Investors demand political certainty

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.