[JAKARTA] With as many as 204 million Indonesians set to head to the polls to elect their next president on Wednesday (Feb 14), local and foreign investors are waiting patiently on the sidelines for the right signals to deploy their funds.

At the top of their wish list is political stability and the continuity of economic policies introduced by outgoing President Joko Widodo, market analysts told The Business Times.

In the last 10 years under Widodo – or Jokowi, as he is popularly known – Indonesia has maintained sound fiscal policy, they said. This has in turn allowed the government to spend heavily on everything from infrastructure to education and healthcare.

Indonesia’s economic and political stability under Widodo’s two terms have also endeared the country to equity investors. According to a recent report in Bloomberg, Indonesia has been the third-best performing stock market after India and the US over the past decade.

“Any change in leadership and economic direction will make investors think twice about continuing to invest in Indonesia,” said an analyst who declined to be named. “There is a lot of money on the sidelines which will be deployed as soon as the elections are over.”

The analyst added: “Investors are hoping to see peaceful elections and the next president continuing with policies that have been implemented by the current government. Everyone is hoping for a result in the first round, as that will remove any uncertainty.”

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For months, Indonesians have been gearing up for what is billed as the world’s biggest single-day election.

The three men looking to succeed Widodo for the next five years are Defence Minister Prabowo Subianto, former Jakarta governor Anies Baswedan, and former Central Java governor Ganjar Pranowo.

Before the campaign drew to a close over the weekend, two opinion surveys projected that 72-year-old Prabowo – who is making his third attempt to be president – would secure more than 50 per cent of the votes on Wednesday, making him the outright winner.

Anies and Ganjar are at least 27 and 31 points behind him, respectively.

Under Indonesia’s election laws, a presidential candidate must clinch over 50 per cent of valid votes cast. If none of the three manage to do so, the top two performers will square off in a second round in June.

Among the trio, Prabowo has committed to continuing Widodo’s key economic policies and direction – in particular, the development of Nusantara, the country’s new capital city in East Kalimantan.

Prabowo has paired up with Widodo’s 36-year-old son Gibran Rakabuming Raka as his running mate, with the move widely seen as a bid to woo the country’s young and more digitally savvy population.

Roughly half of the registered voters in Indonesia are under the age of 40; analysts say this large group will be key in determining the outcome of the election.

Attracting capital

Foreign direct investment will be critical to Indonesia’s economic growth in the coming years, particularly in the manufacturing and downstream processing industries.

Under Widodo, the country has bet heavily on nickel processing to become a heavyweight player in the emerging electric vehicle (EV) sector.

Wijayanto Samirin, a senior member in Anies’ campaign team, said the former Jakarta governor and his running mate Muhaimin Iskandar are very open to investors, and will implement business-friendly policies if they are successful in the election.

“We welcome investors,” said Wijayanto. “We will ensure that businesses, either small or big, will be able to realise their potential. We want to promote economic growth, fairness and sustainability.”

While he recognised that investors may delay their business decisions until the election outcome is finalised, he noted that Indonesia’s macroeconomic conditions are sound, and that there should be no major disruption regardless of which candidate is victorious.

On the outlook of the rupiah, Wijayanto said there will be an impact on the currency – not because of the elections, but due to the decrease in the price of commodities, given that they represent about 60 per cent of Indonesia’s total exports.

“The situation will be more challenging if the elected president fails to maintain budget sustainability by continuing to rely on public debt to finance its spending,” he added.

As Indonesia awaits the results of the poll, political observers said the next president will have to grapple with an increasingly uncertain external geopolitical climate; meeting the aspirations of a fast-growing middle class; and ensuring that economic growth is more inclusive, given the rapid pace of urbanisation.

Plenty at stake

Apart from picking their next president, tens of thousands of candidates are competing for about 20,000 national, provincial and district parliamentary positions. Some 10,000 candidates from 18 political parties are jostling for places in the 580-seat national parliament.

While the full results will take weeks to tally, the public can look forward to early results – known as “quick count” in Indonesia – based on sampling. Many private polling and survey groups are set to deploy thousands of staff and volunteers to polling nations across the country.

The quick count has, in the past, proven to be a fairly reliable indicator of what the final outcome will be when all the votes are counted.