Time to Move On

INDONESIA - Report 21 Apr 2017 by Cyrillus Harinowo

The gubernatorial election in Jakarta was accomplished peacefully. Police backed by the Army did a great job in defusing the mobilization of people from outside Jakarta who would have liked to oversee the election and indirectly might have intervened in the polling process. The quick count by all the pollsters pointed to Anies as the winner of this heated competition. The incumbent, Basuki Tjahaja Purnama, popularly known as "Ahok", conceded the loss and congratulated Anies as the winner of the election. The past few months, which almost tore the seams of social harmony, had finally come to an end. It is now time to move on while healing the past wounds.

From the recent election in Jakarta it became clear that the use of religious issues seemed to be effective in gaining a large number of votes. However, using that particular issue devalued the essence of the election itself because what seemed to be chased was just winning the election without any deep substance. The signal from the incumbent in conceding defeat and inviting the winners into the transition process was indeed a good starting point for the reconciliation. The elected governor responded well by going over to the governor’s office, which showed supporters of both that the two competing candidates have started to move on.

On the economic front, the external sector continued to show further improvement. In the past few years, in the period three months prior to the Muslim festivities the Indonesian economy had always shown a sharp hike in import activity to prepare manufacturers to produce goods to be delivered one month before the festivities. The spike in imports indeed took place in the month of March 2017. However, continued turn-around in the export sector more than compensated for the increase in imports, resulting in a sizable surplus for the month. In March Indonesian exports reached $14,591.8 million, up 15.68% month over month. However, year over year, exports increased by 23.55%. Indonesian imports also experienced a sharp increase, of 17.65%, to reach $13,357.8 million. The trade balance registered a surplus of $1,234.0 million. With the latest monthly surplus, Indonesian trade balance has been continuously in surplus for the first three months of the year and cumulatively reached $3,923.8 million, more than double the $1,544.2 million achieved in the previous year.

In the domestic economy, March 2017 was marked by minor deflation of just 0.02%. Yearly inflation in March was 3.61%, a level at the low end of the target corridor of the Central Bank. For that reason, and at the same time in the mode to stimulate the economy, the Central Bank kept the benchmark rate (the Seven-day Reverse Repo rate) at 4.75%.

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