Indonesia slowly regains regional control

Indonesia slowly regains regional control

Jusuf Wanandi, Co-founder, Member Board of Trustees,
Centre for Strategic and International Studies (CSIS), Jakarta

Southeast Asia and its regional institution, the Association
of Southeast Asian Nations, have been off the international
community's radar screen for the past few years. This is due
partly to the after-effects of the 1997 economic crisis, which
the region has not fully shrugged off, and partly to ASEAN's
preoccupation with expanding its membership.

At the same time China, ASEAN's great regional competitor, has
increased its economic strength and attractiveness while Japan,
ASEAN's main economic partner, has remained in a slump. Above all
though, Indonesia's multiple crises are to blame for the switch
in international attention: these have diminished the leadership
role of a country that was once the anchor of Southeast Asia.

ASEAN members are very conscious of the fact that their
economic problems will not solve themselves. They must therefore
be prepared to widen the ASEAN Free Trade Agreement with accords
on investment services and trade facilitations, a process that
should eventually lead to an ASEAN common market.

Furthermore, the ASEAN plus China, Japan and Korea (ASEAN+3)
mechanism should result in an east Asian community in the longer
term. Economic partnership agreements, to culminate within 10
years in free trade agreements, are already under negotiation
with China and Japan individually. But for such efforts to
succeed, Indonesia must get its act together. Fortunately there
are some positive signs that it is doing so.

In spite of a weak leadership, conflict in its regions and
economic, political and social crises, Indonesia has, since the
Oct. 12 Bali bombing, moved firmly against both regional and
local terrorists. With international support, its police force
has caught almost all of the Jemaah Islamiyah members responsible
for terrorist acts carried out over the past three years. In
doing so it has gained self-respect and public confidence, and is
now going after Indonesia's other terrorist groups, forcing them
on to the defensive.

Debilitating local conflicts have been overcome in central
Kalimantan, south Sulawesi (Poso) and the Moluccas. In Aceh,
which has endured a separatist insurgency for the past 20 years,
a road map for peace has been agreed between the government and
the rebels with the assistance of the Henri Dunant Centre in
Geneva. This outlines a process for ending hostilities and
allowing the rebels to participate in the political process. And
at last Jakarta is granting greater autonomy to Papua, after long
years of neglect.

On the economic front, too, the indicators have improved:
Inflation -- 10 percent in 2002 -- is under control; growth is
3.5 percent (although still not adequate to absorb 2m people
entering the workforce each year); the currency has stabilized;
and the fiscal deficit is manageable.

However, there are still serious weaknesses. The judicial
system is unreliable and corruption remains rampant;
decentralization and the devolution of autonomy to the regions
are not proceeding smoothly, discouraging new investors; and
labour unions are apt to be irresponsible. Political reform
remains a touch and go process because of corruption within
parliament and the political parties, while reforms of the
security services are slow and uneven.

Only civil society, academia and the media can be depended on
to support the reform process. To this end, it is good that
Indonesia is seeing the emergence of moderate Muslim leadership
and groups. In spite of the presence of small radical Muslim
groups and terrorists, the moderates are now defining the debate
about what Islam is, and especially about its role in a
pluralistic society such as Indonesia, the world's most populous
Muslim country. This development could have a real influence on
Islam in other regions, including the Middle East.

The most critical issue in Indonesia is the weakness of the
national leadership -- not only the president but also
parliament, the political parties and the highest courts. This
must be overcome in the 2004 parliamentary and presidential
election. For that, more credible candidates are needed -- but so
far the picture is not encouraging.

While Indonesia has moved in the right direction, too many
weaknesses remain. Only a credible national leadership can ensure
that reform is sustained. That means next year's general
elections are crucial -- not just for Indonesia but for the
region.

This article first appeared in The Financial Times, Singapore