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Looking Back and Forward: Political and Economic Transitions in Indonesia

Looking Back and Forward: Political and Economic Transitions in Indonesia
Date/Time: Feb 07, 2007 / 5.00pm

Well-known political commentator and scholar Mr Jusuf Wanandi enthralled SIIA members with a personal understanding of the history of Indonesia and Indonesian politics, and how this will shape what to expect in the next five to 10 years.

After 100 years of nationalism and subsequent (non)development in Indonesia, Wanandi said that the nation was bound together because of a myth that had its roots in the Majapahit kingdom, but also because of a much deeper cause – colonisation by the Dutch. The latter established the Ethical Policy to develop a national consciousness and promote education, both crucial policies because there were very few schools of tertiary learning before 1941.

In describing the evolution of Indonesia’s national consciousness leading to a National Revival for the country, Wanandi stressed the role of youth, highlighting the Youth Pledge (Sumpah Permuda) of 1928, when Indonesian Youth Nationalists called for One Nation (Satu Tanah – Air Indonesi), One People (Satu Bangsa — Orang Indonesia), and One Language (Satu Bahasa — Bahasa Indonesia). The Youth Pledge also consolidated all local movements into a single national movement. Such developments, Wanandi said, were limited by the Dutch in the past, but the situation changed with the Japanese Occupation, as the Japanese had to rely on the local population to train the military, and create a bureaucracy.

Reflecting upon Sukarno’s leadership, Wanandi commented that he did very well on establishing good relations with Indonesia’s neighbours, and played an instrumental role in leading ASEAN the right way. The present leadership under Susilo Bambang Yudhoyono (SBY) stands in major contrast however, as SBY’s administration seems too often hesitant to make key decisions to overcome crises – this is the crux of what is presently hurting the country, especially the domestic economy, which is not faring as well as it should. Other problems lacking effective decision-making include taxation, labour relations, unemployment, and the lack of long-term investment strategies.

Wanandi rounded off his remarks by noting two challenges for Indonesia in the next five to 10 years. First, the nation’s peoples are diverse, and a prevailing attitude of jealousy has presented a stumbling block to their unity. The mistrust between the various factions has also pervaded the way the nation’s resources (e.g., forestry, fishery, haze) have been managed, and contributed to the loss of respect for political leadership. In short, Wanandi said there is ‘no heart’ for nation-building. Second, while Wanandi acknowledged the country is looking more federalist, with promising developments on the democracy front, he cautioned that administration and governance practices remain problems for Indonesia to overcome, and urged that capacity-building assistance was sorely needed by Indonesia’s neighbours and friends.

Some comments from the Q&A segment:

Q: How have things changed after Indonesia has gone through the period of restructuring? Is the country still relying on the President for decisions?

JW: There is a lot more to be done for the economy. In the political arena, there has been a lot of improvement – unity in the country is stronger than before with democracy and decentralisation. Sectors on the ground are also making their own efforts to eradicate corruption after SBY’s endorsement. The DPR for example, has expressed firm commitment on anti-corruption. Elsewhere, Anwar Nasution, as chairman of Indonesia’s Audit Board, had recently declined two years in a row, to verify the accounting for the President (presumably for possible impeachment later). The NGOs and the press have also been active in pushing for greater accountability. But the legacy of corruption left behind by the Suharto regime has permeated every sector of life in the country, defying any quick-fixes to the problem.

Q: What is the real story behind Indonesia’s sand ban?

JW: It’s a cabinet decision. I believe Trade Minister Mari Pangestu had already warned Minister (Trade and Industry) Lim Hng Kiang twice before the official announcement. I think the ban is completely unnecessary, and can hurt goodwill between the two nations.

Q: Indonesia has been on a road-trip seeking FDI but investors are having problems in the country. It appears that Indonesia does not have the right framework. How do we work this out?

JW: This is not easy, as the country has not tried to properly explore the option of an open economy, but only to monopolise and cultivate family businesses. There is currently a xenophobic mentality against ourselves (Indonesians), as we have not come to terms with opening up – this is a critical period for Indonesia.

The Centre for Strategic and International Studies (CSIS) and the Jakarta Post which I head, have been consistent in informing the elite and politicians with regard to this issue, but everyone still wants to be heroes in their own constituency, which stymies progress. President SBY needs to explain that if more jobs are needed, businesses need to open their doors to foreign investors. The doors also need to be opened for new technology to allow the country to keep up with the rest.

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