Indonesian president Susilo Bambang Yudhoyono, who will end his second and final five-year term in October 2014, announced to meet both presidential candidates (Prabowo Subianto and Joko Widodo) in the country’s State Palace on Sunday (20/07). In this meeting, president Yudhoyono will emphasize the importance of a peaceful and orderly transition to the next government. Currently, it remains unknown who of the two candidates won the presidential election (held on 9 July 2014). Due to the tight race, chances of social unrest increase.

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Global real estate services firm Jones Lang LaSalle expects condominium sales in Indonesia to post a record-breaking figure in 2014, particularly supported by the current trend in Jakarta (Indonesia’s capital city) where people continue to shift to apartment living instead of detached or attached single-unit housing. Anton Sitorus, head of research at Jones Lang LaSalle, said that despite the weaker outlook for Indonesia’s property market, both developers and buyers have shown increased interest in developing and buying property.

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Although investors in Indonesian stocks received positive news from the USA after Federal Reserve Head Janet Yellen stated on Tuesday (15/07) that the US economic recovery remains incomplete therefore justifying the continuation of a loose monetary policy for the foreseeable future as well as solid economic expansion of 7.5 percent (yoy) in China during the second quarter of 2014, the domestic political context in Southeast Asia’s largest economy remains a concern. What are the latest political developments in Indonesia?

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The US dollar continues to depreciate against emerging currencies after the minutes of the Federal Reserve’s latest FOMC meeting, released Wednesday (09/07), suggest that the US central bank will maintain historic low interest rates (0.0 - 0.25 percent) into 2015. The Fed informed that US interest rates hikes will only occur ”a considerable time” after the US asset-buying program (quantitative easing) has ended. Based on the latest minutes, this program is expected to end in October 2014.

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Although not all quick count scores indicate a Joko Widodo (Jokowi) win, Indonesia’s stock and financial markets have gained considerably on Thursday (10/07) - one day after the 2014 Indonesian presidential election - on speculation that the General Elections Commission (KPU) will declare Jokowi the winner of the election on 22 July 2014. Out a total of 12 quick counts (mentioned below), eight showed a Jokowi win. Importantly, these seven quick counts include the authoritative agencies that traditionally have been highly accurate.

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Since 07:00 am local time, Indonesians have been able to cast their votes for the country’s presidential election; a tight race between Joko Widodo and Prabowo Subianto. Despite the narrow gap between both presidential candidates (based on various surveys), the election has been conducted in good order so far. The polling stations will close at 13:00 pm local time. Hereafter, live quick count scores, which are traditionally quite accurate, will be presented. By approximately 17:00 pm local time, the quick counts are expected to be finalized.

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Today, the Indonesian people decide who will become the next president of the world’s largest archipelago for the period 2014-2019. The Indonesian electorate numbers about 185.6 million (out a total population of 250 million) and they have only two options to choose from: Joko Widodo (Jokowi) and Prabowo Subianto, which also implies that the election will only require one round. Voting starts at 07:00 am local time and the ballot boxes close at 13:00 pm local time. Indonesian financial markets are closed.

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Wednesday 9 July 2014, is a big day for Indonesia as on that day the Indonesian people will vote for the successor of incumbent Indonesian President Susilo Bambang Yudhoyono who had been given the mandate to lead two five-year presidential terms between 2004 and 2014 (and who is the only president in the era of Reformasi that was re-elected by the people). Now, the people have to choose between Joko Widodo (Jokowi), joined by running mate Jusuf Kalla, and Prabowo Subianto, who is joined by running mate Hatta Rajasa.

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After having seen his lead over rival Prabowo Subianto narrow considerably in recent months, the latest survey released by the Indonesia Survey Circle (LSI) today (07/07) indicates that presidential candidate Joko ‘Jokowi’ Widodo’s popularity has rebounded, although the race remains tight. According to the survey, Jokowi and running mate Jusuf Kalla secured 47.8 percent of respondents’ votes, slightly higher than their rivals Prabowo Subianto and running mate Hatta Rajasa at 44.2 percent.

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Indonesian presidential candidate Joko Widodo, more popularly known as Jokowi, intends to increase the government’s tax revenue by allowing foreigners to buy luxury apartments, worth at least IDR 2.5 billion (approximately USD $211,864), in the larger cities of Indonesia and on the island of Bali (a popular tourist destination). Currently, foreigners cannot buy property in Indonesia. However, indirect structures, such as the use of their Indonesian wife’s name or an agent are common, meaning that the state loses out on luxury tax income.

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The week ended well for both the Indonesian rupiah exchange rate and the benchmark Jakarta Composite Index (IHSG). Based on the Bloomberg Dollar Index, the rupiah appreciated 0.30 percent to IDR 11,413 per US dollar at the end of Friday's trading day (16/05). Meanwhile, the IHSG surged 0.80 percent to finish just above the psychological level of 5,000 points. The good performance was supported by investors' positive response towards the latest political developments in Indonesia.

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Joko Widodo, the presidential candidate of the PDI-P (Indonesia's current largest opposition party and which won the 2014 legislative election last April) may announce his running mate (the vice presidential candidate) on Wednesday (14/05). Newsportal Bisnis.com reported that Widodo, popularly known as Jokowi, hinted at this during a brief conversation between Jokowi and journalists on Monday. Names that are frequently mentioned in connection to the position of running mate of Jokowi are Jusuf Kalla and Abraham Samad.

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The Indonesian rupiah exchange rate extends its depreciation on Friday (11/04) after market participants showed their concern about Indonesia's legislative election result on Wednesday (09/04). As the election did not result in a clear victory for the PDI-P (the main opposition party which intends to nominate popular Jakarta Governor Joko 'Jokowi' Widodo as presidential candidate), the fragmented outcome is expected to lead to continued political uncertainty ahead of Indonesia's presidential election on 9 July 2014.

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The central bank of Indonesia (Bank Indonesia) expects Indonesia's economic growth to slow to 5.77 percent (year-on-year) in the first quarter of 2014. However, despite this further slowing trend, the institution is content with recent macroeconomic developments: external demand is growing, while domestic demand is moderating, thus impacting positively on the country's current account deficit as well as inflation. Household consumption is expected to have grown in Q1-2014 due to the holding of legislative elections on 9 April 2014.

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Most emerging market currencies, including the Indonesian rupiah exchange rate, appreciated against the US dollar on Tuesday (08/04) due to carry trade (meaning the selling of low-yield currencies for higher-yielding assets) and expected stimulus from China's government to boost its economy (Chinese shares in fact gained 2.2 percent on this stimulus speculation). The rupiah appreciated 0.14 percent to IDR 11,289 per US dollar based on the Bloomberg Dollar Index, partly due to variety of domestic factors.

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On Wednesday 9 April 2014, the Indonesian electorate (consisting of about 190 million people out of a total population of around 250 million) will vote for both the country's national and regional legislatures. This legislative election also bears a big influence on the presidential election that is scheduled for 9 July 2014 as a minimum of 25 percent of the popular vote in the legislative election (or 20 percent of seats in the House of Representatives, DPR) gives a party the authority to nominate a presidential candidate.

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The Indonesian government is still studying the feasibility study for the National Capital Integrated Coastal Development (NCICD) masterplan. The NCICD masterplan, a joint project between the governments of Indonesia and the Netherlands, aims to protect the capital city of Jakarta against floods caused by high tides and faciliates sustainable development of Jakarta. The masterplan is developed by a consortium headed by Witteveen+Bos (main contractor) and Grontmij, with subconsultants KuiperCompagnons, Deltares, Ecorys and Triple-A.

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Previously we were hoping that if global stock indices would turn positive, it could limit the fall of Indonesia's benchmark stock index (Jakarta Composite Index or IHSG) as the 'Jokowi effect' has definately worn off. On Tuesday (18/03), investors continued to engage in profit taking causing the IHSG to plunge 1.45 percent to 4,805.61 points. While most Asian indices were up, influenced by rising indices on Wall Street and in Europe on the previous trading day (17/03), the IHSG deviated sharply from the Asian trend today.

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There were two options with regard to today's trading day (Monday 17 March 2014). First, the Jakarta Composite Index (Indonesia's benchmark stock index also known as IHSG) could rise further after its impressive 3.23 percent jump last Friday (14/03), and secondly, the bullish market could become vulnerable to profit taking as the 'Jokowi effect' tones down and no other factors could trigger positive market sentiments. It turned out to be the second option. Not even sharp rupiah appreciation could push the index in the green zone.

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The Indonesian rupiah exchange rate continued its impressive rebound in 2014, supported by Indonesia's improving economic fundamentals as well as increased political certainty due to the nomination of Joko Widodo (Jokowi) as the main opposition party's (PDI-P) presidential candidate. As such, the 'Jokowi effect' managed to offset negative market sentiments brought on by the (disputed) referendum in Crimea that showed that 97 percent of voters support a split from Ukraine. This intensified political tensions between the West and Russia.

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