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.