Mired at home, RI can't lead ASEAN

Mired at home, RI can't lead ASEAN

Takashi Shiraishi, The Daily Yomiuri, Asia News Network, Tokyo

Since the downfall in 1998 of the Soeharto regime, Indonesia
has seen three presidents: B.J. Habibie (1998-1999), Abdurrahman
Wahid (1999-2001) and Megawati Soekarnoputri, who took office in
2001.

Throughout the past five years, Indonesian politics had been
marked by deep-seated instability, beset by such problems as the
separatist Free Aceh movement in northern Sumatra and the
terrorist activities of the Jamaah Islamiyah.

Moreover, the Indonesian economy has failed to continue on its
once-vibrant high-growth path. The annual growth rate over the
past four years has hovered at about 3 percent to 4 percent.

As a result, Indonesia has turned in on itself, and is unable
to take the initiative in steering the Association of Southeast
Asian Nations.

Given Indonesia's importance to Japan in economic and
geopolitical terms, it is most worrying indeed for us to see the
country drifting politically and mired in a socioeconomic crisis.

How are things in Indonesia likely to evolve in the
foreseeable future?

Indonesia will hold parliamentary and provincial assembly
elections in April. The first round of the presidential election
will take place in July, followed by a second round in September.

Will these elections bring about major changes in Indonesian
politics?

The results of a survey conducted in September by the
Indonesian Survey Institute (LSI) with the help of the Japan
International Cooperation Agency may provide some answers. The
survey was carried out in 30 provinces and covered 2,240 people
from 224 areas. Aceh was not included in the survey.

First, how do the respondents assess Indonesia's political
system?

Since Soeharto was ousted, the Indonesian political system has
undergone a major transformation from a centralized authoritarian
system to a decentralized democracy. Because of this change,
political parties and the parliament have emerged as new power
centers along with the presidency and the military.

In addition, provincial governments are now playing more
important roles in society, comparable to that of the central
government.

After five years of reformasi (reforms), how do people
evaluate the current political framework?

When asked in the poll whether they think democracy is the
best political systems, 65 percent of respondents answered yes,
compared with 71 percent in the previous poll in 2001. But
tellingly, in response to the question, "Do you think the
Soeharto regime was bad?" only 26 percent said yes, compared with
60 percent in 2001.

Asked whether they think it undesirable for a member of the
military to hold political office, only 40 percent agreed, while
53 percent said they were dissatisfied with the state of
democracy in Indonesia, and 56 percent said they thought the
Soeharto regime was better than the current democratic system.

These findings indicate that while the majority of Indonesians
support the decentralized democratic system today, their number
is declining, while those in favor of a centrally governed
autocratic system such as that the one that existed under the
Soeharto regime are increasing. This is mainly because the
current government has failed to live up to public expectations.

What do people want from the government?

Responding to the question, "What do you think is the most
important problem facing Indonesia?" 65.4 percent cited economic
crisis, with public order, corruption and law and order trailing
with 7.7 percent, 1.5 percent and 1.3 percent, respectively.

It is clear that most Indonesians want the government to deal
with the economic crisis. But what does the term "economic
crisis" indicate?

In the two years since Megawati became president, the
government has been generally successful in stabilizing the
macroeconomic situation. This can be seen in the stabilization of
the rupiah's exchange rate and the decline in inflation and
interest rates.

The economic growth rate, however, was less than 4 percent in
both 2001 and 2002.

An annual growth rate of 6 percent is required for the
creation of new jobs to secure employment for the 2.5 million or
more people entering the Indonesian labor market every year. This
means the current pace of growth is insufficient.

In short, what most Indonesians mean by overcoming the
economic crisis is that the government has to realize a high
economic growth rate of 7 percent to 9 percent a year, as was the
case from the late 1980s to the first half of the 1990s under the
Soeharto administration. A growth rate this high would lead to
the creation of ample new jobs and give people a real sense that
their livelihoods are improving.

The government is well aware of this, and has worked out an
economic policy package designed to help Indonesia after it has
graduated from the International Monetary Fund's financial rescue
program at the end of 2003.

To improve the investment climate, however, the government
needs to address a plethora of thorny problems, including labor
issues, law and order, reforming the judicial system and the
elimination of corruption. To do so, all the elements comprising
government must unite and show their unshakable, strong resolve.

A question that must be asked is whether Indonesia, through
the upcoming parliamentary and presidential elections, can give
birth to a government that is able to meet the people's
expectations.

Unfortunately, the chances of this happening are slim.

Without attempting an in-depth analysis of the survey results,
I have come to two conclusions.

First, the elections will not help the Indonesian parliament
break its three-cornered deadlock. Three parliamentary
forces--the Indonesian Democratic Party for Struggle headed by
Megawati; Golkar, the holdover party from the Soeharto days; and
a number of Islamic parties with fundamental Muslims as their
power base--are now locked in a power struggle, each unable to
establish supremacy. The elections will not break this deadlock.

Second, although Megawati remains unquestionably the strongest
presidential candidate, popular support for her is precariously
low--less than 20 percent. This means that to win a second term,
she will have no alternative but to form a coalition with either
Golkar or the Islamic forces, offering vice presidential and
ministerial posts as inducements. If this comes to pass,
Megawati's new administration, while basically economic growth-
oriented, will be composed of players with different backgrounds.
The newly formed administration would not be able to act in
unison to solve the weighty problems facing Indonesia, such as
promoting investment, fostering economic growth and creating new
jobs.

In other words, the three-cornered impasse will remain in
place in and after 2004.

What implications does the current state of Indonesian
politics have for the future of Indonesia and Southeast Asia?

First, should the new government be unable to achieve an
annual economic growth rate of 6 percent or so, the public will
become even more disenchanted with democracy.

There is no knowing whether Indonesia will revert back to a
Soeharto-style authoritarian system of government.

If the new administration fails to create new jobs, the social
crisis will deepen, which might lead to a political crisis if
Indonesia is affected by external shocks as in 1997. Even if
there are no crises, the people's expectations of strong
leadership and strong government will continue to grow.

Second, there are clear signs that Indonesia will continue to
turn even more inward, becoming fully preoccupied with domestic
political affairs. It would then be highly unlikely that
Indonesia would take an active leadership role or play a part in
the war on terrorism.

In all likelihood, Indonesia will remain adrift for quite some
time to come.