Current signs show recovery still years away

Current signs show recovery still years away

By Santo Koesoebjono

This is the second of two articles on necessary efforts to
overcome the economic crisis in Indonesia.

WASSENAAR, the Netherlands (JP): The crumbling Indonesian
economy, occurring in such a short time and with such severity,
is a great shock to all Indonesians. Disappointment and
disillusion are huge. People on the street bear the hardest blow
and the harsh consequences of the economic slump.

Disappointment is deeper among the poor in Jakarta. But does
the economic and financial downturn hit hard the urban elite who
have fared well in the trail of the regime and have enjoyed the
fruits of the "corruption-collusion-nepotism era"?

It is ironic to hear members of this elite saying that they
feel they are also being fooled by the government, even though
they themselves hold high posts and have received prerogatives
from this regime.

Although the elite may not live as comfortably as before the
reform, they can still afford to live lavishly and go abroad.
Notwithstanding skyrocketing prices, they can manage to buy what
they need. It is true that these people must take a few steps
back and cannot go abroad as frequently as before, but they can
still shop abroad.

This is totally different from the situation of a large part
of the middle class that is slipping down to join the army of the
poor, to form an extended societal underclass, the main source of
social unrest.

After the transfer of power on May 21, a minister of the
present Cabinet and his family visited the Netherlands. Their
program included the usual tour around the shops. Recently, an
Indonesian guide tried to make reservations in a four-star hotel
for several ladies on a tour through several European countries
using business class air tickets.

Hearing members of the elite claim they are concerned about
the situation is one thing, but to be faced with their actual way
of life is another.

For the moment, the large majority of the people are enduring
pain from the legacy of the former regime. Poor agricultural
output, ongoing layoffs, spiraling prices and decreasing
participation in education and medical care are the ingredients
for social unrest.

It cannot go on like this any longer. Social upheaval will
become more frequent, fierce and violent. In the second half of
this century, developing countries have witnessed frequent
eruptions of social upheaval and waves of protests of the poor
moving toward urban cities.

Although thorough analysis in the media is seldom obtained, it
should be acknowledged that social upheaval never comes as a big
bang. It is part of a social process occurring over a long
period. Social unrest is simmering below the surface of the
societal fabric and a tiny spark can ignite the fire. Only when
it becomes serious will the elite then perceive it as a big bang
initiated by a number of bad guys.

It is no longer the time to give alms or to talk about
grandiose projects, such as the Java-Sumatra bridge, in national
and international media. It is time instead to develop income-
generating activities together with the urban poor and the rural
people.

Indonesia is a people-rich country, with 65 percent of the
population living in rural areas. Labor intensive agriculture-
based projects are likely to be appropriate. The population knows
what they want. Accepting and complying with the people's demands
is a much better approach than the top-down and central
government-decided approach.

There are sufficient channels to carry out activities, as
indicated by the presence of a large number of non-governmental
organizations (NGOs). In the past, such organizations were
involved in developing and implementing projects for the poor and
destitute in circumstances that were often difficult and opposed
by the authorities. Nevertheless, many of them were successful in
using the funds to help the poor.

It is little wonder that Indonesian and foreign agencies
demand the right to channel the foreign funds directly to NGOs
rather than through government bodies. This is a sign of no
confidence. Right they are, since in the past it was a common
practice for government institutions to ask for 40 percent of a
project's funding provided as a loan by international agencies.

Even the World Bank has recently stated that at least 20
percent of the project money in Indonesia was siphoned off by
corrupt official. Regardless of graft, loans should be paid back
in full and the population must bear the burden of the debt.

In early 1996, The Economist weekly magazine stated that the
political and economic system in Indonesia was unfair. It warned
that "even low-key protests serve as a reminder that, if the
system is seen as corrupt and unjust, the poor will seek other
forms of redress".

Lack of nine basic commodities in various parts of the country
forms the basis for explosive popular protests. The longer the
government postpones taking serious action in improving their
fate, the greater chance the protest will explode.

The elite can join and support NGOs if they are really
concerned in helping the poor and not merely wanting to ease
their own conscience. After all, Indonesians are a gotong-royong
(mutual-help) society. Give something that the people need the
most. Food first, other stuff later.

The writer is an economist-demographer based in the
Netherlands.