Indonesia: Prabowo is favourite to win election, but likely to face runoff

• Prabowo-Gibran lead all polls, but fall short of 50% threshold to win in first round
• Anies, Ganjar could reportedly form coalition for potential runoff
• Markets would be surprised mostly in case Anies wins, Prabowo/Ganjar are seen as more of the same

Gerindra leader Prabowo Subianto is the clear frontrunner to win the upcoming presidential elections. His popularity has surged passed his rivals over the last few months, drawing in part supporters of the incumbent President Joko Widodo. However, should he fail to win in the first round, the runoff may prove tricky as his rivals mull forming a coalition for the runoff.

Legal framework

Indonesia is facing a dual election on Feb 14, with both the president's and the parliament's terms ending. The focus is largely on the presidential election, as the future president will be the one to form a government and seek parliamentary support for his cabinet. However, parliamentary elections also carry significant weight as the parties' bargaining power will be determined by the number of seats they win.

The presidential election features a two-round voting system, with voters casting a single vote for their preferred candidate. The candidates are paired with their VPs, with each pair getting a ballot number 1-3 on a random basis. To be eligible to run in the presidential elections, each candidate must be endorsed by a party or coalition which has at least 20% of the MPs in the lower chamber, the DPR, or 25% of the popular vote in the previous general election.

To win in the first round, a candidate must win a simple majority (50% of the votes cast) and at least 20% of the vote in more than half of all provinces. The latter largely discourages strong regional candidates, though they could be paired as VPs to draw votes from a specific province. If no one wins in the first round, the election goes to a runoff between the two most popular candidates, where whoever gets more votes becomes the next Indonesian president. The second round, if it comes to it, will be held on Jun 26.

The parliamentary elections feature a proportional representation system, where by MPs in the DPR, the lower chamber, are elected through an open-list system - meaning voters can cast preferences for the candidates in the party list. There are 84 districts, which elect a different number of MPs (between 3-10) based on the population, while seat distribution is done according to the Sainte-Lague method. The parliamentary threshold is set at 4%.

Main candidates

Prabowo - Gibran

Gerindra leader Prabowo Subianto chose Solo mayor Gibran Rakabuming Raka as his VP candidate. Gibran is the eldest son of acting President Joko Widodo. This was largely seen as a move to draw Jokowi supporters towards Prabowo and away from the senior ruling PDI-P's candidate. The move drew a lot of controversy as Gibran was not eligible to register as a VP candidate, due to his young age, but a Constitutional Court ruling allowed him to do so. Coincidentally, the Chief Justice of the Constitutional Court at the time was Jokowi's brother-in-law Anwar Usman, who was later demoted due to a breach of the ethics code.

Prabowo himself is a former army commander with dubious human rights records. He ran twice unsuccessfully for the Indonesian presidency, in 2014 and 2019, both times losing to current President Joko Widodo. Once fierce rivals, the two embraced after the last election in 2019 and Prabowo joined Jokowi's cabinet as a minister of defence in the grand coalition formed by Jokowi, which left only two parties in opposition. Prabowo has since moderated his stance significantly and even taken Jokowi's eldest son as his VP nominee.

In terms of political agenda, a new Prabowo government would be largely a continuation of the Jokowi government, at least initially. Prabowo tries to draw support from a lot of Jokowi supporters, appearing almost daily at various events with the popular Indonesian president. Understandably, there has been little to no criticism of the current administration, with Prabowo choosing to devote more focus on his agenda for higher defence spending, as well as the social policies, which are a key topic among other candidates as well.

Ganjar - Mahfud

Central Java governor Ganjar Pranowo and coordinating minister Mahfud MD were the senior ruling PDI-P's nominations for president and vice-president, respectively. The PDI-P is the only party to have more than 20% of the MPs in the current parliament, hence it was able to nominate its candidate without the need to negotiate for support with other parties.

Ganjar reportedly overcame significant internal competition to become the presidential candidate, after party whip Puan Maharani, the daughter of party leader Megawati Soekarnoputri, allegedly pursued the nomination. Internal party rumours suggested that Ganjar was the preferred candidate of the current President Joko Widodo, though Jokowi has not formally supported any candidate. This process took place before Prabowo nominated Jokowi's son Gibran for VP, which led to all of Jokowi, Gibran and Jokowi's brother-in-law Bobby Nasution leaving the PDI-P.

Ganjar is a seasoned politician, having spent all his political career in the PDI-P. He served two terms as MP (2004-2009 and 2009-2013) before becoming Central Java governor in 2013. His running mate, Mahfud MD, is a former Chief Justice of the Constitutional Court, who currently serves as coordinating minister for political, legal and security affairs in Jokowi's cabinet.

On the political front, we see a new Ganjar government largely as a continuation of the Jokowi government, much like the Prabowo cabinet, though Ganjar will likely not be able to form a grand coalition like Jokowi. So, as a result, we may see a slight turn to central-leftist policies, more to the agenda of the PDI-P. Moreover, Ganjar is not as popular as Jokowi, hence he would be more susceptible to the party's agenda being pushed through his government.

Anies - Muhaimin

Former Jakarta governor Anies Baswedan and PKB leader Muhaimin Iskandar are the only real opposition to the current government, running in the presidential elections. Anies served for two years in President Joko Widodo's first cabinet (2014-2016), but relations between the two have since reportedly deteriorated as Anies is the harshest political critic of Jokowi at present. Although he is not a party member, his bid was endorsed by NasDem, which then formed a coalition around him.

On the other hand, the PKB initially formed a coalition with Gerindra in support of Prabowo but later left it after it became clear that PKB leader Muhaimin Iskandar would not become Prabowo's VP candidate. Muhaimin was reportedly negotiating extensively with both Anies and Ganjar, eventually securing a nomination with Anies. His previous experience includes serving as Labour Minister under former President Susilo Bambang Yudhoyono (SBY) in 2009-2014. He has been the party leader since 2005, supporting President Joko Widodo in the last two presidential votes. His presence as a running mate for Anies largely aims to attract Muslim votes.

On the political front, this is the only real alternative to Jokowi's policies. Also, a potential victory for Anies-Muhaimin would certainly cause some market turmoil, due to the expected departure from the current political and economic course. Some of the more radical proposals put forward by Anies include cancelling the construction of the new capital Nusantara and instead focusing on multi-city development. Muhaimin has also been critical of some social aspects of Jokowi's government, with his party insisting on more social equality and adjustment of the distribution of social aid by the government.

Parliamentary elections

The parliamentary elections will take place at the same time as the presidential elections. Although not receiving much focus in the media, they are crucial for the political parties to secure their bargaining position with the future president when he tries to form a cabinet.

Political parties in Indonesia are usually not divided by the left-wing/right-wing political spectrum, but rather by the role Islam plays in the party ideology. Previously, parties used to be either pro-Pancasila, the national ideology of Indonesia, or pro-Islam, but all Islamic parties have more or less adopted Pancasila.

For more clarity, we will divide parties by the candidates they endorsed for the presidential elections.

Prabowo - Gibran

The frontrunners are backed by the Advanced Indonesia Coalition, which is a wordplay with the Onward Indonesia Coalition (KIM), which backed the current President Joko Widodo at the last presidential election in 2019 as both coalitions are spelt the same in Indonesian. This once again highlights the attempt of Prabowo to gain as many Jokowi supporters as possible. The parties in the coalition currently have 45.4% of the MPs in the parliament, which is more or less in line with Prabowo's polling. The Advanced Indonesia Coalition members are:

Gerindra

Prabowo's party is currently the third-largest party in the parliament. It is a right-wing populist party, which could be said for a lot of other parties in Indonesia, endorsing the Pancasila principles. Gerindra split from Golkar back in 2008 as Prabowo aimed to run for VP, while Golkar nominated Yusuf Kalla for president and Prabowo's arch-rival Wiranto for VP. It is a leader-focused party, though again this applies to the bulk of political parties in Indonesia.

Golkar

Golkar is the oldest party in Indonesia, formed by long-time dictator Suharto. The party sought to reposition itself after Suharto's fall in 1999, undergoing a series of leadership changes. The party currently positions as centrist, or centre-right, and it is the second-largest party in the current parliament. The party's leader is EconMin Airlangga Hartarto, who has served in both cabinets of President Joko Widodo. Notably, Airlangga has not run for president or VP, despite being the leader of the second-largest party in Indonesia.

Democratic Party

One of the only two opposition parties during President Joko Widodo's second term. However, it has a strong affiliation with Gerindra leader Prabowo Subianto, as it backed him twice in his previous two attempts to become president. It is led by Agus Harimurti Yudhoyono (AHY), who is the son of former President Susilo Bambang Yudhoyono (SBY), who served between 2009 and 2014. It is a nationalist and populist party, positioned in the centre-right. Its popularity has decreased since SBY's presidency.

PAN

An Islamic nationalist party, which is again positioned centre- to centre-right. It stems from the Muhammadiyah organisation, now one of the two main Muslim organisations in Indonesia (the other being NU). The party has been a staunch supporter of Prabowo during his two previous attempts to become president.

PSI, PBB, Garuda, Gelora

They are all smaller parties, which are currently not represented in the parliament. The PSI (Indonesian Solidarity Party) deserves the most attention as it elected Jokowi's youngest son Kaesang Pangarep as leader. Also, it is one of the few left-wing parties in Indonesia, which have enjoyed very low popularity, largely as a consequence of the Suharto regime, when left-wing and communist parties were banned.

Ganjar - Mahfud

Ganjar Pranowo was selected as the presidential candidate by the senior ruling PDI-P, which was the only party that could nominate a candidate on its own, as it had more than 20% of the MPs. The minor ruling PPP also supported Ganjar, while the other two non-parliamentary parties Perindo and Hanura joined at a later stage. As a result, the coalition behind Ganjar is much smaller than the one behind Prabowo.

PDI-P

The senior ruling party, which was behind the success of President Joko Widodo. However, relations between Jokowi and the party deteriorated over the last year. First, because Jokowi reportedly supported Ganjar, who faced competition from the party leader's daughter Puan Maharani, and second after Jokowi's eldest son Gibran joined Prabowo as a VP candidate, which in turn led to Jokowi and his close family cutting ties with the PDI-P.

The PDI-P is the largest nationalist, non-Islamic party, which is a centrist and populist party. It attracts voters from a broad political spectrum. Some local media describe it as a progressive leftist party, though it is far from what a modern left-wing party looks like. It is led by former Indonesian President Megawati Soekarnoputri, who is the daughter of Indonesia's first President Sukarno. The party is very focused on its leader, with even the presidential nomination being Megawati's decision.

PPP

The United Development Party (PPP) is one of the many Islamic parties in Indonesia. One of the oldest parties, it served as a united party for all Muslim organisations at the time of its foundation during the Suharto regime. Today, it is one of the more mildest Muslim parties, which endorses Pancasila and does not look to Sharia law as the main principle. It is a centre-right political party, like the majority of other political parties, though it endorses some nationalistic left-wing ideas such as the state control over major SOEs and sectors, affecting the majority of the population.

The PPP is the smallest party in the ruling coalition at present, having just 19MPs. Its support has been gradually declining throughout the last 20 years and the party barely made it into the parliament in 2019. This time, it is again on the verge of entering the parliament, according to most polls, while this could prove vital for Ganjar if he wins the presidential election.

Perindo

One of the more recently formed centre-right parties, Perindo does not have any MPs at present, while its potential to enter parliament remains limited. It is a leader-focused party, founded by media tycoon Hary Ranoesoedibjo, after he split from NasDem and Hanura respectively.

Hanura

A centrist party, formed by former national army commander Gen. Wiranto. It had MPs back in 2014-2019, but its support dwindled at the last general election. At present, it does not have the chance to enter the parliament, but its support for Ganjar could bring an additional number of loyal Wiranto voters.

Anies - Muhaimin

The only opposition to the current president is backed by the Coalition of Change for Unity, which consists of three parliamentary parties and several regional parties not present in the parliament. The two largest parties in the coalition, NasDem and PKB, are currently part of the ruling coalition, though NasDem has been on the verge of leaving it and has been critical of President Jokowi. Previously, the Democratic Party was also part of the coalition but left after the PKB joined and Anies selected Muhaimin as his VP candidate instead of the Democratic Party leader Agus Harimurti Yudhoyono (AHY).

NasDem

The largest party in the coalition, it is a centrist party, though sometimes seen as a centre-left party. It was founded by media tycoon Surya Paloh after he left Golkar in 2011 following a 40-year membership in the party. It adopts Pancasila but is more of a nationalist party and a leader-focused party. Its support has grown over the years, though it supported President Joko Widodo over the last two elections, which could be seen as a factor towards its growth.

PKB

The largest Muslim party presently, it is a centrist political party with a more traditional view on Islam. It was founded by the NU in 1998, but recently the NU has tried to remain neutral and differentiate from the political party. It has strong support among traditionalist Muslim voters, particularly in Java. It is the first time its leader has been nominated for VP, though since 2004 it has always supported the winning candidate.

Opinion polls

Opinion polls have put Prabowo as the firm favourite to win the election since the candidates were registered in October 2023. Still, Prabowo's support falls short of the 50% threshold needed to win the election in the first round. On the other hand, a potential runoff would be an easy victory for Prabowo, according to virtually all polls.

On a related note, the PDI-P's Ganjar used to be the most popular candidate, before the registration, largely due to popular opinion seeing him as Jokowi's choice for his successor. However, with the latest political developments, Ganjar's popularity has dropped significantly and he now trails behind Prabowo, with some polls even showing him behind Anies as well.

On his part, Anies started from a very low level, but his popularity has been gaining pace as he gradually formed a coalition around his bid. The PKB's switch also played a role as Anies will gather a lot of Muslim votes.

Election scenarios

Prabowo wins in first round - 35%

We give a 35% chance to Prabowo winning in the first round. Overall, the election is expected to go into a second round, but given that Prabowo is quite close to the 50% threshold, a minor swing in voter preferences could help push his support above 50%. This could happen given that the age structure of the voting population has been changing, with a lot of young and first-time voters taking part in the election. In fact, the share of Millennials and Gen Z voters is 52% out of the 204.8mn registered voters.

Prabowo wins in second round - 55%

We see this as the most likely outcome of the presidential election. Opinion polls give Prabowo a sizeable advantage over any of his rivals in a potential runoff. However, coalition building could come into play here as rumours suggest that Ganjar and Anies have reportedly explored options to join forces for the runoff in support of the second-placed candidate.

Ganjar/Anies win in second round - 10%

We attach a rather small probability to the second-placed candidate in the first round to win in a potential runoff against Prabowo. This would be a big surprise, which could send markets into turmoil, particularly in case Anies manages to defeat Prabowo. Both Ganjar and Anies run quite close in polls, so each of them is equally likely to make it to the runoff, in our view.