With the presidential election of Indonesia (scheduled for 9 July) becoming a battle between Governor of Jakarta Joko Widodo, popularly known as Jokowi, and former army general and Suharto crony Prabowo Subianto, it is worth taking a closer look into the ideas and policies that both candidates would like to implement if elected as the next Indonesian president, as well as their stance on specific economic issues. The viewpoints that are mentioned below are based on the documents that both parties provided to the General Election Commission.

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US multinational conglomerate General Electric (GE) is exploring possibilities to establish a regional business hub in Indonesia due to the promising perspectives of both Indonesia and other countries in Southeast Asia. Currently, Indonesia is the largest market for GE in Southeast Asia, accounting for roughly 30 percent of the company's revenue in this region (but Indonesia's regional peers are developing rapidly as well). However, GE Indonesia CEO Handry Satriago said that human resources form a problem.

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Indonesian vice president Boediono stated at the opening of the two-day Green Infrastructure Summit in Jakarta (29/04) that Indonesia's heavily subsidized energy prices might be the key reason why the country has failed to make its development policy more environment friendly. According to Boediono, a national consensus - involving the central and regional governments, businesses, lawmakers and other stakeholders - is needed to systematically curb Indonesia's large energy subsidies.

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On 06 April 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as an analysis of March inflation and the February trade balance, the 2014 legislative election, a toll road construction tender, a possible dispute between Japan and Indonesia, Jakarta´s Giant Sea Wall, and more.

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Pembangunan Perumahan (PP), an Indonesia-based government-controlled construction and investment company, plans to list its subsidiary PP Properti on the Indonesia Stock Exchange through an initial public offering (IPO). The subsidiary is expected to list 30 percent of its shares on the stock exchange and aims to raise between IDR 1.2 and 1.5 trillion (roughly USD $119 million) through this corporate action. The IPO is planned to be conducted in the first quarter of 2015. The possible lead underwriters are Mandiri Sekuritas and Bahana Securities.

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On 30 March 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as the rupiah exchange rate, a prognosis of March inflation, the legislative election, the introduction of a new stock portfolio, an oil refinery tender, infrastructure, and more.

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In the past ten years, Indonesia has seen its toll roads expand by about 300 kilometers only. In 2004, the total length of the country's toll road network was 611 kilometers. In 2014, it reached a length of 918 kilometers. This slow growth of toll road development is alarming as the lack of quality and quantity of infrastructure is one of the major bottlenecks for Indonesia's economic development. (as subsequent high logistics costs put off investors). The difficulty of land acquisition is possibly the most notorious stumbling-block for infrastructure development.

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Chatib Basri, the Finance Minister of Indonesia, said that the government will focus more on infrastructure development in order to support the third economic policy package which was announced last week by Coordinating Minister of Economic Affairs Hatta Rajasa. Previously, in August and December 2013, the government had already implemented two policy reform packages aimed at safeguarding financial stability as the country had been plagued by a wide current account deficit, high inflation, large capital outflows and sharp rupiah depreciation.

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Indonesia has been hit by a number of severe natural disasters in the first two months of 2014. The volcanic eruptions of Mount Sinabung in North Sumatra (which started late last year but still continues today although having become less active) and Mount Kelud in East Java led to a total of 20 casualties, hundreds of thousands of evacuees and damaged infrastructure and crops. Moreover, due to torrential rains amid a peak of the rainy season, severe floods ravaged a number of Indonesian regions and cities (particularly Jakarta and Manado).

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Colin Crooks, Deputy Head of the European Union delegation to Indonesia, Brunei Darussalam and ASEAN, said that Europe's businesses are eager to invest in Indonesia. However, the European Union (EU) hopes that several issues that are blocking the Indonesian economy (particularly related to trade and investments) from growing further are dealt with. Crooks pointed at EuroCham's position papers, which discuss bottlenecks to Indonesia's investment climate and provides recommendations for its improvement.

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The position of consultant, tasked to conduct a feasibility study for the Jakarta-Surabaya toll road, will be tendered in early 2014. The realization of the Jakarta-Surabaya toll road, a 775 kilometer-long toll road that is built above the sea (along the coast line between Jakarta and Surabaya), is an ambition of the Indonesian government and expected to ease the difficulty of transportation on Java, Indonesia's most populous island. The feasibility study should explore the technical and environmental framework related to the establishment of the toll road.

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According to the Indonesian Cement Association (ASI), cement sales in Indonesia reached 41.6 million tons in the first three quarters of 2013, a 5.3 percent increase compared to domestic cement sales in the same period in 2012 (39.5 million tons), while Indonesia's cement exports jumped by 187 percent to 503 thousand tons. As such, total cement sales from January to September 2013 grew 6.2 percent to 42 million tons. Meanwhile, Semen Indonesia, Indonesia's largest cement producer, managed to expand its market share.

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Although initially expected to start in 2015, the government announced that construction of the new Karawang airport (in West Java) may commence in 2014. The administrative process (including a spatial plan review) is near completion, thus clearing the way for the airport's groundbreaking. The Karawang International Airport, which is designed to have a passenger handling capacity of 70 million people per year, will be built on a 900 ha piece of land and is envisaged to relieve passenger and flight congestion at Soekarno-Hatta International Airport.

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After a decade of high growth and a swift rebound after the collapse of US investment bank Lehman Brothers, emerging markets are seeing slowing growth. Their average growth is now 1½ percentage points lower than in 2010 and 2011. This is a widespread phenomenon: growth has been slowing in roughly three out of four emerging markets. This share is remarkably high; in the past, such synchronized and persistent slowdowns typically have only occurred during acute crises.

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In order to improve Indonesia's intra-island connectivity on Java (and thus reduce logistics costs that are due to fragile infrastructure), the government is planning to build a toll road above the sea from the capital city of Jakarta in the western part of Java to Surabaya in East Java. Both these cities are Indonesia's centers of industrial productivity and economic growth. The 775 kilometer-long toll road, which is expected to cost about IDR 150 trillion (USD $13.3 billion), will be build by a consortium of 19 Indonesian state-owned enterprises.

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Softer than expected economic activity in the People’s Republic of China (PRC) and India and jitters over the United States (US) quantitative easing (QE) program will weigh on Asia and the Pacific’s growth prospects in the near term, says a new Asian Development Bank (ADB) report. “Asia and the Pacific's 2013 growth will come in below earlier projections due to more moderate activity in the region’s two largest economies and effects of QE nervousness,” said ADB Chief Economist Changyong Rhee.

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Growth rates in Indonesia in 2013 and 2014 will fall below earlier projections, highlighting the need to continue improving the country’s competitiveness in manufactured exports, says the Asian Development Bank (ADB) in an update of its flagship annual economic publication, Asian Development Outlook 2013. ADB revised down its 2013 gross domestic product (GDP) growth forecast for Indonesia to 5.7% from 6.4% seen in April. For 2014, growth will also be adjusted to 6.0% from the previous estimate of 6.6%.

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After China and India, Indonesia is currently the third most important investment destination for Japanese investments in the manufacturing sector. In 2011, Indonesia - Southeast Asia's largest economy - was still ranked number five on that list. However, in recent years the country managed to surpass Thailand and Vietnam. This fact indicates the important link between Indonesia and Japan. The chief executive officer of the Japan Bank for International Cooperation (JBIC), Hiroshi Watanabe, confirmed these findings.

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According to data from the Indonesian Cement Association (ASI), domestic cement sales have fallen 5.8 percent to 3.3 million tons in August 2013 (from the same month last year). Being an important indicator of economic expansion (as cement sales inform about the development of property and infrastructure projects in the country), these lower cement sales confirm the slowing pace of economic growth in Indonesia. Compared to July 2013, cement sales in Indonesia fell by a massive 32 percent.

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In its most recent report regarding Indonesia's economy, the World Bank states that high logistic costs form a serious impediment to the country's economic growth. The report, titled Annual Logistics Report, is compiled by Bandung Institute of Technology’s Research Center for Logistics and Supply Chains, the Indonesian Logistics Association (ALI), the STC Group, Panteia Research Institute, and the World Bank Indonesia Office. The report provides an analysis and overview of the progress made in tackling the problem of logistics in Indonesia.

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