Ethnic and religious tensions have flared up in Indonesia ahead of the Jakarta gubernatorial election in February 2017. Meanwhile, global financial markets, particularly emerging market assets, have been plagued by heavy volatility ever since Donald Trump became US president-elect. It all leads to a situation in which investors prefer to seek safer haven assets, reflected by major pressures on Indonesian stocks and the Indonesian rupiah exchange rate (versus the US dollar).

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The business environment in Indonesia needs political stability as well as a conducive investment climate to grow. However, if there exists a high degree of social unrest then the central government can offer as many incentives as it wants but entrepreneurs will be hesitant to engage in investment and business expansion. Currently, there is quite some unrest in the capital city of Jakarta. Ever since a manipulated video of Jakarta Governor Basuki Cahaya Purnama (Ahok) surfaced in which he allegedly insulted Islam, there has been outrage among Islamic hardliners. This brings economic costs.

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After a first hearing on Tuesday (15/11) Indonesia's Police named incumbent Jakarta Governor Basuki Cahaya Purnama (better known as Ahok) as suspect in a blasphemy investigation case, implying that he cannot leave the country while investigation is conducted. This announcement was made on Wednesday morning (16/11). About a dozen people filed blasphemy allegations against Ahok after a manipulated recording surfaced on social media showing him expressing disrespectful language about a specific Quranic verse during a speech in Kepulauan Seribu, off the coast of Jakarta, in early October.

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Jakarta's Police Department said chances are small that there will be another anti-Ahok demonstration in Indonesia's capital city of Jakarta. Over the past week media reported that protesters want to stage another demonstration on 25 November 2016 to demand the arrest of incumbent Jakarta Governor Basuki Cahaya Purnama (known as Ahok). Protesters accuse Ahok (a Christian of Chinese descent) of blasphemy after seeing a manipulated video that showed Ahok (mis)quoting Quranic verses during a speech in Kepulauan Seribu, off the coast of Jakarta, in early October.

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Between 50,000 and 100,000 protesters are expected to gather today (04/11) in Central Jakarta to express their anger at incumbent Jakarta Governor Basuki Cahaya Purnama (Ahok). This demonstration, which is organized by a coalition of several Islamic groups including hard-line group Islamic Defenders Front (FPI), is held as protesters accuse Ahok (a Christian of Chinese descent) of blasphemy by (mis)quoting Quranic verses during a speech in Kepulauan Seribu, off the coast of Jakarta, in early October.

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Foreigners are advised to stay clear of the "anti-Ahok" demonstration that is scheduled for Friday (04/11) in Central Jakarta as Islamic State-inspired terrorist cells may take advantage of the rally. The Jakarta police department will deploy about 7,000 personnel to safeguard security during the rally. However, this actually presents an opportunity for radical Muslims to launch attacks on Indonesian security officers. In the anti-Ahok rally, thousands of Muslims will express their anger toward incumbent Jakarta Governor Basuki "Ahok" Tjahaja Purnama.

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Today, Indonesian taxi and public transportation drivers staged another demonstration in Jakarta. They protest against the presence of app-based mobile applications such as Uber Taxi, GrabCar and Go-Jek that all recently started offering transportation services in the bigger cities of Indonesia and have become increasingly popular, at the expense of the financial performance of established transportation services such as taxis, public buses, bajaj (three-wheeled scooters) and ojek (motor taxi). The demonstration turned violent on Tuesday morning.

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Mirah Sumirat, Chairman of the Indonesian Association of Trade Unions (Asosiasi Serikat Pekerja, abbreviated ASPEK), stated that the tens of thousands of Indonesian workers who participate in the demonstration, organized in Central Jakarta on Tuesday (01/09), are not seeking anarchy or a coup but simply request that the government will make more efforts to protect the interests of the people (as stipulated by the 1945 Constitution; article 27, paragraph 2).

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Tomorrow (Tuesday 01 September 2015) around 50,000 Indonesian workers are expected to demonstrate on the streets of Central Jakarta and demand for higher wages. This mass protest is a response to the many layoffs that occurred in Indonesia’s labor-intensive industries in recent months (while more layoffs are expected in the period ahead) as well as a response to people’s weakening purchasing power (curtailed by prolonged high inflation).

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Despite some protests in Indonesia’s capital city of Jakarta, the Indonesian government raised the price of subsidized low-octane gasoline (premium) from IDR 6,900 (USD $0.53) per liter to IDR 7,400 (USD $0.56) over the weekend (a 7.2 percentage point price increase). Meanwhile, the price of subsidized diesel (solar) was raised from IDR 6,400 (USD $0.49) to IDR 6,900 per liter (+7.8 percent). The price increase was considered necessary as crude oil prices had increased over the past month, while the rupiah continued to depreciate.

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Thousands of hardline Muslims gathered at Jakarta's Istiqlal mosque on Saturday (11/02) to protest against Jakarta Governor Basuki Tjahaja Purnama (popularly known as Ahok). Protesters accuse Ahok - a Christian of Chinese descent - of blasphemy (insulting Islam) based on a manipulated video in which he expressed inappropriate language that surfaced on social media in October 2016. The protest, locally called "Aksi 112" (Action of 11 February) is the fourth anti-Ahok protest over the past five months and has strong political motives.

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A high profile trial is about to start in Indonesia. On Tuesday (13/12) incumbent Jakarta Governor Basuki Cahaya Purnama (better known as Ahok), a Christian of Chinese descent, will visit the Jakarta Court for the first day of his trial. Ahok is prosecuted for blasphemy, an offense that carries a maximum prison sentence of five years in Indonesia. After the Vietnamese iced coffee murder case, this is another huge court case followed not only by the Indonesian people, but also by the international community that is concerned about rising intolerance in Indonesia.

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Again we advise people, specifically expats, to stay away from Central Jakarta on Friday (02/12) when another massive rally is scheduled to take place. This second big protest rally, aimed against incumbent Jakarta Governor Basuki Cahaya Purnama (better known as Ahok), may attract more than 150,000 protesters and could become the scene of riots and other forms of violence in the capital city of Indonesia. Many businesses will keep their doors shut on Friday to anticipate the unpredictable situation.

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On Friday (04/11) a massive demonstration is scheduled to be staged in Jakarta. In this protest rally thousands of people are expected to gather to ventilate their disapproval of incumbent Jakarta Governor Basuki Cahaya Purnama (better known as Ahok). The rally is organized by a coalition of Islamic groups including hard-line group Islamic Defenders Front (FPI) which has often used violence to achieve their targets. The Muslim groups accuse Ahok of blasphemy by misquoting Quranic verses during a speech in Kepulauan Seribu, off the coast of Jakarta, in early October.

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Indonesian drivers of taxis, buses and bajaj (three-wheeled scooters) gathered on Monday (14/03) on several locations - in front of the State Palace, City Hall, and the Ministry of Communication and Information - in Central Jakarta to demonstrate against the presence of online transportation applications such as Uber Taxi, GrabCar and Go-Jek. Protestors claim that these mobile apps are operating illegally in the country (as these services are not regulated by law) and cause a decline in income for long-time established transportation services, including taxi services, bus services and the more traditional transportation services such as bajaj and ojek (motor taxi).

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It took almost six hours for the Constitutional Court of Indonesia (Mahkamah Konstitusi) on Thursday (21/08) to read out 300 pages of a lengthy 4,392-page verdict in the case filed by defeated presidential candidate Prabowo Subianto, who claimed that the result of Indonesia’s July 2014 presidential election was invalid due to widespread violations and fraud that allegedly occurred during the voting and counting processes. During the read out it became increasingly clear that the court would reject Subianto’s claims due to a lack of evidence.

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Last week, the Jakarta Composite Index (IHSG) weakened. The benchmark stock index of Indonesia was affected by negative market sentiments brought on by domestic factors. Most importantly, the large-scale demonstrations across Indonesia by Indonesian workers who demanded for higher minimum wages as annual inflation has surged since June 2013 after prices of subsidized fuels were raised. These demands, however, jeopardize the attractiveness of Indonesia's investment climate.

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