who are now part of the global middle-class. These income classes are growing rapidly, rising by over 20 percentage points between 2010 and 2017. An average of 1.5 million Vietnamese joined the global middle class each year since 2014, confirming that households continue to climb the economic ladder after escaping poverty. The rise of the consumer class changes society’s aspirations and the focus of the poverty and shared prosperity agenda shifts from combatting extreme poverty to effecting broad improvements in the quality of life and supporting the further expansion of the middle class. Rapid job creation and an ongoing transition to wage employment are driving gains in poverty reduction and shared prosperity.

The report suggests several areas of strategic priorities to further reduce poverty and promote shared prosperity, including:

  • Boosting labor productivity and investing in infrastructure to sustain job creation and wage growth without losing competitiveness.
  • Implementing education reforms designed to equalize opportunities and develop workforce skills.
  • Spurring agriculture structural transformation through changing farmland use patterns, strengthening land user rights, and improving skills of the poor farmers.

While reducing inequality remains a challenge, the report notes that the number of individuals vulnerable to falling back into poverty declined to only 2 percent between 2014 and 2016. In contrast, the period saw the middle class expanding by more than 3 million people.

One of the prioritized areas under the new World Bank Group Country Partnership Framework with Vietnam for the period from FY18 – FY22 is inclusive growth, with a specific objective for the “economic integration of the poor and vulnerable groups” under which the Bank will provide support for targeted interventions to expand economic opportunities for people in lagging areas.

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