People should join hands as government in crumbling

People should join hands as government in crumbling

People are encouraged to maintain solidarity as the prolonged
crisis bites deeper, particularly as the government has been slow
in addressing the crisis. Solidarity will help Indonesia stay
united and hence repress any separatist inclinations, says
economist Hadi Soesastro of the Centre for Strategic and
International Studies (CSIS). He talked to The Jakarta Post's
contributor I. Christianto recently. Here are excerpts from the
interview.

Question: What are the biggest challenges the country is
facing?

Answer: I'll define two kinds of challenges: Internal and
international.

Internally, as a nation, Indonesia is losing its identity.
It's been taken for granted for too long. We are existing without
an identity. In the past, we had an identity as a young nation
gaining independence through struggle. We kept this identity from
when we proclaimed independence until the 1980s.

The New Order regime put too much emphasis on material wealth.
The result was impoverishing ourselves as a nation as we were
losing our identity. It's no myth that we struggled for
independence.

Also internally, there is a process of disintegration. The
idea and concept of decentralization and autonomy is like a quick
fix for the problem of disintegration.

Internationally, since there's no identity or new identity,
Indonesia does not have a precise attitude in the face of
globalization. Some people are afraid of it, some are
antiglobalization, and others don't give a damn about it, while
others think globalization is a perfect opportunity.

Q: Internally, is disintegration a challenge or threat to the
nation?

A: Both, depending on how you look at it. It should have been a
challenge as decentralization is an integral part of
democratization.

But we have to be careful in implementing this concept. I do
not see a basic philosophy for this (the implementation of
decentralization). It is not only about technical matters. Then
there is the threat that the nation will become polarized from
decentralization and regional autonomy.

There is already concern that once the regions get full
autonomy, some will expel nonindigenous people. I know there are
several regions agreeing to do this.

It will be even more dangerous as there is no definition of
who is indigenous and how to identify certain groups who have
lived in other areas outside their place of origin for a long
period. We have to consider that everyone is Indonesian, don't
we? But how can we have a state if we have such a narrow-minded
philosophy? So are we really in a crisis of identity, which is
reflected from the incapability to respond to internal and
external challenges.

Q: What should we do in facing these challenges?

A: This is not about a priority to respond to either challenge.
The nation has to have good organization to be able to respond to
internal and external challenges. When the government fails to
respond, the challenges will become threats. Just imagine if a
region expels people who are regarded as nonindigenous based on
their race, Indonesia will become a Yugoslavia.

Q: Then how can we maintain the spirit of integrity, especially
when the government fully implements regional autonomy which will
give provincial administrations more authority in managing local
resources?

A: It's a matter of state mentality. We need to have strong
leadership. Leaders, including the government, House of
Representatives and People's Consultative Assembly must be able
to set the ideas of the integrity of the nation.

Q: To some extent we're moving toward an open society. Isn't this
a good condition to be in?

A: It is. Indonesian society is moving toward becoming an open
society; however, we are moving without a clear direction. Say
that the door is opened, but when we leave, everyone is confused
about what direction to take and there is no clear rule on how to
prepare for that direction.

Q: What do you think about the nation's general condition next
year?

A: More or less, it will be about the same in all aspects. I
think it's good news if next year will be more or less the same,
because there's serious danger if it worsens.

Q: What kind of danger?

A: I think law and order will decay. Some people may think this
is already happening now. But it'll be more serious next year. At
worst, unrest will erupt everywhere.

Q: What will it be like, in particular the economic situation?

A: It's a mixed picture. We know, at least at this point, that
there are a few parts of the nation's economy that are growing
dynamically.

I can say the economy consists of two parts: the sick and the
healthy. The latter, I project, will have grown by almost 7
percent by the end of this year. The sick part will have grown by
only 2 percent or 2.5 percent.

Q: How do you categorize the sick and healthy parts?

A: The sick economy includes those under the Indonesian Bank
Restructuring Agency (IBRA) plus some state-owned enterprises,
like electricity company PT PLN and oil company Pertamina.

IBRA is like a hospital treating the sick firms. But the
hospital chief is always changing, the physicians keep quarreling
among themselves and the nurses do not care. This situation is
hindering the sick from recovering.

It's a picture of the sick economy. All the government's
energy is being directed at the sick economy, but I don't think
it will be over soon.

To some extent it's good because the government does not have
any time to interfere with the healthy economy. I would be very
concerned if the government begins to create a lot of problems in
the healthy economy. When they try to do something, they do it
wrongly.

Q: What does the healthy economy include?

A: The healthy economy includes export-oriented companies which
are not affected by debts. They are, among others, the Korean or
Japanese electronics firms. The rest include medium-sized
companies which are doing well. There are also small-scale
companies. Some people call them the "underground" economy or
"gray" economy. We used to call them the informal economy, but
it's actually much more than just informal as this sector has
been growing in retail, trade and so on.

By now the companies are not annoyed with the government for
not receiving significant facilities while the banking (financial
sector) seldom lends funds.

These companies, however, have been growing. It seems that
we're turning into a traditional economy; a producing economy
which does not rely on financial service sectors. There could
have been lending without seeing a bank, but it has been based on
trust and a cash-based economy. Usually this is very inefficient,
but it is happening.

Q: Will the healthy economy survive?

A: The government may disturb the healthy economy through tax
administration. But that would be hard.

There will likely be an impact on the sick economy. So far,
the sick economy is the main source of tax for the government.
Meanwhile, the healthy economy, which is originally not the main
object of taxation, has been growing. Consequently, although the
country's economic growth will be able to grow by 5 percent, the
government will probably fail to collect enough taxes as
anticipated.

The government may also kill the healthy economy if it fails
to reform the economy.

Meanwhile, labor regulations may also affect the healthy
economy.

Q: How will the economic situation affect the everyday person?

A: Certain people still have ideas and visions. When the economy
allows the common man to have meals, the nation will be all
right.

But unemployment figures will surge when economic growth
remains at 4 percent or 5 percent. The problem is, educated
people in urban areas dominate the unemployment profile in
Indonesia. They can be a source of instability when the economic
situation gets worse.

Q: Generally, what can we do in such a condition?

A: We can't depend on the current government, but it is going to
be there for sometime although there will always be attempts to
topple it.

We have to try to organize ourselves since we have a very
messy government. That's why, I think, society must play a
greater role. It must become the anchor of the nation, which is
losing many things, including direction.

Q: What factors make the current government able to remain in
power?

A: Attempts to topple the government must still be taken
constitutionally. If it's not, the next government will also be
toppled and so on. But doing it constitutionally will be very
difficult, as a number (of mistakes) is necessary (to make it
really happen).

I think even though there are attempts to topple the
President, Vice President Megawati and House Speaker Akbar
Tandjung and Assembly Speaker Amien Rais would not support them.
Because they are reluctant to take over power in during such a
difficult time. Also, I don't think it would be easy to do.

The people, as good citizens, still need to be whistle-blowers
who observe the government.

Q: Are you personally optimistic about the nation's future?

A: I have to always be optimistic. My optimism is based on public
trust. I believe the public tries to strengthen civil society. I
have almost given up on the government, but that does not mean I
will give up on the country.

I don't see any incentive for the government to make
corrections. The elite always mentions the crisis in their
speeches, but they don't really know about the crisis or feel its
effects. There is no sense of urgency at all. Nobody in the
bureaucracy makes decisions because everyone wants to retain
their position.

Q: How can the common man maintain optimism?

A: If I criticize the government for not having any sense of
urgency toward the prolonged crisis, the common people have to
make up for it.

We have to show solidarity.

But I don't see any solidarity yet. Just as an example, I've
seen there's a new showroom of luxury cars in Jakarta (Jaguar has
just opened a showroom in Slipi, West Jakarta). What is this for?
People will give up among themselves. No one will be able to live
in peace when certain people show off such an extravagant way of
life.

I don't understand why the government allows luxury car sales
in Indonesia by using the World Trade Organization (WTO) as an
excuse. Nobody is pressuring Indonesia to open its market to
luxury cars in the country. There's no urgency to do this.

There are a lot of rules in the WTO for doing these things. We
could have mentioned them for social reasons. There's the
security factor, and there will be national instability because
of a serious social gap.

So we can impose high duty on luxury cars. It's legitimate, as
Indonesia does not have any luxury carmakers.