The economics of Indonesia’s election campaigns

Indonesia’s election campaigns are an expensive business. They can even lead political parties to financial ruin. From spending on such things as free music concerts, food, T-shirts, stickers and expenses for candidates, parties need funds to cover their campaign costs.

Some politicians may even attempt to use illegitimate funding sources, which will undermine their parties’ and candidates’ integrity.

How much are the political parties willing to invest in order to contest the upcoming elections next month, compared with the last elections?

Political parties and candidates often do not hesitate to heavily invest in their campaigns. In the 2004 and 2009 legislative elections, the total funds reported to the state auditor were 298 billion rupiah (S$32.1 million) and 826 billion rupiah, respectively.

For the upcoming elections, the preliminary campaign budgets registered with the Indonesian Election Commission (KPU) have reached 927 billion rupiah.

HIGH COST OF OPEN-LIST SYSTEM

Presidential contender Prabowo Subianto’s Gerindra Party is the “high roller” with 144 billion rupiah. Meanwhile, President Susilo Bambang Yudhoyono’s Democratic Party will provide 135 billion rupiah and the Indonesian Democrat Party-Struggle (PDIP), headed by former President Megawati Sukarnoputri, has allocated 130 billion rupiah for its campaign budget.

Although Gerindra and Democrat are among the biggest spenders, their campaign funds are smaller than for the 2009 elections. This year, Gerindra’s budget has shrunk by 53 per cent and Democrat’s by 43 per cent. Conversely, the PDIP and other political parties (United Development Party, Crescent Star Party and PDIP) are growing their budgets between three times and 14 times (in the case of the National Awakening Party) of their 2009 budgets.

Golkar, one of Indonesia’s oldest political parties, has cut its budget to almost 50 per cent, from 143 billion to 75 billion rupiah.

However, even the large political parties’ budgets are not enough to fully support their candidates, who are thus forced to seek additional sources of funding.

The open-list system, in which the electorate votes for the person rather than the party, forces every candidate to do self-promotion to woo voters.

For example, in the last national legislative elections, each candidate spent an average of 2 billion rupiah, although some better-known candidates were able to spend as little as 300 million rupiah.

The open-list system undermines Indonesia’s democratic progress. This can be seen from the flourishing candidacies of public personalities such as actors, actresses, religious leaders and well-off business people outside the party hierarchies.

Coupled with the absence of ideological platforms, the erosion of parties’ reputations and questions about their raison d’etre may arise. Nevertheless, without those public figures, the campaign costs of parties are bound to increase.

FUNDING BY ANY MEANS

There are several ways for political parties to overcome the high cost of the elections.

First, candidates can and do use their own money. However, this creates cynicism that political participation is only for the rich. Second, candidates borrow money and promise to pay back when they win. This leads to problems as winning candidates focus on repaying their debts rather than working as legislators and losing candidates face debt burdens.

Third, candidates tend to turn to large donors. This “donation trap” weakens the integrity of the candidates as they feel indebted and give preferential treatments to the sponsors when it comes to government tenders, eliciting corruption.

Another source of questionable election funding is the use of the state budget for campaign purposes. Some politicians allegedly use their institutions’ facilities for campaigning.

For example, a Prosperous Justice Party candidate came under fire recently as her campaign team had pasted her campaign photo sticker on the Ministry of Health biscuits donated to the flood victims in Jakarta.

In an attempt to solve the campaign funding trap, the KPU has demanded that political parties and candidates report their campaign financial accounts, as well as list donations received from individuals and organisations (capped at 1 billion and 7.5 billion rupiah, respectively).

Campaign-financing activities are audited; failure to meet these requirements will disqualify political candidates and parties. Those providing fake financial reports will have their votes annulled.

The KPU cooperates with the Election Supervisory Board and Indonesian Police Force to investigate any suspicious financial reports. Notwithstanding these procedures, critics are still demanding that the election funding be better regulated.

LIMITING CAMPAIGN FUNDING

One issue that keeps arising is that there is no limit for overall campaign funding — only limits on the amount of donations received per individual or organisation.

If not regulated, this system will produce sky-high campaign costs. It creates a focus on gathering more resources rather than creating smarter campaign strategies, while high campaign budgets may also lead to vote-buying, rather than providing political education to the electorate. Additionally, political parties select candidates based on resource ownership or public popularity, rather than quality.

If these problems are to be solved, it is necessary for the government to set a reasonable election campaign fund limit. Candidates will be able to focus on engaging the voters and develop campaign methods based on voluntarism as a way to reduce cost. To attract volunteers, candidates should pay attention to grassroots-level political involvement instead of focusing on elite political deals.

To support the standardising of election costs, the government must impose campaign conditions that provide political education for voters as a way to balance to candidates’ pragmatic campaigning.

For example, the government can arrange open debates between candidates and parties, so that the public know their quality and style of communication. Capping campaign budgets will help Indonesia build a quality democracy rather than a wasteful political system.

ABOUT THE AUTHORS

Fitri Bintang Timur is an Associate Research Fellow and Adhi Priamarizki is a Senior Analyst at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.