Challenges to national unity<\/p>\n
The following article is based on a paper presented by Juwono
\nSudarsono, Vice Governor of the National Resilience Institute
\nDefense College, at the Indonesian Executive Circle on March 29,
\n1995. This is the first of two articles.<\/p>\n
JAKARTA (JP): The challenges facing our national leaders in
\nmaintaining Indonesia's unity during the next 10-15 years will be
\nin factoring an archipelagic outlook and national resilience in a
\ncomprehensive and balanced manner. The judicious implementation
\nof these collective performances will be compelling as pressures
\nbuild up for change and reform, arising from the very success of
\nwidespread social and economic transformation across the country
\nover the past 25 years.<\/p>\n
Externally, the advantages that Indonesia enjoyed throughout
\n1969-1994, its strategic importance in maritime Southeast Asia,
\nits vast pool of natural resources and its striking potential as
\na vigorous market, have declined in relative terms as the major
\neconomies of North America, Europe and Japan look to other big
\nemerging markets. Competition for investments, trade
\nopportunities, market access and development finance come from
\nMexico, Argentina, Brazil, China, India, Vietnam.<\/p>\n
Despite Indonesia's past success at controlling population
\ngrowth at an annual average of 1.8 percent (an increase of three
\nmillion Indonesians every year) a keen sense of urgency must be
\nmaintained, especially in Java and Bali, where 65 percent of the
\npopulation resides. Recent estimates put the breakdown of
\npopulation distribution at: Sumatra 41 million, Java 110 million,
\nKalimantan 11 million, Sulawesi 13 million, Nusa Tenggara 11.5
\nmillion, Maluku 11.9 million and Irian Jaya 1.6 million.<\/p>\n
Nation-wide, total fertility has declined by 40 percent since
\nfamily planning was instituted 25 years ago, although growth
\nrates in Riau, Kalimantan, Southeast Sulawesi and Irian Jaya
\nremain at above three percent per annum.<\/p>\n
The government estimates that by the year 2020 the growth rate
\nwill plateau at 250 million Indonesians, at an average of 3.1 for
\nthe desired family size (compared to 6.6 twenty years ago); even
\nthat seems overly optimistic.<\/p>\n
The tension levels which periodically occur in Java,
\nparticularly over land ownership and never-ending labor disputes,
\nare clear manifestations of enduring population pressures. For
\nthe rest of the 1990s, roughly 85 million Indonesians will be in
\nthe work force, of whom 15 percent do not have any education and
\nabout 50 percent achieve primarily school level only. Over one-
\nthird comprise the socially volatile 15-29 age group. By 2005,
\nmore than 35 percent of Indonesia's population will congregate in
\nindustrial-urban centers.<\/p>\n
Our greatest challenge in the economic field will be to
\nmaintain real growth above the rate of population increase and to
\ncontrol inflation at a manageable level. In the past, growth
\nrelied heavily on the oil and gas sectors, which contributed more
\nthan 70 percent of government revenue during the crucial 1966-75
\nperiod of consolidation. Over the past decade, impressive annual
\ngrowth rates of 12 percent in the export of manufactured goods
\nhave been sustained, surpassing oil-gas earnings since 1986.<\/p>\n
Nevertheless, if we are to achieve measurable improvement in
\nour material well-being, Indonesia will have to uphold an annual
\ngrowth rate of at least 5.6 percent well beyond the year 2000
\nwhen the Gross Domestic Product per capita is expected to reach
\nUS$1000. By 2010, the Indonesian economy is expected to comprise
\n45 percent in industry and manufacturing, 24 percent in services
\nand 12 percent in agriculture.<\/p>\n
Until the 1980s, the problem of balanced growth had been
\ndefined in the dichotomy between Java and the outer islands. The
\ndangers of economic disintegration now and in the future emanate
\nfrom the wide disparity in the scope of activity and the
\nstrikingly different growth rates between the western and the
\neastern provinces.<\/p>\n
These disparities are made more acute by the pattern of
\nIndonesia's international exports and flow of investments.<\/p>\n
Japan and the Asian Newly Industrialized Economies (NIEs)
\nconstitute 40-60 percent of export destinations, the combined
\nU.S.-Europe about 20 percent and intra-ASEAN another 15 percent.
\nMore than 70 percent of these exports originate from Sumatra,
\nJava and Kalimantan. Sixty percent of Japanese and Asian NIEs
\ninvestments are concentrated in Java, Sumatra and Kalimantan,
\nwhere the infrastructure is relatively advanced.<\/p>\n
The challenge to maintain economic resilience will be to
\nprovide impetus so that the industrial growth poles facilitate
\nhigher levels of integration with the eastern half of the
\narchipelago. The race to match rhetoric with performance will be
\ndemanding.<\/p>\n
Maintaining the inter-provincial balance constitutes another
\nimperative. The more prosperous areas are in the west-central
\nregions of the country: Greater Jakarta (Jabotabek), Java, East
\nand Central Kalimantan, Aceh, Riau and South Sumatra. Aceh, Riau
\nand East Kalimantan are richest in oil and gas, currently
\ncontributing 54 percent of the revenue, with substantial non-oil
\nexport products. Because of proximity to consumer markets and
\nsuperior infrastructure, West and East Java showed a 40 percent
\nincrease of value-added manufacturing exports in the 1986-1992
\nperiod. Prime cities such as Medan, Pekanbaru, Palembang,
\nPontianak, Banjarmasin, Balikpapan and Samarinda will have to
\nfunction more effectively as crucial points in a network of
\nexchanges of goods, services as well as managerial personnel.<\/p>\n
Clearly the links between the growth poles in the west,
\nSingapore-Johore-Riau, the Indonesia-Malaysia-Thailand growth
\ntriangle, and the East ASEAN Growth Area must show more tangible
\nprogress in the critical decade ahead.<\/p>\n
Some estimates project, that by 2005, Indonesia will cease to
\nbe a net energy exporter. Though coal and gas will continue to be
\nimportant sources of revenue, there will be even more urgent
\nneeds for tighter management, improved efficiency and expanded
\nexport diversification in the non-oil sectors. The ASEAN Free
\nTrade Area 2003, Asia Pacific Economic Cooperation 2020 and World
\nTrade Organization rules will be never ending issues of hard
\nbargaining and tough negotiation.<\/p>\n
Internally, Indonesia's leaders will have to undertake even
\nmore serious steps to overcome imbalances between powerful
\ngroupings of the 22 conglomerates and the vast majority who
\nremain below the poverty line. A major transformation of the
\ncredit structure must be instituted through concerted government
\npolitical will and action.<\/p>\n
Small scale and medium enterprises -- largely indigenous, and
\noften imbued with strong Islamic values -- must be nurtured to
\ndevelop skills and build effective economic institutions. Unless
\ntackled with seriousness and consistency the economic disparities
\nbetween the rich and the poor will continue to be marked by
\nperiodic social dissatisfaction and political agitation,
\nmagnified by dangerous cleavages along racial, ethnic and
\nreligious lines.<\/p>\n
Politically, the rise of the Indonesian middle-class,
\ncurrently estimated at 14 million, has led to incessant demands
\nfor broader political participation not only in the urban centers
\nof Java, Sumatra, Kalimantan and Sulawesi, but also in the three
\noutlying and politically sensitive areas of Aceh, Irian Jaya and
\nEast Timor.<\/p>\n
Public administration, specifically local government, will
\nhave to bear heavier burdens of delivering the basics such as
\nfood, public order and low-cost public housing. Without
\ndiscernible progress in the provision of these essentials of
\n"social overhead", there are dangers that overzealousness in the
\ninculcation of Pancasila as the national ideology will breed
\napathy, cynicism and even outright rejection, especially among
\nthe young and the unemployed.<\/p>",
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