Tenggara Backgrounder July 26, 2019

Megawati-Prabowo, Paloh-Anies: Foes turn friends

Overview - In a sudden turn of events, foes recently turned into friends this week. The meeting between Indonesian Democratic Party of Struggle (PDI-P) matriarch Megawati Soekarnoputri and Gerindra Party chairman Prabowo Subianto on Wednesday ended the distant relationship between the two, at least for now.

 
Much ado about the Assembly speakership

Overview - One of the most hotly contested positions among political parties is the speakership of the People’s Consultative Assembly (MPR). The job, in the recent past, has been mostly ceremonial. Rumor mills say the MPR speakership is important this time amid the growing campaign to reopen the debate on amending the Constitution.

Muhammadiyah, NU squabble over strategic posts

Overview - Squabbling between the country’s two largest Islamic organizations, Nahdlatul Ulama (NU) and Muhammadiyah, has been reportedly reignited as President Joko “Jokowi” Widodo is preparing his upcoming Cabinet. Indeed, the NU’s political clout has increased considerably, after Jokowi and his running mate, NU-backed Ma’ruf Amin, won the 2019 presidential race. 
 

Jokowi's fight against radicalism in question

Overview - In his first political speech following his reelection on July 15, President Joko “Jokowi’ Widodo boldly stated that his second and last term in office would not tolerate those who disturb and take issue with state ideology Pancasila. However, the government could only go so far as to create a new regulation to prevent the spread of radicalism and promote state Pancasila.

Duniatex struggles with more than $2 billion debt

Overview - A subsidiary of PT Duta Merlin Dunia Textile (Duniatex), the largest textile manufacturer in Indonesia, failed to meet a scheduled US$11 million interest payment for its dollar-denominated bond worth $300 million (Rp4 trillion). Bloomberg reports that Duniatex’s bond is part of the increasingly popular Asian junk bond market, mostly issued by Chinese real estate companies.

PTBA president director proposed to lead PLN

Overview - State-Owned Enterprises (SOEs) Minister Rini Soemarno has reportedly proposed Arviyand Arifin, currently president director of state mining company Bukit Asam (PTBA), to President Joko “Jokowi” Widodo as the sole candidate for state electricity firm PLN president director.

OJK demands Ilham Habibie bring in more cash for Muamalat

Overview - The Financial Services Authority (OJK) has rejected for a third time a rights issue request by PT Bank Muamalat Indonesia. The OJK demanded new investor Ilham Habibie deposit more cash to reach the required minimum capital. Initially, Ilham planned to cover the difference in the form of debt that could later be exchanged for shares. The OJK rejected this scheme.

Global Macro: US intervenes in Japan-South Korea trade dispute

Overview - Upon learning development of Japan-South Korea trade dispute, US President Donald Trump dispatched his national security adviser John Bolton to South Korea and Japan to prevent South Korea from making a drastic move that could jeopardize the trilateral cooperation.