In the wake of Indonesia’s worst stock-market rout since the 1998 Asian financial crisis, President Prabowo Subianto’s administration has turned to appeals to economic nationalism to shore up confidence, urging citizens to rally behind the country’s battered stock market.
The government has promised reforms in response to warnings from global index provider MSCI that Indonesia could be downgraded from emerging-market to stand-alone-market status.
But analysts say its patriotic appeals will do little to restore investor confidence without concrete steps to improve market transparency and governance, while potentially exposing retail investors to further losses.
After the Jakarta Composite Index (JCI) plunged 11 per cent on Friday, further sell-offs followed in the ensuing days, prompting a defiant Prabowo to address the market turmoil at a cabinet meeting five days later.