Sound breaking up the House of Representatives ( DPR ) and a coalition government that comes from the election last week dims chances rapid and thorough reform in Indonesia .
A number of key terms are threatened : the opening of the industry to foreign investors , the institutionalization of labor reform , and opportunities flushing subsidies that have long made fuel oil ( BBM ) in Indonesia as the cheapest in the region .
" The next government will wake up from a weak coalition , as before , " said Bill Sullivan , counsel a large number of mining companies . It becomes " bad news for the mining sector in general and foreign investors in the mining sector in particular . "
The investors were critical of President Susilo Bambang Yudhoyono who reach the end of this year tenure as president . During his reign , important government posts filled more and more politicians from the six-party coalition , rather than the technocrats .
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The House of Representatives also showed a complex picture . According to a quick calculation of sound legislative elections , the party received 10 seats in parliament . In fact , only nine parties who receive rations at the previous election . Official results will be released is a new voice in May. However , in the past , a quick tally proved to be reliable .
Before legislative elections took place , Joko Widodo appears estimates that the acquisition will also boost the party's voice . If it goes according to plan , there is hope the legislature will work more effectively with the executive . However , disappointing results achieved by the Indonesian Democratic Party - Struggle ( PDI - P ) required him to form a coalition with other parties to nominate Jokowi as president .
However, Jokowi still a serious contender in the presidential elections next July . Chances of political horse-trading is still large , said Sullivan .
" The parting of the sound [ in the House ] , we may return to the status quo in the presence of coalition politics and compromise , " said Chua Hak Bin , economist at Bank of America Merrill Lynch .
Jokowi on Friday said that the PDI - P had met another party . " However , there is no end result . We may still have to meet three or four times more, " he said .
Indonesian economy lay at a crossroads after last year's weakening of global trade and capital withdrawals by investors . Indonesian growth rate dropped to 6 % below the figure for the first time since 2009 . Meanwhile , the rupiah dropped approximately 26 % against the U.S. dollar - its lowest level in four years .
This year , the trade deficit and the current account managed slightly narrowed , coupled with thin strengthening rupiah and the stock market index . One reason is the rise in interest rates and an increase in the BI Rate subsidized fuel prices . However , broader economic recovery will be difficult to maintain in the presence of political competition .
" Crazy . We can not expect the House of Representatives , "said Poltak Sitanggang , managing director of the mining company Mustang Inti Corpora . " According to the Constitution , Indonesia adopts a presidential system . However , instead ruling parliamentary system . "
Governments have great difficulty in enforcing a consistent economic policy since President Yudhoyono ended the first term in 2009 . Biggest obstacle is political feud that happened in Parliament and a coalition government . In 2012 , for example , the government implemented import restrictions on beef cattle in order to boost the domestic industry . However , the government then reversed course when beef prices skyrocketed and burdening consumers .
Thorn was stuck on the issue of fuel subsidy . This year , the subsidy can figure ballooned to $ 20 billion and cause the fiscal deficit to 2.5 % of gross domestic product , according to estimates Bank of America Merrill Lynch . In fact , the government is projected 1.7 % of GDP .
If Jokowi elected president , as predicted , PDI - P will be the main government party . The party officials said drafting a new political agenda . " We would welcome the investors , both foreign and domestic , so far as they have added value , " said Arif Budimanta , a senior party officials . According to him , the party will review the fuel subsidy policy . However , there are no plans to cut it . " If the economy is growing and rising purchasing power , the subsidy may be time shifted to more productive sectors , " such as infrastructure , education , and health , he said .
However, PDI - P and the top brass not disclose further particulars of his economic policies . Most political parties in Indonesia , including the PDI - P , called repair industry to the next grade by leaving the basic industries that rely on cheap labor and raw commodities .
However , a number of industries disrupted by tangles of message length consideration by the government and regulators , including in the financial sector . In 2012 , Bank of Singapore , DBS , Bank Danamon plans to acquire the $ 7 billion bid . However , the plan foundered after bank ownership rules were revised a year later .
For the mining sector , the rules recently requiring mining companies to build a smelter and mineral processing in the country had escaped until the last second , following a political maneuver . The government's move reflects an effort to provide added value to the mining industry by ending the export of minerals to be processed abroad .
In addition to complaining about the new rules , foreign investors also alludes to other rules that limit foreign ownership in local mining company .WSJ
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