The Business Monitor International (BMI) ratings can be used to rank emerging markets in terms of political risk, the economy and quality of business environment. There are four ratings : a composite rating, a political rating, an economy rating and business environment rating. These ratings are reviewed every month and the results posted on BMI's online service Emerging MArkets Online (www.businessmonitor.com). The political and economy ratings have short-and-long-term components. The long-term ratings are designed to reflect more structural considerations and will not change greatly in the short term. The short-term ratings will change frequently in response to more transient influences. All ratings are expressed as a number between 1 and 100. A hight rating is an indicator of lower risk.
Political rating - Yudhoyono leads Presidential Race : Campaigning has begun for Indonesia’s presidential elections on July 5. According to opinion polls, former security minister Susilo Bambang Yudoyono remains favourite to become the country’s first directly elected leader. Forty-one percent of respondents to the latest survey named the ex-general as their first choice-that puts him nearly 30 points ahead of his closet rival, President Megawati. Indonesia’s next president will likely be decided by a run-off vote between the two leading candidates on September 20.
Economic Rating - Bank Indonesia Tightens policy : Bank Indonesia, the central bank, has tightened monetary policy in a bid to contain rising inflation which is being fuelled by depreciation of local currency, the rupiah. On June 2, Governor Burhanuddin Abdullah said that he would raise banks’ reserve requirements and increase austions of government debt as a part of package of measures aimed at absorbing an estimated IDR39trn-40trn (US$4.1 bn - 4.2 bn ) in exess liquidity. The Rupiah, Asia’s worst performing currency this year, had fallen to a two year low of IDR9.570/US$.
Busiess Environment Rating - Prudentioal Wins Appeal : Prudential Life Assurance, the Indonesian subsidiary of UK based Prudential Plc, has won its appeal against a controversial bankcruptcy ruling. In April, The Pru was declared bankcrupt by Jakarta’s commercial court in a move that sparked alarm among investors. But, on June 8, the supreme court overturned the ruling. A hit-and-miss legal system is one of the biggest barriers to greater foreign investment in Indonesia.