Outlook clouds as polls narrow

Indonesia's presidential election just got interesting. After spending the last 12 months as the runaway favourite, Joko Widodo, the down-to-earth reformist mayor of Jakarta, now has former military general Prabowo Subianto nipping at his heels. Recent polling data, not always reliable in Indonesia, has Mr Widodo's lead at around six percentage points and narrowing.

This election is probably the most significant since the fall of the Suharto dictatorship in 1998. Mr Widodo hails from outside of the usual elite, is untainted by corruption and would be likely to make good progress on enforcing the rule of law and improving the bureaucracy. Mr Subianto, on the other hand, is focusing on the resource nationalism that has kept Indonesia from reaching potential. Foreign investors are rightly nervous.

For the world, the collapse of the Arab Spring heightens the symbolic role of Indonesia as the largest Muslim democracy.  Indonesia will also strongly influence the future path of the Association of South-East Asian Nations, a ten country alliance with 630m people and an economy that will be as big as Germany's by 2018.

I'll be watching closely on July 9th. Will this election result change your activity in south-east Asia? Let me know on Twitter @Baptist_Simon or via email on simonjbaptist@eiu.com. 

Best regards,

Simon Baptist
Chief Economist and Asia Regional Director