Bloomberg News

Indonesia’s Presidential Candidates Trade Barbs on Graft

July 07, 2014

Indonesian Election Debate

Jusuf Kalla, vice presidential candidate, speaks next to Joko Widodo, governor of Jakarta and his running mate as presidential candidate, during a debate against opponents Prabowo Subianto, presidential candidate, second from left, and Hatta Rajasa, vice presidential candidate, in Jakarta, Indonesia, on July 5, 2014. Photographer: Dimas Ardian/Bloomberg

Indonesia’s presidential candidates sparred over vested interests and corruption impeding the country’s economic progress, in a final debate ahead of this week’s neck-and-neck election.

Vice presidential contender Jusuf Kalla, 72, the running mate of Jakarta Governor Joko Widodo, said the two had no “mafia” standing by their side and asked Widodo’s challenger, former army general Prabowo Subianto, who he was referring to in comments about the risk of a kleptocracy in Indonesia. Prabowo, speaking in the July 5 televised debate, said democracy was at risk of drowning in improper practices.

The efforts of both sides to tout their commitment to fighting graft, in a country which ranked 114th among 177 countries in a 2013 Transparency International survey on corruption perceptions, shows how tight the race is ahead of the July 9 vote. Survey company Roy Morgan said the election is “too close to call,” as its latest poll showed 52 percent support for Widodo, known as Jokowi, and 48 percent for Prabowo.

Indonesia's Nationalism

“Since there is no oil mafia, beef mafia, rice mafia, sugar mafia, no hajj mafia nor forestry mafia on our side, the question is to whom was your speech about kleptocracy addressed to?” Kalla, a former vice-president, asked Prabowo, referring in part to the Islamic pilgrimage to Mecca. “I’m not saying there are no thieves in my party,” responded Prabowo, 62. “The spirit of democracy is being destroyed by many things. It can be from my party,” he said.

The rupiah and local stocks rallied as investors speculated Jokowi may win the election after his performance in the final debate. The rupiah gained 1.5 percent, the most this year, while Jakarta’s benchmark index closed 1.7 percent higher.

“Jokowi’s record when it comes to corruption seems better compared to Prabowo, so the debate reflected well on him,” said Irene Cheung, a Singapore-based strategist at Australia & New Zealand Banking Group Ltd.

Beef Prices

The presidential candidates, seeking to replace Susilo Bambang Yudhoyono, who can’t stand for a third term, have pledged to curb corruption, build infrastructure and reduce income inequality in Southeast Asia’s biggest economy. In forestry, mismanagement and illegal logging may have prevented more than $7 billion flowing to state coffers from 2007 to 2011, costing the government more than its health budget, Human Rights Watch said in a November report.

In their final debate, the candidates tackled efforts to increase production of energy and food such as beef to make the country more self-sufficient. Jokowi questioned why beef prices rise during the Ramadan month, when people in the world’s most populous Muslim nation break their daily fast with lavish meals.

Big Fish

Luthfi Hasan Ishaaq, the former chairman of the Prosperous Justice Party, which backs Prabowo, was sentenced to 16 years in prison in December for graft for accepting bribes from meat importer Indoguna Utama in exchange for persuading party colleague Suswono, the agriculture minister, to increase the company’s beef import quota.

The coalition of Prabowo includes an Islamic party led by Suryadharma Ali, who resigned as religious affairs minister in May after being named a suspect in an investigation into the ministry’s management of the Hajj fund, which pools the savings of Indonesians waiting to make the journey to Mecca.

The country’s anti-graft agency, known as the KPK, has convicted ministers, chief executives and central bankers and is now angling for big fish, saying it is just scratching the surface of corruption in the country.

“What hampers us mostly and will always happen is those groups of interests,” said Jokowi, 53. “Those mafias. Therefore Jokowi-JK is a coalition without conditions. We want to be present to bring changes, to bring breakthroughs, concrete actions.”

Mining Investigation

Jokowi and Kalla called for an investigation into the ownership of the local units of Freeport-McMoRan Copper & Gold Inc. (FCX:US) and Newmont Mining Corp. (NEM:US) The government owns about a 10 percent stake in Freeport Indonesia and is pushing for further divestment in contract talks. Newmont’s Indonesia mine is part owned by local government in a deal that was financed by companies owned by the family of Aburizal Bakrie, the head of the Golkar party that also joined Prabowo’s coalition.

“Indonesian presidential debates tend to be too polite for my taste but it was good to see a few punches thrown in this one,” said Paul Rowland, an independent Jakarta-based political consultant. “Jokowi-Kalla won hands down.”

Jokowi, who ran a furniture business before getting into politics, has fended off various allegations during the election campaign, including on his religion and ethnicity. The race has narrowed as Prabowo’s better-funded campaign has set the agenda, with a Roy Morgan survey in May showing 42 percent of voters favoring Widodo and 24 percent Prabowo.

Honest, Humble

Nini Tarmini and Wiwin Kuswinah Dahlan, Indonesians working as maids in Singapore and voting on July 6, said they had decided from the beginning and the campaign did not swing their views.

“I chose Jokowi because I see Jokowi is an honest, humble, and simple man,” said Tarmini. “He also has proven his track record through his work as Jakarta governor.”

Dahlan said she was voting for Prabowo. “My friends do sometimes persuade me to vote for Jokowi, but I have set my mind straight.”

The contest sparked a higher turnout in Singapore than in 2009 or April’s parliamentary election, said Andri Hadi, Indonesia’s ambassador to Singapore.

“The current enthusiasm is noticeably higher,” he said.

To contact the reporters on this story: Rieka Rahadiana in Jakarta at rrahadiana@bloomberg.net; Fitri Wulandari in Jakarta at fwulandari@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Neil Chatterjee


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