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Antonio Soto, Asia Manager of AJE Group posed for a photoshoot at AJE factory in Cikarang, West Java, Indonesia. June 5, 2014. Rony Zakaria for The Financial Times©Rony Zakaria

Sebastianus Hendro Kistanto, an IT technician in the Indonesian city of Semarang, always drank Coca-Cola, even after he stop­ped working for the US soft-drinks company’s operation in the country.

That was until he picked up his first bottle of Big Cola last year, attracted by the low price – just Rp3,000 (25 cents) for a 535ml serving. “Coke has the best taste but Big Cola costs much less,” he says, adding that he drinks about four bottles a week.

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All eyes are on the official vote counting process in Indonesia after Joko Widodo, the reformist Jakarta governor, and Prabowo Subianto, a self-styled military strongman, both claimed victory in Wednesday’s milestone presidential election.

Most “quick counts” – based on samples of actual votes cast – predicted a victory for Widodo by a margin of 4 to 5 percentage points. But Subianto has refused to concede, with his brother insisting that their own counts put him in the lead by a margin of nearly 4 percentage points. Continue reading »

It is a truth almost universally recognised that internet penetration in the 10-member bloc known as Asean – the Association of Southeast Asian Nations – is low, even though the region is humming economically.

Or is it?

UBS has come out with some interesting research that will give the e-commerce crowd something to cheer. The bank finds that Asean has a 32 per cent “internet penetration rate”, or almost 200m users, out of a total population of 620m.

This contrasts with market data apparently widely accepted – and cited by UBS – saying that penetration could be as low as 62m users. Continue reading »

Tough-talking former general Prabowo Subianto has put nationalist rhetoric at the heart of his powerful presidential campaign.

But one of his communication advisers is Rob Allyn, an American political consultant has who worked for George W. Bush and Mexico’s Vicente Fox among many others.

Supporters of Subianto’s rival Joko Widodo, the Jakarta governor, have claimed that Allyn is linked to a widely circulated smear campaign that has falsely accused him of being a Communist, ethnically Chinese and not a Muslim. Continue reading »

If ever the phrase “it was the best of times, it was the worst of times” could be applied to Indonesia, it would be to President Yudhoyono’s ten years in power from 2004-2014. Arguably, his first term was the best five-year period of economic reform and revitalisation in the history of the country, while his second term was possibly the worst.

As Indonesia, Asia’s fifth-largest economy, speed-walks towards presidential elections on July 9, it’s probably time now to start looking beyond the elections. What kind of economic-reform program could the newly-elected president pursue to re-ignite our sharply slowing economy?

As it turns out, President Yudhoyono’s first term in 2004-2009 showcases what can be accomplished in Indonesia, given enough political will, and given enough desire to execute and implement. Here’s a sampling of bold, determined and successful reforms from 2004-2009. Continue reading »

Tracking Joko Widodo, the narrow front-runner in Indonesia’s presidential election, is not an easy task, as the FT found out when it trailed him in East Java at the weekend.

The schedule constantly changes, he turns up for events hours late and keeping up with his entourage’s long convoy of cars requires bouts of death-defying acceleration through busy city streets.

The perils of following the Jakarta governor on the stump underline the weaknesses of his campaign, which has lost a 30 percentage point poll lead over the past three months. Continue reading »

For a frontrunner whose campaign has been floundering, the first of Indonesia’s televised presidential debates did not start well on Monday night.

Small-town mayor turned political superstar Joko Widodo had left a large piece of notepaper poking prominently out of his suit as the candidates sang the national anthem.

To supporters of his rival, former general Prabowo Subianto, the wardrobe malfunction underlined their view that Widodo, now the governor of Jakarta, is an uncertain and inexperienced leader, not ready for the highest office. Continue reading »

By Wellian Wiranto of OCBC Bank

The past year has not been easy for India and Indonesia. Faced with slowing growth, festering fiscal deficits, ballooning current account gaps and political uncertainties, the two had the common misfortune of being counted into the Fragile Five group of challenged economies.

In India’s case, though, it appears that investors can now see light at the end of the tunnel. Not only has the business-friendly Narendra Modi won the election; he has also clinched a rare outright majority for his BJP party, making it easier to push through tough reforms.

With Indonesia’s presidential election taking place a month from now, there are hopes that the country can find a Modi-like savior in Joko Widodo, known as Jokowi, the frontrunner in the race. Continue reading »

From Uber to GrabTaxi, the leading car-for-hire apps are finally coming to Jakarta, where they will find congested roads and congested mobile bandwidth but also a large market of tech-savvy consumers. Continue reading »

Not everything in life is always completely and irredeemably bad, even if you happen to be running an emerging economy. In the case of currency devaluations handed to the big emerging markets over the past year, however, the silver lining has not made up for the cloud.

It was a year ago this week that the “taper tantrum” shook emerging markets, after comments from then Fed chairman Ben Bernanke raised fears of the US central bank tightening monetary policy. Exchange rates dropped sharply in the fragile fraternity of emerging markets with flexible currencies – Brazil, India, Indonesia, South Africa and Turkey. However, bad though the turbulence was – and the panic returned for a short while earlier this year – the currency movements should at least have had the benefit of handing those economies’ exports a competitive advantage through a lower exchange rate.

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Although he officially stepped down from the family business when he entered the government in 2004, Indonesian tycoon Aburizal Bakrie still has the power to move markets.

His announcement late on Tuesday that he was withdrawing from Indonesia’s presidential race to support front-runner Joko Widodo pushed the Jakarta stock exchange up by 1.4 per cent on Wednesday and sent the rupiah 0.8 per cent higher against the US dollar in its biggest one-day move for two months. Continue reading »

Unilever boasts that the mission of its Wall’s ice cream brand is “to bring more smiles to more people”.

But the consumer goods giant had rather the opposite effect on Tri Risma Harini, the indomitable mayor of Surabaya, after its latest marketing push in Indonesia’s booming second city went awry on Sunday. Continue reading »

Management consultants at McKinsey say the Indonesian middle class consists of 45m people, while their rivals at Boston Consulting Group cite a figure of 74m. The Asian Development Bank puts it at an eye-popping 146m, or 59 per cent of the population.

Either way, investors are whetting their appetites at the prospect of selling their goods and services into this undoubtedly large and fast-growing market of consumers. Continue reading »

While the “quick count” results from Wednesday’s five-yearly legislative election are only preliminary, it seems clear that the Indonesian Democratic Party-Struggle (PDI-P) has failed to fully capitalise on the popularity of its presidential candidate, Joko Widodo.

Having named Widodo, the highly regarded Jakarta governor, as its presidential candidate in March, PDI-P was targeting at least 27 per cent of the vote for the 560-member House of Representatives (DPR). But initial results showed that it secured 19 per cent, in spite of coming first.

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There is no doubt that emerging market (EM) investors have cheered up considerably of late. Following a torrid January and February, virtually all asset classes in the EM universe appear – on aggregate at least – to be gaining in value.

The bellwether stock index, the MSCI EM index, is up 9.6 per cent from its low on February 5. EM sovereign bonds are yielding an average of 5.51 per cent, down 0.37 per cent since January 1. Local currency bonds are, in many cases, producing stellar returns sharpened by windfall currency gains. Indeed, some EM currencies are among the world’s best performers, with the Indonesian rupiah rising 7.81 per cent, the Brazilian real gaining 7.3 per cent and the Indian rupee climbing 2.8 per cent so far this year. Continue reading »