Reform enters a 'mystical' phase

By Emmanuel Subangun

YOGYAKARTA (JP): In mass psychology, mystical sects are a phenomenon related to the gushing forth of exaggerated hopes, leading to the overhaul of values, reality and routines. The phenomenon has not only smitten the backward and the poor in Africa, but also in Europe, and not uncommonly in the United States.

As the reform movement in Indonesia enters its third year, the signs of a "mystical sect" are different from that of religious mysticism. The latter offers a different world after the apocalypse, while the "mystical" feature in the reform movement demands that its benefits must be attained immediately during a social crisis.

One attraction of industrialization, which was constantly promoted in the global economic system under the Soeharto years, was that the market was growing and that labor was abundant and cheap. This signified that Indonesia was enjoying the birth of its consumer class which was to benefit greatly from industrialization; the labor class could be milked for the convenience and social economic mobility enjoyed by the middle class.

When the crisis affected the whole of society in recent years, those directly hit were the closest to industrialization: managers, staff and low level employees in the "formal" sector.

It was this group that was immediately on the receiving end of dismissals and the loss of monthly wages, a hard blow killing dreams of mobility. Bit by bit their savings were nibbled away and the old consumption pattern changed -- from its role in accelerating industrial growth to the demolishing of endless purchasing power.

During this first cycle, the pressure of the crisis moved in a subtle manner, hiding its cruel features which posed life and death issues to those affected. But the cycle then moved further. There was a time when the labor class of some 30 million could still survive up until the point where they could not be any more miserable. They managed to survive that bottom line of human misery.

However, it was that bottom line that finally burst under pressure and initiated the cycle of the crisis, which led to the beginnings of a "mystical" phase of the reform movement.

Meanwhile, millions of Indonesian workers who were not dismissed will, by the end of 2000, face a simultaneous party: Christmas for the Christians, Idul Fitri for the Muslims and a New Year for all. The result is simple and clear: more money is needed for shopping.

This year's festivities will become a mystical ritual once the following conditions are met: 1. Labor demands for extra money, called the THR, are granted, along with demands for minimum regional wages. In East Java, the monthly minimum regional wage has increased from Rp 240,000 (about US$24) to Rp 330,000. 2. Once expenses for wages have been spent workers will experience some relief; but this will be a severe burden to factories' cash flows. In such a tense liquidity condition factories inevitably will rush to those in the money business -- the banks. 3. For banks, whose main role is bridging the productive business circle and the public, these are times to sell credit with decent prices. Here credit is not aimed for investment, but to maintain the cash flow of companies. 4. The consequence to companies is that the pressure of this flow of money is in no way acceptable. In the medium and long term, with the shrinking market and increasing production costs, plus political uncertainty, investors will surely seek other places to do business. Countries like China, Vietnam or even India and Malaysia, according to business people, are more sensible investment destinations.

If that capital flight happens, the cycle will be complete, and our economy will digress further, until a new bottom line is reached. And where is that point, and when will we get there?

It is within such a social and economic crisis that we witness events which will eventually trigger a disaster. These are indications which a mystical sect is ready to believe that the end of the world is imminent; members then release themselves of all worldly attachments including their own bodies, to then leap into the fires of death or to inject themselves with lethal toxic serums!

When reform started, many intellectuals, and politicians still believed that the crisis was temporary, and that we would soon automatically return to normal times.

Yet such expectations have been increasingly denied by the current structural situation: at the level of decision makers, the fight to maintain and obtain benefits before the ship sinks is getting fiercer. Indications of this include extraordinary legislators' salaries and the culture of political trading in Jakarta.

At the economic and social level, with its own rules, regulations and laws, the suffering will soon reach a limit. No one is willing to die voluntarily from hunger! Companies which must produce goods and services cannot afford to sit still and observe the greed of the elite in Jakarta allowing their firms to die.

Capital flow at the company level and anarchy among workers is the direct result of a myopic vision of the Indonesian elite. This vision has reversed the noble ideal of leaving a corrupt, cruel and authoritarian regime which leads to a social system full of murders, bankruptcy and despair.

The iron law of the crisis at the end of this year will surely display its final blow. Mass suicides are to be expected and what is worse, everyone will feel they are winners for having succeeded in attaining their own interests; the elite having gained their power, the workers having yearned for decent pay, business people who dreamt of profit margins, and banks feeling that they are playing a vital role in oiling the economy. All these will eventually be drowned by a giant wave of all these self-interests, which are fast becoming a joint curse.

Indonesia's reform movement will immediately enter this "mystical sect" phase once all elements of the movement have achieved their objectives. When strategic groups blindly chase their interests and succeed, collective hell will break loose.

And these days, the emergence of this later cycle is becoming increasingly clear.

The writer is the director of the Jakarta-based Research Productivity Center survey firm.