Military

DATE=09/21/04

TYPE=CORRESPONDENT REPORT

TITLE=INDONESIA ELECTIONS L-ONLY

NUMBER=2-319136

BYLINE=SCOTT BOBB

DATELINE=JAKARTA

CONTENT=

VOICED AT:

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HEADLINE: Indonesia's Yudhoyono Holds Wide Election Lead Over Megawati

INTRO: Indonesia's election commission says Susilo Bambang Yudhoyono is maintaining a wide lead over President Megawati Sukarnoputri. With more than half the votes counted from Monday's election, Mr. Yudhoyono has garnered 60 percent of the vote. Correspondent Scott Bobb reports from Jakarta.

TEXT: Susilo Bambang Yudhoyono has refused to declare victory in Monday's vote. Instead he praised his rival, President Megawati Sukarnoputri, for overseeing political reforms that allowed the country's first direct presidential election to take place.

Mr. Yudhoyono says now is the time for reconciliation.

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"We have to be more united in the near future to face our national challenge to build a better Indonesia."

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Dozens of monitoring groups observed the balloting. The director the U.S.-based Carter Center, Eric Bjornlund, says preliminary reports say, overall, the election was a success.

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"The election went quite well, was reasonably well administered. In general, our assessment of the election process is quite positive."

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He says there were some procedural problems but no evidence of any intentional, vote tampering. Mr. Bjornlund called it the most democratic election in the country's history.

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"Clearly you have a president who can claim a very significant mandate because of the way in which he was elected president in addition perhaps to the margin by which he was elected president."

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The orderly nature of the process brought praise from foreign governments.

Domestically, the Jakarta stock market surged Tuesday and the Indonesian currency (the rupiah) strengthened on foreign exchange markets.

It is hoped the election will boost investor confidence in Indonesia, where the economy has stagnated since the Asia financial crisis of 1997.

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An analyst with the Control Risks Group, Martin Hughes, says foreign investors are hoping Mr. Yudhoyono will quickly address security issues and laws that hamper investors. But he says it will take much longer to reduce corruption.

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"In a growing country like this, it's a business reality. And it is hoped that he'll (Yudhoyono) somehow try and make some changes."

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Ms. Megawati's party has formed an alliance with a half-dozen parties that together will control more than half of the seats in the new parliament. Mr. Hughes says, as a result, if Mr. Yudhoyono becomes president, he will also face political challenges.

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"He will have some difficulties because he only holds 10 percent of the seats in the parliament, so we imagine that there will have to be some alliance-building and, indeed, negotiations."

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Nevertheless, analysts say Mr. Yudhoyono should enjoy a honeymoon with voters due to his expected landslide victory. And he may be able to attract leaders from other parties through cabinet and other government appointments. Buy they caution that the honeymoon could end quickly if he does not show decisive leadership in addressing some of the country's entrenched problems, including a vulnerability to terrorism and graft. (signed)

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