GBE Domestic Politics
General Business Environment
(Domestic Political Environment)
THE IMPACTS OF POLITICAL TURMOIL DURING GENERAL ELECTION IN INDONESIA
ON PALM OIL INDUSTRY
The Case of Golden Agri Resources Ltd.
Lecturer:
Prof. Dr. Mohtar Masoed, M.A.
by:
Nanang Suko Sadono
13/361118/PEK/19272
Batch 63 International
MAGISTER OF MANAGEMENT
UNIVERSITAS GADJAH MADA
YOGYAKARTA
2014
THE IMPACTS OF POLITICAL TURMOIL DURING GENERAL ELECTION IN INDONESIA
ON PALM OIL INDUSTRY
The Case of Golden Agri Resources Ltd.
1. INTRODUCTION
In business, it is important to consider the political risk and its impact on the organization. Political risk is worth considering because an action or a change in policy in one country can have a big impact on the financial sector and the economy of that country. Political risks are generally associated closely with the government as well as political and security situation in a country. If the political situation is stable, generally business runs smoothly. In terms of the stock market, a conducive political situation would make the stock price go up. Conversely, if the political situation is uncertain, it would cause the element of uncertainty in the business.
In Indonesia, after the fall of the New Order, changes in politics and governance was characterized by a significant change in the political system (a process of democratization) which had opened new opportunities and also new threats to the business community this country. For years, during New Order, political parties in Indonesia were only 3 parties: PPP, Golkar, and PDI. After New Order fell (Reformation Era), the number of political parties involved in general election increased significantly. The 1999 general election, the first general election in Reformation Era, was followed by 48 parties.
Despite the number of political parties are always changing during the Reformation Era, political situation was relatively stable. The stability also continued under President Susilo
(Domestic Political Environment)
THE IMPACTS OF POLITICAL TURMOIL DURING GENERAL ELECTION IN INDONESIA
ON PALM OIL INDUSTRY
The Case of Golden Agri Resources Ltd.
Lecturer:
Prof. Dr. Mohtar Masoed, M.A.
by:
Nanang Suko Sadono
13/361118/PEK/19272
Batch 63 International
MAGISTER OF MANAGEMENT
UNIVERSITAS GADJAH MADA
YOGYAKARTA
2014
THE IMPACTS OF POLITICAL TURMOIL DURING GENERAL ELECTION IN INDONESIA
ON PALM OIL INDUSTRY
The Case of Golden Agri Resources Ltd.
1. INTRODUCTION
In business, it is important to consider the political risk and its impact on the organization. Political risk is worth considering because an action or a change in policy in one country can have a big impact on the financial sector and the economy of that country. Political risks are generally associated closely with the government as well as political and security situation in a country. If the political situation is stable, generally business runs smoothly. In terms of the stock market, a conducive political situation would make the stock price go up. Conversely, if the political situation is uncertain, it would cause the element of uncertainty in the business.
In Indonesia, after the fall of the New Order, changes in politics and governance was characterized by a significant change in the political system (a process of democratization) which had opened new opportunities and also new threats to the business community this country. For years, during New Order, political parties in Indonesia were only 3 parties: PPP, Golkar, and PDI. After New Order fell (Reformation Era), the number of political parties involved in general election increased significantly. The 1999 general election, the first general election in Reformation Era, was followed by 48 parties.
Despite the number of political parties are always changing during the Reformation Era, political situation was relatively stable. The stability also continued under President Susilo
References: 6. Diary. 2014. Quick Count Indonesian election : Prabowo vs Jokowi, URL: http://www.redstate.com/diary/tukangsepam/2014/07/11/quick-count-indonesian-election-prabowo-vs-jokowi/, accessed on October 15, 2014. 7. General Elections Commission (KPU). 2014. Presidential Election Result. URL: http://www.kpu.go.id/index.php/pages/detail/2014/316, accessed on October 15, 2014. 8. Golden Agri Resources Ltd. 2014. Preserving the Present Ensuring the Future-Annual Report 2013. Singapore: Golden Agri Resources Ltd. 9. Thatcher et al. 2014. Indonesia 's Prabowo withdraws presidential candidacy - party official. URL: http://www.reuters.com/article/2014/07/22/us-indonesia-election-prabowo-idUSKBN0FR0T720140722, accessed on October 15, 2014. 10. Yahoo Finance. 2014. Composite Index (JKSE). URL: http://finance.yahoo.com/q/bc?s=^JKSE&t=6m&l=on&z=l&q=l&c=, accessed on October 16, 2014. 11. Yahoo Finance. 2014. Golden Agri Resources Ltd. URL: https://sg.finance.yahoo.com/q/bc?s=E5H.SI&t=3m&l=on&z=l&q=l&c=, accessed on October 16, 2014. 12.