Fair poll crucial for nation's future

By Jusuf Wanandi

JAKARTA (JP): Economic growth prospects in Asia and the Pacific have become a subject of much discussion. A growing consensus has emerged that the region's productivity growth will eventually slow, and newly industrializing economies in East Asia may begin to encounter the problems of maturing economies.

It also seems that flash points in East Asia which could create instability and hamper economic growth, such as the problems in the Korean Peninsula, Taiwan and the South China Sea, have almost stabilized and the region has begun trying to overcome them permanently. These problems are complicated and risky so they should be monitored closely.

Other factors that could bring this dynamism and growth to a halt are the domestic political challenges facing some of the bigger developing nations in the region, in particular China and Indonesia. Indeed, they could be the region's Achilles heel.

Indonesia's general election for national and local assemblies, held every five years, will be on May 29, 1997, but the political climate has been heating up for the last nine months. The government party, Golkar, which calls itself a functional group, began campaigning ahead of schedule amid protests from the two opposition parties: the nationalist Indonesian Democratic Party (PDI); and the Moslem-oriented United Development Party (PPP). The protests focused on the mode of campaigning and campaign regulations which are seen as heavily discriminating against the two opposition parties.

Most people believe Golkar will win a majority of votes, but less than the 68 percent it gained in the 1992 election, which was down from 73 percent in the 1987 election. This downward trend is mainly caused by its unenviable position as a government party which has to defend the policies of a regime that has been in power for almost 30 years, although it does not have a significant autonomous capacity to control or balance the power of the government.

Golkar aims to win 70 percent or more of the vote, but will only succeed if it plays extreme hard ball. It may achieve this if some PDI supporters, which are split into two factions supporting Megawati or Soerjadi, vote informally.

The immediate question is whether the election can be fair, since the government has almost total control over its management. Therefore, regardless of whether non-governmental organizations are allowed a supervisory role, the 1997 election will be crucial in determining the future of fair and clean elections.

It is assumed that President Soeharto will stand again for presidential election in March 1998. Support for his reelection has been rolling in. If he is willing and his health permits, there will be no formal opposition to his reelection. This means that important decisions relating to the succession will be postponed further, causing greater uncertainty and complexity. The President will be under increasing pressure over his advancing age and a more complex society. Therefore, the election for the next vice president will be more crucial than ever before.

This year and 1998 hold many uncertainties because of increasingly frequent riots and civil disturbances based on primordial ethnic, tribal and religious animosities. These seem to have resulted from declining authority and the public's increasing sense of injustice. But the possibility of more serious disturbances in the short term can be allayed because the economy has been doing well and is expected to keep doing so.

The continued dynamism of ASEAN countries, which have become role models, will also help guarantee security. But, perhaps more importantly, the trauma of 1965 is still very much in the minds of the elite and most people wish to avoid disturbances of a similar magnitude. It is difficult, however, to guarantee this.

It is important to realize that medium-term political development may be even harder than the short-term. Necessary changes cannot be postponed any longer because problems have become protracted and more complicated. Some of the most salient issues are a regular and peaceful presidential succession, openness in the political system -- including the role of Moslem organizations in a democratic Indonesia -- changes to the military's political role and how to tackle problems of equity and social disparity while maintaining rapid and sustainable economic growth.

The big question for the medium-term is whether the country's future leaders will adopt the current development strategy. The ideal strategy is one which promotes free market and a substantial private-sector role, including access for foreign enterprises. This strategy should be coupled with a more open political system in which greater participation is assured and the rule of law is paramount. This strategy should also address problems of disparity caused by the market system while maintaining the nation's most important values in the face of modernization and globalization. Answering this problem depends, to a large extend, on how the change of leadership occurs and whether adequate adjustments are underway in the meantime to strengthen and sustain the development strategy of the next regime.

The above political problems make one wonder how economic growth has been sustained at 7 percent or more in recent years and perhaps in years to come. In particular, why have foreign direct investment approvals continued to be between US$20 million and $30 billion annually. This is not too surprising because emerging economies continue to attract private investment unless there are crises such as in Mexico.

This does not mean that investors are not worried. Political consultants and analysts from major foreign financial institutions are visiting Jakarta more often. But they remain confident that a change of government would not mean a change of development strategy because the next government is not expected to be run by left-wing or religious radicals.

Their short-term investments are perceived to be low risk because they can be withdrawn easily, and their long-term investments, particularly in infrastructure, energy, petrochemicals or telecommunication, are expected to be welcomed by any regime maintaining the current development policy. Investors also believe that if some political hiccups occurred, they would not last long.

A dynamic and vibrant Asia Pacific economy is a factor that continues to make Indonesia an attractive destination for foreign direct investment. Economic growth is being sustained by the right macroeconomic policies and will only be affected if there is sustained political upheaval. But, despite grave political challenges, this is unlikely to happen unless the government handles the 1997 general election disastrously.

The writer is Chairman of the Supervisory Board of the Center for Strategic and International Studies.

Window A: This year and 1998 hold many uncertainties because of increasingly frequent riots and civil disturbances based on primordial ethnic, tribal and religious animosities.

Window B: It is important to realize that medium-term political development may be even harder than the short-term. Necessary changes cannot be postponed any longer because problems have become protracted and more complicated.