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.