Just one day after the Plenary Meeting of House decided that regional Election be exercised in local Parliament instead of by the people, the domestic financial market was rocked. Rupiah value nosed dived to Rp. 12,100 per USD against the previous Rp. 11,900. Not just that, index of IHSG at BEI sank to around 4,990 against the previous 5,200.
The market’s logic was contradictory to that of the people’s representative combined in the KMP coalition who believed that election of regional leaders be executed in House. Market pressures solidified as the process of election of House’s leaders was designed in such a way that KMP candidates dominated the leadership position. In the end, the two historical events was responded negatively by the market.
The market, with logic of its own, could not agree to it. The market believed that in the name of democracy and people’s sovereignty it was the winner of legislative election who deserved to chair the parliament and candidates for Regional Election would be elected directly by the people instead of by house members.
Disappointed, together they let go Rupiah and change to USD and caused Rupiah and IHSG to slump. What made things worse was that all the hassles took place in tandem with mounting gossip that the Fed planned to increase benchmark rate.
It was much too apparent that the faith of Rupiah and IHSG was governed by market sentiments. They feared that there would be conspiracy to undermine Government’s workplan due to disharmony between the KMP coalition and KIH coalition.
In Parliament, the KMP coalition by far outnumbered the market’s reaction was much too strong and Coordinating Minister Chairul Tanjung felt in necessary to underscore the importance of market confident and called out for harmonious relationship between the Executive and Legislative.
Chaerul warned that marketplayers believed that Government’s policies would be powerless without Parliament’s support while Deputy Finance Minister Bambang PS Brodjonegoro that the new Government must convince marketplayers that they would able reform economic policy provided there was good relationship between Government and Parliament.
Market turbulence in post plenary Meeting of House on September 25 and 26 2014 last was reaction to negative signal of Government – House relationship. If there was Government initiative to change the Law, most probably it would be by rejected by the KMP dominated House.
To convince marketplayers, there was no other way but to seek for support of the two opposing coalition to support Government’s economic policy; or else the market would keep reacting negatively. What’s more, capital outflow, for fear of Government’s program being annualled by the opposition, might be inevitable.
Imagine, in just 3 short days [1-3 October 2014], capital withdrawal by foreign investors had come to Rp. 2.3 trillion. It must be understood that the stockmarket being supported by foreign investors making net buy of Rp. 57 trillion from January to August 2014.
There was growing optimism when people’s support for the new Government was strong enough to start suspended infra-structure projects. The view changed totally as some of the House members hindrance progress and negative sentiment would continue unless the JOKOWI-JK turned majority in Parliament.
If that was the condition, the Government must strive to maintain macro stability, minimize trade deficit to safeguard reformation process. The new Government must not be afraid of House pressures as long as their programs were people orientated. Behind the KIH coalition there were the Indonesian people and thousands of democracy guards and volunteers to back up the JOKOWI-JK government.
In other words, President JOKOWI-JK were sure they would run Government’s agenda although the Parliament was dominated by PRABOWO supporters.
Beside five political parties in KIH coalition, spread were other elements not to be under estimated spread out all over the country who were ready to support JOKOWI-JK.
The volunteers would never stop mobilizing people’s power movement voluntarily, it was because JOKOWI-JK were movement voluntarily, it was because JOKOWI-JK were determined to continue reformation, clean up the country from corruption and promote people’s welfare. The volunteers who were mostly young people were expected to perform as enhancers of metal revolution soon to be run by JOKOWI-JK, the young volunteers were idealist who were more than ready to respond to changes.
In the event that the House do things to rattle the Government, there would be MK to shield of the attack. On the other hand, KPK would not sit on their laurels if anybody tried to achieve aims by all means like money politics.
So it was important for KIH to keep the supporting parties solid to make sure that the JOKOWI-JK government perform well. A solid condition would secure Government’s effective role, moreover being guarded by people who were more intelligent plus millions of activist and democracy and marketplayers who were pro democracy. Not less important was international concern of the process of democracy in Indonesia, if they saw regress, they would reconsider their international agreement with Indonesia. Ambassadors of friendly countries would observe it. This was JOKOWI’s “extra power” in running the Government for the next 5 years. (SS)
Business New - October 10, 2014