Witnessing a Slow Dawn in Indonesia*

Jakarta Post, Indonesia

Wednesday, August 21, 2002

By Thang Nguyen, World Economic Forum, Geneva

As Indonesia celebrated its Independence Day on 17 August it is an appropriate time to reflect on where it is and try to sketch a roadmap for its future.

Recently, there have been signs of progress. Indicators as inflation and interest rate are low, and the rupiah is going up. Economists and analysts even forecast a 5 % growth for next year.
But perhaps the most notable sign of progress in Indonesia revealed itself last week when the People’s Consultative Assembly (MPR) approved a mixed package of constitutional reforms that, if properly implemented, would make Indonesia truly the third largest democracy in the world.

Designed to take full effect by 2004, the reform package focused on three critical areas, namely: the executive power, the role of the military in Indonesian politics, and Islamic fundamentalism. On all three issues, members of the MPR showed with their votes that they desire an electoral system in which the president is elected by the people, a military that is professional and a government that is both civilian and secular.

Those who know Indonesia’s history and politics will tell you that the passing of these laws is a major event, and the new legislation could help the country break away from its rather unfortunate past.

In the past, the president would be elected indirectly by the MPR members who gave their votes of confidence. Under the new law, the president will be elected by a popular vote. In addition to promoting direct election, the new system will also make the executive and legislative powers more independent of each other. After all, the job of the MPR, like the US Congress, is to make laws, not the president.
The reform on the role of the Indonesia Military (TNI) separates the armed forces from its politics. It removes the 38 seats that were in the past occupied by, and reserved for, TNI members.

Breaking from this dwi fungsi has two crucial implications. First, it ensures that the TNI is professional, that is, its sole responsibility is to defend the country and to protect its people. Second, and more important, it will help the TNI rebuild its credibility.

The reform package also reiterates that Indonesia is a democracy and not a theocracy. The MPR rejected a motion to institute sharia, or Islamic law, across Indonesia. After the tragic events of Sept.11, Indonesia, home to the world’s largest Muslim population, has been regarded by some as a potential haven for terrorists, basing on the theory that they might have been linked to the Al Qaeda.

A recent report by the International Crisis Group (ICG), a multinational non-governmental organisation headed by the former Australian foreign minister Gareth Evans, rejects this claim with the conclusion that there is scant evidence of links between the Al Qaeda and radical Indonesians, however.

The approval of these constitutional reforms is indeed a remarkable step forward for Indonesia. As Indonesia looks toward its near future, however, there are some long-existing, but pressing issues that deserve special attention and require more, not less, action.

The first is how to further eliminate corruption, collusion and nepotism (KKN). Indonesia, one of the prominent victims of the Asian 1997 financial crisis, has been, and still is, criticised for its dearth of transparency and governance in both the private and public sectors.

In addition to establishing such institutions as the Indonesian Bank Restructuring Agency (IBRA) to increase transparency, the MPR can also make more laws to ensure corporate governance. Once passed, these laws must be applied in an incentive-based and draconian manner.

This means that businesses—state-owned or private—whose performance is proved both profitable and KKN-free should be rewarded with more business contracts or other opportunities and those whose performance is otherwise must be judged and persecuted accordingly.

Another thing that can be done is to increase the salary of middle- and entry-level civil servants, so that they do not have to take briberies in order to support themselves and their families.

The second is how to improve Jakarta’s relations with the outer islands. Experts often describe its inter-regional relations as Java-centric. Java, which has almost no natural resources, has always been the most favored child and the most powerful sibling in the Indonesian household, especially during Suharto’s 32-year presidency.

To solve this problem, Jakarta needs to have more dialogues with such provinces as Aceh—which has been calling for independence from Jakarta—and give them more regional autonomy. In doing so, Jakarta can keep Indonesia together.

The third one is how to improve Indonesia’s inter-ethnic and inter-religious relations. Known to Indonesians as SARA, the inter-ethnic and inter-religious relations cause serious conflicts when they are mismanaged. One among them is the unresolved May 1998 riots in which over 1,000 were killed in some 5,000 Chinese-owned stores and buildings and dozens of women, mostly Chinese, were sexually assaulted and raped.. Also, violent clashes between Christians and Muslims have often taken place in Maluku and other provinces.

Together, these insurgencies call for more nurturing policies that can bring about equality among all Indonesians.

If Indonesia can manage to confront these major challenges and implement the constitutional reforms approved early last week, it will certainly be a more domestically united democratic nation and a reliable and stable partner in the region.

As for Asia and the international community, Indonesia is too important to ignore. Countries in other regions as well as international organisations, such as the IMF and the World Bank, can also encourage, and play a role in helping Indonesia, to continue making progress.

*Frank-Jürgen Richter contributed to this article.