Morning Briefing: Vice President Candidate Ma’ruf Amin hurts Widodo’s Electability

Joko Widodo and Ma'ruf Amin announced the cabinet member today (10/23) - Photo by Kompas

JAKARTA (TheInsiderStories) – Good morning. President Joko Widodo’s pick as running mate in re-election bid in 2019, Ma’ruf Amin, could be a handicap with a recent survey shows the incumbent’s electability drops slightly, mostly come from non-Muslim and first-time voters.

Pollster Lembaga Surve Indonesia Denny JA said Widodo’s electability dropped to 52.2 per cent after announcing Amin as running mate. Before, it was 53.6 per cent. Of course, his electability was way ahead of the opposition camp candidates, disgraced general Prabowo Subianto and his running mate businessman-cum-politician Sandiaga Uno, at only 29.5 per cent.

However, the survey confirms one suspicions, that Amin needs to improve his credentials to court non-Muslim and secular voters. For one, Amin is seen as playing an instrumental role in a series of even that resulted with the loss of the popular Basuki Tjahaja Purnama, which carries double minorities identities of Christian and ethnic Chinese, in Jakarta gubernatorial election and subsequently his jailing due to blasphemy charges.

There are another slight bump too with the ruling coalition’s campaign team is still without a leader, with two candidates, current Vice President Jusuf Kalla and former Constitutional Court chief Mahfud MD, refused the position. In addition, one of its members, Sri Mulyani Indrawati, resigned after public outcries due to her role as Finance Minister.

Moving to economic issues, oil prices rose for three straight days due to a combination of supply fears from Iran and higher demand in the United States (US). Rising oil prices could give a sense of urgency to the government’s efforts to reduce imports of the commodity, with aim to contain the rupiah from falling further.

One such efforts, which could have an immediate impact, is an attempt for all crude oil from foreign companies to be purchased by state-owned energy producer PT Pertamina for domestic consumption. It is reported that the plan could reduce imports by as much as 225,000 barrels per day.

Another, which could have more significant impact, is expanding the mandate of the B20 policy, that is for all diesel fuel to have 20 per cent blend of crude palm oil, to all non-subsidized diesel fuel. The policy, which will be implemented in September, will not only reduce imports of oil but also boost the price of crude palm oil, which Indonesia is the world’s largest producer and exporter.

The government, however, is not content for palm oil to be used only in vehicles. There are plans to use palm oil as fuel in train, heavy machinery and, most recently, in jet engine. Trade Minister Enggartiasto Lukita said the government is seeking to set up palm oil-based biodiesel plants in the US and Europe as a trade off for the nation’s significant purchases of planes either from Boeing or Airbus.

Such plan, however, is a distant dream at best, but one that shows the government’s effort to increase the use of palm oil, access of which is getting restricted in Europe and US due to a combination of trade politics and the industry’s poor environmental record.

Financial market is expected to be less volatile as tension from US-China trade war eases and market participants are cautious ahead of the meeting of world’s top central bankers later this week.

The Rupiah strengthened to 14,568 per US$1 on Tuesday (21/08) from 14,578 on Monday, while the Jakarta Composite Index rose 0.9 per cent to 5,944.3 with foreign investors net sold equities worth Rp146.9 rupiah.

Hope you have a profitabile day.

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