Prospects for 2006<\/p>\n
Jusuf Wanandi
\nJakarta<\/p>\n
I was not a supporter of Susilo Bamang Yudhoyono (SBY) during
\nthe presidential election campaign, because I thought that he
\nwould not be a decisive leader. However, now I have to admit,
\nthat while not a perfect and decisive leader, he has shown more
\nwillingness to bite the bullet on many crucial issues, albeit
\nafter a lot of pressure, advise and deliberation.<\/p>\n
Before making a prognosis for the year 2006, I first want to
\nevaluate SBY's first year as President. Despite severe
\nchallenges, such as the tsunami, the high prices of world oil,
\nand now the possibility of an avian flu pandemic that could
\nthreaten his presidency, he has achieved some real solid
\nachievements, mainly in the political field.<\/p>\n
He has achieved peace for Aceh, after almost 30 years of
\nstrife and rebellion. Despite some misgivings from some factions
\nin the House of Representatives, he has persevered and peace has
\nnow been achieved for the most part. The tsunami has assisted him
\nin changing public opinion in Aceh on the empathy from and
\nsupport from other Indonesians for the plight of the province. He
\nhas fully supported what his vice president, Jusuf Kalla, has
\ninitiated on Aceh.<\/p>\n
He has also laid down the necessary prerequisites for solving
\nthe Papua problem, by establishing the Papuan People's Council,
\nwhich is responsible on behalf of the Papuans to lay down the
\nbasic policies in that province. He also postponed the local
\nelections in the controversial West Irian Province established by
\nPresident Megawati Soekarnoputri.<\/p>\n
Obviously, more needs to be done in Papua, especially to
\ninstitute better governance and to undertake more investment for
\nthe human resource development of the locals in the form of
\neducation and health. The revenues accruing to this province
\nshould be sufficient to do that adequately. In addition, the best
\namong the bureaucracy should be sent there to work with the
\nlocals to develop the province.<\/p>\n
Despite its explosive political sensitivity, President SBY has
\nmade the decision to increase fuel prices by more than double,
\nalbeit a little bit late, to reach 80 percent of the
\ninternational market prices. This was a brave act, but was
\nnecessary, since the subsidies could amount to 40 percent of the
\nstate budget.<\/p>\n
He also has changed the Army chief of staff and National
\nPolice (Polri) chief without a hitch. They are willing to play a
\nmore positive role on such political issues as Aceh and Papua. He
\nis also very popular among the internationally community,
\nespecially in the West, because he can relate to them very well,
\nand is always open to them.<\/p>\n
However, President SBY also has his deficiencies and lacunae.<\/p>\n
First, is by being overly cautious.<\/p>\n
Second, is the lack of experienced advisors that he can really
\ntrust.<\/p>\n
Third, is his weak \"rainbow\" Cabinet, because he needs the
\nsupport from other political parties. Since Kalla has taken over
\nthe leadership of the biggest party, Golkar, such support has
\nbecome less urgent.<\/p>\n
His weakest point is obviously the economy, because he has not
\nbeen able to solve the problems of unemployment and
\nunderemployment, which are critical to his performance
\nlegitimacy, but also are a prerequisites for Indonesia's
\nstability and peace. About 40 million Indonesians have remained
\nunderemployed for the last eight years and it has stretched the
\npatience of the people.<\/p>\n
To overcome this, SBY has to get more foreign direct
\ninvestment (FDI), which is not coming because of the deficiencies
\nhe has shown above, plus the unresolved problems of corruption.
\nThe people, local administrations and civil society groups have
\nexposed many corruption cases, but many have not been handled
\nsatisfactorily for lack of political will.<\/p>\n
The problem of public security is a major issue because of
\nrepeated acts of terrorism. President SBY is now willing to take
\nsome real actions against terror, supported fully for the first
\ntime, by mainstream Muslims, who now see the danger that Islamic
\nteachings can be misused to support terrorist acts. The threat of
\nterrorism cannot be overcome simply by military means.<\/p>\n
On top of these issues there is the problem of taxation, and
\nthe new finance minister may be able to better tackle it. Labor
\nrelations should be improved, and the costs of compensation and
\nminimum wages are just too high for Indonesia to be able to
\ncompete against her neighbors such as Vietnam and India.<\/p>\n
The prospects for 2006 depend on the answers to some of the
\nresidual issues that SBY has not been able to give during the
\nfirst year of his presidency. The Cabinet reshuffle has been too
\nlimited, although the appointment of Boediono and Sri Mulyani as
\ncoordinating economic minister and finance minister,
\nrespectively, is an excellent choice and is a real plus for his
\nCabinet. The problem is with manpower and labor, which are now
\nhandled by somebody very inexperienced. Manpower is an important
\nportfolio. The existing labor regulations will not help in
\nattracting new investments.<\/p>\n
President Susilo's action against corruption have to be more
\nconsistent to make a real impact. Several steps have been taken
\nbut the government lacks a consistent and effective anti-
\ncorruption policy. His new stronger policies against terrorism
\nare welcomed, and the support from moderate Muslims is crucial.
\nHe yet has to improve the intelligence services, and should not
\nsimply rely on the military to counter terrorism.<\/p>\n
There are crucial issues to get FDI to come back to Indonesia.
\nChanging Cabinet ministers can help but improvements in policies
\nand the business environment are most important. The high
\ninflation following the dramatic rise in fuel prices last October
\nhas increased the vulnerability of the little people. If the
\neconomy is not improving soon, there could be a major political
\nimpact. The people have been patient for many years, but will not
\nbe so indefinitely, and as happened in 1965 and 1998, anything
\ncan then change the people's behavior, leading to upheavals that
\ncan lead to a serious political crisis.<\/p>\n
On foreign policy, the year 2006 could further consolidate
\nSBY's contribution and achievements in Indonesia's foreign
\npolicy. A lot has been said about expectations for ASEAN to take
\nthe driver's seat in the process toward East Asian community
\nbuilding. This will only happen if ASEAN gets her act together,
\nand for that to happen Indonesia's leadership is crucial.<\/p>\n
President SBY is the one that can do this, because he is
\nintellectually well equipped, and he has a real interest in
\nforeign policy. This will also help him to bring back foreign
\ninvestment to Indonesia.<\/p>\n
In conclusion, it can be said that politically, the year 2006
\ncan be stable and peaceful if some real improvement can happen on
\nthe economic front, especially in regard to employment. The
\neconomic challenge facing the SBY government remains severe, and
\nthere is a litany of problems to make a failure possible.<\/p>\n
The good news is that the duet of the president and vice
\npresident is still much intact. They complement each other so
\nwell and they do need each other to succeed, despite the rumors
\nto the contrary. Furthermore, the majority in the House is now
\nsupporting the government.<\/p>\n
The writer is a Co-founder and Vice Chairman of the Board of
\nTrustees as well as a Senior Fellow at the Centre for Strategic
\nand International Studies (CSIS), Jakarta.<\/p>",
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