RI moving in right direction, although at 'glacial' speed
RI moving in right direction, although at 'glacial' speed
Managing relations between Indonesia and the United
States has never been easy, and events of the last few years have
made it even more challenging. The terrorist attack against the
United States on Sept. 11, 2001, changed many dynamics in the
world, including the relationship between Indonesia and the
United States.
Obviously, Jakarta and Washington do not see eye to eye on
many issues. Relations cooled even further when President George
W. Bush sent his coalition forces to invade Iraq in March.
But as U.S. Ambassador to Indonesia Ralph L. Boyce has
repeatedly said, "As friends, we can disagree on a lot of
things".
Both countries indeed have a stake in maintaining and
nurturing friendly relations, even as they disagree on various
global issues. They know that they have a lot to gain by working
together, and that it would be unthinkable to embark on a
different approach.
Boyce, taking up his Jakarta post only a few months after the
Sept. 11 terrorist attacks, found he had his work cut out for
him. The war on terrorism, and the subsequent war in Iraq, is
only one element in the overall complex relationship between the
two countries.
There are other aspects that have kept him busy, from helping
to promote the process of democratization in Indonesia,
Indonesia's economic recovery program, to enhancing business and
economic ties.
The ambassador recently talked at length with The Jakarta
Post's Endy M. Bayuni about the state of relations between the
United States and Indonesia. An excerpt of the interview follows:
Question: How do you see Indonesia developing in the
medium and long term?
Boyce: Indonesia is undergoing one of the most dramatic
transformations anywhere, maybe ever, from an authoritarian
centralized state to a democratic and decentralized state, with
relatively little violence and a generally shared commitment to
that direction of change.
There was very little debate about remaining democratic, or
wanting to remake a lot of Indonesia's institutions. There is
generally a shared view about where Indonesia wants to get in the
medium and long term. Obviously, bringing about that kind of
change on a day-to-day basis in the short term, in a new
political environment, is very difficult.
You have turmoil, a lack of agreement on the day-to-day
tactical issues, but there is a general agreement on the
direction, the course, which I think is a good thing.
What underpins your optimism?
Politically, the August session of the People's
Consultative Assembly (MPR) is a historic milestone that has gone
under-reported and certainly under-recognized outside Indonesia,
maybe even inside Indonesia. That was a monumental date over not
just one or two fundamental issues, but a whole handful of issues
that defined the very nature of Indonesia and the state, the
definition of the MPR role, strengthening of the presidential
institution, the creation of a new elected body, the continued
distancing of the military from politics, the reaffirmation of
Indonesia as a secular state.
All of these things, any of them individually would have been
remarkable (but) taken as a cluster of issues for a national
debate and carried out on televisions in front of the entire
nation, is really quite remarkable. That's on the political side.
Over the last three-year timeframe, decentralization has
probably today presented more problems than solutions. But in the
very magnitude of the endeavor, it would be surprising if it did
not. You have gone, with the stroke of a pen, from a centralized
to a decentralized system, not at provincial but at the district
level.
Obviously there are going to be a lot of loose ends that have
to be picked up, such as the relationship between the districts,
revenue sharing and interstate commerce and regulations, and this
sort of thing, but I hope this process will continue.
Hopefully, it would be better recognized that this is the
most ambitious exercise of its kind in the history of the world.
Again, this is one of the quiet success stories of Indonesia.
How does this development bode for the U.S.-Indonesia
relations?
It's tremendously exciting for an American to be
witnessing even part of these dramatic changes, because the two
countries have so much in common in terms of their geographic
spread, ethnic and religious disparity, the population
composition, and we being the oldest democracy and Indonesia one
of the newest democracies.
It's sometimes tempting to be prescriptive, but again,
something will inevitably happen in our own country to remind us
that we still don't have it right when it comes to perfecting
democracy. So, rather than try to imply that we have all the
answers, we may have some experience over 226 years of trying to
do this, that we can make available to Indonesia.
The United States has always been a major trading partner
and an important source of foreign direct investment and
financial assistance to Indonesia. How do you see this developing
in the coming years? What problems do you see?
I hope, at the very minimum, we remain the top sources
and destinations of all those three. I hope over time foreign aid
will become increasingly unnecessary. It is an irony that we were
actually phasing out our assistance program at the end of the
Soeharto period because of the excellent macroeconomic growth
indicators, but in the post-1998 period, we have completely
redesigned our program and basically started a whole new type of
program, from the ground up.
We have focused largely on the whole society, supporting
democracy and economic reforms and health related issues.
Indonesia will continue to rely on the United States as a source
of investment and a trading partner. There are some who
prophesize that the Asian market will become increasingly more
Asian in nature as China becomes a larger and larger force in the
region. The emergence and rise of China is a natural thing, and
we are all going to have to accommodate, but I don't think it
necessarily means that Indonesia's traditional partners like the
U.S. and Western countries need to be necessarily out of the
picture.
Just how important is Indonesia to the United States' foreign
policy and foreign economic relations?
We can take a number of different indicators, and all of them
show Indonesia being very important. From a political point of
view, it's important for Indonesia to succeed as an emerging
democracy. From the political stability point of view, it is
important to us that Indonesia remains a unitary state, and that
the problems from Aceh to Papua are resolved in the context of a
unified Indonesia.
From the point of view of the war on terror, Indonesia is a
good partner and we hope that it will continue to be so in the
region.
From the point of view of Indonesia's political importance
within ASEAN, it's vitally important that Indonesia reassert
itself as the anchor and the leader of ASEAN. That's a natural
role that it used to have, and I am confident that it will have
again. It is important, now that ASEAN has expanded, for
Indonesia to come back and reassert its traditional position.From
economic point of view, for the very trade, aid and investment
relations you have mentioned, in all of those Indonesia is one of
our top destinations and or sources.
What are you telling American investors about Indonesia?
I've talked to the existing American investor community that
has been here and has had long experience. We have been involved
in Indonesia for over 100 years, and in many sectors. Good
investment advice to anyone is to be present on the ground rather
than try to do things by facsimile, e-mail or through an agent.
But, most importantly, is that we tell them that the Indonesian
government has a good policy of economic reforms and we should
keep an eye on it, because the fact that it is implementing its
policy, the more conducive the foreign economic trade and
investment activities, the better.
In particular, of late, we have focused on the need for
implementation of the announced program of legal and judicial
reform.
Are you encouraging American investors to come to Indonesia?
No.
We are encouraging investors to come to Indonesia once the
climate reemerges in a more positive way. We are encouraged by
the announced packages of economic reforms that we believe the
government really intends to implement. The speed with which they
pursue that package is going to govern the degree with which
investors are going to be engaged.
Right now, it is not clear that a significant input of new
capital from any source is necessarily going to be predictable
and or protected under the existing legal structure. It is that
lack of predictability inherent in the capital movement that is
going to make investors go elsewhere, if there is any doubt about
how safe a capital investment is going to be.
Do you think the Indonesian government is addressing this
problem?
The announced policy is right on. So there is clearly
recognition of what needs to be done. But as is always the case,
with difficult economic choices that are accompanied by very
difficult political price tags to pay, it is easy for an outsider
to say the process should move more quickly and be more
draconian.
But when you're making some difficult choices that have real
costs associated to them in a democracy, heading into an election
year, with a new empowered parliament, a media that is playing a
watchdog role, and a whole new growth of NGOs and civil society
that was not there before, it's not quite as easy to make
dramatic policy shifts as it used to be.
Are you confident that these changes will happen?
They have to happen. I think it's inevitable, otherwise there is
not going to be any new investment in Indonesia from any sources.
How soon will they happen?
The government has seen the year 2002 as being the year when
they get the budget and the fiscal indicators under control. 2003
has been announced as the Year of Investment, so the subtext to
that is the year of the microeconomic reform that are going to
encourage investment.
We're a quarter of the way into the new year, and I think it
may be overly optimistic to expect that a whole lot is going to
happen this year. There is an election next year. Realistically
speaking, it's a very difficult call for the government. But in
putting off difficult economic decisions because of the political
costs associated with them, you are literally putting off the
prospect of a return to robust investment growth in Indonesia. So
there's the cost and the benefit.
What about three to five years down the road?
Every indication I see is that the direction and the course
are unchanging, and the speed may be sometimes seeming almost
glacial, but nevertheless always in forward gear. There has not
been a lot of reverse movement. If you could go back in time and
take a moment and just dwell on where Indonesia was three to five
years ago, you will see how much we take for granted today.
Yet, how much has happened and how much movement there
actually has been, what appears glacial on the day-to-day basis,
turns out to be significant. I wouldn't be surprised if three to
five years from now, people are sitting and complaining about how
slow everything is moving, and how difficult it is to expect
change, and yet we are probably going to be in a wholly different
environment because there will have been many imperceptible
changes going on.