Indonesia's long-term objectives

By Jusuf Wanandi

JAKARTA (JP): The country has been in a state of fervor since the onset of the financial crisis in July 1997. Rapid changes have occurred across the board and affected every segment of society.

Yet, change is taking place in a very disorderly way. It is because the political system stalled during the last 20 years of Soeharto's reign due to his constant refusal to accept any change, which he considered a threat to his retention of power.

The pace of change is chaotic because political institutions are weak. Under Soeharto, the political system became rigid so that when change becomes unavoidable, it takes place in a volatile and explosive way.

Chaos and anarchy are detrimental to efforts to revive the economy. The transitional government under President B.J. Habibie -- merely a continuation of the Soeharto regime without Soeharto -- is unable to handle the situation. It is because it lacks the legitimacy and authority, as well as the political will, to undertake the necessary reforms, except under pressure from the public, especially opposition forces and the students.

Much more is needed to overcome the crisis than those reactive, ad hoc and temporary measures. Above all, the Indonesian leaders and public have to have a clear vision of what they want to achieve for the country's future so that they are not easily swayed and influenced by focusing only on short-term needs to resolve the crisis. And this will also help to overcome the pessimism and feelings of despair in facing the crisis. This is important because it may take a decade before the nation can overcome its main challenges.

Considering the demands of the people -- expressed during the last 20 months in reaction to the abuses and misdeeds of the Soeharto regime -- three main objectives for the future are immediately obvious.

The first is democracy. This does not simply mean a formal participatory political system with a general election of representatives based on a multiparty system, but materially a guarantee of political rights. These include freedom of speech and organization; the rule of law and not of men; the right to change governments and, last but not least, an active civil society to give meaning to democracy.

The most immediate task now is to have fair elections on June 7. This is a prerequisite to the rebuilding of Indonesia, because only through a fair general election can the country have a new legitimate government. Only then will the government be able to undertake the critical reforms in the political and economic fields, which are in themselves very difficult and which need a lot of sacrifices from everybody.

One general election cannot solve all the problems in the political, social and economic fields. Patience could only be expected from the general populace if it was asked for by a solid, legitimate government with majority support. A simple majority, with a vote of 50 percent plus, will not do the job.

Therefore, the new government must be a broad-based government with at least two-thirds of the seats in the legislature. This means that the three big parties -- Megawati Soekarnoputri's Indonesian Democratic Party of Struggle (PDI Perjuangan), Abdurrahman "Gus Dur" Wahid's National Awakening Party (PKB), and Amien Rais' National Mandate Party (PAN) -- have to cooperate and form a viable coalition government.

Ideally, this should be announced before the election. It will function as a guarantee to the Indonesian people and the international community that a solid government is possible after the elections. It should also help calm down the political atmosphere before the elections and during the campaign that otherwise could become uncontrollable.

Of course, it is anybody's guess whether the three big parties could establish a strong coalition. They are potentially the big winners in the elections because their leaders have certain name recognition and they have an infrastructure based on well established social or political organizations. PDI Perjuangan is based on the old Indonesian Nationalist Party (PNI), established in 1927, and PKB is an outgrowth of the largest Muslim organization Nahdlatul Ulama (NU), founded in 1926. PAN relies on the support of the second largest Muslim organization, Muhammadiyah, established in 1912.

The three parties are already cooperating at the working level in putting pressure on legislation for general elections and on political parties, which helped produce decent political laws that are critical for a level playing field for the holding of general elections. The real problem concerns relations among the leaders of the three parties but, in a survival situation, they are bound to cooperate.

Another problem in establishing a democracy is the role of the judiciary in implementing the rule of law. This is an urgent matter because the Indonesian judiciary is archaic and corrupt.

Political rights, especially freedom of speech, are of critical importance, and efforts to curb them by the government should be challenged. Granted, there is always the possibility of irresponsibility by a member of the mass media, which should then be taken to court. But censorship in whatever form should be avoided because freedom of speech and opinion is a political right that should always be guarded jealously by the people, especially civil society.

The second objective is full autonomy of the regions. In fact, the idea of federalism is not a bad one for a country as big and diverse as Indonesia. Historically, it was an anathema to the freedom fighters of 1945 because it was proposed by the Dutch as a neocolonialist tactic. However, it does make sense to debate this thoroughly in the future. For now, full autonomy for the provinces is a political imperative; otherwise the center can no longer hold following the heavy-handedness during the past three decades.

The newly approved law on decentralization and autonomy does include full-fledged autonomy, where the central government only has defense, foreign affairs, the judiciary, monetary affairs and some fiscal policies under its control. The rest will be in the hands of provinces. This is a good start, but its presence should not be an excuse to limit future developments.

East Timor is, of course, a special case. The right of self- determination after a few years of transition with full autonomy is still an option for Indonesians and the East Timorese after the general election and with a new government in charge. It is clear that both the offer of special status as a final solution and independence in early 2000 is not a realistic or honorable solution.

In the end, Indonesians still believe in the one Indonesian state and nation that is based on the strong sense of nationalism that emerged in 1908, something which cannot be discarded easily. However, this sense of nationalism must be nurtured into a democratic and just society to take root and flourish.

The third objective is social justice. This is a long-term objective and should be undertaken gradually and with transparency based on the rule of law. It should not involve a forced transfer of wealth from the rich to the poor.

The challenge is to have more inclusive economic development and empowering the small people, while at the same time guaranteeing there is healthy competition among the big enterprises. This is a politically loaded issue in Indonesia.

At issue is not only the establishment of economic democracy, but also the racial connotations of the problem. It has been argued, wrongly, that the Chinese-Indonesian minority controls up to 70 percent of the economy. It is a myth. At the most, about 30 percent of the gross domestic product (GDP) is contributed by activities under the control of Chinese-Indonesians. And this appears to be rapidly diminishing because many of their companies that have been severely affected by the financial crisis will soon end up becoming foreign owned.

However, their involvement in the economy will remain significant. They also believe that it is important to progressively increase the share of indigenous Indonesians in the economy, as long as this is undertaken in a transparent way and based on the rule of law.

Malaysia's affirmative policy for the bumiputra is one model, although it would result in corrupt, collusive and nepotistic (KKN) practices if not implemented correctly. Nelson Mandela's model for South Africa also has been mentioned as an alternative, where big White African companies are placed under a better competition regulation while small Black African companies are given greater opportunities and are being empowered.

Whatever strategy is chosen, it should result from a thorough examination among mainstream economists and then among the public in order to get the necessary support for its implementation. But, first, the economic reforms have to be resolutely in place.

And a new team of economists, partly technocratic and partly political, has to cooperate in implementing a common strategy of economic reforms and development.

Adoption of different and conflicting strategies and policies, which is characteristic of the Habibie Cabinet, is damaging to the economy and to restoring confidence in the economy. Indonesia will be in a critical state of affairs economically for some time to come, and it just cannot afford a division among its policy makers.

The proposed group of economists in the new coalition government has to be able to formulate a new strategy and propose it to the public for debate. Among the issues involved should be the new strategy of overcoming discrepancies in income among groups in society, including among ethnic groups.

Additionally, there is the issue of establishing a social safety net and the future social welfare system.

The new strategy also should be based on the recognition that globalization is here to stay and that the Indonesian economy is inevitably going to become more integrated into the global economy. The challenge is to be able to involve the Indonesian people at large, and in so doing make them aware of and accept these new realities. They must realize that there is no alternative to growth and development in the future than by riding the wave of globalization.

The writer is chairman of the supervisory board of the Center for Strategic and International Studies.