Investors should look beyond the divisive and religiously charged Jakarta election and take confidence from a peaceful voting day as a sign of stability in the country, officials and business leaders said.
Quick count results show that Anies Baswedan, the candidate backed by Muslim hardliners and conservatives, won the runoff election by a landslide against incumbent Governor Basuki “Ahok” Tjahaja Purnama, a Christian of Chinese descent. The latter ran a doomed campaign in the Muslim-majority capital while facing false blasphemy allegations, despite having scored high approval ratings of his performance in office.
“There are many questions about the impact and result of the dramatic election on investment,” Investment Coordinating Board (BKPM) head Thomas Lembong said on Thursday (20/04).
“I think [the impact on investment] will be positive, because the election took place in an orderly and peaceful manner,” he said on the sidelines of The Economist Events’ Indonesia Summit in Jakarta, where policy makers, investors, regulators, academics and business leaders gathered to get an update on economic conditions in the country.
Talks at the summit were dominated by the second round of the Jakarta gubernatorial election, which took place just a day before the event.
Prominent business leaders at the summit also expressed optimism in the new leaders’ ability to govern Jakarta, where about a sixth of Indonesia’s economic output was generated last year.
“The most important thing for the business sector is stability and the fact that yesterday’s election ran smoothly is very important,” Lippo Group director John Riady said.
John said Anies and his deputy, Sandiaga Uno, must boost infrastructure and find ways to reduce traffic congestion and flooding, while also improving the welfare of Jakarta residents.
“Sandi is a businessman, so he must understand exactly what we want and what’s best for the economy,” he said.
However, Shinta Widjaja Kamdani, deputy chairwoman of the Indonesian Employers Association (Apindo), said some foreign investors are concerned about the way sectarian issues played out during the election campaign period.
“They are worried that what happened in Jakarta can be replicated elsewhere and that [the use of issues related to] race and religion can win the election,” she said.
Shinta said investors also have many factors to consider that are not related to Wednesday’s election and its aftermath, before investing large amounts of money in Indonesia.
“Now we will support Anies, so he will be able to develop Jakarta; to understand the role of the business sector and to help the businesses sector solve the problems they face,” she said.
The BKPM has set a foreign and local investment target of Rp 679 trillion ($51 billion) for this year and Rp 860 trillion for next year.
Last year, the agency reported that the total value of foreign investment that came into the country amounted to Rp 397 trillion, which was 8.4 percent higher compared with a year earlier. This also exceeded the target of Rp 386 trillion.