Indonesia: How to restore confidence

This is the second article on restoring confidence by Laksamana Sukardi, former state minister of investment and state enterprises development.

JAKARTA (JP): Transparency is obviously a key component of good governance. It refers to open information and procedures. Corruption and dictatorship thrive on secrecy. Secrecy and democracy are completely incompatible. There can be no such thing as government of, by, and for the people if the people have no idea what those in government are doing.

If the people are not able to see how positions are awarded or policies are decided, they are disempowered and legitimacy is lost.

The current government has not gone far enough to increase transparency. Although we have a more open press in Indonesia, access to information is still a problem and reporters are still kept in the dark about many key decisions and procedures.

This is a dangerous combination: an open press but a non- transparent government. Over time, the legitimacy of the new government will collapse. We see the process of erosion already starting.

A key area for immediate action must be the reform of Indonesia's rotten legal system. The people get to express their commitment to change only once every five years in the national elections. But it is through the legal system that the struggle for rule of law can and must be an on-going endeavor.

Nearly all judges in Indonesia today are products of the New Order military regime. As a result, they are thoroughly corrupt. Where should we start in rebuilding the system?

There are two broad choices we face, and both are going to take time: either we should try to reform the judges already in the system or we should sweep all of them out and start from square one.

All the evidence so far suggests that keeping the current judges and trying to rehabilitate them (it's like sending a drug addict to a detoxification center -- in this case addiction to money for judgments) is not working and not likely to work.

Just consider the Bank Bali case, the Texmaco case, and the trials involving the Soeharto family members. It is clear to everyone that Indonesia's courts are a joke.

We would be better off firing all the judges at one time and installing inexperienced young judges, elderly legal professionals, and even law professors. I would rather have a legal system where the main problem was inexperience rather than corruption.

Inexperience is something which corrects itself over time with more and more experience. The opposite is true with corruption. It only gets worse as judges get more and more experienced at the fine art of demanding and accepting payoffs.

The best hope for rapid legal reform in Indonesia is starting from scratch. Any other approach is likely to take much longer and not likely to yield positive results because the vested interests in the legal system are too deep.

Indonesia has a long way to go before we can call the country truly democratic. The quality of the political parties is miserably low. Their internal structures are weak and the definition of their positions and issues is almost impossible to understand. For the masses, the focus is still on abstract symbols from the past, primordial sentiments, or the emotional adoration of individuals who lead the parties.

This is a fragile and dangerous situation because major shifts in loyalty can occur suddenly when institutional organization is weak.

As another sign of our weak democracy, we still do not elect individual candidates in Indonesia. This means that there is almost no accountability between our elected leaders and their so-called constituencies.

What happened last October in the meeting of the People's Consultative Assembly was constitutional, but not very democratic. A man was chosen as president without having run for the office and without being the leader of any party. His party was not even among the top three winners of votes in the election.

Democracy in Indonesia is designed to give maximum power to elites to broker backroom deals. The voters play only a minor and temporary role in the process. The people can express their choices through voting, and yet anything is possible in the MPR meeting.

Indonesia has a strange mix of parliamentary and presidential elements. The current President rose to office based on a coalition that excluded the largest winner in the election, the Indonesian Democratic Party of Struggle (PDI Perjuangan). He then proceeded to include individuals from various parties in his cabinet to reflect the power-sharing that made his presidency possible in the first place.

In subsequent cabinet reshuffles, the President has systematically undercut the power-sharing arrangement and put more and more of his own people in place.

There are several things that need to be considered about this process. The first is, on what basis were ministers pushed out? Were the reasons legitimate and was the process transparent? His last reshuffle, for instance, caused a major public uproar and destabilized the financial markets. The way in which the reshuffle was handled was particularly disruptive.

A second consideration is whether a president should have a free prerogative to set up his cabinet as he wishes. In a strictly legal sense, he does. And one could even argue that particularly for the economic portfolios, it is a very good idea that the minister be able to work in close coordination with each other and with the president.

But there are considerations beyond narrow legalities and teamwork. Indonesia is a new democracy and broad political support is crucial for any leader who wants to push through basic changes in the system. This is the dilemma for the President to confront and solve.

Where is Indonesia heading?

To close, it must be recognized that negative perceptions of Indonesia, both at home and abroad, are building. Other than rolling back the military and the investigation of human rights violations in East Timor, there has been very little good news coming from this government.

And even the military rollback cannot be viewed as permanent if no progress is made on the other fronts that are crucial for moving the country forward politically and economically. There are already signs that confidence among the top brass of the military is being restored as they watch the civilians spinning their wheels in the mud.

Although the danger of a military take-over seems low at the moment, it remains a real possibility in Indonesia, and one that could grow more likely if the government's performance over the coming seven months is as poor as we have seen during the first seven months.

Restoring confidence in Indonesia depends on taking serious and dramatic action and engaging in less talk.

Legal reform remains the single largest priority. Everything else, including bank restructuring and private sector work outs, depends on the legal system. The public and private investors are hungry for immediate action.

The distortions in the democratic system must also be rectified. This means making sure the government has broad support in the legislature.

And setting a standard of integrity and transparency at the highest level of government is also desperately needed if anything else is to succeed. Cases like the Bulog affair and other rumors of rampant corruption, collusion and nepotism at the highest levels do major damage to confidence.

If the government fails to rise to these challenges, there can be no restoration of confidence in Indonesia.