Indonesia graft takes toll on ruling party's popularity

Indonesia's President Susilo Bambang Yudhoyono speaks in a news conference at the presidential palace in Jakarta February 13, 2012.

JAKARTA (Reuters) - Indonesian support for President Susilo Bambang Yudhoyono's ruling Democrat Party has dropped sharply due to the perception that its fight against graft is failing, a survey by the Indonesian Survey Institute showed on Monday.

Yudhoyono was re-elected for a second and final term in 2009 on a platform to tackle rampant graft in Southeast Asia's largest economy, but his popularity has steadily fallen in the past year over concerns over progress.

The next presidential election is in 2014.

"If the Democrat Party doesn't do something to restore its anti-corruption image, support will keep on dropping and it's possible that Golkar (part of the ruling coalition) could win the 2014 elections," said Dodi Ambardi, a political expert from the Indonesian Survey Institute.

Graft remains a major obstacle for many foreign firms thinking of doing business in Indonesia now it has been granted investment grade status.

The Democrat Party's former treasurer has been charged with corruption, while another senior Democrat lawmaker has been named as a suspect, throwing the spotlight on institutional graft, despite the country's solid economic performance.

The February survey of 2,050 people projected that if a general election were held now, the Democrat Party would win 13.7 percent of the vote, down from a 21 percent share in a previous poll a year ago and in its 2009 election victory.

The Golkar Party would get 15.5 percent, slightly up from 14 percent in 2009. Golkar's leader, tycoon Aburizal Bakrie, is expected to contest the next presidential election.

The number of undecided voters had also risen, the institute said.

(Reporting by Olivia Rondonuwu; Editing by Neil Chatterjee)