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.