Prabowo’s selection of Gibran as his vice-presidential candidate has made him the clear frontrunner in Indonesia’s presidential election
As general elections inch closer, there is a high likelihood of a victory for presidential candidate Prabowo Subianto. Since Prabowo is closely aligned with incumbent President Jokowi, firms operating in Indonesia will likely see broad policy continuity if Prabowo wins. As a result, key policies under Jokowi’s administration such as the construction of the new capital city, Nusantara, and the bolstering of the domestic mining industry will remain a priority, providing top-line growth potential for B2B firms. In addition to carrying forward Jokowi’s policies, Prabowo also announced plans to reduce the tax burden on low-income consumers and eradicate extreme poverty, providing demand opportunities for B2C firms that serve the low-income segment.
Overview
- Prabowo has seen a rise in popularity in recent months, positioning him as the clear frontrunner for the 2024 general elections.
- According to opinion polls conducted in Q4 2023, Prabowo received an average of 40.3% of the votes, while Ganjar Pranowo and Anies Baswedan received an average of 27.7% and 22.1%, respectively.
Our View
With elections only a month away, Prabowo has emerged as a strong contender to win. Prabowo’s increasing popularity can be attributed to many of President Jokowi’s followers switching their support to Prabowo after he selected Gibran, Jokowi’s eldest son, as his vice-presidential candidate. This alliance between Jokowi and Prabowo essentially signifies a continuation of the Jokowi era. Jokowi’s alignment with Prabowo has, in turn, led to a growing disconnect between him and Ganjar, whom Jokowi initially endorsed. Consequently, Ganjar, who originally intended to uphold Jokowi’s policies, has adopted a more neutral stance, creating uncertainty about his policy orientation. The third and final presidential candidate, Anies Baswedan, presents a low-likelihood potential for a significant policy shift in Indonesia. Anies has vocally opposed some of Jokowi’s initiatives, such as the new capital city project, pledging to cancel it if he assumes the presidency. He also plans to implement a range of new policies to stimulate economic growth in the medium term. Notably, Anies aims to substantially increase taxes on the affluent while reducing taxes for both middle- and low-income earners, a move that could impact spending within the premium segment. Additionally, he plans to ramp up the construction of affordable residential housing, incentivize renewable energy investment, and strengthen free trade agreements.
Firms should also note that there is a distinct likelihood of elections going into a second round, which occurs when no candidate gains at least 50% of total votes across the country and at least 20% of the votes in each province. If needed, the second round of voting will happen in July 2024 between the top two contenders, creating some degree of political turbulence in H1 2024. However, due to Prabowo’s strong performance in public polls, we expect him to still win the elections in the second round.
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