Warning to President and his ministers to take concrete steps to convince Indonesians that the administration deserves to stay in office

Warning to President and his ministers to take concrete steps to convince Indonesians that the administration deserves to stay in office

Massive demonstrations in Malaysia demanding Prime Minister Najib Razak to relinquish power should serve as a warning to President Joko Widodo and his ministers to take concrete steps to convince Indonesians that the administration deserves to stay in office, experts here say.

Demonstration attracting tens of thousands of people spilled over into a second day in the neighboring country on Sunday.

"It all began with Malaysia's worsening economic performance, with corruption accusations against Najib as the trigger. Now it has turned into a political crisis," said Aleksius Jemadu, dean of Pelita Harapan University's School of Social and Political Sciences.

"Like in Malaysia, we are facing the same economic downturn. The value of the rupiah, for instance, continues to fall. We have yet to face political crisis as in the neighboring country. But if the rupiah continues to drop and prices keep on rising we will have economic and political crises simultaneously," he added.

Aleksius said that Joko must avoid such crises from taking place at the same time because the impact would be unpredictable and very difficult to contain.

He cited the 1998 turmoil that led to the fall of Suharto and his New Order regime, as an example of of the impact of simultaneous crises in economy and politics.

"We are not there yet, and we still have room to avoid repeating history, as long as concrete actions are taken," said Aleksius.

Currency woes

The currency hit a 17-year low on Thursday before strengthening more than 1 percent on the central bank's direct intervention. The rupiah has fallen 13 percent to Rp 14,011 year-to-date, according to BI data.

Indonesia's annual inflation could pick up in August due to a weaker currency and an increase in import duties on a wide range of consumer goods, a Reuters poll showed.

The median forecast of 11 analysts was for August inflation to edge up to 7.43 percent from a year earlier, from July's 7.26 percent, making it the highest this year. Consumer prices were expected to rise 0.63 percent from the previous month, the poll showed. Bank Indonesia said prices in August likely rose 0.3 percent from July.

BI has said its focus would be on supporting the rupiah's stability and the central bank has introduced several measures.

Bantarto Bandoro, an international relations expert with the Indonesian Defense University, also voiced his concerns on the performance of Joko's administration almost a year after his inauguration.

He said even after the recent reshuffle he noticed that a number of ministers still were not performing well, adding that people believed the cabinet to be incapable of solving problems, further slashing trust in the government.

"If people see the government is not serious or incapable, as many are hit by the economic downturn, then it will only take a trigger for Indonesians to take to the streets like in Malaysia," he said.

'Dr. M. crossed  the line'

In Malaysia on Sunday, thousands gathered in a festive mood for a second day of protests. Their spirits had been lifted the night before when Malaysia's longest-serving leader, Mahathir Mohamad, made a brief and unexpected appearance among them.

Organizers expected the number of protesters to rise, despite a heavy downpour of rain, as the demonstration reached its climax in the evening.

Security remained tight and anti-riot trucks stood ready, but there were no reports of violence. City authorities rejected an application by pro-democracy group Bersih for a protest permit, which had raised fears of a repeat of a 2012 rally when police used water cannons and teargas to disperse protesters.

The protest has brought into the streets a political crisis triggered by reports of a mysterious transfer worth more than $600 million into an account under Najib's name.

Najib, who denies wrongdoing, has weathered the storm and analysts say the protest is unlikely to inspire broad public support for him to quit because the parliament lacks a strong alternative leader.

These protests, unlike the 2012 rally, lack the support of a party identified with the Malay majority. Most protesters on Saturday were from the minority ethnic Chinese and Indian communities.

However, Mahathir — a deeply respected 90-year-old who was once Najib's patron and is now his fiercest critic — was long a leader of UMNO, which represents Malays.

UMNO Vice-President Hishammuddin Hussein said Mahathir had "crossed over the line" by attending the anti-government protest, the New Straits Times reported.

Malaysia has been gripped since July by reports that investigators probing allegations of mismanagement and corruption at the debt-laden state fund 1Malaysia Development had discovered the transfer into Najib's account.

Its anti-corruption agency has said the funds were a donation from an unidentified Middle East donor.

Najib, who says he did not take any money for personal gain, has sacked his deputy and ministers who had questioned him as he sought to contain the scandal. The attorney-general who had been investigating 1MDB was also replaced.

Authorities also suspended two newspapers and blocked access to a website that had reported extensively on 1MDB.

Ringgit at 17-year low

Najib also retains significant support from the long-ruling National Front (BN) coalition and his party, UMNO. The coalition, in power since 1957, lost the popular vote for the first time in 2013 to an opposition alliance that split earlier this year.

However, he is under pressure over his handling of the economy, which has been hit by a slump in energy prices that threaten oil and gas revenues, and Malaysia's currency plummeted this month to 17-year lows against the dollar.

Meanwhile, a leader of Malaysia's ruling party said on Sunday that a million government supporters would stage a rally in October that would trump protests over the past two days.

Deputy Prime Minister Ahmad Zahid Hamidi warned organizers they could face legal action, a sign that Najib's government is losing patience with the anti-government protests that began in central Kuala Lumpur on Saturday.

"They must face the consequences if they dare to break the law," he said, according to a New Straits Times online report.

The Bernama national news agency said 12 people in the southwestern city of Malacca were arrested for wearing the signature yellow T-shirts of the protests, which the government had banned before the rally.

Jamal Yunos, a divisional UMNO chief, said one million "red shirt" government supporters would stage a rally in Kuala Lumpur on Oct. 10 as a riposte to the weekend protests.