The chaos in Indonesia may suggest that a new president is needed. However, any likely alternatives are worse than the inclusive, liberal Gus Dur. And the economy and law and order are not so bad as to preclude investment and tourism. SCMP


by Philip Bowring

Few countries are currently generating more bad news than Indonesia. Almost daily there is communal bloodshed in some corner or other of the archipelago. The blind President is widely ridiculed, attacked as corrupt and threatened with impeachment. The economy remains mired in local and foreign debt. The government is publicly at odds with the IMF. The banking system is barely functional and the currency oscillates uneasily, with another plunge always a possibility. Graft is taken for granted. Religious tensions lie close to the surface. The President is often absent overseas and not above using the threat of his loyal mob against opponents similarly willing to take their political struggles to the streets.

Surely a country in need of a new leader. Surely a country for tourists to avoid. Surely no place to invest. Not at all.

First, the presidency. Abdurrahman Wahid (aka Gus Dur) has created many problems for himself. He has stuck up for the prerogatives of the presidency in the process offending parliament, which has responded by making a relatively minor graft issue into a threat to impeach him. Born to power as head of the Nahdatul Ulama religious organisation he is naturally autocratic, not the best quality to lead a new democracy. His formidable intellect and internationalist outlook have bred an arrogant contempt for his critics.He is an incompetent administrator who has failed to delegate and whose pre-occupations with political maneuvering have distracted him from governing. Reform of the system has almost stalled and policy implementation is feeble. So far so bad.

But look at what he has to work with. Firstly, a parliament in which his own party has only a small number of seats. Secondly, a parliament which is trying in effect, if not formally, to shift the constitution from a presidential one giving the president, elected for five years, wide executive authority, with parliament only making laws, into a half way house to a parliamentary system in which the head of government is constantly answerable to it.

Next, he is supposed to be reforming the system and jailing corrupt crooks and human rights violators from the Suharto era. But the aforesaid parliament is full of old era people as it is of his new era political opponents. Worse, the bureaucracy and the judiciary in particular are corrupt and choc-a-bloc with appointees from the past who have scant interest in reform. The IMF and World Bank sing their songs about reform meaning more bankruptcy and similar legislation but the fact is that law enforcement is extremely difficult.

The same applies to efforts to resolve corporate debt problems, attract back capital and get businesses functioning normally. The process is going slowly partly because of nationalist political and bureaucratic opposition and partly because deals are in many cases impossible without forgiving sins as well as debts. Justice and economic needs are at odds.

The basic fact is that for all his faults Gus Dur is a better bet than anyone else now available. He remains the most inclusive figure, a Muslim leader trusted by Chinese and Christians and genuinely liberal in belief. He has a global outlook and, in so far as he is interested in economics, favours open markets and distrusts state enterprise. He has at least tried, in the face of military opposition, to find non-military solutions to separatism in Aceh and Papua and pressed ahead, albeit chaotically, with decentralisation. He has reconciled most Indonesians to the loss of East Timor.

Look at the most likely replacement, Megawati Sukarnoputri. She may be no worse an administrator than Gus Dur, but that says nothing. Her party has scant platform. She herself expresses few views but is naturally to a significant extent guided by the memory of her father. In current terms, this translates into a much more nationalist economic agenda, a unitary state, no quarter for separatist movements, a bigger role for the army - all things which would put Indonesia more profoundly at odds with the outside world than is now the case.

She would also be more divisive internally. She may have the largest party in parliament but would be almost as vulnerable to parliamentary machinations as Gus Dur. In particular, he leadership could result on the now badly split Muslim parties ganging up against her. The downfall of Gus Dur would likely result in a shift among the Muslim parties towards more overtly Islamic agenda as represented by the devious Amien Rais, speaker of the MPR, the assembly which elects the president. The nation would divide more clearly along ideological lines than is now the case.

Down the road, new possibilities may emerge, democratic or not. The military may well stage a comeback - but for now it remains weak, discredited and unkeen to take on a monumental task. Golkar under Akbar Tandjung may manage a comeback as a centrist technocratic force. Another election would probably solve little, though a change in the voting system towards geographical constituencies could alter the composition of parliament and reduce the influence of an elite which has changed only marginally since 1998.

Combining reform and punishment of Suharto era crimes is proving incompatible with stability and democracy. For now, a desire for compromise is still winning most of the time, to the frustration of reformers and those hankering either for a return to the past or a move to a more radical future.

But is this is a safe place for tourists to visit. The answer is mostly yes. There are almost certainly more people being killed daily in civil conflicts in India - Kashmir, Assam, Bihar etc etc - than in Indonesia. But the public, local and international, take little notice. For foreigners, most of Indonesia remains a very cheap, cheerful and friendly place to visit with more monuments and as much attraction for the beach, sex or diving tourist as Thailand.

As for investment, there are indeed many problems not least of which is the uncertainty that regional autonomy is bringing to mining and plantation businesses. But for those prepared for high risk, the rewards may be huge. Capital may be reluctant to return but there is enough working capital, cheap labour and spare industrial capacity so that exports and consumption have all been expanding faster than most people assumed possible - and probably faster than the statistics suggest as so much trade goes un-invoiced or unrecorded. It's a reasonable bet that Indonesia's GDP this year will grow at least as fast as the average of Thailand, Philippines and Malaysia.

At some point Indonesia will need new capital, will have to resolve debt issues, will have to resolve its de-centralisation problems if the current growth rate of 4% is to be sustained, let alone raised. But for all its complex of troubles, which will take years to be resolved, Indonesia is neither a failed state nor a dysfunctional economy. Nor does it need more political turmoil as implied by the demand to remove an inadequate Gus Dur until a clearly better alternative is on offer. ends




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