What Will Donald Trump’s Presidency Mean for Indonesia’s Economy?
Awkward. which may best describe Indonesian policymakers’ response to Donald Trump’s election as 45th president of the United States last week. While President Joko “Jokowi” Widodo extended congratulations, his finance minister Sri Mulyani Indrawati was more circumspect as well as also also maybe more telling.
“We respect the choice of the people of America,” she told the media the next day. “the item will be best to think about our own country as well as also also let them think about theirs.”
Both leaders are certain to find themselves managing the fallout via policy bombshells dropped by the one-time reality TV star during his 18-month campaign for the White House. Debt fueled infrastructure spending, protectionism as well as also also a ban on Muslims via entering the United States are sure to complicate an already fraught bilateral relationship.
“the item’s early days yet. the item’s unclear whether or how the rhetoric of campaigning will translate into the rhetoric of governing,” says Keith Lovard, an analyst at security consultancy Concord
Already markets are voting with their feet by selling assets as well as also also currencies deemed risky as well as also also opting for safer harbours. The day after the election, the rupiah posted its biggest fall since 2011, forcing Bank of Indonesia (BI) to intervene. The Jakarta Composite Index has slumped 4 percent since Nov 9.
Interest rates, if not rising, have at least stopped easing. This kind of week BI put a halt to its year-long exercise of easing interest rates. Worries which the US will blow out its deficit to build fresh roads, bridges as well as also also ports, however necessary they may be, have fanned expectations which the Federal Reserve will raise rates faster than the item already planned. Southeast Asia’s largest economy will be already growing at an underwhelming pace as Sri Mulyani tamps down spending. A more expensive cost of borrowing will put the brakes on consumer spending, too.
Trump’s election platform, at least in part, centred on re-negotiating trade treaties as well as also also protectionism. This kind of seems to have helped sweep members of his party to power inside the US congress as well as also also also throughout a majority of states. Republicans control legislatures in 32 states. This kind of lock prompted Indonesian business representatives to meet with their US counterparts This kind of week.
What they found, according to Roesiani Rosan, the chairman of the Chamber of Commerce as well as also also Industry of Indonesia, was which not only the Trans Pacific Partnership was all however dead, however most trade agreements were right now up for review. “which’s a possibility,” says Rosan.
To be sure, economically, Indonesia will be somewhat removed via the impacts of a Trump presidency.
This kind of country, once briefly the childhood home to his soon-to-be predecessor, Barack Obama, wasn’t on Trump’s radar during the election. Rather, Trump’s suggestion of unilateral tariffs on Chinese-made consumer goods as well as also also his focus on trade deficits with various other big Asian economies like Japan will have knock-on effects for Indonesia’s exports of energy as well as also also minerals. The extent of the damage won’t be clear until after Trump assumes office, at least in January.
Perhaps what sets Indonesia apart via the rest of the globe will be the impact of Trump’s anti-Muslim rhetoric. As a republic with the globe’s largest Muslim population, Indonesia will be at the front line when Trump muses of Muslim registries, or outright bans on immigration. Should Trump make Great on his promises, US businesses as well as also also government can’t count on a warm reception in Indonesia.
as well as also also there will be every reason to expect Trump to follow through. Trump’s party will eventually have command of all three branches of government in part because of his anti-Muslim rhetoric. This kind of month Trump appointed, as chief strategist, Steve Bannon, executive chairman of Breitbart News, often criticized for its race baiting content. Not expecting Trump to at least try to deliver on the very policies which swept him to power seems so much wishful thinking.
At risk may be Indonesia’s experiment with democracy. During the election campaign, Trump’s opponents criticized his proposed ban on Muslims because the item risked provoking jihadists or alienating Muslims. This kind of scenario risks playing out in Jakarta. Following his questionable indictment for blasphemy, Jakarta Governor Basuki “Ahok” Purnama will be struggling to staunch the haemorrhaging of support of mostly Muslim voters. A spokesman for his campaign says he sees the same ethnic as well as also also religious fractures which opened up inside the United States during the presidential campaign as inside the United Kingdom during the vote on EU referendum.
“the item’s not just Indonesia. This kind of will be happening in America as well as also also in Britain. People are fragmenting along ethnic, national as well as also also religious lines,” says Raja Antonio, Ahok’s campaign spokesman. “Do we choose people who are the same religion or do we move forward? I think the people of Jakarta are rational.”
the item stands to reason which anti-Muslim rhetoric via the President of the United States may undermine which desire for rationalism.
Of course, Trump’s election spells opportunity for some. For Golkar Chairman Setya Novanto as well as also also Geridra vice chairman Fadli Zon, the item was vindication. Both men were reported to the parliamentary ethics committee for allegedly endorsing Donald Trump at a campaign rally in fresh York while on a government junket.
Novanto was later forced to resign as parliamentary speaker after the same ethics committee opened a probe into whether he illegally sought shares in mining giant Freeport. Novanto denied those allegations.
Trump’s election will be potentially Great news for Hary Tanoesoedibjo, a former investment banker as well as also also business partner of the Suharto family. Tanoesoedibjo controls the MNC media as well as also also property group.
MNC, which has extensive land holdings, entered into an agreement last year with Trump Hotels Collection regarding two high-end resorts in West Java as well as also also Bali. MNC shares surged after Trump’s election. which reaction may yet prove premature. Trump’s relationship with MNC will be barely a year old. the item’s unclear whether much money has flowed to MNC under the auspices which may only be a licensing as well as also also management contract.
which hasn’t stopped Novanto as well as also also Fadli Zon. In contrast to Jokowi as well as also also Sri Mulyani, who will need to deal with the fallout of a Trump presidency, the pair heaped praise on Trump for his win as well as also also on themselves for having chosen the right side of history.
Said Novanto, according to media: “right now the item will be proven which what I did was inside the best interests of the Indonesian state.”
Awkward.
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What Will Donald Trump’s Presidency Mean for Indonesia’s Economy?
What Will Donald Trump’s Presidency Mean for Indonesia’s Economy?