Presidential elections in Indonesia 2024: favorite, candidates and effects on the economy

Presidential elections in Indonesia 2024: favorite, candidates and effects on the economy

On February 14, 2024, presidential elections take place in Indonesia. At the same time, the national parliament and parliaments of the 38 provinces are chosen. The incumbent President Joko Widodo, who is no longer allowed to run after two terms, has three potential successors: Prabowo Subianto, Minister of Defense, Ganjar Pranowo, former governor of Central Java, and Anies Baswedan, former governor of Jakarta. According to surveys, Prabowo Subianto is the favorite for the choice.

In Indonesian politics, personalities are often more important than parties, which is why political opponents are happy to enter into alliances when it comes to their own interests. The election campaign in Indonesia mainly takes place through social media and primarily serves to maintain the image of the candidates. Topics such as economy, workplace acquisition, corruption and the environment play an important role.

The economic policy focus of the candidates is likely to differ significantly from previous politics. Indonesian economic policy is protected, with exports promoted and imports are to be minimized. Industrialization is intended to promote protectionist measures in order to achieve higher added value in the country. It is expected that all three candidates will be captured on the export ban for nickel ores, although it was declared illegally by the WTO.

Foreign companies are still reluctant to expansion plans to Indonesia. The state intervenes massively into economic events, both through legislation and its powerful state -owned companies, which dominate many industrial areas. The integration into international supply chains and the lack of specialists make the settlement difficult. Indonesia pursues a foreign policy of neutrality that is expected to be retained after the election.

Although Indonesia is a “Upper-Middle Income Economy” according to the World Bank and has an average annual economic growth of over 5 percent, there are structural deficits. The country depends heavily on the export of raw materials such as coal and palm oil, the proportion of industry is low and technological know-how is missing. Indonesia plans to become an industrial company by 2045, but is expected to rely on technology imports. This could offer opportunities for German companies. The trade in China is very dominant with a share of 25 percent, while German exports to Indonesia currently only make up about 0.2 percent, compared to the significantly higher exports to Singapore, Malaysia and Thailand.

Further information on the Indonesian economy is available on the Germany Trade & Invest (GTAI) website. GTAI is the business development agency of the Federal Republic of Germany and informs German companies about foreign markets and supports foreign companies in the settlement in Germany.

Source: Germany Trade & OTS