Understanding the Recent Election

Indonesia’s recent election marks another milestone in the country’s democracy. After completing two terms, President Joko Widodo, commonly known as Jokowi, is stepping down. Prabowo Subianto, a military veteran and former presidential candidate who previously opposed Jokowi, won the election. He controversially partnered with Gibran Rakabuming Raka, Jokowi’s son and the current mayor of Surakarta. They ran on a platform of continuing Jokowi’s policies, which remain popular.

The coalition consists of Gerindra, Golkar, PAN, and Demokrat, with rumors that other opposition parties may join. Recent estimates show the coalition will hold over 48% or 280 of the 580 legislative seats in Indonesia’s parliament, the DPR. PDIP, the former ruling party, will now be the largest opposition with an estimated 110 seats.

Possible Business Implications of a Prabowo Presidency

President-elect Prabowo’s policies are expected to continue Jokowi’s legacy. His main focus areas will be national security, downstreaming, and infrastructure development. Jokowi is likely to serve as an advisor, maintaining influence on the new administration, which suggests business continuity.

For the foreign business community, particularly those involved in natural resources, the ban on raw material exports will continue, encouraging investment in value-added products like smelters in the mining sector.

Focus Areas for Companies with the New Government

While continuity is anticipated, new ministers may introduce policy changes. Companies need to stay flexible and closely monitor developments to adapt to any changes. A government change can bring uncertainty, new policies, priorities, and regulations.

Understanding the new government’s agenda, analyzing policy pronouncements, and the backgrounds of key officials is essential. This analysis will provide insights into potential changes in regulations, taxes, trade policies, and infrastructure spending.

Businesses should reassess their models to comply with new regulations or capitalize on emerging opportunities. This could involve diversifying product lines, exploring new markets, or investing in sustainable practices.

Transparent communication with stakeholders about how the changing political landscape might affect business is crucial. Transparency fosters trust and mitigates uncertainty.

Successful businesses anticipate change, adapt to new realities, and capitalize on emerging opportunities. This involves establishing connections with new government officials, engaging in policy advocacy, and collaborating on shared objectives. Companies should profile DPR members and engage early to build rapport and influence policy discussions. Monitoring legislative developments, assessing risks and opportunities, and engaging in advocacy efforts are essential.

Strengthening involvement in industry associations and collaborating with policymakers can influence regulatory decisions in line with business interests.

Communication Implications of a New Government

• Political Monitoring

Companies should prepare for potential political uncertainties by closely monitoring developments and maintaining strategic flexibility.

• Government Relations

Establishing or strengthening relationships with incoming government officials and their advisors is crucial. Early engagement with DPR members, officials, and ministers can help influence policy discussions.

• Reputation Management

Public perception of the new leadership can impact stakeholder views of companies. Navigating political dynamics and ensuring alignment with stakeholder expectations through transparent communication is essential.

• Stakeholder Communication

Transparent communication about potential regulatory changes and the new administration’s implications is vital. Companies should address concerns and reassure stakeholders about the impact on operations and investments.

• Public Policy 

Anticipating regulatory changes is crucial. Companies must monitor legislative developments, assess risks and opportunities, and engage in advocacy efforts. Staying informed, participating in industry associations, and collaborating with policymakers to influence regulatory decisions is essential.

Praxis can help you navigate the new political and communication landscape through proactive public affairs, stakeholder mapping, and developing communication strategies to engage and advocate business priorities to the new administration. Contact our team to develop a communication plan to navigate this time of change.