Which new President: Does it matter?<\/p>\n
Richard Robison, Jakarta<\/p>\n
When the new president is finally confirmed later in
\nSeptember, she or he will confront the immediate task of
\nassembling enough power to rule effectively. More fundamentally,
\nthough, is the task of arresting a seemingly inexorable slide
\ninto the sort of 'savage capitalism' that often accompanies
\nparliamentary systems in their early years.<\/p>\n
This will not be an easy task and certainly not one that can
\nbe addressed by the sort of technical and policy fixes advocated
\nby the World Bank and other development agencies through programs
\nof good governance and capacity building. The problem, instead,
\nis one of power and politics.<\/p>\n
Put simply, because the democratic revolution in Indonesia
\nwas not the consequence of any political or social revolution, it
\nis inherited by many of the very forces of the previous regime
\nfor whom the function of the state is seen as one of allocating
\npower and wealth rather than legislating and regulating. No
\npolitically effective reformist force yet appears on the radar
\nscreen.<\/p>\n
As we have seen in the cases of both Abdurrahman Wahid and
\nMegawati Soekarnoputri, post-Soeharto presidents have been
\nineffective reformers not least because of the power of these
\nentrenched interests. In any case, they possess few resources
\nthat might be potentially used against to impose reforms.<\/p>\n
Unlike Soeharto they must win elections and mobilize support
\nin legislature. This means building complex alliances in a
\nlegislative assembly indifferent or hostile to reformist
\nprograms. Nor does a new president command the sort of fiscal
\nresources Soeharto was able to call upon to fund economic
\nprojects or reformist initiatives independently.<\/p>\n
At the same time, the apparatus of administrative power
\nestablished by Soeharto remains more or less intact. Some
\nelements, especially in the army and the judiciary now constitute
\na stubborn rearguard against social and corporate reform.<\/p>\n
Most important, the programs of political, fiscal and
\nadministrative decentralization have shifted the balance of power
\nfurther away from the center.<\/p>\n
Regions and provinces are now emerging as competing centers
\nfor revenues and authority, imposing their own fiscal and tax
\nregimes. Importantly, decentralization has allowed governments to
\nfall even more deeply into the hands of regional and provincial
\npredators for whom the idea of public interest and collective
\ngoods is entirely foreign.<\/p>\n
This phenomenon is not, as understood by the World Bank and
\nother neoliberal commentators, a problem of a failed state. As an
\nexample, the accelerating destruction of national parks and
\nforests cannot be blamed on poor resources and weak institutions.
\nRather, it is a process central to the interests of elites often
\norganized and facilitated by regional officials and politicians
\nthemselves.<\/p>\n
Yet, democratic reform and decentralization are expected to
\nenhance the power of popular forces and interests against
\noppressive states. And it is true that both NGOs and various
\npolitical alliances, together with the media, have in some cases
\nbeen able to force rapacious and corrupt officials from office in
\na way never before possible. Does this not provide the basis for
\na new political alliance that might enable a president to
\noutflank both the remnants of the Soeharto state and the new
\npredatory interests?<\/p>\n
While the prospect of any president entrenching her or his
\npower by leading a progressive revolution against predatory
\nelements of the elite is a fanciful proposition, the possibility
\nof a different sort of reorganization of power through a new
\npopulist social contract is not out of the realms of possibility.<\/p>\n
In this matter, the experience of Thailand's prime minister,
\nThaksin, is instructive. Replacing prime ministers who closely
\nfollowed IMF reform prescriptions, Thaksin has not only
\ninstituted a more nationalist economic policy but has directly
\nconfronted the power of regional political and business interests
\nin the parliament.<\/p>\n
He built a national political party to bypass regional power
\nbrokers and put in place a new social contract at the grass roots
\nlevel that linked centralized, national power with the sources of
\nvotes through grants to villages, new health policies and other
\npopulist policies. Money politics was re-centralized.<\/p>\n
While such a scenario is not progressive it does provide the
\nbasis of a new alliance in which a president might triumph over
\nparliament and regional power brokers. Certainly it is an option
\nthat might be attractive to Susilo Bambang Yudhoyono who has
\nlittle strength or influence within the national legislature and
\nfew resources in the regions to match the vast networks of Golkar
\nor the PDI-P. It would, however, be a high-risk option requiring
\ncourage and decisiveness.<\/p>\n
At the same time, the task of defeating Yudhoyono may
\nprecipitate what is really a logical alliance - that of the two
\nsecular, nationalist and statist parties; Golkar and PDI. Such a
\npower block at the center would significantly boost any president
\nby providing a majority in parliament and a potential basis for
\nan assault on the contending centers of predatory power in the
\nregions.<\/p>\n
But there are important differences with the Thai case. Most
\nimportant, Thaksin's agenda is directly to establish the
\npolitical ascendance of national business through the Thai Rat
\nThai party. It is backed by a powerful and wealthy set of
\ninterests.<\/p>\n
By contrast, neither Golkar nor PDI in Indonesia constitute a
\ncohesive set of interests. Nor do they represent the center
\nagainst the regions. Rather, they represent long strands of
\npolitical alliance that extend down into the regions and
\nprovinces and include complex business and political elites.
\nBusiness today in Indonesia may fund politics but is entirely
\nincapable of organizing a party in their interests to capture
\npower.<\/p>\n
At one level, the changing nature of business in Indonesia
\nwill be ultimately critical in the political outcome. On the one
\nhand, damaged by the crisis, no longer with access to state
\ngenerated monopolies and easy credit, there is a trend for
\nIndonesian business to be found increasingly in such areas as
\nproperty and development, or in small scale insurance and
\nfinance, local and regional trading and in the more sinister
\nblack areas of the economy. These are natural allies for
\npredatory politics, regional political bossism and 'savage
\ncapitalism'.<\/p>\n
But we should not dismiss the prospect of a growing
\nintegration with a new Southeast Asian and mainland Chinese
\neconomic and corporate expansion. The fact that a large share of
\nthe assets sold by the now defunct Indonesian Bank Restructuring
\nAgency (IBRA), including banks, have been purchased by firms from
\nSingapore and other Asian countries rather than from the West
\ndemonstrates that Asian countries may be more able to negotiate
\nthe vagaries of the new business climate.<\/p>\n
We might speculate that a new process of globalization linking
\nIndonesia more closely to the larger economic agendas of Asia
\nwill be more pervasive and thus more capable of transforming
\nIndonesia than Western corporate investment. If some elements of
\nbig Indonesian business is reconstituted as partners and brokers
\nwithin this new relationship they too, will become more
\ninternationalized.<\/p>\n
Thus the future for Indonesia may be conceived not as the
\noligarchic regionalism of, say, the Philippines, nor as the
\ncentralized populism of Thailand but more in terms of the
\norganized and centralized capitalism of Malaysia.<\/p>\n
The writer is professor of political economy at the Institute
\nof Social Studies in The Hague. He has recently co-authored with
\nVedi Hadiz, Reorganizing Power in Indonesia: The politics of
\noligarchy in an age of markets (published by Routledge, London).<\/p>",
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