Indonesia is a sprawling and complex archipelago to the south of Singapore. For decades under former President Suharto, the stability and good understanding between Indonesia and Singapore has been a cornerstone of peace and prosperity for both countries. The crisis of 1997 ended this abruptly. Under the next two presidents, BJ Habibe and Abdurrahman Wahid (also known as Gus Dur), Indonesia began a tumultuous period of change. Singapore, so close in geography and economics, could not help but be affected.
More, there has been a growing distance and disturbance in Indonesia-Singapore ties. Former President Habibe referred to Singapore disdainfully as a "little red dot" and President Wahid threatened to join Malaysia to cut off water supplies. Throughout this period, the Indonesian economy suffered, showing no sign of recovery and reform from the worst of 1997. Indeed, with political uncertainty and incidents of violence, the economy seemed to drift further.
At the same time, a transition to democracy began, with a much more plural and diverse political landscape. More parties, more power centers and even more people's organisations and non-governmental organisations: all these began to have an influence, in contrast to the centralised, strongman system of the past. It is against this canvas of vast and interlocking economic and political changes that President Megawati Sukarnoputri has come into office. But what can she realistically achieve.
This special report on Indonesia tries to explain what has been done and what remains undone. It also suggests the important issues that will mark the Megawati presidency in the coming six months or so. This special report is the second in a series of Briefings, specially commissioned by the Singapore Institute of International Affairs for our corporate members of the Singapore chapter of the Pacific Basin Economic Council and the Singapore Institute of International Affairs. We hope that these special reports will provide focus and depth to our readers. Insight and concision, however, remain our trademark. In a world deluged by urgent headlines and overloaded with information, we seek to be selective, insightful and brief.