Mon, 09 Feb 1998

The reformists' battle

World Bank President James D. Wolfensohn understandably ducked political questions raised during his meeting with about 60 non- government public figures, including vocal critics of the government, in Jakarta last week. It was a commendable act on his part to meet them and then to openly admit that the bank was mistaken with its rosy assessment of Indonesia last year, a misjudgment which has perhaps exacerbated the present economic crisis.

It would have been inappropriate to expect him to address political questions, or even nudge the government towards the political reforms for which these critics have been calling. Wolfensohn is, after all, a guest of the government, and a banker whose chief concern, and sole domain, is the economy.

It is equally understandable that these reformists should have gone to the meeting expecting that the World Bank chief would, for once, address political questions in Indonesia. After all, didn't the World Bank, together with the International Monetary Fund (IMF), suggest in September that good governance was now very much part of their considerations in extending loans? Furthermore, was it not the IMF that imposed the sweeping economic reforms that the government, unwillingly, has now pledged a commitment to, in return for a US$43 billion rescue package?

Some people might dispute the assertion that the reforms had been imposed upon the government by the IMF; the IMF, out of politeness, would be the last to claim to have done so. But it did not escape the attention of government critics that the reforms promised by President Soeharto in a letter of intent sent to the IMF -- reforms including the dismantling of monopolies, cartels and the removal of special business privileges -- were reforms which they themselves had long advocated. The IMF, in just over one week of negotiating, succeeded in persuading the government to instigate reform, something the critics had been unable to achieve over many years.

That it should take external pressures to convince the government of the need to begin economic reform must have suggested to these reformists that similar external pressure would add impetus to the push for the political reforms they have been seeking all these years.

In recent weeks, these critics have stepped up the campaign for their cause, arguing that since the economic crisis had cut so deeply into the nations psyche and become such a crisis of confidence, the only solution could be sweeping political reforms.

But they cannot count on the World Bank, or any other major foreign lenders, to use their influence and powers of persuasion on the government. These donors chief interest is in the safety of their loans and investments in Indonesia, and in the country's ability to repay them. Previously they must have felt that their money was safe and were willing to turn a blind eye to the business monopolies, privileges and other irregularities in the way the government managed the economy. But now, in this time of crisis, there was no choice but to insist on economic reform, at the risk of being seen to interfere in Indonesia's domestic affairs.

Such an incentive does not exist when it comes to political reform. On the contrary, the donors best bet lies in the perpetuation of the current status quo, with a structure and system which supports a government committed to economic reform and which has promised to pay back its loans.

While some of those taking part in the meeting with Wolfensohn were disillusioned by his refusal to discuss politics, one of their number felt that the more important point was that they had succeeded in getting their message across to him by explaining that the government faces growing disenchantment.

If anything, the most that these reformists can expect from abroad is sympathy, for now and the foreseeable future. In the end, they must fight their own battles.