Leadership and 'Balkanization'

Leadership and 'Balkanization'

Peter Milne, Managing Editor of Van Zorge Report on Indonesia, Jakarta

In relative terms, perhaps President Megawati Soekarnoputri's first 100 days in office can be viewed as positive: Relative stability, relatively few people either inside or outside the country upset, and relatively few controversial statements emanating from the government.

Megawati can be said to have "succeeded" in her first 100 days in office, but she has also yet to score any major gains.

She has accepted a daunting challenge. Most importantly, she has brought a modicum of political stability to this country.

This is surely why Indonesians and the international community have been so supportive in the initial months of her tenure. There is no one who could conceivably offer any credible alternative. She is doing her best in difficult circumstances, is sincere in her desire to help her country and has avoided making any serious blunders.

But only the qualities of forthright and decisive leadership driven by a vision of where Indonesia should be heading will lead to real progress in overcoming the multitude of self-interests that threaten democratic society and an improvement in the lives of ordinary Indonesians.

This is a country in which it pays to be indirect; to be sensitive to the local culture; to avoid conflict; and to build consensus. But who is benefiting from this reluctance to take the bull by the horns? Indonesians will thank their good fortune that some semblance of stability has returned.

Foreigners will be relieved that militant groups are not on the verge of turning Indonesia into an Islamic state. But there seems to be little if any sense of urgency in tackling corruption, economic and legal reform, or long-term national policy-making. This lack of progress in such crucial areas indicates either a lack of ability to lead or a realization that some of those lower down in the system will simply refuse to be led. So who is really in charge?

The government seems to prefer not to confront the pretense of "national interest" that surrounds the stalling privatization deal with Mexican-based Cemex that would allow the Mexican company to take control of Semen Gresik. This has the potential to turn Gresik into a world-class cement manufacturer, one that can earn profits, increase exports, pay taxes, and expand to create jobs for the local people in Padang and Tonasa -- not to mention fill the sadly empty government coffers with 80 percent of the 2001 budget target for privatization in one fell swoop.

But the government's resolve is being tested at it faces increasing challenges in overcoming the resistance of local elites managements -- the only players who stand to gain from the deal falling through.

Such an avoidance of tough issues sets a precedent for those lower down: It seems safer not to reveal that a bank supposedly under close supervision by the central bank as the regulator of the banking sector has a capital adequacy ratio of minus 200 percent, with 51 percent of its assets sunk in loss-making affiliated companies.

Not unless word leaks out and runs on branches make the secret impossible to hide. But then we are still awaiting decisive leadership to replace several deputy governors of the central bank who have resigned once and have now outstayed their tenures.

Firm leadership is considered inappropriate in pushing forward the sale of the government's stake in BCA, allowing the legislature to take the lead in ensuring that no foreign bank with any sense would want to take the risk. The main concern seems to be only that BCA should remain in Indonesian hands.

Likewise, it seems to be of little concern that there is no clear economic agenda, or that the political truth is that the powers that be have no intention of selling assets to foreigners. But where is the leadership in government proposing the tough solutions needed to fill the gaping budgetary holes? If the these gaps will probably be filled by foreign loans aimed at shoring up support from the largest Muslim country in the world, then this is dubious leadership at best.

Megawati has reminded the nation to hold together and avoid the "Balkanization" of Indonesia. She has a point; the risks are there if government authority is not respected. But where is that authority when the provincial legislature in Padang, West Sumatra, can apparently decide to expropriate Semen Padang in order to scupper the central government's plan to sell its majority stake to Cemex?

Is this Balkanization of Indonesia already starting under the very nose of the president? Megawati is the person best able to address this issue by showing firm leadership in the national interest, not by appealing to people to put their grievances to one side and all live happily ever after.

In absence of vision and decisive action from the leadership, Indonesia will continue to be a country that is steadily running out of control. The thousand tails of the elite never disappeared after the fall of Soeharto, and are starting to wag the dog. Meanwhile, the dog has lost its bark.

Megawati should credited for her cautious and careful start. But is there a vision of determination and courage? This must be Megawati's role if she is to succeed in offering some positive future to the country that she has taken upon herself to govern.

Megawati has the undoubted support of most Indonesians and has the opportunity to take the country forward, even this entails some pain. If she hesitates to seize this crucial role then Megawati, by default, will be making a Faustian bargain with the forces of status quo.