Indonesia's presidential front-runner Jokowi said to plan market-friendly policies

JAKARTA (REUTERS) - Indonesian presidential front-runner Joko "Jokowi" Widodo has assured top fund managers that he would cut fuel subsidies, improve infrastructure and enact major bureaucratic reforms to attract investment if elected in July.

In a private event on Tuesday attended by representatives of the top 10 asset management funds in Indonesia, Mr Jokowi offered a rare glimpse of policies that he has yet to make public ahead of a July 9 presidential election.

"His key election platform is market-friendly with a focus on lifting workforce capability through education, bureaucratic reform, infrastructure construction and encouraging energy investment," investment firm CLSA, the organisers of the Jakarta event, said in a research note.

CLSA officials declined to identify the other fund management companies at the event.

Mr Jokowi is governor of Jakarta. His populist style has won him much support in the world's third biggest democracy, where years of rapid growth have started to slow, threatening to widen a gulf between the rich and the growing ranks of poor.

But the election is not yet won and one recent poll showed Mr Jokowi's lead had narrowed slightly, although he was still 15 points ahead of his closest rival.

The only major economic policy that Jokowi has announced has been that he would reduce fuel subsidies within a four to five-year period.

He provided more details of that policy to the fund managers, saying ending wasteful fuel subsidies would save the government US$30 billion (S$ 37 billion). Those funds would be reallocated to building roads, ports and airports, CLSA said.

Mr Jokowi, who is expected to announce his running mate by May 20, also said he would look to cut energy costs by US$7 billion a year by removing up to 90 per cent of diesel-fired power plants.

If elected, Mr Jokowi also promised to issue at least four presidential decrees on bureaucratic reform within his first 100 days in office.

CLSA said the key beneficiaries of Mr Jokowi's policies would be highway operator PT Jasa Marga, cement firm PT Indocement Tunggal Prakarsa, and construction firm PT Wijaya Karya. Energy firms PT Perusahaan Gas Negara, PT Elnusa , and offshore service provider PT Wintermar Offshore Marine also stood to benefit.

Many have called on Mr Jokowi, who is a fresh face on the national scene, to pick a running mate with business and political experience.

Media has tipped former vice president Jusuf Kalla, who is an influential public figure and heads the Indonesian Red Cross.

The recent opinion poll showed a Jokowi-Kalla ticket would win 46 per cent of the vote, far ahead of the rival ticket formed this week by ex-general Prabowo Subianto and former chief economic minister Hatta Rajasa.

But many voters are undecided, the survey showed.