The country is a vibrant democracy that is continuing to strengthen its political structures and deepen the enfranchisement of the population.
Indonesia has undergone a political transformation since the upheaval of 1998 which saw the fall of General Suharto after 30 years of authoritarian rule and a collapse of the Rupiah. The 2009 election results signaled a maturity among the electorate through the re-election of the incumbent president, Susilo Bambang Yudhoyono who became the first Indonesian president to be democratically elected for two consecutive terms which hugely boosted global investor confidence.
His firm stance on terrorism and national security is another welcome continuation of his tenure.
Other political reforms such as decentralization of political power to regional and provincial leaders, while still at an experimental stage, is serving to unleash the potential of Indonesia’s less developed regions outside Java and fostering more even participation in the country’s growth. Political noises towards greater protectionism are regular occurrences that often result in overlapping regulations which create investor uncertainty.
However, despite the various push and pull forces to veer off course; the country remains on a stable track while fully acknowledging its political flaws. This is a healthy environment for the future development of democracy and the gradual stamping out of detrimental and corrupt practices. The political system therefore, continues to be a work in progress. Nonetheless, from this long-term perspective, investors can have confidence in Indonesia’s stability and its political system will continue to strengthen in the decades to come.
Finally, the political stability has a relevant effect also on the country’s position within the ASEAN, with a steep rise of dependency from Indonesian goods By the US.