Investors demand political certainty

By Aleksius Jemadu

BANDUNG (JP): When the minister of finance and leaders of the Indonesian Chamber of Commerce (Kadin) visited the United States on a business mission recently, they were confronted with questions from American investors regarding policy transparency in Indonesia.

The questions focused particularly on the nation's preparations for a post-Soeharto era. And it was not surprising that they were curious about who would be the next vice president.

It goes without saying that foreign investors will tend to stay away from any country lacking in political certainty and a transparent regeneration of leaders.

Government officials and prominent legislative members of the ruling party Golkar have always maintained that Indonesia has its own institutional mechanisms to ensure a smooth succession of power.

Indeed, it was argued that there was no guarantee that announcing the vice presidential candidate ahead of schedule would help stabilize the economy. The ruling elite would take it for granted that the existing institutional mechanisms are reliable enough to ensure a democratic process of electing a president and vice president.

Political analysts can only speculate on the reasons why the ruling elite insist on not mentioning names of vice presidential candidates.

There is a long-held tradition within the dominant political organization, Golkar, to consult with the president-elect before announcing a candidate for vice president.

Since it is a foregone conclusion that President Soeharto will be reelected again for the 1998/2003 term, Golkar runs the risk of making a political transgression if it announces the name of its candidate for vice president ahead of the Assembly's general session.

Politically, announcing the name of Golkar's presidential candidate could spark an intense and public struggle for power among competing political groups in society.

The benefit of keeping the situation unpredictable is to prevent political opponents from knowing the specifics. Such political uncertainty will in effect scatter the preparations of any political group with different aspirations to that of the ruling elite.

However, it is important to note that as far as power succession is concerned, foreign investors seem to have doubts about the independent functioning of our formal mechanisms. Their doubts are believed to be based on an observation that in many developing societies critical decisions are made where the concentration of political power is.

It is not easy to convince them that our legislative bodies retain a decisive and independent power in a presidential election. In a developing democracy such as ours the real power of the House of Representatives is known to be structurally embedded in the dominance of an overwhelming executive power.

In his theory about a prismatic society, Fred. W Riggs (1964) gave an interesting explanation about the functions of political and administrative institutions in developing countries.

Riggs argued that these institutions give an illusionary impression of autonomy whereas in fact they are deeply enmeshed in and cross-influenced by remnants of older traditional social, economic, religious and political systems.

When a degree of overlapping in governance occurs, considerable formalism may be expected. It follows that the mere existence of formal mechanisms may not necessarily reflect their autonomous function. On top of that, the function of political and administrative institutions are structurally embedded in the configuration of vested interests of the politically privileged few. Consequently, it is difficult to make a clear distinction between public interests and private aspirations of the governing elite.

If this theory can be accepted, then it would be understandable why foreign investors doubt long-term political certainty in Indonesia. Their curiosity to know more about the real configuration of leadership regeneration in this nation is quite valid.

Golkar, as the ruling party, has a moral obligation to spearhead more transparency in preparing future Indonesian leaders. Unfortunately, it is precisely this political group which first refused to mention the name of its candidate for vice president.

The policy of "keeping everybody guessing" in this time of deep economic crisis could have tremendous consequences in the future. The survival of the nation might be at stake.

It is high time to put aside all our partisan political interests and put more attention on the greater interests of the nation as a whole.

Act now, or this nation may become entangled in an unending regret.

The writer is director of the Parahyangan Center for International Studies (PACIS) at UNPAR-Bandung. He is also a lecturer of the School of International Relations at the same university.