Indonesia's journey: Is the glass half empty?

Indonesia's journey: Is the glass half empty?

Satish Mishra, Head, United Nations Support Facility for Indonesian
Recovery (UNSFIR), Jakarta

There is much encouraging news for the habitual pessimist
these days. Bombs go off in peaceful Bali. War looms over Iraq.
Corporate corruption lurks at the heart of twenty first century
capitalism. The FTSE and the Nasdaq are on a slow, slippery
slide. There are fears that globalization spells the end of third
world industry and third world government. Sheep are cloned.
Seeds are genetically engineered. The pursuit of Mammon rapes the
environment.

What a change in mood in less than a decade. The last century
ended on a note of optimism. The Berlin Wall, not unlike the
Biblical walls of Jericho, bit the dust amidst a clamor of
popular frustration. Many looked forward to a future of peace and
global understanding. The Cold War had ended. The battle of
ideologies was over. Francis Fukyama predicted the end of
history. All that seemed a long time ago.

By 2002, Indonesia, like the rest of the world, is feeling a
touch of the wobbles. Civil society bemoans the death of
reformasi. Government officials complain about endless scrutiny
from the legislature. The international community detects a lack
of political will in the reform process. The employers point to
dire consequences of the current labor law. Labor leaders decry
the low level of Indonesian wages. The man on the street feels
the burden of corruption in public life. Meanwhile, Aceh is
restive. Unemployment and crime are on the rise. The pessimists
are having a field day. For them, the Indonesian glass is
definitely half empty.

But is that really the way to interpret the present Indonesian
scene? Is all this hand wringing and gloom really justified? The
simple answer is that it is not. Pessimism is so pervasive that
it is in danger of becoming a national past time. It is time to
resist it. It is time to consider the other side of the story.

Unfortunately, telling the other side of the story is not as
simple at it sounds. It involves comparing like with like. That
in turn requires a fair characterization of the benchmark against
which Indonesia's performance might be measured. After all, it is
easy to beat up on Indonesia.

Its economy has not recovered from the 1997/1998 slump as fast
as neighboring Korea. There is a mountain of pending legislation
in the House of Representatives. Privatization is behind
schedule. Regional governments levy unauthorized taxes. Police
reform is at the starting blocks.

All this might be true. But how do we decide on the relative
merit of the Indonesian case compared to the performance of other
countries in similar situations. On what criteria do we decide to
compare Indonesia with Korea and not with Argentina or Russia or
Brazil?

A frequent response is to simply ignore the need for setting
any comparative criteria or bench marks at all. At times, this is
through sheer lack of knowledge. At others, it is because the
analytical framework which we use is not appropriate in the
Indonesian context. Or again, it is because our intention is
precisely to make an unfair comparison.

That might be especially be the case when we want to shift the
responsibility of a given policy failure on to someone else. If
economic policies are ineffective this is because of messy
politics. If the political system lies in a quagmire it is
because of slow economic recovery. If regional separatism gains
ground it is because of foreign intervention. All of them
represent partial truths. Taken together, they are just a retreat
into banality. The reality is more complicated and fast moving.

What kind of situation and what kind of country should provide
the yardstick of comparison with Indonesia? Several criteria
might be used: Size, nature of the economic shock, decompression
of political power, historical experience of dealing with similar
transformations and similarities in culture or religious
philosophies.

The scale and timing of the Indonesian systemic transition
makes this task very difficult. A piecemeal or a uni-dimensional
comparison runs the risk of missing the links between political
changes and economic reforms taking place at the same time.
Unqualified comparisons with Thailand or Korea miss the point
that these countries have spent over a decade and half in
reforming their political structures before the advent of the
Asian economic crisis.

Comparing Indonesia with Singapore is equally problematic.
Singapore is a city. Indonesia is the fourth largest country in
the world. Would it not be better to compare a Singapore with a
Kebayoran Baru or a Pondok Indah?

A more convincing framework for comparison is provided by
post-Cold War Soviet Union (USSR), or a U.S.A. or Britain in the
midst of the Great Depression of the 1930s. Countries struggling
to establish post-colonial government and economic structures in
the late 1940s and 1950s might provide another choice. Even
there, some sifting will be required. Not all post-colonial
governments emerged amidst the chaos of deep economic shocks.

Sensible comparisons of the kind suggested above lead to the
conclusion that Indonesia has done rather well in the
circumstances. First, it has managed a progressive dispersion of
political power and containment of the military. Second, its
economic recovery to pre-crisis levels of output is much faster
than that experienced in the transitions of the former USSR and
Eastern Europe.

Third, social conflict remained localized in a few key
centers. Fourth, key public services and infrastructure continued
to function despite the suddenness and ferocity of the economic
shock. Fifth, xenophobia and extremism find little support in the
public mind. Post-Soeharto Indonesia remains less tame and less
divisive than the politics of an Ireland or Spain or Brazil or
India.

Pessimism is a bent of mind. Indonesia is engaged in a long
and difficult journey. The end of this journey is to turn a
dictatorship to a democracy. It is to turn a patrimonial and
outmoded form of cronyism into a competitive rules-based economy.
This transformation is nothing less than a metamorphosis of a
caterpillar into a butterfly. The pessimist only sees the mangled
remains of the caterpillar. That is surely one part of the
picture. There is however another. If one looks closely, one also
observes the emerging wings of a butterfly.

The opinions expressed in this article are strictly personal.