Reform's second wave: Reflections of an optimist

Satish Mishra, Jakarta

The last six years have been years of national trauma. Many of Indonesia's cherished institutions and beliefs are being questioned. The external world is pushing it now one way, then another. The world appears to be an unstable place. Indonesians long for order and stability.

Despite these pressures there are many reasons for optimism. Indonesia has persevered though an almost total transformation: Of each one of its governing institutions, its major enterprises, its labor unions, its social organizations and even the relationships within individual families without breakdown and disintegration. It has accomplished constitutional and political reforms which would have taken many other countries several decades to make.

Its political parties and its military organizations have worked together to ensure a peaceful succession of power over three presidents in less than four years.

The Indonesian spirit of liberation has come alive in thousand different ways: through a proliferation of voluntary associations, religious charities, professional-associations and media groups. Faced with the worst crisis in living memory, Indonesians did not wallow in despair. They worked. They built. They did not fall apart.

On the whole, it remained true to the liberation spirit of those early independence days; to that powerful emotion of reform unleashed by the first wave of Reformasi (reform).

Of course, many are apprehensive of the future. Many are tired of the pressures and uncertainties and unfairness of the change. Yet, the reform goes on. The surprising results of the recent legislative elections are proof of that.

The great task of the transition is to understand the power of the liberation spirit, to have confidence in the people and to build, brick by brick, a new Indonesia on the foundations of the old. It is to harness the spirit of the first phase of Reformasi into the systems and programs of a Second Wave of Reform and Reconstruction. It is to ensure that no future economic shock or political storm will lead to a systemic collapse of Indonesia's entire way of life.

What principles should guide us in constructing a future program of reform and reconstruction? The answer, drawing on lessons of history is relatively obvious.

First, the teething problems of creating a new democratic order should not be used as an excuse to push us back towards a new variety of dictatorship. It should not be forgotten that it was the internal weaknesses of the New Order which was directly responsible for pushing us into the most severe economic and social crisis of our time.

Nothing will be gained by repeating past mistakes. We must go forward not backwards. Going forward means building a well functioning, orderly, and stable democratic system for Indonesia.

Second, government economic programs must touch the lives of the average Indonesian, not just the ones who became well off under the New Order or those who have done well out of the confusions of the monetary crisis. Food for the family, education for Indonesia's children, health-cover against common diseases, protection against criminality and physical assault are things that we all need to function as free human beings.

Democracy which stops at five yearly elections of distant leaders will not win the hearts and minds of the Indonesian public. It will not take root in Indonesia. Economic progress must be therefore measured not in terms of growth rates of gross domestic product (GDP) or confidence of foreign investors but in the way in which the lives of our people are changed by it.

Jobs not GDP must be the slogan of future Indonesian democracy. We must not fall into the New Order trap of equating aggregate growth rates of national income as the organizing principle of our political system. We must work out a new economics of democracy, one anchored on a set of clearly defined and recognized rights, obligations and duties of the citizen and the state.

The basic question is once again of balance and perspective, not statistics and formulae. Indonesia badly needs the resumption of economic growth, to provide jobs and support to our poor and sick. But not all growth, as we have already learnt by the bitter experience of the past, is the same. Growth to be meaningful must be shared by the many, not restricted to a few individuals or a few already well off regions.

Equally true is the fact that growth needs a resumption of investment; yet not just any form of investment. We need investment of the right kind, one that is sustainable, rooted in our own economy and one that raises our future productivity and the competitiveness of our goods. There are different kinds of investment as there are different patterns of growth.

While difficult to resist, the fascination with overall rates of economic growth and investment ratios is a carry over from the politics of the New Order. For that reason it is attractive to many schooled in the old tradition. Yet, a second major lesson learnt during the difficult years of the current crisis is that investment and growth of the future depends not so much on the confidence of banks and investment houses as that of the general public in Indonesia's own governing and social institutions.

What is needed to restore public confidence and bring a wider social legitimacy to the new democracy, is growth which is generated from a wider sharing of business and employment opportunities, an economic growth based on ability not kinship.

Economic recovery based on the same pre-1997 foundations of privilege and connection is bound to fail in raising public confidence in Indonesia's new governing institutions. Without domestic, public confidence, the political and security environment will remain unstable. Investment will remain a gamble on the herd instincts of a few leading business corporations. Growth, even if strong for a short while, will in the end falter and fail.

We cannot afford any more false starts on the road to economic recovery. Sudden collapses of our economic and political institutions such as that occurred in 1998, sharply increase the underlying frictions in our society.

Third, we must rebuild a united Indonesia. This is not just a question of geography but of national identity. A united Indonesia cannot be built on force and coercion. In the past national security has often been equated with armed force. It is time to move to a broader concept of national security, one which combines the creation of an organized, well financed and disciplined police and armed force, with a strategy for tackling the root causes of alienation and despair.

The Second Wave of Reform and Reconstruction must thus be driven by an overall vision which seeks to consolidate Indonesian democracy; root broadly shared economic growth in a set of competitive, regulated, open market institutions, and a national unity built not just on organized force, however well motivated, but on a new framework for human security.

The writer is Head/Chief Adviser of UNSFIR (a joint project of Government of Indonesia and UNDP). The views expressed here are strictly personal.