Indonesia at crossroads after 53 years of independence

Indonesia at crossroads after 53 years of independence

By Mohammad Sadli

JAKARTA (JP): As it turns 53, Indonesia finds itself at a
crossroads. It is not the first time. Our country went through
Constitutional changes in its early years when we had prime
ministers rather than strong presidents. Then we saw a changing
of the guard when the old Sukarno order made way for the "New
Order" of Soeharto.

Today, the government catchword is not the "New Order"
anymore, but the "Reform Order" since Soeharto does not reign
supreme.

The junction we find ourselves at has no clear road signs.
Yet, it is most compelling, and also confusing, as our domestic
political players must switch gears as they choose which way to
go. Everybody agrees that we need to get rid of the Soeharto
style of political repression. But what alternatives will we
choose?

The new president, B.J. Habibie, is trying hard to shed his
old image of a long time understudy of the old political maestro.
He wants to go down in history as a leader who is more
accessible, folksy and amicable, i.e., the "you can touch me" and
"call me Rudi" type. This is an image completely different from
his stern-looking and up-on-a-pedestal predecessor.

Habibie says that his Cabinet sessions now see open
discussions with give-and-take between the chief executive and
his ministers. But that only affects style. What about substance?
In this, Habibie and his Cabinet are also doing their best. He
calls his administration the "development and reform government".

He is looking to reform the political system. The election
system will be changed from a proportional (or party list) system
-- in which voters actually chose a party rather than individual
candidates, which allowed Golkar leaders to place obedient
followers in the legislature regardless of whether they had ever
lived in the district -- into a "district system", in which
individual candidates are chosen by the voters.

Such reform, some say, will not change the fact that Golkar
has the potential to win a majority again.

Others, however, predict that the new national legislature
will be full of popular religious leaders elected by their
districts. Depending on how the districts are drawn up, the
system could be harsh on minorities and bountiful to large
parties.

Hence, many have agreed now that there should be a combination
between the two systems, which could develop over time. But who
should decide how the two are mixed and what changes occur over
time?

Before the end of the year, though, the legal reforms
pertaining to the election and political system should be in
place because the date for the general election has been set for
May 1999.

With no current restrictions on the formation of political
parties, a large number (as many as 58) have either been
registered or have been publicly announced. Many political
observers believe, however, that the number of parties should
eventually not exceed, say, eight.

The German model of refusing a party that cannot win a minimum
number of seats totaling 5 percent has become popular. But how
would this recognize small parties of legitimate minorities? Of
course, Indonesia could follow another example, like the one in
Singapore, where non-Chinese minorities are guaranteed a number
of seats in the legislature. All such details have to be agreed
upon in very short period of time. But perhaps our lack of time
will turn out to be a blessing in disguise. Given unlimited time,
politicians and lawmakers often never come to a consensus.

Military

The role of the military is now also under debate. Young
Indonesians see no use for the "dual function" of the Armed
Forces (ABRI). Together with Soeharto, they made a mess out of
nation building. On the other hand, ABRI is still a major
political force. When looking at the "Turkish formula", in which
a civilian president is watched over by the army, we can see
several similarities with our political system.

Should the military have a quota of seats in the House of
Representatives (DPR), or in the bigger People's Consultative
Assembly (MPR)? Certainly, in the next legislature or in the
future, that should be decided by what is deemed necessary at the
time.

The succession from Soeharto to Habibie has been called by
some foreign observers as having gone "smoothly". Perhaps that
is true compared to 32 years ago when it was much more bloody.
One of the direct costs was the lives of four Trisakti University
students. Without this incident, Soeharto most probably would not
have relinquished his power.

The indirect cost was much greater -- that is, the loss of
more than 1,000 lives during the May riots. The economic costs
have included a serious battering of the rupiah, a further slump
in the manufacturing sector, hundreds of thousands of newly
unemployed workers, and a near breakdown of law and order taking
the form of mass actions, sometimes accompanied by loss of
property, looting of crops (including coffee beans) and prawns,
and the seizure and hijacking of container ships. Because labor
unions have been given freer reign, while wages have remained
depressed, we can expect more labor actions affecting the
business climate.

The nation has never been properly prepared for such a sudden
succession, though in retrospect, the fall of Soeharto was
predictable months before it happened. But before that, the
organized political system, the bureaucracy and the military did
not even dare to think about a "post-Soeharto" situation.

From now on, the system will definitely be much more
democratic. On the other hand, order should be preserved so as
not to throw sand into the economic machine. How should we manage
this transition and who should lead the country?

Due to the political process surrounding the succession, the
transition is now being led by a government which, in terms of
leading personalities, is still very much an extension of the old
Soeharto regime.

Because of this, the present government is politically
tainted.

ABRI, having to cope with the maintenance of law and order,
has also called for a gradual approach to reform. General
Wiranto, its chief, still has problems within his ranks. He has
managed to win a power contest with Prabowo, Soeharto's son-in-
law, though some problems may still come from this.

Hence, ABRI's leadership, under the circumstances, does not
hold a strong card.

Habibie realizes that he is a transitional president tainted
by past political affiliations. However, he does not want to go
down in history as a mere footnote. He is working very hard to
accommodate popular demands and please everybody, even the
international world, by, for example, helping along the peace
process for East Timor.

In a way, that will make him a popular "reformer", but one
cannot please everybody all the time. Sooner rather than later,
some people will get mad at him. In the end, he is, by definition
(of a transitional leader), a weak president.

Golkar, the major political supporter of the government, has
also been weakened. It may face a significant loss of votes in
the planned May 1999 general election.

On the other hand, since it has the best political machinery
in the country, Golkar may be able to garner enough votes to
remain indispensable in the formation of any government,
especially because the "opposition" will probably be splintered
and weak in organization, with not much money to finance its
campaigns. Officially, ABRI and the bureaucracy should not
support Golkar much longer, but one does not know how this will
be in reality.

And where are the students who were able to persuade Soeharto
to step down from the presidency? Nobody seems to know what has
happened to them as a political force. Are they like the gallant
cowboy who, after the shoot-out, silently rides away into the
sunset without even claiming recognition? Most Indonesians do not
even know who their leaders are, let alone their future agenda.

With all these changes and the weakness of both the old forces
of Soeharto and the opposition, how will the political map be
shaped? We do not know, but this uncertainty will affect the
other aspects of civil life, especially the economy. The only
consolation is that it may enable a "thousand flowers to bloom".
But at some stage, there will be the danger of a power takeover
by a strong man and a setback of our country's flowering
democracy.

The Habibie and Akbar Tandjung faction has won the leadership
contest in Golkar's recent extraordinary congress. Had retired
Gen. Edi Sudradjat won the contest, that could have paved the way
to a change in the presidency in a special MPR session planned
for November. Now it looks that Habibie will reign until the end
of the century. Is this (relative) political stability better?
Perhaps for politics, but we cannot be so sure for the economy.

Economy

The Habibie factor, by itself, has not been able to persuade
the market to strengthen the rupiah. The currency only marginally
strengthened from a position of around Rp 14,000 per dollar after
the results of the aid consortium meeting in Paris, where clearly
the international donor community has given strong support to
Indonesia in its plight to survive a very deep economic crisis.
The hope of the International Monetary Fund (IMF) is that it will
strengthen toward Rp 10,000 by the end of the year.

Habibie, Akbar, Minister of Cooperatives Adi Sasono and some
others in the Cabinet are representatives of the Association of
Indonesian Moslem Intellectuals (ICMI) and the Association of
Indonesian Young Businessmen (Hipmi) with aspirations of
empowering the Moslem majority in social and political life and
giving it a greater role in business. Some of the signals
emanated (for example, from Habibie himself) did not acquiesce
the Chinese business community, and the capital that fled after
the burning and looting during the May riots has not returned. In
time it may, but in the meantime, the economy is suffering.

The weak rupiah can gain strength only if confidence returns,
and that is, in the final analysis, a political variable. Can the
Habibie government do something about this in this transition
period? We do not know, but he can revamp his government and shed
some of the corruption from the Soeharto days.

The November 1998 special MPR session may provide that
opportunity, but so far, nothing is on the agenda. He can speed
up reform and engage in a more forceful "righting of the wrongs
of the past", but that will be tricky for him if it means that he
should go after the ill-gotten wealth of the former first family.

The economic reform agenda is probably easier. If the
government follows the agreement with the IMF, it would have to
implement a lot of reforms. For instance, an antimonopoly and a
new bankruptcy law, further deregulation of economic sectors, an
independent central bank, a thorough banking reform, greater
transparency and accountability of government transactions and of
economic institutions will be on the government's plate.

Apart from such reforms, there is now a demand from certain
intellectual circles to change the economic (development)
paradigm, from (perceived) too much reliance on conglomerates and
big businesses to a greater emphasis on small and medium
enterprises -- adopting the Taiwanese rather than the Korean
model. From reliance on industrialization with high import
contents, large projects and a lot of borrowed capital, to
greater emphasis on a resource-based economy -- back to
agriculture and other natural resources. Perhaps, it is part of
an emerging inclination for "populism" in a time of dire economic
emergency. When, after two or three years, times will be normal
again and growth rates rebound, we have to asses the mood again,
and the political situation.

The writer is a noted economist and a former cabinet minister.