Insight: Indonesia tycoon Bakrie gears up for presidential bid

TANGERANG, Indonesia (Reuters) - There are many ways to describe Indonesia's Aburizal Bakrie: multi-millionaire businessman, global mining tycoon, heavyweight contender for the presidency in 2014. One description that does not spring to mind is man of the common people.

So when Bakrie strode into a railway station in south Jakarta last week and slapped the equivalent of one U.S. dollar down on the counter for a ticket, it was a moment of political theatre.

It also signaled an early step in the march to presidential elections in mid-2014 in the world's most populous Muslim-majority nation. Secular Indonesia, a hot favorite of international investors, is a sprawling archipelago of largely untapped mineral riches, an increasingly wealthy middle class and an economic growth rate last year of 6.5 percent.

But in a country in which it is deemed unseemly to openly declare ambition, Bakrie, chairman of the nationalist Golkar Party, stressed he was merely testing the waters.

"It is not yet a campaign," the 65-year-old told Reuters.

"The purpose of the trip is to give a speech, a motivation speech to ... high school students, to meet small vendors, to see also the agriculture, to see what their problems are so that I can tell my legislators," he said.

In fact, Bakrie was doing all the things that politicians do on the campaign trail. He was also confronting what his aides say is an obstacle on the road to the presidency: the perception that as a member of Indonesia's elite he is out of touch with the people.

Bakrie is one of Indonesia's wealthiest men, ranked number 30 by Forbes magazine with a net worth of around $900 million. He is considered one of the most successful pribumi, or native Indonesian, businessmen in a country where commerce is dominated by ethnic Chinese.

Until 2004, Bakrie headed the mining, palm oil and telecommunications conglomerate founded by his father Achmad, that is associated with London-listed coal venture Bumi Plc. Operations are now overseen by a brother.

Early opinion polls put Bakrie trailing in the list of possible candidates to take over from President Susilo Bambang Yudhoyono after his second and final term, but with the power of Golkar behind him and his own resources, he is seen as the man to beat.

Golkar, the second biggest party in Yudhoyono's coalition, was the political vehicle of strongman President Suharto, who ruled the archipelago for over three decades until 1998.

Yudhoyono is yet to endorse a candidate from his Democrat Party; however there are some familiar names in the running.

The opposition Greater Indonesia Movement Party has named businessman and former general Prabowo Subianto, once married to a daughter of Suharto, as its candidate.

The opposition Indonesian Democratic Party of Struggle is divided in its support between former President Megawati Sukarnoputri, daughter of the country's first president, and her own daughter, Puan Maharani.

Neither woman has said she will seek the party's nomination.

Indonesian mining graphic http://link.reuters.com/xej47s

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NOMINATION

Bakrie, who has served in cabinet as Yudhoyono's chief economic minister, has first to win Golkar's nomination for 2014 at a convention likely next month. To do so, he must overcome resistance in part from senior party leader Akbar Tandjung, but that is not seen as a problem.

"He is very likely to become the presidential candidate because nobody is as strong as him in Golkar," said Sunny Tanuwidjaja of the Centre for Strategic and International Studies, a think tank based in Jakarta.

The party is also in the midst of a rebuilding exercise. Its presidential candidate in 2009, Jusuf Kalla, secured just 12 percent of the vote behind Yudhoyono and Megawati and some voters are wary of its identification with Suharto's authoritarian era.

Bakrie must also overcome the fallout from an environmental accident in 2006 when a mud volcano erupted near a gas drilling site in east Java, inundating several villages.

The cause of the eruption is disputed with the drilling company, part-owned by the Bakrie Group, blaming an earthquake. Many villagers, however, blame Bakrie. Mud spews to this day and could taint Bakrie's prospects in a voter-rich region of the country.

Golkar however believes its time has come. It has in recent months assiduously worked to delineate its policies from its coalition partners, aided by a series of corruption scandals within the Democrat Party that have hurt its standing with voters.

"Golkar was born to be in power and to lead .... But it is changing. From a kingmaker, Golkar now wants to be the king. We tried this twice (in 2004 and 2009 elections) and we failed," said Yorrys Raweyai, a member of Golkar's central board.

"I am optimistic (that we can be more successful with Bakrie as a candidate) but in a realistic kind of way," he said.

"BORN AT THE FINISH LINE"

Although it is trying to distance itself from Suharto's shadow, Golkar remains staunchly nationalist.

Growing calls from some Golkar politicians for Indonesia to secure more revenue from its abundant resources to sustain its rapid growth and service its growing middle class have left some foreign investors nervous.

Last month, Golkar politicians opposed a bid by Singapore's DBS Group to take over local lender Bank Danamon, and said they wanted to bar heavy foreign ownership of local banks.

The party was also instrumental in scuppering a government push to reduce subsidies on fuel prices - long called for by economists and rating agencies - after widespread public protests.

For Bakrie himself, there are other issues that could affect a potential candidacy, beside the mud volcano.

The Bakrie Group, though no longer led by the politician, could stand to gain from recent mining policy changes including one under which foreign companies must divest 51 percent within 10 years.

His business decisions have also been questioned. The group has a history of running into debt crises and emerging from them by selling off assets, as well as making acquisitions through debt linked to shares in its firms.

Currently, the group is struggling with a covenant breach on a $437 million loan for which the Bakries had pledged their 23.8 percent in Bumi Plc, one of the world's largest exporters of thermal coal, as collateral.

But such issues seemed far away during Bakrie's tour of the Jakarta suburbs of Depok and Tangerang as voters, many struggling on low incomes, were preoccupied with what more the state could do to help them.

"I told him to pay attention to the state of the trains in Jakarta, how the trains often come late, there are lost signals, how the fleet for passengers is too small, how there's not enough maintenance," said Syaifudin, an online marketer who was listening to one of his speeches.

For his part, Bakrie confined himself to remarks on leadership and the work ethic, with few references either to the coming political battle or the nation's policy challenges.

"Never give up and don't stand in the dark for too long because if you do even your best friend will leave you," he said in a speech to high school students. "Who is your best friend? Your shadow. Find fresh ideas and get up to work," he said.

Senior party officials said his strategy during the twice-monthly roadshows around the country is to broaden his appeal as a national leader to voters such as students who can vote in 2014.

They were also testing their own organizational skills: he travelled in a motorcade that stopped traffic and was accompanied by a squad of young workers, all dressed in T-shirts bearing his initials, ARB, and armed with walkie-talkies.

Yet they said the prevailing view of him as a successful member of the elite which gives him credibility as a candidate could also be seen as a weakness.

"Ical was born on the finish line, he has nothing else to fight for. He was rich when he was born," said Indra Jaya Piliang, head of Golkar's policy review department, using Bakrie's diminutive name.

"This (roadshow) campaign will make him say 'Hi' to the people at the grassroots. In his office, who dares to debate him?," he told Reuters.

Still, the approach has its limits. He travelled by train the first day. The next day he arrived in Tangerang in a helicopter.

(Editing by Raju Gopalakrishnan)

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