Fair poll crucial for nation's future

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.