ESG and the Indonesian Elections
Indonesia, the world’s third-largest democracy, is going to the polls on 14th February 2024. Almost 205 million registered voters will be choosing their next president, vice president, as well as around 20,000 local and national legislators in the House of Representatives. The presidential election features three candidates: Prabowo Subianto, the minister of defence, Ganjar Pranowo, the former governor of Central Java and Anies Baswedan, the former governor of Jakarta. They will be replacing the extremely popular Joko Widodo (also known as Jokowi), who is unable to run for a third term. This report focuses on the impact of each candidate's policies related to nickel mining and deforestation.
Key takeaways
All candidates have committed to downstreaming, which is seen as the key contributor to economic growth in Indonesia. Downstreaming policies are of high importance in sectors related to the energy transition, such as nickel mining and the palm oil industry.
China serves as the major variable in the political landscape of nickel industry. While Indonesia still needs Chinese investment for its developmental ambitions, the future president will determine the environmental and social cost he is willing to pay.
Little regulatory change concerning deforestation is likely, with increased risks to forests due to political momentum in furthering the economic impacts of infrastructure-led development.