No major changes expected after elections
Dadan Wijaksana, The Jakarta Post, Jakarta
The investment community hopes the general election will result in a winning party that can promote stability and certainty, which is crucial to ensure the current pace of economic reform, experts say.
The last thing the country needs is an abrupt change in terms of policy, as it could shake investors' confidence and make the market nervous, Citigroup economist Anton Gunawan said on Tuesday.
Citigroup is one of the leading global investment banks operating in the country that manages huge amount of investments on behalf of domestic and international investors.
"The business sector, based on what we've garnered from our clients, puts stability on top of everything, which then brings certainty. It means businesses can continue, plus improvements here and there along the way -- but gradually, not drastically," Anton told The Jakarta Post.
A gradual change should give clear direction as to where the economy, which has just started to recover from the late 1990s economic crisis, was moving and also give more predictability to doing businesses here, Anton added.
A stock analyst at a local securities firm, who asked for anonymity, agreed. He said that, judging from the political map, it was likely that whoever won the elections would bring about stability and certainty.
"Currently, at least based on various surveys, those who have a fair chance of winning the elections is not far from the top five parties, those that did well in the 1999 elections.
"So, in order to maintain the status quo, I don't think there will be major changes proposed by those parties, which would suit the market well," he said.
As voting day for legislative seats is scheduled for April 5, the country is entering the second round of indoor campaigns.
Concerns that the campaigns could turn violent have so far proved unfounded.
The decline in the Jakarta Stock Composite Index in the past week was caused more by the gloomy global sentiment, following the terrorist attacks in Madrid.
The two experts agreed that although some parties planned drastic changes to the country's economy, their slim chance of winning the elections meant it was unlikely their programs would see the light of day.
Anton cited as examples some Islamic-based parties that were calling for a sharia economy, which would have a massive impact on Indonesia's economy.
"But even if they unite and form a coalition, which many political observers find highly unlikely, I still doubt they could win the elections," he said.
The United Development Party (PPP), the Reform Star Party (PBR), the Prosperous Justice Party (PKS) and the Crescent Star Party (PBB) are among those that have include sharia in their platforms, including in their respective economic programs.