Indonesian markets welcome projected Jokowi win

JAKARTA, Indonesia (UPDATED) – Indonesian stocks rallied on Thursday, July 10, after most unofficial tallies showed Jakarta governor Joko Widodo ahead of ex-general Prabowo Subianto in a closely fought race to lead Southeast Asia’s biggest economy.

Both candidates declared victory Wednesday, July 9, in the tightest and most divisive presidential election since the downfall of dictator Suharto in 1998.

However the polling agencies considered most reliable indicated a Jokowi win, and the Jakarta benchmark index surged more than 2.5 percent at the open.

Official results are not expected until July 22.

Investors have been hoping for victory for the Jakarta governor, the first serious presidential contender without deep roots in the Suharto era, seeing him as a potential reformer and clean leader in a graft-ridden country.

Prabowo, who was a top general in the Suharto era and has been dogged by allegations of human rights abuses, is seen as less friendly to overseas investors.

His speeches on the campaign trail have been marked by fiercely nationalistic rhetoric and pledges to further squeeze foreign companies operating in Indonesia.

While Jokowi also adopted a more nationalistic tone during campaigning, Bank of America Merrill Lynch said he was seen as more market-friendly and open to foreign investment than Prabowo.

“Investors were unnerved over the past two months by Prabowo’s rising popularity,” said the bank, according to Dow Jones Newswires.

Jokowi was far ahead in the polls several months ago, but his lead shrank dramatically before election day in the face of a well-run campaign by Prabowo and a flood of negative attacks.

However, despite the initial market euphoria, concerns are also growing about a long period of uncertainty, which could unnerve investors.

‘History has been made’

Official results are around two weeks away. Even if Jokowi is then declared the winner, Prabowo can still challenge the result in the Constitutional Court, potentially dragging out the process for weeks.

Amid worries that the closely fought race could cause unrest, President Susilo Bambang Yudhoyono last night met both candidates at his official residence outside Jakarta and urged them to wait until the official results before holding major celebrations.

“We call on all party members and volunteers not to organize a parade, it’s better just to give thankful prayers,” Jokowi said late Wednesday after meeting the president.

Nevertheless the euphoria among his camp was clear.

On Wednesday evening, he gave a victory speech at a central Jakarta park, telling thousands of flag-waving supporters: “History has been made – this is a new chapter for Indonesia.”

Several polling agencies, which have accurately predicted the result of previous elections in Indonesia, gave Jokowi a lead of four to five percentage points.

Prabowo, 62, however insisted that survey agencies followed by his camp gave him a narrow lead. He relied on three, less well-known agencies.

He gave a fiery speech Wednesday evening, urging people to respect the official results and warning: “Do not ever think that we are weak, do not ever think that we can be trampled.”

Should he be declared the official winner, 53-year-old Jokowi is seen as likely to usher in a new style of leadership and consolidate democracy.

He shot to prominence in 2012 when he was elected Jakarta governor, and won legions of fans with his common touch. He would make regular tours of the metropolis’s sprawling slums in casual clothes. (READ: Jokowi: Break from the past)

Prabowo, in contrast, was head of the feared special forces under Suharto, admitted ordering the abduction of democracy activists before the dictator’s downfall in 1998 and was formerly married to one of his daughters. (READ: The remaking of Prabowo)

He has won support by playing up his military background, in a country where many have a yearning for a strong leader, but critics fear he may roll back democratic gains made since the fall of Suharto.

Some 190 million voters were eligible to cast ballots in Indonesia’s third direct presidential election since the end of authoritarian rule.

Polling went smoothly across the country, from eastern Papua to the main island of Java and jungle-clad Sumatra in the west, and no major disruptions were reported. – Rappler.com