The Indonesian Economy Will Not Be Badly Affected In This Political Year
Harian Press. Next year's political moment, namely the Legislative General Election (Pileg) and the Presidential Election (Pilpres), is considered not to have an impact on the Indonesian economy. Although a number of investors will wait and see or wait for political certainty before making an investment decision, the number of investors is not significant.
Charta Politika Executive Director Yunarto Wijaya said there was no correlation between political events and economic performance. "What's more, don't associate with (investment) portfolios, it's small," Yunarto said at the Indonesia Investment Conference & Exhibition 2018 at the Ritz Carlton, Jakarta, Wednesday (11/21).
He revealed, the performance of the Composite Stock Price Index (CSPI) had dropped by more than 10% in 2008, 2013, 2015 and 2018. However, the drop in the JCI was caused by global factors. The 2008 crisis was caused by the financial crisis in the United States (US) which affected various other countries.
The crisis in 2013 was caused by taper tantrums due to the plan of the US Central Bank to raise its benchmark interest rate and end its economic stimulus. The turmoil in the financial markets throughout the year was more influenced by the issue of trade war between the US and China.
However, Yunarto estimates that the money supply will increase due to the election. Moreover, the number of legislative candidates in the Election reached 26 thousand candidates. This will have an impact on people's consumption.
He said, there are only two variables that will affect economic performance, namely conflict on a national scale and changes in economic structure. For example in Thailand, which had experienced a military coup conflict in 2014. At that time, a large demonstration helped shake the domestic market but only lasted for five days. "After that, the market has its own immunity," he said.
In addition, the economic structure will change if a leader massively changes his vision and mission. This happened to Zimbabwe which carried out land reform in 1980. Yunarto assessed that there were no significant differences in the economic policies of the two presidential candidates 2019-2024. Meanwhile, the electoral process is not expected to trigger conflict. "Our election is indeed hot but the end is peaceful. Never has a conflict," he said.
Charta Politika Executive Director Yunarto Wijaya said there was no correlation between political events and economic performance. "What's more, don't associate with (investment) portfolios, it's small," Yunarto said at the Indonesia Investment Conference & Exhibition 2018 at the Ritz Carlton, Jakarta, Wednesday (11/21).
He revealed, the performance of the Composite Stock Price Index (CSPI) had dropped by more than 10% in 2008, 2013, 2015 and 2018. However, the drop in the JCI was caused by global factors. The 2008 crisis was caused by the financial crisis in the United States (US) which affected various other countries.
The crisis in 2013 was caused by taper tantrums due to the plan of the US Central Bank to raise its benchmark interest rate and end its economic stimulus. The turmoil in the financial markets throughout the year was more influenced by the issue of trade war between the US and China.
However, Yunarto estimates that the money supply will increase due to the election. Moreover, the number of legislative candidates in the Election reached 26 thousand candidates. This will have an impact on people's consumption.
He said, there are only two variables that will affect economic performance, namely conflict on a national scale and changes in economic structure. For example in Thailand, which had experienced a military coup conflict in 2014. At that time, a large demonstration helped shake the domestic market but only lasted for five days. "After that, the market has its own immunity," he said.
In addition, the economic structure will change if a leader massively changes his vision and mission. This happened to Zimbabwe which carried out land reform in 1980. Yunarto assessed that there were no significant differences in the economic policies of the two presidential candidates 2019-2024. Meanwhile, the electoral process is not expected to trigger conflict. "Our election is indeed hot but the end is peaceful. Never has a conflict," he said.
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