Sugar takes centre stage in Indonesian presidential race
JAKARTA: Indonesian President Joko Widodo, who’s seeking another five-year term in 2019, has opened up the floodgates to sugar imports to stabilise domestic prices. It worked, but now he’s facing the heat from local farmers, a key voting bloc.
With an election looming in April, Indonesia’s economy has expanded at a rate of about 5% under Jokowi, as he’s commonly known. While the government has failed to hit its 7% target, the nation’s unemployment rate is about 5.3%, after falling to a two-decade low in February. The president has also been praised for a massive infrastructure program and reform agenda that’s helped secure sovereign rating upgrades and much-needed investment.
Yet Indonesian politics are complex, and Jokowi is engaged in a delicate balancing act.
He’s launched an array of policies to keep the prices of everyday staples like sugar and rice in check and improve upon the stagnating wage growth that’s weighed on Indonesia’s expanding middle class.
Yet by doing so he has drawn the wrath of the country’s powerful agricultural lobby that favors Prabowo Subianto, an Indonesian businessman and ex-special forces commander who leads the opposition Gerindra party.
“Jokowi must ensure that commodity prices are affordable for lower-income consumers,” said Achmad Sukarsono, a Singapore- based analyst at Control Risks. “At the same time, Jokowi must show he cares about the plight of local farmers whose products fail to compete with these imported goods.”
Hundreds of cane planters rallied in front of the presidential palace in Jakarta on Oct 16-17 and called on the government to stop imports and ensure refined sugar for industry use is not sold in the retail market. The protesters also seek the dismissal of Trade Minister Enggartiasto Lukita.
Domestic farmers are facing an estimated two trillion rupiah (US$137mil) of losses as sugar prices have tumbled 7% over the last year, according to the Indonesia Sugarcane Farmers Association.