Sugar takes cen­tre stage in In­done­sian pres­i­den­tial race

The Star Malaysia - StarBiz - - Foreign News -

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.

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