Country Report Indonesia October 2009

Summary

The president, Susilo Bambang Yudhoyono, has a strong mandate to pursue his reformist policy agenda after comfortably winning re-election in July 2009.
Mr Yudhoyono's Democratic Party is the largest in the House of People's Representatives (DPR, the legislature), but holding a coalition government together could still be difficult in the president's second term.
The authorities will look to withdraw fiscal and monetary policy stimulus measures in 2010 to contain inflationary pressures.
The budget deficit will narrow to an average of 1.5% of GDP in 2010-11, from an estimated 2.6% of GDP in 2009, as revenue recovers.
The Economist Intelligence Unit expects real GDP to expand by 5.1% in 2010 and 5.6% in 2011 on the back of private consumption and investment growth.
We expect the current account to record an average surplus equivalent to 2.3% of GDP in 2010-11.

On October 1st 560 members of the House of Representatives were sworn into office for the 2009-14 term.
In an end-of-term report the Indonesian Parliamentary Watchdog (Formappi) reported that the DPR adopted only 70 out of 284 laws that it was expected to pass in the 2004-09 term.
In early October a business tycoon and the outgoing chief welfare minister, Aburizal Bakrie, was appointed chairman of the Golkar party for the 2009-14 period, replacing Jusuf Kalla.
In mid-September police shot dead a leading Malaysian terrorist, Noordin Mohammad Top, who had evaded capture in Indonesia for eight years.
In late September a new law was passed that abolished a requirement that ad hoc judges, who are drawn from outside of the corrupt judiciary, should constitute a majority on judicial panels that oversee corruption cases.
Mr Yudhoyono has hinted that he will oversee a gradual transition to a more accurately targeted subsidy regime in his second term in office.
Year-on-year inflation remained stable in September, at 2.8%, the same rate as was recorded in August. However, on a month-on-month basis, inflation rose by 1.1%, compared with 0.6% in August.
Merchandise exports rose by 9.3% month on month to US$10.6bn in August, following increases of 3.4% and 0.8% in June and July respectively.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;49
NAICS Code: 52;22