Sat, 22 Feb 2003

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