Indonesia’s new reformist leader

Joko Widodo may have won Indonesia's presidential election, but reforming the economy won't be easy.

Joko Widodo has been declared the winner of the presidential election by Indonesia's election commission. The former salesman, who went on to become a successful governor of the capital Jakarta, won 53% of the vote, becoming the fifth president since the country embraced democracy in 1998.

His opponent, Prabowo Subianto, plans to mount a challenge, but isn't expected to get far, as independent observers were satisfied the vote was fair. Widodo will take over in October.

What the commentators said

Taking a stand on subsidies will be key, said William Pesek on Bloombergview.com. If Widodo can push through a timetable for their removal, he would not only free up money for spending on infrastructure, but also unlock foreign investment in it, as it will be clear that Indonesia is no longer wasting money but is "open for business". "Subsidy roll-backs are [also] a litmus test for attacking graft."

These programmes are "the ultimate cookie jar for wayward politicians", who divert at least $21bn a year from fuel subsidies alone. But he could struggle, warned Ben Bland in the FT. His coalition has only 37% of the seats in parliament, and his own party was "lukewarm" about his run for president.

His lack of experience on the national stage could also hamper his attempt to give Indonesia's $900bn economy the kick it needs.

Recommended

I wish I knew what an emerging market was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what an emerging market was, but I’m too embarrassed to ask

This week's “too embarrassed to ask” explains what emerging markets are, and why you might want to invest in them.
9 Sep 2020
Bullish investors return to emerging markets
Stockmarkets

Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
Beware the hidden risks when investing in emerging markets
Investment strategy

Beware the hidden risks when investing in emerging markets

Emerging markets look cheap compared with developed countries, but earnings may be less trustworthy.
23 Dec 2019
Emerging markets: buy when the news is bad
Emerging markets

Emerging markets: buy when the news is bad

Emerging markets are being squeezed by local turmoil and by more general factors. But bad news can spell opportunity for investors.
5 Nov 2019

Most Popular

Oil producers are back at their Covid-19 lows – is it time to buy?
Oil

Oil producers are back at their Covid-19 lows – is it time to buy?

With demand for oil hammered by Covid-19 and talk of “peak oil demand”, there are lots of good reasons to be bearish on oil producers. So, asks John S…
22 Sep 2020
Why you should stuff your end-of-pandemic portfolio with Chinese stocks
China stockmarkets

Why you should stuff your end-of-pandemic portfolio with Chinese stocks

For an end-of-pandemic portfolio, you need assets that can cope with today’s volatility. And that, says Merryn Somerset Webb, means Chinese stocks.
14 Sep 2020
IAG's share price is ready for take-off - here's how to play it
Trading

IAG's share price is ready for take-off - here's how to play it

The owner of British Airways has had a turbulent year, but is now worth a punt. Matthew Partridge explains the best way to play it.
8 Sep 2020