Susilo ushers in new confidence

Susilo ushers in new confidence

John Mcbeth, The Straits Times, Asia News Network, Singapore

One American business executive describes it as "restrained
optimism". Others have called it "refreshing" and even "a wind of
change".

Whatever it is, President Susilo Bambang Yudhoyono's first 100
days in office have ushered in a new mood of confidence and
expectation.

More than seven years after the Asian financial crisis
triggered grinding economic hardship and sweeping political
change, Indonesia finally seems to be on the threshold of a new
beginning.

For a country understandably cynical about most things, no one
doubts Susilo's sincerity and his determination to get things
done. That is important in itself. Even his critics now
acknowledge that another five years under former president
Megawati Soekarnoputri would have been a disaster. The retired
general brings to the job everything that Megawati and her
predecessor Abdurrahman Wahid did not -- a sense of engagement, a
sense of organization and structure -- and, most important of
all, a sense of vision.

Interestingly, it was the confluence of Indonesia's long-
planned Jan. 17 Indonesia Infrastructure Summit and the fallout
from the unplanned Aceh tsunami disaster that has provided him
with a launch pad with which to gain some much-needed momentum.
Most importantly, it has allowed him to demonstrate an
assertiveness that had been missing from the early days of his
leadership and which brought to the surface all the old fears
about his lack of decisiveness.

The first signs appeared on Jan. 16 when Susilo indirectly
criticized Vice-President Jusuf Kalla's management of the
National Coordinating Agency for Disaster Relief and Refugees --
the body responsible for the Aceh relief operation. What appears
to have irked the President was Kalla's controversial statement
that all foreign troops helping in the relief effort should leave
the stricken province by March 26, turning what the Cabinet had
meant to be only a timeline into a deadline.

Presidential aides have sought to play down the apparent rift,
but it was not the first time Kalla had caused controversy. In
January, he was widely criticized for issuing a vice-presidential
decree establishing a national team to deal with the Aceh
disaster -- something that is the prerogative of only the
President.

More recently, a senior aide was forced to resign when a memo
leaked from Kalla's office was shown to belittle questions posed
by legislators at parliamentary hearings.

Kalla's election as chairman of the Golkar party in mid-
December has always seemed to be a double-edged sword, winning
for Susilo the support of the country's largest and most
influential party, but creating the perception that the Vice-
President was the power behind the throne. That perception may
continue to linger, given the powerful political and economic
interests Kalla is seen to represent, but the reprimand was
important in reminding Indonesians who was in charge.

This is, after all, a presidential system -- and that is not
the first time Susilo has cracked the whip. Two days before, he
called in his economic team and told them he was dissatisfied
with the preparations for the infrastructure summit. It has left
an impression. Trade Minister Mari Pangestu described the summit
as the President's "trick" to force his ministers and their
senior bureaucrats to come up with a slew of new regulations to
win back foreign investors. "The President paid a lot of
attention," she said. "He asked about it at every meeting."

Little wonder. To accelerate growth to a targeted 7.2 percent
over the next five years, Indonesia needs US$150 billion (S$245
billion) in infrastructure spending. It plans to secure $60
billion of that from domestic sources, but the remaining $90
billion will have to come from foreign investors.

As it was, the summit -- and its unprecedented turnout of 10
hard-worked ministers -- pleased many in the 32-nation audience.
"I think we're on the verge of something," said James Castle,
veteran Jakarta-based consultant and former chairman of the U.S.
Chamber of Commerce. "But talk is talk and I'll want to see the
follow-up and to see if we're going to get a can-do bureaucracy."

That is the key, of course. Susilo's lack of parliamentary
support was always something that could be overcome. The real
challenge will be to energize the civil service, which generally
sees reform as a threat to its influence and entrenched
interests.

Economic Coordinating Minister Aburizal Bakrie, himself a
businessman, knows the obstacles only too well. "The bureaucracy
needs to improve and to be more business-friendly," he told
participants. "It has to be more pro-active." International water
and power companies, for example, were far from happy at the new
set of regulations for their sectors, saying they enshrined some
of the old thinking where the state stays firmly in the frame and
long-term tariff structures remain unaffected by market forces.

Against this backdrop, it is difficult to know what to make of
the uneasy Susilo-Kalla relationship and whether it could disturb
the functions of government. Political insiders say the President
regards the diminutive Kalla as essentially a trader who may not
have a long-term perspective, but is valuable in getting things
done.

"The rivalry might confuse people, but I don't think there
will be a real clash," says one palace aide. "Mr. Kalla is very
decisive, he's a man of action. He comes up with aggressive ideas
and pushes Susilo to adopt them. Susilo is different, he has to
think a lot before he makes a decision."

It is important to remember, however, that the Sulawesi tycoon
was the first person Susilo went to when he was looking for a
running mate. It was also clear from the start that unlike the
tea-pouring vice-presidents of the past, Kalla would be given a
real job, supervising mostly micro-economic issues. Controversial
as it was, the subsequent choice of Bakrie, another ethnic
Indonesian wheeler-dealer, as head of the economic team also
fitted into the President's desire for a business-orientated
Cabinet.

Ever since, however, businessmen and political activists alike
have been looking for signs that Kalla and Bakrie are using their
positions to enrich themselves and those around them, with
rumors already circulating that their companies are preparing to
cash in on lucrative reconstruction contracts in Aceh.

True or not, they demonstrate the depth of a national mindset
which takes it for granted that self-interest rather than
national interest guides people in power. That is still a
mountain Susilo has to climb, but the 62 percent mandate he
enjoys from Indonesian voters provides him with a potentially
important weapon if he ever cares to use it.

The writer was formerly the Jakarta correspondent for the Far
Eastern Economic Review.