Thursday, November 23, 2006


The following article is part of a chapter in a book entitled The Muslim Renaissance: The Birth of a New Era, which was launched at the 2nd World Islamic Economic Forum organized by the Asian Strategic and Leadership Institute (ASLI) in Islamabad, Pakistan, from 5 to 7 November 2006.



Columnist (, Jakarta, Indonesia


This book and the 2nd World Islamic Economic Forum organized by the Asian Strategic and Leadership Institute in Islamabad, Pakistan, from 5 to 7 November could not have been timelier.

During a lecture at the University of Regensburg in Germany, where he was previously a professor of theology, Pope Benedict XVI quoted the 14th-century Byzantine emperor Manuel II Paleologus, who said:

“Show me just what Muhammad brought that was new and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached.”

This quote has caused anger across the world, particularly among Muslim communities. From the Middle East to Asia, Muslims put out protests, burned churches, and attacked Christians in reaction to the Pope’s usage of the quote in his lecture, which was interpreted as a condemnation of, or an insult to, Islam.

On 1 October, Indonesia—the world’s largest Muslim-majority nation— commemorated the 2nd anniversary of the 2nd Bali bombing. Along with the first Bali bombing in 2002 and other terrorist attacks in Jakarta, the 2nd Bali bombing was the work of the al-Qaida-linked Jemaah Islamiyah (JI), an Indonesian radical Islamic network with links and operations across Southeast Asia.

And amid the Iraq War and the Palestine-Israel conflict, Israel attacked Lebanon in August this year. The attack, which took place under a vacuous pretext that Israel needed to rescue two of its soldiers whom the Hezbollah had captured, killed thousands of civilians and destroyed several cities in Lebanon. It must be noted that the international community, except for the US and UK, condemned this attack, but Israel forged ahead with its plan and only stopped it when too much blood was shed in Lebanon.

Altogether, these wars, attacks, and conflicts raise several questions. Why do they happen to, or in, Muslim countries? Is terrorism the way for them to fight back? Or is there a smarter way to do it? But most importantly, how do Islamic nations—at one point in history an advanced civilization—rise against the rest of the world in today’s competitive environment?

This essay is a humble attempt to answer these questions. The first section lays out key challenges that the Islamic world faces. The second part shows why the Islamic World has been unable to overcome them. The third part suggests what the Islamic nations need to do to deal with its challenges and gain power in today’s competitive world. Finally, the article will conclude that the challenges facing the Islamic world are formidable, but they are not impossible to deal with; however, overcoming them will require some self-critical thinking and pragmatic actions.


If we take a good look at the Islamic world today and ask ourselves which countries that are peaceful, prosperous, and progressed, we can only name a few: Brunei, Malaysia, Qatar, and the United Emirates. As for the rest, some are either at war with a foreign country or in a civil war, e.g. Iraq, while others face the threat of terrorism that is masterminded and launched by homegrown radical Islamic groups, e.g. Indonesia.

Ironically, this is the Islamic world that is 1.3 billion strong and has the biggest oil reserve in the world, among a wealth of other natural resources. And, to be sure, this is the same Islamic world that was the most powerful, advanced, and enlightened civilization at one point in history. For this reason, many Muslims and scholars of Islam have started to question what has happened to Islam.

The Middle East scholar Bernard Lewis phrased this question as follows.

What went wrong? For a long time people in the Islamic world, especially but not exclusively in the Middle East, have been asking this question...There is indeed good reason for questioning and concern, even for anger. For many centuries the world of Islam was in the forefront of human civilization and achievement...In the Muslims’ own perception, Islam itself was indeed coterminous with civilization, and beyond its borders there were only barbarians and infidels.

The answer to this question, according to Lewis and some Muslims themselves, is the rise of the West, first on the battlefield and later in science and the marketplace. Along with technology, modernity, and economic growth that enabled the rising power of the West, particularly the US, came the concept of democracy, secularism and other values.

As the West became more dominant, Muslims started to retreat. What’s more, they started to perceive the West as a force that is incompatible with—if not antithetical to—Islam. This is part of what Harvard political science professor Samuel Huntington called The Clash of Civilizations:

Indeed, it is hard to find statements by any Muslims, whether politicians, officials, academics, businesspersons, or journalists, praising Western values and institutions. They instead stress the differences between their civilization and Western civilization, the superiority of their culture, and the need to maintain the integrity of that culture against Western onslaught. Muslims fear and resent Western power and the threat [that] this poses to their society and beliefs. They see Western culture as materialistic, corrupt, decadent, and immoral. They also see it as seductive, and hence stress all the more the need to resist its impact on their way of life. Increasingly, Muslims attack the West not for adhering to an imperfect, erroneous religion, which is nonetheless a “religion of the book,” but for not adhering to any religion at all. In Muslim eyes Western secularism, irreligiosity [sic], and hence immorality are worse evils than the Western Christianity that produced them.

In other words, the biggest problem that the Islamic world is facing today is that it is still living in the past in which it was once one the most superior civilization; it fails to realize that it is so far behind the West in every sphere; and, it is in denial of such issues as poverty, backwardness, and terrorism as their problems.

Thus, the Islamic world can only conclude that the West causes all their problems and, as such, the West is their enemy. As long as Muslims throughout the world keep thinking like this, they will never be able to solve their problems and rise again to be a leading civilization that they once were. Like the treatment of a patient of alcoholism, the first step for the Islamic World is to admit its problems—political, social, economic, or otherwise. Only then can they start to change the Islamic world for the better.


In addition to the dominance of the West in the world today, the overwhelming support of Israel from the US, and the UK, has worsened the anti-Western mentality and resentment among Muslim communities across the globe.

As a matter of fact, Muslims see the killings of Palestinians and the blatant US support of Israel as a direct attack against the Islamic world as a whole. The al-Qaida leader Osama bin Ladin, for instance, has cited the Palestinian struggle as one of the reasons why his organization has launched the 911 attacks in the US and the London bombing in July 2005.

To be sure, US foreign policy under the Bush Administration has fueled more anger from the Muslim world than any other previous one. Examples are plenty. For one thing, the US bypassed the United Nations and invaded Iraq under the false pretext that Baghdad had weapons of mass destruction (WMD). What is more, while the Bush Administration supported India’s development of nuclear programs, it opposes Iran’s. Why, Muslims worldwide ask. Is because Iran is a Muslim nation and India is not?

Thus, Muslims across the world have increasingly joined the Islamic struggle against the US and its allies, including Australia, India and the UK. In Asia, for instance, terrorist attacks continue to happen in Pakistan and India as of this writing, following the two bombings in the Indonesian island of Bali in 2002 and 2005 as well as those of the Marriott Hotel and the Australian Embassy in Jakarta in 2003 and 2004, respectively.

In what they see as their defense against the rise of the West and its anti-Islamic values and the unilateral US foreign policy, leaders of Muslim organizations have found no other way other than resigning themselves to terrorism. For them, this is a battle for Islam, or a jihad, which is often interpreted as a holy war. The religion expert Karen Armstrong wrote in The Battle for God:

Jihad (“struggle”) [in Arabic] was not a holy war to convert the infidel, as Westerners believed, nor was it purely a means of self-defense, as Abdu had argued. Mawdudi de.ned jihad as a revolutionary struggle to seize power for the good of all humanity...Mawdudi, who developed this idea in 1939, shared the same perspective as such militant ideologies as Marxism. Just as the Prophet had fought the jahiliyyah, the ignorance and barbarism of the pre-Islamic period, so all Muslims must use all means at their disposal to resist the modern jahiliyyah of the West. The jihad could take many forms. Some people would write

articles, others make speeches, but in the last resort, they must be prepared for armed struggle.

As justified as it is in the eyes of Muslim jihadists, terrorism cannot and will not help them win their battle against the US and its allies. To be sure, the 911 attacks have changed the world in many ways, but they have not defeated the US—still the world’s superpower – or stopped its support of Israel or foreign policy towards Muslim countries. Quite the contrary: The US is as aggressive and powerful as ever. The proof is its invasion of Iraq and its silent backing of Israel in the recent attack on Lebanon, not too long after its retaliation in Afghanistan to “wipe and smoke” the al-Qaida out of its caves.

Moreover, Islamic militant and terrorist attacks don’t help Muslims win their battle against the US or the West; in fact, they are costly – in financial terms and otherwise. But most importantly, as Muslims spend more financial and other resources on jihad, they forgo the same resources that can be used to improve their economies, which in turn will translate into peace, prosperity, and power.

The former Prime Minister of Malaysia, Dr. Mahathir bin Mohamad, capture the problems facing the Islamic world very clearly in his speech at the Organization of the Islamic Conference in Putrajaya, Malaysia, on October 16, 2003:

None of our countries are truly independent. We are under pressure to conform to our oppressors’ wishes about how we should behave, how we should govern our lands, how we should think even.

Today if they want to raid our country, kill our people, destroy our villages and towns, there is nothing substantial that we can do. Is it Islam which has caused all these? Or is it that we have failed to do our duty according to our religion?

Our only reaction is to become more and more angry. Angry people cannot think properly. And so we .nd some of our people reacting irrationally. They launch their own attacks, killing just about anybody including fellow Muslims to vent their anger and frustration. Their Governments can do nothing to stop
them. The enemy retaliates and puts more pressure on the Governments. And the Governments have no choice but to give in, to accept the directions of the enemy, literally to give up their independence of action.

There is a feeling of hopelessness among the Muslim countries and their people. They feel that they can do nothing right. They believe that things can only get worse... They will forever be poor, backward and weak. Some believe, this is the Will of Allah, that the proper state of the Muslims is to be poor and oppressed in this world.

But is it true that we should do and can do nothing for ourselves? Is it true that 1.3 billion people can exert no power to save themselves from the humiliation and oppression inflicted upon them by a much smaller enemy? Can they only lash back blindly in anger? Is there no other way than to ask our young people to blow themselves up and kill people and invite the massacre of more of our own people?

There is a way – there must be – for the Islamic world to deal with its many formidable challenges. But it is only possible if the world’s Muslim community starts to think instead of reacting in a state of anger.


As shown in the previous section of this essay, fundamentalism – as expressed by Muslims in the various forms of jihad, including terrorism – is not the way for the world’s Islamic community to solve its problems. As a matter of fact, it is counterproductive.

Thus, instead of fundamentalism, Muslims need to come together as one united community to assess their strengths and weaknesses, make good use of their wealth of oil and other resources, and think of strategies that will improve their economies and, thereby, enhance their national defense and power.

As they control 57 out of the 180 countries in the world, Muslims are a considerable group. Unfortunately, their voice in the international community is weak, however. For one thing, it is because most of them do not have the economic power that can make them be heard. But, more importantly, they are not united as a community. Thus, Muslim nations need a collective coordinating body to ensure that all members act in concert and, thereby, wield strength among them for the improvement of the Islamic world.

Working closely with such organizations as the League of Arab Nations, the World Islamic Economic Forum (WIEF) can be used for that purpose. In addition to addressing challenges that the Islamic world faces, the WIEF is a place where delegates can share knowledge and skills, build networks of valuable contacts, and seize business opportunities worldwide.

But creating and participating in such forums as the WIEF is not enough to improve the knowledge or enhance the skills that Muslims need to compete in today’s global economy. If we take a close and honest look at the curriculum at schools across Muslim countries, we can see that it still focuses a little too much on the teachings of the Koran and not enough on computer science, math and natural sciences, writing and the English language, which enable students to be find jobs easily upon graduation and more competent at the workplace.

To be sure, students who read more than one book and study more than one discipline must be more knowledgeable and well-rounded than those who read only one book or study only theology. Upon graduation, the former will be able to contribute better and more to their jobs, organizations, families, communities, and societies than the latter. This is the reason why in the US there are many liberal arts colleges where students are required to take courses in all disciplines, aside from their majors or concentration.

In addition to education, the Muslim world needs to focus more on other requirements of economic development. A progressive educational system will produce a good labor force for their economies, but that, alone, is not enough for economic growth. For one thing, Muslim countries need to spend more on research and development (R&D) because it is where new ideas, inventions, and advancements come about. If we look at the US, it is a young nation compared with the Islamic world. But it is the strongest economy. How
is that possible? One of the reasons is, in addition to its first-rate educational system, it has a lot of think tanks, such as the Rand Corporation, where smart graduates get paid to think and come up with new ideas that are applied in business and daily life.

Furthermore, economic growth requires good infrastructures. These include roads, telecommunication systems, ports, and so on. Like bones and vessels in a human body, infrastructures facilitate business transactions and other economic activities. To be sure, a country with poor infrastructures cannot
have a strong economy, and it takes more time and costs more to do business in such an uncompetitive environment.

Finally, and most importantly, economic growth requires a country that is politically stable. If a Muslim nation does not like the idea of democracy as a form of government and would rather stick to a monarchy or sultanate system, that is a choice that others – especially the US – should respect. Nevertheless,
if such a country is constantly bombarded with terrorist attacks or conflicts caused by home-grown militant, radical Islamic groups, then it cannot blame investors, domestic and foreign alike, to close their businesses and move them somewhere else safer. So, if governments of Muslim nations want to enhance their economic growth by increasing the level of investment in their economies, they should work hard to provide security in their countries.

As for Muslim nations that are fighting wars that the US has started or supports, namely Iraq and Palestine, peace is still a dream. But there are things other than telling young Muslims to commit suicide attacks that their leaders can do to help stop the violence that has been shedding too much Muslim blood already. For one thing, as Dr. Mahathir bin Mohamad suggested, they should work more closely with other Muslim nations and non-Muslim nations that sympathize with them to gain more support in the international community for
their causes. What’s more, use their own media – not Fox News, of course – to show the world the killings and sufferings of innocent civilian Muslims and that it is as wrong to kill a Muslim as it is to kill a Jew or anyone else, for that matter.
Until the world sees and acknowledges this, more Muslim blood will be shed.


As shown in this essay, the Islamic community has moved from being, for centuries, a most powerful civilization in the world to being one that is far behind the West. Today, the Islamic world is confronted with poverty, backwardness, and oppression, and that is sad – if not ironic – for a 1.3 billion community with
the largest oil reserve and a wealth of other national resources. This has made Muslims and Islam scholars question what has happened to, or gone wrong with, Islam. Some have pointed to the rise of the West and modernity as the causes of Islam’s turmoil, while others go back to Islamic fundamentalism, or jihad, as a solution.

To be sure, some Muslim nations are fighting wars that the US has started or supports, but the US and its allies cannot be blamed entirely for what has happened to the Islamic world. And terrorism, which is committed in the name of Islam, is not the way for Muslims to .ght these wars. Nor is it the way for the Islamic world to rise against the West and be the powerful civilization that it once was.

Rather, as suggested in this essay, the Islamic community needs to think collectively of how to deal with its challenges. While the challenges facing the Islamic world are formidable, they are not impossible to overcome. What the Muslim world needs to deal with its challenges effectively are unity, knowledge, and economic growth. Only when these requirements are met can the Islamic community gain peace, prosperity, and power and rise again in the world.

Thang D. Nguyen is a writer, editor, and communications consultant. He pens frequently on Indonesian and Asian affairs for international and major Asian newspapers. His publications include three books:
Indonesia Matters, The Malaysian Journey, and The Indonesian Dream. Prior to moving to Indonesia in 2003, Thang was a manager for Asian affairs at the World Economic Forum (WEF) in Geneva, Switzerland.
Among his other credentials, he holds degrees from the Johns Hopkins School of Advanced International Studies (SAIS); Hobart College; and Springfield Technical Community College (STCC), USA.

Thursday, November 16, 2006

Why the US doesn't invade North Korea

By Thang D. Nguyen

JAKARTA—His visit to Hanoi, Vietnam, for the Asia-Pacific Economic Cooperation (APEC) Summit on 18-19 November is President George W. Bush’s first overseas trip since his Republican Party’s defeat in the November 7 election.

For the most part, the Democrats’ victory—and control of the US Congress after 12 years—was because of the increasingly visible failure of the Iraq War.

But, as leaders of the 21-nation APEC come to Hanoi this weekend, including President Hu Jintao, President Vladimir Putin, and Prime Minister Shinzo Abe, the US debacle in Iraq is not on their minds.

To be sure, there will be trade talks among APEC leaders, particularly on how to revitalize world trade after the failure of the Doha Round.

But the big issue at this year’s APEC Summit is something much hotter than trade: It’s North Korea and its nuclear programs.

“It’s inevitable that North Korea will be the focus of everyone’s attention,” Daniel Sneider, associate director of Stanford University’s Shorenstein Asia-Pacific Research Center, told The Associated Press.

Indeed, the APEC meet is the first meeting at head-of-state level among the US, China, Russia, and Japan since Pyongyang tested its atomic bomb on 9 October. Along with the two Koreas, these countries have been involved in six-party talks designed to get Pyongyang to drop its nuclear programs.

As it can be expected, the now so-called lame duck president George Bush will continue to criticize North Korea and probably drops a few caveats it during the APEC Summit. After all, as it is a member of the “axis of evil”—a phrase that he used in speech at the UN General Assembly in 2002—that includes Iraq, Iran, and North Korea itself.

Furthermore, although his secretary of defense Donald Rumsfeld resigned (he got sagged) after the Republicans’ defeat, President Bush continues to defend the Iraq War and insists that withdrawing from Iraq is a defeat. He keeps regurgitating the point that his administration has saved the Iraqi people from living under tyranny and dictatorship by taking Saddam Hussein out.

To be sure, Saddam Hussein—who is now waiting to be hanged for his crimes against humanity—is no angel. But, if Saddam’s dictatorship was good enough a reason to go to war, why hasn't the U.S. invaded North Korea, which showed the world its nuclear capability in early September, and taken its dictator Kim Jong-Il out?
Is Kim Jong-Il lesser of a dictator than Saddam Hussein? Or does Mr. Bush think that the North Korean people have not suffered as much as the Iraqi people?

Clearly, North Korea meets all the justifications for a war that Iraq did not have. So, why has the US not gone to war with North Korea?

There are several possibilities. First, North Korea is of no economic values to the US.

For one thing, North Korea has no oil. Furthermore, there are no US business activities in or trading with this closed, Communist economy.

As a matter of fact, starving North Koreans survive each year because of the generous food aid from—you guessed it— Uncle Sam.

To be sure, going to wars does benefit the US economy as it brings big contracts to the defense industries or business opportunities for other sectors.

In the case of North Korea, however, there would be only costs for going to war with Pyongyang but no benefits from it.

Second, unlike Baghdad, Pyongyang has Beijing as a patron.

Despite Beijing's statement that it is "resolutely opposed to" the nuclear test and that Pyongyang has "ignored universal opposition of the international community", China is still North Korea's big brother. Thus, the US would have to deal with China if it wanted to do anything to North Korea.

Third, while South Korea and Japan are US allies, they are not Israel.

It's no secret that Israel is America's favorite and spoiled child. Time and time again, we have seen Washington's overprotective attitude when it comes to Jerusalem.

Examples are plenty. One is the Bush Administration's silence (read approval) on Israel's attack on Lebanon that started in July this year. The attack killed over 1,500 people, many of whom were Lebanese civilians, and severely damaged Lebanese infrastructure.

Imagine what Washington would do if someone else did the same thing to Israel? And, imagine what Washington would do if North Korea, with its real nuclear programs, were located near Israel, as Iraq is?

The former Malaysian prime minister, Dr. Mahathir bin Mohamad, had it right: Israel rules America and the world by proxy.

Finally, although Pyongyang is a danger to Seoul and Tokyo, it is an opportunity to Washington.

For South Korea and Japan, who are most exposed to North Korea as a security threat, their source of protection comes from none other than the US. In other words, each year Seoul and Tokyo spend a great deal of their national budgets on US-made weapons and defense systems as part of their guard against North Korea.

As such, North Korea makes the US indispensable for South Korea and Japan and, of course, keeps fat contracts for US defense companies with Seoul and Tokyo coming.

Indeed, the day the North Korean Communist regime collapses or the demilitarized zone (DMZ) that divides North Korea and South Korea falls down—as the Berlin Wall did—the US will be less relevant in North Asia. And, thus, there won't be many contracts for US defense companies either.

The writer is a Jakarta-based columnist. His writing can be read at

Thursday, November 09, 2006

Gossip is not journalism

The Jakarta Post
10 November 2006


I write in response to the article entitled Squander good luck, rake in misfortune by Julia Suryakusuma in The Jakarta Post on Nov. 8. The author complained about how her maid, and the maid's husband, quit their jobs by not returning to work after Idul Fitri.

Once again, Julia Suryakusuma, who is Indonesia's leading feminist writer, complains about her servants to readers of this newspaper. In doing so, she puts herself in the same category as Jakarta's elite housewives whose pastime is to gather, usually in five-star malls or over lunch at fancy restaurants, to exchange -- you guessed it -- gossip and complaints about their maids or drivers. Is this the result of a U.K education and decades of writing essays on feminism?

What is more pathetic is that Julia Suryakusuma, an intellectual and author, chose to bring her pen down to the level of two semi-literate Indonesians who can't defend themselves.

Whining about your maid is inappropriate in a commentary column. In other words, journalism is not about complaints concerning your personal problems. To be sure, it is not uncommon for journalists to get ideas from their daily lives. But they don't devote their articles to telling readers about them or complaining about their servants.

As for why Julia's maid quit her job, it is possible that she found a different and better job -- or a better boss -- during her vacation.


Squander good luck, rake in misfortune

Opinion and Editorial - November 08, 2006

Julia Suryakusuma, Jakarta

Disaster has struck: My servants Sari and Didi have disappeared and with them goes a mother lode of ideas for columns!

My ever-forgetful cook and her husband, the "pious giggler", were meant to return after a one-week mudik (Idul Fitri homecoming), in time for major renovations starting in my house. However, I discovered a few days ago that they had deserted me. Their room was stripped bare of their belongings (and some of mine as well!) and I finally realized that this was their very Javanese way of saying so long, farewell, auf wiedersehen, goodbye.

Perhaps I should have been suspicious from the start -- servants taking mudik for only one week? Get real!

As I stood there in their dusty empty room, it hit me that perhaps I should not be unhappy to lose them. The one thing that I had banked on from them -- their honesty -- turned out to be unfounded. They had lied, stolen and let me down at a crucial time. So, perhaps their disappearing act was a blessing in disguise. Better sooner than later, no?

But I was totally at a loss to comprehend why they did it -- why give up the fantastic deal they had? They only had to do the normal work expected of any household servant -- cooking, cleaning, laundry. In return they got an above-average salary, tips, medical costs and guaranteed education for their three kids, as far as they could go. All the children did well at school, so university and perhaps a chance to escape the poverty cycle was possible too. I was even willing to support the fourth child, Sari or Didi Jr., due any time now in November.

Yes, I know, women sometimes get loopy when they're pregnant -- maybe all the blood being pumped away from the head into the baby-making machine leaves the brain dry as a bone, reducing thinking power to zero, zippo, zilch. But what was Didi's excuse?

I had actually been quite excited at the prospect of a new life -- the baby -- in the house, but this excitement now became astonished reflection as I tried to understand their self-destructive decision. And I couldn't help but wonder if Sari and Didi's short-term thinking, squandering good fortune and planting the seeds for your own -- and others -- bad luck, was somehow a particularly Indonesian thing?

Looking back on our history, it struck me that the answer was a resounding "yes"! From day one in August 1945, we've been consistently wasting our good fortune. Forget Marhaenism, integralism, patrimonialism. Scrap theories of class, economics and institutions! Throw out all the complicated political, anthropological, cultural, psychological theorizing ever cooked up by Indonesian and Western scholars to comprehend Indonesia and Indonesians! Now there's one, complete, explanation: Sari-Didiism. Brilliant, brilliant!

Just look back over the last six decades. We squandered the hard-won independence that promised freedom (at last!), prosperity, pluralism and the pursuit of happiness, for Guided Democracy, our very own homegrown brand of tyranny. Sure, Western-style liberal democracy was fun to fool around with for seven years (1950-1957), but then we said, nah, this ain't suited to our Indonesian circumstances. Let's really mess ourselves up!

So Sukarno called for a political system of "democracy with guidance" based on "indigenous" procedures: Musyawarah (prolonged deliberation) and mufakat (consensus), all, naturally, under the guidance of the Penyambung Lidah Rakyat (Extension of the Tongue of the People, my personal favorite among the many titles Sukarno gave himself).

This dictatorship of "talk, but then do what I say" laid the basis for Soeharto's 32-year authoritarian rule, where all the fruits independence had given us -- political freedom, freedom of expression, civil liberties, human rights -- were dumped in the out-tray.

But there was a lot in the in-tray in the New Order as well, don't you worry. Indonesia experienced unprecedented economic growth, thanks to an export-driven economy, so much so that it was hailed as a model "Asian Tiger" economy. And poverty was alleviated as well -- especially for members of the military, Golkar and Soeharto cronies. In fact, Transparency International even proclaimed Soeharto the world's most corrupt politician, claiming he pinched between US$15-35 million through bribery, racketeering and embezzlement. So there we go again, short-term gains resulting from short-term thinking, squandering our chances to be an economic power in the region.

And 60 years after independence, eight years into Reformasi, will we have another Sari-Didi moment and squander our big chance for post-Soeharto reform? Will we drop the ball and opt instead for ego-centered instant power that gives rise to fragmentation and endless conflicts? Will we blow the chance for moderate Islam to emerge from under repression as a moral and intellectual force for good, instead allowing the positive aspects of religion to be lost in a wasteful burst of extremist militancy? Take a guess.

Enough! The reflections on Sari-Didiism in Indonesia jostling in my head may win me a Nobel prize, but they weren't doing much to solve my domestic crisis. I began to sweep up the dust and debris the fugitives had left behind.

Luckily Hadi, my quiet and efficient new driver, came to the rescue the next day, miraculously delivering me Asih, one of his neighbors, to help salvage my home from the ruins. She is effective, efficient, diligent and reliable -- and the house has never been so clean, the clothes more neatly ironed!

There is a downside though. Asih is just too good. I don't think she can ever be the rich mine of ideas for columns that Sari & Didi were. But, then again, maybe she could be an inspiration for stories about the other side of midnight, where we use all the good chances that come our way. Let's hope ...

The writer is the author of Sex, Power and Nation. She can be reached at or

Tuesday, November 07, 2006

Indonesia needs to do more to attract investment

The Business Times
7 November 2006

The reason why investors hesitate to invest in infrastructure projects, or in any other area for that matter, is the legal uncertainty that characterises South-east Asia's largest economy


AS AN attempt to show investors that it means business, the Indonesian government put on the Indonesia Infrastructure Conference and Exhibition 2006 which ended last week. It was the sequel to the Infrastructure Summit 2005, which is considered less-than-successful.

This conference is an effort to lure investment for at least 10 infrastructure projects. Ranging from toll roads and seaports to telecom networks and power plants, these projects are worth about US$4.5 billion. Compared with the 91 projects exhibited at last year's summit, the scaled down number of projects at this year's conference shows that the government has learned its lesson.

'This year's event will be different from the previous one. We have made improvements to our preparations and the tender process for the projects,' Suyono Dikun, deputy to Indonesia's coordinating minister for the economy, was quoted as saying.

The criticism of last year's summit is not without substance. According to The Jakarta Post, of the 91 projects, worth US$22 billion, offered during last year's summit, only '24 deals worth US$6 billion have so far been clinched, with eight others still under negotiation'.

When asked about the dismal outcome of last year's summit, Chris Kanter, who is the chairman of the Indonesian Chamber of Trade and Industry (KADIN), said: 'What we offered back then was simply a list of projects from the ministries (sic), several of which were still at the 'raw proposal' stage. The ministers back then were also relatively new in their posts, and were busy with the tsunami disaster at the time.' To be sure, last year the Susilo Bambang Yudhoyono (SBY) cabinet was still on the learning curve and had to deal with the aftermath of the Asian tsunami of December 2004.

During the same period, however, 23 new shopping malls, numerous luxurious apartment buildings, and many other private properties popped up like mushrooms in Jakarta alone.

And at the same time, the Jakarta monorail was started. But, alas, as of now, the funding for the project has stopped; all that can be seen of it are half-built cement columns standing in the middle of Jakarta's main roads. And why is it that government projects, like the Jakarta monorail, do not get funded easily or - for that matter - completed as quickly as those offered by the private sector?

For one thing, bureaucracy prevents government, or public, projects from getting done quickly. No one would be surprised to learn that red tape is one of the biggest problems facing the Indonesian economy and investors, both foreign and domestic. To deal with this issue and get their projects done, investors don't have much of a choice other than resorting to paying bribes.

Depending on the size of their projects, investors often find themselves giving bribes - in cash or in kind - to government officials and other parties involved. Unfortunately, bribes, or 'facilitating payments' as they are sometimes called here, do not solve the red-tape issue.

To be sure, the SBY government has launched a visible anti-corruption campaign since it assumed power two years ago. Thus, corruption seems to be less prevalent these days; however, it is still well and alive beneath the surface.

Actually, corruption in Indonesia today is worse than what it was during the Suharto era because there are more parties that investors have to bribe than there used to be. Worse still, there is no guarantee that, after paying big bribes, investors get what they want.

As the Australia National University economist Andrew MacIntyre puts it: 'The only thing worse than 'organised corruption' is 'disorganised corruption'.'

But uncertainty in corruption is only part of the problem facing the business community in Indonesia. The main reason why investors hesitate to invest in Indonesia's infrastructure projects, or in any other area for that matter, is the legal uncertainty that characterises South-east Asia's largest economy.

It is not that Indonesia lacks sufficient legislation governing foreign investment (it is the other way around, actually). Rather, the real impediment to legal certainty is the unwillingness of government officials, the courts, and other law-enforcement authorities to respect the laws that they are sworn to uphold.

What is more, uncertainty also lies in the government's policies towards investment in Indonesia. There is no such thing as investment without risks; some investment projects have more or higher risks - and thus high gains - than others.

One of the risks that investors encounter in Indonesia's infrastructure projects is that there is no written guarantee of returns (or profit). This risk is normal and acceptable, however.

A bigger - or political - risk is a change of government or its policies towards ongoing investment projects. When this happens, a contract's terms of reference or agreement often fail to be honoured. Thus, together with bureaucracy, corruption, and legal uncertainty, political risks in Indonesia kill investor confidence that the economy badly needs.

To be fair, the Indonesian government recognises this. It will need, however, to provide investors with more substance, incentives, and a more business-friendly environment to gain their confidence than just holding conferences on infrastructure and other investment projects.

Otherwise, these conferences will end up being, as Indonesians like to say, NATO, or No Action, Talk Only.

The writer is a Jakarta-based columnist.

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