Indonesia: How to restore confidence

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.