Although all quick count results show that the Basuki "Ahok" Tjahaja Purnama - Djarot Saiful Hidayat pair won the first round of Jakarta's 2017 gubernatorial election, the Anies Baswedan - Sandiaga Uno pair may feel like the moral winner of this election as there is only a small margin (less than four percent) between both pairs. The winner of the second round, ergo winner of the election, will thus be determined by those who voted on the Agus Harimurti Yudhoyono - Sylviana Murni pair in the first round (this pair cannot participate in the second round).

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Starting from 7:00 am local Jakarta time on Wednesday (15/02), the capital city of Indonesia is voting for their next governor. There are more than 13,000 polling places spread across Jakarta to accommodate the 7.1 million eligible voters. Although actually in more than 100 provinces, cities and districts the regional heads are being elected today, most attention goes to Jakarta where ethnic and religious tensions are high due to the participation of incumbent Jakarta Governor Basuki Tjahaja Purnama (better known as Ahok), a Christian, ethnic Chinese politician who is being prosecuted for blasphemy.

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Indonesia's Energy and Mineral Resources Ministry targets to replace the cost recovery scheme in the oil and gas industry in January 2017. Instead, the government would use contracts with a gross profit sharing mechanism. The new scheme would simplify procedures (making the investment climate more attractive) while Indonesia "continues to prioritize the interests of the nation and optimize the use of local resources and labor", Deputy Energy Minister Arcandra Tahar said. The proposed changes will not affect existing contracts between contractors and the Indonesian government.

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The business environment in Indonesia needs political stability as well as a conducive investment climate to grow. However, if there exists a high degree of social unrest then the central government can offer as many incentives as it wants but entrepreneurs will be hesitant to engage in investment and business expansion. Currently, there is quite some unrest in the capital city of Jakarta. Ever since a manipulated video of Jakarta Governor Basuki Cahaya Purnama (Ahok) surfaced in which he allegedly insulted Islam, there has been outrage among Islamic hardliners. This brings economic costs.

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Indonesian newspaper Bisnis Indonesia printed an interesting interview with Vice President Jusuf Kalla on Wednesday (19/10). Kalla is one of the few political veterans of Indonesia, having been born during the Japanese occupancy of the Dutch East Indies, before Indonesia existed. He was VP under Susilo Bambang Yudhoyono (2004-2009), leader of Golkar, Coordinating Minister for People's Welfare (2001-2004), and Minister of Trade & Industry (1999-2000). Before he became fully committed to politics he developed a successful business empire.

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On 16 October 2016, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website over the last seven days. Most of the topics involve economy and political-related topics such as the new Energy minister, GDP growth, credit ratings, the food and modern retail sectors, property prices for foreign buyers, cement sales, coal price, car sales, and more.

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Indonesian Energy and Mineral Resource Minister Arcandra Tahar was dismissed (honorably) from his post by President Joko Widodo on Monday (15/08) after reports surfaced that indicated Tahar holds American citizenship. Indonesian law does not recognize dual citizenship (except for persons under the age of 18 years). Tahar had only just been appointed the country's Energy Minister in a cabinet reshuffle that took place on 27 July 2016 (Tahar replaced Sudirman Said). State Secretary Pratikno announced the Tahar's dismissal in the late hours on Monday.

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On Wednesday (27/07) Indonesian President Joko "Jokowi" Widodo confirmed that he has reshuffled his cabinet, a move aimed at enhancing the effectiveness of his cabinet. Widodo also announced the names of the new ministers. Two names are very interesting: (1) Sri Mulyani Indrawati, who was Indonesia's finance minister between 2005 and 2010, and (2) retired army general Wiranto, who played a key role in handling security issues during the transition from Suharto's New Order to the Reformation era. However, his name is linked to human rights violations.

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In local media it is reported that Indonesian President Joko Widodo will announce another cabinet reshuffle on Wednesday afternoon (27/07). The three ministers that - according to speculation in media - are set to be replaced are Industry Minister Saleh Husin, Energy and Mineral Resources Minister Sudirman Said, and National Development Planning Minister Sofyan Djalil. It would be the second cabinet reshuffle that is undertaken by Widodo (in August 2015 he replaced six ministers in a cabinet reshuffle).

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A survey from Saiful Mujani Research and Consulting (SMRC) shows that Indonesians' confidence in the performance of President Joko Widodo's government has risen. The survey signals that some 67 percent of the Indonesian population are satisfied with the government's performance, significantly higher compared to 42 percent in 2015. Reform-minded Widodo, often called Jokowi, has been in office since October 2014. However, he has to guide the nation amid global and domestic challenges (sluggish economic growth, low commodity prices and monetary policy changes of key central banks that trigger capital inflows/outflows).

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After two years in office, the time is ripe now to take a look at the performance and accomplishments of the government under the leadership of Joko Widodo, often called Jokowi. Indonesia's seventh president was a bit unlucky. In the first year of his rule, commodity prices were at multi-year lows (curbing Indonesia's foreign exchange earnings) amid sluggish global economic growth, while capital outflows from Indonesia occurred on the back of monetary tightening in the USA, sending the rupiah to a 17-year low in September 2015.

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On Friday (14/10) Indonesian President Joko Widodo appointed Ignasius Jonan as Indonesia's new Energy and Mineral Resources Minister. Jonan is the nation's former Transportation Minister who was replaced by Budi Karya Sumadi in a cabinet reshuffle in late July 2016. Meanwhile, the position of Energy and Mineral Resources Minister had been empty (although for the time being filled by Coordinating Minister for Maritime Affairs Luhut Pandjaitan) after the dismissal of Arcandra Tahar in mid-August 2016.

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Although Indonesia’s economic growth slowed further in 2014, there is optimism that growth will accelerate in 2015 despite sluggish global economic conditions (curbing Indonesia’s export performance) and Bank Indonesia’s relatively high interest rate environment. Indonesia’s central bank has raised its BI rate several times over the past one and a half years in an effort to combat high inflation (caused by fuel price hikes), curb capital outflows ahead of US monetary tightening, limit the current account deficit and support the rupiah.

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By the mid-1960s, politics and the economy of Indonesia had turned into disaster. After Independence in 1945 (and the cessation of hostilities with the Dutch in 1949), the young nation was plagued by hostile internal politics in which several political forces - consisting of the army, nationalists, Muslims, and communists - opposed each other. For over a decade, Sukarno, Indonesia’s first president, had reasonable success in keeping these forces in check by the force of his own personality. However, by the mid-1960s his failure became evident.

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Indonesian stocks and the rupiah have rebounded on Friday due to several internal and external factors. During the first trading session on Friday (17/10), the benchmark stock index of Indonesia (Jakarta Composite Index, or IHSG) surged 0.94 percent to 4,998.14 points. Meanwhile, based on the Bloomberg Dollar Index, the Indonesian rupiah exchange rate had appreciated 0.26 percent to IDR 12,228 per US dollar by 12:30 pm local Jakarta time. Why do Indonesian stocks and the rupiah perform well on Friday?

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Global credit rating agency Moody’s Investors Service stated that it maintains a stable outlook for Indonesia’s sovereign and corporate debt rating in the next quarters due to the country’s healthy credit fundamentals, solid macroeconomy, and reduced political tensions. Moody’s believes that Indonesia’s fundamentals are strong enough to offset the negative impact of external pressures such as looming higher US interest rates and slowing economic growth in China. Moody’s had raised Indonesia’s sovereign debt rating to investment grade in late 2011.

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Amid political uncertainty and a looming increase in US interest rates, Indonesian stocks and the rupiah exchange rate weakened considerably in the past week. Market participants are increasingly concerned about the situation in Indonesia’s parliament where a majority of political parties - named the Merah-Putih coalition (led by defeated presidential candidate Prabowo Subianto) - is expected to undermine president-elect Joko Widodo’s reform programs as well as the democratic foundations of the country.

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Indonesian stocks plunged considerably on Thursday (02/10). The country’s benchmark stock index (Jakarta Composite Index, abbreviated IHSG) declined 2.73 percent to 5,000.81 points, the largest drop in almost six months. This poor performance was caused by both external and internal factors. Externally, various weak economic data from the USA and Europe as well as an appreciating yen impacted negatively on Asian stock indices. Internally, market participants responded negatively toward the inauguration of the new parliament.

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More and more concerns have arisen recently regarding the democratic future of Indonesia. In fact, some media have reported that an impeachment of president-elect Joko Widodo, who will assume office on 20 October 2014, could become a reality as opposition in parliament - led by controversial and vindictive former army general Prabowo Subianto - is large. The Merah-Putih coalition, referring to the coalition of political parties that supported Subianto in the presidential election (which he narrowly lost to Widodo) will control 353 of the 560 seats in parliament.

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It took almost six hours for the Constitutional Court of Indonesia (Mahkamah Konstitusi) on Thursday (21/08) to read out 300 pages of a lengthy 4,392-page verdict in the case filed by defeated presidential candidate Prabowo Subianto, who claimed that the result of Indonesia’s July 2014 presidential election was invalid due to widespread violations and fraud that allegedly occurred during the voting and counting processes. During the read out it became increasingly clear that the court would reject Subianto’s claims due to a lack of evidence.

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