Military

DATE=07/07/04

TYPE=CORRESPONDENT REPORT

TITLE=INDONESIA / PRESIDENTIAL CANDIDATES L-ONLY

NUMBER=2-317302

BYLINE=TIM JOHNSTON

DATELINE=JAKARTA

CONTENT=

VOICED AT:

// Re-issuing, clarifying last graph //

HEADLINE: Indonesia Presidential Second Round To Be Tight Battle

INTRO: After the first round of Indonesia's presidential elections on Monday, it is becoming increasingly clear that the run-off, scheduled for September, will pit the incumbent, President Megawati Sukarnoputri, against her former security minister. As Tim Johnston reports from Jakarta, Mrs. Megawati faces a difficult challenge.

TEXT: After a campaign that concentrated on personalities rather than policies, President Megawati Sukarnoputri and her former security minister Susilo Bambang Yudhoyono ended up at the top of the ballot in Monday's first round election. They will now face each other in a run off in September.

Mr. Yudhoyono, a former general, goes into the race with a strong lead. He was eight percentage points ahead of Mrs. Megawati in the first round. Polls show he is likely to inherit many of the votes of the three other candidates that were knocked out.

Mrs. Megawati ran a lackluster campaign, and was widely seen as aloof and out of touch with an electorate looking for a strong leader who would tackle the country's economic and security problems.

Mr. Yudhoyono capitalized on these worries, criss- crossing the country stressing his military background. He also promised to revive economic growth, but was less specific about concrete financial details.

Landry Subianto is an analyst with the Centre for Strategic and International Studies in Jakarta. He believes there is little to differentiate the candidates, and predicts they will end up trying to appeal to their core geographical base.

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"They tried to run for the same ideological basis, they tried to grab the nationalist sentiment among the voters. And since the second round will be determined not by a proportional majority but by an absolute majority, I think Java and Sumatra will be the battleground and obviously both Megawati and Susilo Bambang Yudhoyono tries to work hard on these two islands."

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Analysts say Mrs. Megawati has probably gotten less credit than she deserves for stabilizing the economy and the country after her predecessor, the unpredictable Abdurrahman Wahid, was forced from office three years ago.

Mr. Yudhoyono established a solid profile during his time as security minister. He was tough on terror, but also backed an ultimately unsuccessful negotiated solution to the simmering separatist rebellion in the northern province of Aceh.

The polls show that Mrs. Megawati might be fighting a losing battle.

Analysts say people are hungry for change, and have difficulty understanding why so many of the promises of reform she made at the last elections have remained unfulfilled. (signed)

NEB/HK/TJ/JJ