Kyrgyz President Re-elected Amid Charges of Widespread Fraud

By VOA News 24 July 2009

Kyrgyz election officials dump ballots onto a table to begin the vote count at a polling station in Bishkek, 23 Jul 2009

International monitors are criticizing Kyrgyzstan's presidential election Friday, even as the country's election commission claims President Kurmanbek Bakijev is headed for a landslide win.

The Organization for Security and Cooperation in Europe, OSCE, says Thursday's election was marred by ballot-box stuffing, voter list inaccuracies and evidence of multiple voting. It also accused President Bakijev of using government resources to ensure his victory.

The preliminary report by Europe's top security organization may bolster claims by the main opposition candidate, former Prime Minister Almazbek Atambayev, who says the election was a sham.

Before the polls closed Thursday, Mr. Atambayev said the election was rigged and called for a rerun. Another presidential candidate, Zhenishbek Nazaraliyev, also quit while the voting was under way.

Kyrgyzstan's elections commission said Friday that Mr. Bakijev led the race by 86 percent, with about two-thirds of the ballots counted.

The commission insists the results are valid.

The United States has a strong interest in the central Asian country, which hosts a U.S. air base that supplies American and NATO troops in nearby Afghanistan.

Russia has recently given Kyrgyzstan about $2 billion in aid in what analysts say is an attempt to wield influence in Kyrgyzstan.

President Bakiyev took power in 2005 after violent street protests forced his predecessor, Askar Akayev, to resign.

Indonesia's President Looks Ahead as Vote Nears

By TOM WRIGHT

Reuters

Indonesian President Susilo Bambang Yudhoyono and his wife, center, greet supporters at a campaign rally on Saturday in the capital of Jakarta.

JAKARTA, Indonesia -- On the eve of a national election this week, Indonesia is re-emerging as one of the world's hottest developing economies, a remarkable turnaround for a country that was once widely viewed as a basket case.

Despite the global financial crisis, Indonesia's economy is on track to grow nearly 4% this year, making it one of only a handful of major economies -- including China and India -- that International Monetary Fund expects to expand in 2009.

Its stock market is up 50% for the year, and companies including Volkswagen AG and British American Tobacco PLC are making new investments there.

Much of the credit goes to Indonesia's president Susilo Bambang Yudhoyono, a former army general who is widely expected to win re-election after five years in power. Under his watch, the government has stamped out Islamic terrorism and ended its civil war in the resource-rich province of Aceh. He has brought state spending under control and launched a popular anti-corruption drive, landing a number of senior politicians and central bank officials, including one whose daughter is married to Mr. Yudhoyono's son, in jail.

But critics say Mr. Yudhoyono will have to do more to attack corruption if the nation is to reach its potential of China-style economic growth rates of over 8%. Last year, China attracted six times more foreign direct investment than Indonesia. Foreign businesses say that a corrupt legal system and bureaucracy are major deterrents to doing business in Indonesia.

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Indonesia's Election

In a rare hour-long interview on Sunday at his home -- a sprawling estate outside Jakarta that has a library of 13,000 volumes -- Mr. Yudhoyono said that if he's re-elected, he will fill his next cabinet with technocrats, rather than hand out positions to a wide range of under-qualified leaders from rival political parties, as he did to placate opponents in his first term. He acknowledged that in the past his government has included businessmen with conflicts of interest that made it harder for him to rein in corruption and push reform -- a practice that he pledged to end in a second term.

"Five years from now, I have to complete my effort in reforming Indonesia," Mr. Yudhoyono said. "Good governance, bureaucratic reform, the anti-corruption campaign all have to be intensified."

A broad-shouldered man who dresses neatly in bureaucrats' safari suits or silk batik shirts, Mr. Yudhoyono, 59, is an unlikely reformer. He is a career military officer in a country where the military is widely associated with corruption and human rights abuses.

In a poll of 3,000 people released on Sunday by Lembaga Survei Indonesia, 63% of respondents said they will vote for Mr. Yudhoyono in the presidential election set for Wednesday. Twenty percent opted for his closest rival, former president Megawati Sukarnoputri, who has been pushing an anti-free trade stance. Trailing a distant third is Jusuf Kalla, chairman of the Golkar Party.

The question is whether Mr. Yudhoyono could carry his law-and-order campaign to a new level in a second term, putting Indonesia -- the world's fourth-largest country with 240 million people -- on a more sustainable path as one of the world's top emerging-market economies. Mr. Yudhoyono has taken a number of steps in recent weeks -- including choosing a well-respected Wharton-educated economist with few political ties as his new running mate -- that suggest he'll press for bigger changes during a second term.

In the interview, Mr. Yudhoyono said he would protect only a few crucial industries such as the local rice market, to make sure food security is maintained, but said he is otherwise committed to free trade and investment as a way to raise incomes in a country filled with natural resources.

For more than a decade, this ethnically-diverse archipelago nation of more than 17,000 islands -- covering a distance greater than Los Angeles to New York -- was known for corruption and chronic instability, with one of the world's longest-running civil wars. Islamic terrorists struck Western targets in Indonesia with impunity, and foreign investors mostly steered clear. Indonesia seemed so unstable at times that some Western analysts feared it would turn into another Pakistan.

Recently, its fortunes are changing. Last month, a Morgan Stanley analyst report suggested Indonesia should be added to the famous "BRIC" grouping of fast-growing emerging markets that now includes Brazil, Russia, India and China.

Mr. Yudhoyono's reputation as a reformer in the Muslim world's largest democracy is far from assured. Indonesia's cosy business elite has barely changed since the fall of former authoritarian president Suharto in 1998. The judiciary and civil service remain graft-ridden, according to advocacy group Transparency International, despite Mr. Yudhoyono's personal reputation for probity. Without more serious changes, investors fear the recent surge in interest in the country will fizzle.

Despite his anti-corruption drive, Mr. Yudhoyono remains part of the nation's elite, making him cautious in going after the most powerful politicians, judges and other government officials involved in graft, critics say. Last month, New York-based Human Rights Watch issued a report detailing continued abuses by military special forces, including rape and torture, in Indonesia's easternmost province of Papua.

"He's very much part of the system," says Michael Buehler, a fellow at Columbia University's Weatherhead East Asian Institute. "If you look at civil service reform, nothing has happened in the past five years."

Mr. Yudhoyono hit back at critics who charge he has been slow at bringing reform. He says they underestimate the enormity of Indonesia's problems of graft, which could take 10 years more to clean up, and the need to weigh decisions carefully to bolster respect for the nation's laws and Constitution, which in the past were often disregarded. "That's the way we have to run the country, it's not a small company where you can make decisions right away," he said.

And while acknowledging that army reform isn't yet complete, Mr. Yudhoyono insisted there have been no major violations of human rights or other systematic repressions under his watch.

Like Mr. Suharto, who was also an army general, Mr. Yudhoyono can seem aloof and stiff in public, preferring to read from prepared scripts than answer questions off-the-cuff from the media. He often deliberates so long over decisions that cabinet meetings have been known to run all day without reaching a decision.

But he is also considered to be an intellectual who has shown a commitment to democracy and rule of law that's somewhat unusual for Indonesia. After declaring independence from the Netherlands in 1945, Indonesia became one of the world's most impoverished economies under its first president, an independence hero named Sukarno. Mr. Suharto took over in 1965 and presided over growth fueled by Western capital and foreign aid, but also ruled the country as his own fiefdom. In 2007, a report by the U.N. and World Bank alleged Mr. Suharto stole more state funds than any other modern world leader -- as much as $35 billion. Rights groups documented a range of abuses, including military-led massacres in East Timor, which voted in 1999 to split from Indonesia in a U.N.-backed referendum after a 24-year civil war.

Mr. Suharto, who died in 2008, justified his practices by arguing that Indonesia would disintegrate without an authoritarian figure at the helm. This seemed all the more true after Mr. Suharto's government collapsed in the wake of the 1998 Asian financial crisis. A series of ineffective civilian leaders left the country adrift and foreign investors fled.

Mr. Yudhoyono appears to have broken that mold. Born into a poor family whose father was a low-ranking military official, he excelled in studies from an early age and won a place at Indonesia's prestigious military academy, where he graduated top of his class.

From early on, his approach to soldiering often put him at odds with army colleagues. Upon taking command of Battalion 744, a feared infantry unit with a reputation for brutality in East Timor in the 1980s, he moved to end the common practice of summarily executing prisoners.

On one occasion, he intervened to stop troops from killing a resistance fighter who was badly injured in a skirmish, ordering that he instead receive hospital treatment, according to an account of the incident in Mr. Yudhoyono's official biography. Former senior generals confirm the account and say Mr. Yudhoyono was criticized by some for these unusual tactics.

He studied several times in the U.S. on joint-training programs and served as a top United Nations commander in Bosnia. In 1990, he spent a year at the U.S. Army's staff college in Fort Leavenworth in Kansas, where officials conducted classes on the role of the army in the U.S. and its separation from politics.

"He saw how the United States could be a superpower and democratic," says T.B. Silalahi, a former general who was Mr. Yudhoyono's senior in rank at staff training college in the 1990s and is now a presidential national security adviser for Mr. Yudhoyono.

By the mid-1990s, a pattern in Mr. Yudhoyono's leadership was emerging in which he stayed loyal to the country's establishment but pressed for more flexibility and reform from within. He became head of the army's political wing, an army staff position that oversaw the secondment of generals to the civilian government's cabinet and played a role in policymaking.

When tensions between pro-democracy student activists and Mr. Suharto's government reached a boiling point in 1998, with three days of rioting in which hundreds of people were killed, Mr. Yudhoyono backed the government. But unlike most other generals, he tried to help mediate by organizing televised forums with pro-democracy groups to reduce tensions. There was an ethos that "rebellions must be crushed militarily. I didn't agree," Mr. Yudhoyono said.

After Mr. Suharto stepped down, Mr. Yudhoyono took a lead role in the new government headed by Mr. Suharto's last vice president, B.J. Habibie, and drew up a blueprint for army reforms that were quickly enacted. They included measures aimed at withdrawing the military from domestic politics -- including forcing generals to resign before taking up cabinet positions -- and removing the country's national police from army control.

Mr. Yudhoyono, who left the army for a full-time career in politics in 1999, also grew frustrated by the country's low reputation abroad. The following year, as the nation's top political and security minister under then-President Abdurrahman Wahid, he was summoned by the U.N. Security Council in New York after an episode in which an Indonesian military-backed militia attacked a U.N. office near East Timor, killing three U.N. personnel.

Mr. Yudhoyono defended his country, amid angry responses by President Bill Clinton and other world leaders, telling U.N. officials that sending a U.N. peacekeeping force would be meddling in Indonesia's affairs. But he also promised to create a timetable for reining in the militias and privately told advisers he was deeply embarrassed by the affair.

"The world had a problem with Indonesia because of East Timor," Mr. Yudhoyono said in the interview. World leaders saw the nation as a "repressive country in which internal security problems were resolved militarily."

Indonesia was in chaos on other fronts, too. Hard-line Islamist groups that had been forced into exile by Mr. Suharto but were able to return after the end of military-backed rule plotted terrorist attacks on Western targets, culminating in the 2002 nightclub bombings in Bali that killed 202 people.

Meanwhile, decentralization laws designed to unravel some of Mr. Suharto's power network instead led to near anarchy in the provinces, where newly-empowered local politicians became extremely wealthy handing out permits to cut down trees and mine inside national parks.

Mr. Yudhoyono coordinated the setting up of a U.S.-funded anti-terrorism police unit called Detachment 88 that made scores of arrests over the next few years, including those of the Bali bombers, all but destroying a local Islamic terrorist network linked to al Qaeda.

In 2004, backed by a group of disgruntled liberal former generals, Mr. Yudhoyono resigned from the government of Ms. Megawati, a daughter of Mr. Sukarno, to stand in Indonesia's first direct presidential elections. Mr. Yudhoyono, who wasn't implicated in a number of corruption scandals that plagued Ms. Megawati's tenure, promised voters he wouldn't shy away from taking tough decisions to end Indonesia's security and economic woes. The voters responded, electing him in 2004 in a landslide victory.

His strategy, he now says, was to identify a few key areas where Indonesia needed to act -- including lack of respect for the law, reining in corruption and restoring overall economic and political stability -- while recognizing that some other areas couldn't be fixed right away.

Within a year, he signed a deal to end 30 years of fighting in the province of Aceh by agreeing to give it special autonomy within Indonesia and more power to run its own affairs, despite opposition from hard-line generals who feared compromise would cause Indonesia's other minorities to demand independence -- something that hasn't happened.

"I did convince military officers we had to change," Mr. Yudhoyono said. "It's not that we necessarily had to conduct military operations all the time."

On the economic front, high global oil prices were wreaking havoc on the state budget, with generous consumer fuel subsidies adding up to $7 billion in 2004. Foreign investors were fleeing the stock market and local currency on fears the nation was on the verge of bankruptcy.

The government raised fuel prices twice in 2005, sparking street protests. Opposition politicians and NGOs slammed the moves as anti-poor and inflationary. But Mr. Yudhoyono appeared regularly in public and mustered academic experts to point out fuel prices disproportionately benefited the middle classes who drive cars, while leaving less for education and health care.

To balance the fuel-price increase, Mr. Yudhoyono instituted a cash-transfer program that reached a third of households. The government has spent more than $2 billion in cash handouts, subsidized primary education and other benefits, paid for in part from fuel subsidy savings.

The president appointed well-respected technocrats who have run a tight economic ship. Finance Minister Sri Mulyani Indrawati, a former International Monetary Fund executive director, has presided over a reduction in public debt to 30% of gross domestic product from 60% when Mr. Yudhoyono came to power. The economy, helped by a commodity boom and healthy consumer spending, grew by over 5% annually between 2004 and last year.

"The fact he's going after corruption is a very good sign," said Mark Mobius, a Hong Kong-based executive chairman of Templeton Asset Management LLC, who has covered emerging markets for over 40 years. "The $64 million question is whether he will continue to carry that out. They're up against a lot of competition in the race for investment from around the world. They've really got to move forward."

Mr. Yudhoyono's ability to drive change is now greater, his supporters argue. In part because of his success over the past several years, Mr. Yudhoyono's Democrat Party is today the largest in Parliament, which means he can more easily press through reform legislation, if he chooses.

"I've tried to transform Indonesia," he said. His goal, he says, is "to be as any other normal democratic countries."

-- Yayu Yuniar contributed to this article.

Write to Tom Wright at tom.wright@wsj.com

The Eagle Has Crash-landed

Despite an unprecedented media campaign, Prabowo Subianto’s political comeback has fallen flat – for now

Dirk Tomsa

‘Beware! Killers surround us! We remember those who were abducted and killed. We do not forget, we do not forgive.’ An image popular among Indonesian users of Facebook

Ten years ago it seemed as if Prabowo Subianto’s political career was over before it had really begun. During the twilight days of the New Order, the former commander of the notorious special forces unit Kopassus had lost a power struggle against his arch-rival Wiranto and was subsequently dismissed from the military. Accused of involvement in the abduction of student activists and the instigation of the anti-Chinese riots in Jakarta in May 1998, the former son-in-law of ousted president Suharto considered it safer to leave the country and go into temporary hiding. In self-imposed exile in Jordan he turned his attention to business, making a fortune on the international oil and gas market and through a number of high-stake deals aided by his billionaire brother, business tycoon Hashim Djojohadikusumo.

In the meantime, Prabowo’s arch-rival from his days in the army, Wiranto, enjoyed a brief moment in the sun. Having outmaneuvered Prabowo during the turbulent days of the transition, the former adjutant of Suharto was instrumental in helping Abdurrahman Wahid to an unexpected stint at the presidency in 1999. But to Wiranto’s disappointment, his support for Wahid did not bring the desired recompense. Instead of being rewarded with the vice-presidency, he had to make do with a ministerial post. Shortly afterwards, Wahid added insult to injury when he sacked Wiranto from the cabinet. Thus, merely two years after the fall of Suharto it seemed, for a short time at least, as if there was no place for either Wiranto or Prabowo in Indonesia’s new democracy.

Two years after the fall of Suharto it seemed there was no place for either Wiranto or Prabowo in Indonesia’s new democracy

It did not take long for the two to attempt political comebacks. In 2004, Wiranto and Prabowo were both candidates in Golkar’s national convention to select a presidential candidate. Wiranto in particular invested huge amounts of money at the convention in order to secure a place in Indonesia’s first-ever direct presidential election. In the end the former commander-in-chief of the armed forces did manage to win the convention, but he failed to make it all the way to the palace, finishing third in the presidential poll. Undeterred by the defeat, Wiranto then moved on to found his own party (Hanura) and soon began preparing for the next elections in 2009.

His old foe Prabowo, meanwhile, was not just sitting idly by. In fact, it seemed as if defeat at the Golkar convention had only whetted his appetite for politics. Watching Wiranto’s activities carefully, Prabowo too began to get ready for the next elections. In contrast to his half-hearted campaign in 2004, however, this time he meant business. Assisted by a high-profile media consultancy firm from the United States, Prabowo crafted an elaborate strategy which he hoped would eventually elevate him to the highest office. The strategy consisted of three main pillars: first, mobilisation of support for his bid; second, enhancing name recognition for his organisational vehicle; and third, finding a niche in the political spectrum that he could use to distinguish himself from other candidates.

Finding the right vehicle

Prabowo’s first step was to assume control over one of Indonesia’s biggest mass organisations, the national farmers’ association HKTI (Himpunan Kerukunan Tani Indonesia). Created during the New Order as a corporatist tool for Suharto to monitor Indonesia’s millions of peasants, this organisation had descended into political oblivion after 1998, but its vague affiliation with the rural masses made it an ideal vehicle for Prabowo because it provided him with an opportunity to begin his image-building campaign by presenting himself as a champion of the poor. In December 2004 he was elected HKTI chairman with 309 out of 325 votes – never mind that he was not even a member of the association at that time.

The HKTI position provided Prabowo with valuable access to an organisational base, but with a view to the 2009 elections he needed more than the chairmanship of a mass organisation. Indonesia’s electoral rules dictate that only candidates who are nominated by political parties are allowed to contest a presidential election, so in order to avoid dependence on the goodwill of an already existing party, he decided to emulate what various other retired generals had done before him: he created a new party of his own. And so Gerindra (Movement for a Great Indonesia) was born, a party with a fierce-looking Garuda eagle on its logo (the Garuda is the centrepiece of Indonesia’s national coat of arms). From the day of its formation in February 2008, Gerindra dedicated itself almost exclusively to promoting the presidential ambitions of Prabowo Subianto.

At first sight, Gerindra appeared to be not much different from the various other parties that had been established by retired generals in recent years. Just like Edi Sudradjat’s PKPI, Hartono’s PKPB and more recently Wiranto’s Hanura, Gerindra too seemed to stand for little more than conservative nationalism imbued with a touch of New Order nostalgia. And yet, many observers were much more concerned about Gerindra than the other parties formed by retired officers. A closer look at the composition of its leadership board and its advisory council reveals why. Formally led by a largely unknown forestry professor called Suhardi, Gerindra provides a political home for a number of controversial former generals who continue to be dogged by persistent allegations of gross human rights violations. Amongst the most prominent are Gleny Kairupan, a former intelligence officer with a dubious track record in East Timor, Muchdi Purwopranyoto, who despite his exoneration by a Jakarta court is widely believed to have masterminded the murder of human rights activist Munir in September 2004, and of course Prabowo himself, whose list of alleged crimes includes abduction, torture, and instigation of large-scale anti-Chinese riots. For this reason, Gerindra and Prabowo caused particular alarm among human rights advocates, many of whom protested openly against his presidential campaign this year.

In order to dispel this image, Prabowo pursued an ingenious plan. To the disbelief of those human rights activists who now opposed his candidature, Prabowo approached some of his former victims and persuaded them to join his party. Why exactly former student activists like Desmond Mahesa or Pius Lustrilanang, and Haryanto Taslam, a former leader of Megawati Soekarnoputri’s PDI-P, all three of whom were kidnapped by Prabowo’s troops in 1998, agreed to support the presidential ambitions of their former tormentor has been the subject of much speculation. Some observers have argued that they were simply bought off while others claim they may suffer from Stockholm syndrome (a psychological condition in which victims of abductions become emotionally attached to their hostage-taker). The three men themselves have rejected all such speculation and simply maintained that after Prabowo had apologised to them, it was time to move on.

An unprecedented media campaign

For Prabowo, people like Haryano, Desmond and Pius represented important human capital that could be used in his bid for the presidency. But the real weapon in Prabowo Subianto’s struggle to polish his image was an unprecedented media offensive which in mid-2008 ushered in the second phase of his presidential campaign. While other parties were still in the planning stage, Prabowo began to inundate the Indonesian public with an unparalleled bombardment of political advertisements.

Buoyed by a self-confidence bordering on hubris, Prabowo used these advertisements to liken himself to statesmen ranging from Napoleon and Sukarno to Barack Obama

Buoyed by a self-confidence bordering on hubris, Prabowo used these advertisements to liken himself to an array of past and present statesmen, ranging from Napoleon and Sukarno to Barack Obama. All television advertisements featured the majestic Garuda eagle and consistently highlighted the alleged failure of post-Suharto administrations to realise Indonesia’s huge economic potential. To fund this media onslaught, the soldier-cum-businessman-cum-politician had to dig deep into his pockets (and those of his brother Hashim). According to a Gerindra official, the media campaign alone cost about US$100 million, leaving plenty of room for speculation about just how much more was spent on other campaign activities.

Throughout his media offensive, Prabowo portrayed himself as the only presidential contender capable of liberating Indonesia from the yoke of rural poverty, unemployment and foreign debt. So far, so predictable. What very few observers had predicted, however, was the solution Prabowo proposed for the country’s alleged malaise. Driven by the need to distinguish himself from his rivals, the man who owed his fortune largely to strategic maneuvers on global financial markets and to his connections to some of Indonesia’s most powerful elite families campaigned on a quasi-socialist platform, criticising the government’s privatisation agenda and proposing revisions of existing contracts with foreign companies such as Freeport and Exxon. Given Prabowo’s background, this may sound cynical, but the ‘anti-neoliberal’ label helped him to stand out from his rivals. And in view of the electoral success of other big-spending leftist populists like Hugo Chavez or perhaps Thaksin Shinawatra the strategy made sense, especially in times of a global financial crisis.

Was it all in vain?

So why did it not work? Even though Prabowo had implemented his campaign strategy meticulously from the start, Gerindra got less than five per cent of the vote (Wiranto’s Hanura party fared even worse, achieving only about three per cent). A number of reasons probably account for this poor result, including persistent discomfort amongst many Indonesians about Prabowo’s hardline image and his human rights record, as well as widespread apprehension about his links to the Suharto family. Taken together, these factors apparently provided a substantial deterrent for many voters. Arguably the most important reason, however, is that despite the global financial crisis the overall socio-economic conditions in Indonesia were simply not ripe for the emergence of a populist saviour.

The man who owed his fortune to strategic global financial markets and connections to some of Indonesia’s most powerful elite families campaigned on a quasi-socialist platform

Thanks largely to the government’s three-phase ‘direct cash assistance’ (BLT) program, many poorer Indonesians appear to be quite satisfied with President Susilo Bambang Yudhoyono’s performance. Significantly, the third phase of the BLT program was implemented in late March 2009, which meant that merely two weeks before the election more than 18 million poor families received yet another government-sponsored cash injection of Rp 100,000 per month, to be distributed over a period of two months. In view of these measures taken by the incumbent president, it is hardly surprising that few of the millions of farmers and fisherfolk targeted by Prabowo saw a need for a radical overhaul of the economic system. Moreover, even those who may actually have seen this need were apparently reluctant to believe that the person to implement it would be, of all people, Prabowo Subianto, who, to put it lightly, is hardly famous for his philanthropy.

Another important reason for Prabowo’s failure to push Gerindra to a better result was that his campaign was essentially regressive. Despite the professional outlook of the advertisements, Gerindra appeared to be preoccupied primarily with romanticising the past rather than outlining the future. This nostalgia was epitomised in a statement by Gerindra’s deputy chairman Fadli Zon who maintained that Gerindra ‘would like to rebuild Indonesia just like how it was in the past when people gained prosperity from agriculture and fishing’. Clearly, the election result showed that very few Indonesians share this desire to go back in time. Thus, it could be argued that Prabowo may have revolutionised the style of political advertising in Indonesia, but he failed to match his impressive style with a convincing message.

So Prabowo will not become Indonesia’s next president, and neither will Wiranto. Does that mean that at long last there really is no place for these two in Indonesia’s democracy? Not quite. Despite the clear verdict at the ballot box and poor approval ratings in most opinion polls, both Prabowo and Wiranto are running as vice-presidential candidates for Megawati and Jusuf Kalla respectively. This may look like a consolation prize only, but it will ensure that the two will continue to have a place in the system for years to come. And don’t be surprised if they run for president again in 2014. ii

Dirk Tomsa (Dirk.Tomsa@utas.edu.au) is a lecturer in Asian Studies at the University of Tasmania.

Inside Indonesia 97: Jul-Sep 2009

Head Scarf, or Jilbab, Emerges as Indonesia Political Symbol

By NORIMITSU ONISHI

JAKARTA, Indonesia — The three parties competing in Indonesia’s presidential election next week have plastered this city with campaign billboards and posters depicting, predictably, their presidential and vice presidential choices looking self-confident.

But one party, Golkar, has also put up posters of the candidates’ wives next to their husbands, posing demurely and wearing Muslim head scarves known here as jilbabs. The wives recently went on a jilbab shopping spree in one of Jakarta’s largest markets, and published a book together titled “Devout Wives of Future Leaders.”

Most polls suggest that President Susilo Bambang Yudhoyono of the Democratic Party will be re-elected in next Wednesday’s vote, after running a smooth campaign based on his economic policies and a popular anticorruption drive. Despite television debates, the personality-driven campaigns have focused little on differences over policies or ideas, except regarding the wearing of the jilbab.

It is perhaps not surprising that the jilbab, the Islamic style of dress in which a woman covers her head and neck, has become an issue in a presidential campaign this year. Jilbab sales have been booming for three years across a country where women have traditionally gone unveiled, and where the meaning of wearing the jilbab — or not wearing one — remains fluid. The issue also cuts to a central, unresolved debate in Indonesia’s decade-old democracy: the role of Islam in politics.

“It’s the first time that the jilbab has become an issue in a presidential campaign in Indonesia,” said Siti Musdah Mulia, a professor of Islamic studies at Syarif Hidayatullah State Islamic University here and a leading proponent of women’s rights. “There are so many more important issues that should be addressed in the campaign,” said Ms. Mulia, who has worn a jilbab for eight years. “Why this one?”

But it would not be the first time that politicians tried to co-opt religious symbols to win votes. The ruckus over the jilbab began a few months ago when Mr. Yudhoyono, whose wife, Kristiani Herawati, does not wear a jilbab, and Vice President Jusuf Kalla, whose wife, Mufidah, does, decided not to run together again.

The president selected as his new vice presidential running mate a respected central banker, Boediono, whose wife, Herawati, goes unveiled. Mr. Kalla, in turn, decided to run for president as the Golkar Party’s standard-bearer and picked as his No. 2 a retired general, Wiranto, whose wife, Rugaya, is veiled. (Many Indonesians go by only one name.)

Perhaps sensing an opening as it trailed in the polls, the Golkar Party soon put up posters of the veiled wives. With the news media in tow, the wives went shopping together for jilbabs at Tanah Abang, the city’s largest textile market, where the general’s wife was known as a regular, but Mr. Kalla’s wife was not.

Golkar Party officials rejected accusations by the president’s party that they were trying to exploit Islam for politics; they also denied having anything to do with the recent distribution of leaflets that stated, falsely, that Boediono’s wife was not Muslim, but Roman Catholic.

President Yudhoyono was also getting pressure from a current coalition ally, the Prosperous Justice Party, the country’s largest Islamic party. A party leader said that members were gravitating toward the Golkar candidates because of their jilbab-wearing wives.

The country’s Islamic parties have core supporters that are coveted by the major parties, though the Islamic parties have failed to make inroads among mainstream voters. In fact, in April’s parliamentary elections, they suffered a steep drop in support compared with five years ago, a decline interpreted as mainstream voters’ rejection of Islam in politics.

Neng Dara Affiah, an official at Nahdlatul Ulama, the country’s largest Islamic organization, which espouses moderate Islam, said the fight over the meaning of wearing the jilbab was taking place between “fundamentalists” and “progressives.”

The fundamentalists are trying to force women to wear the jilbab as an act of submission, and had already done so in various municipalities across the Indonesian archipelago in recent years, Ms. Neng said. For the progressives, she said, wearing the jilbab was an expression of a woman’s right.

“For women in Indonesia, whether they want to wear the jilbab or not is their choice,” said Ms. Neng, who started wearing one five years ago. “It shouldn’t be political.”

Despite being the world’s most populous Muslim nation, Indonesia does not have a tradition of Islamic dress. Most Indonesian women started wearing the jilbab in the last decade, after the fall in 1998 of President Suharto, who had kept a close grip on Islamic groups.

Fashion and clothing industry experts said the number of women wearing jilbabs rose sharply in the past three years, for reasons of religion, fashion or something undefined.

“If you ask 10 different women why they’re wearing jilbab, you’ll get 10 different answers,” said Jetti R. Hadi, the editor in chief of Noor, a magazine specializing in Muslim fashion, which features jilbab-clad models on its cover. “You cannot assume that because a woman is wearing a jilbab, she’s a good Muslim.”

At Tanah Abang, the market where the political wives shopped for jilbabs, many small shop owners had recently switched from selling Western clothes to jilbabs to capitalize on the boom. One shop owner, Syafnir, 53, said 7 of his 15 relatives working in the market had begun to sell jilbabs in the past two years. He himself now has two stores; the second opened just two months ago.

Asked whether faith was fueling the boom, he shook his head emphatically. Fashion was, he said, an answer echoed by others in the market.

Deni Sartika, 36, who was shopping with her mother and young daughter, all three of them veiled, said she started wearing a jilbab in 1991, long before most Indonesian women did. She was a member of the Prosperous Justice Party, the Islamic party that supports President Yudhoyono.

Ms. Deni said she would vote for Mr. Yudhoyono and his vice president even though their wives did not wear jilbabs.

“I’m looking at the candidates themselves instead of their wives,” she said, before adding, “but we’d be happy if the wives wore jilbabs.”

Candidates on Defensive Over Weekend

Muninggar Sri Saraswati & Antara

With just 10 days to go before the election on July 8, the presidential candidates were forced to spend the weekend fending off what they labeled as baseless and fabricated allegations.

President Susilo Bambang Yudhoyono, speaking at a campaign event at the Bima Cirebon sports stadium in West Java on Saturday, lashed out at what he said were slanderous allegations arising from the “black campaigns” being waged against him and running mate Boediono.

“SBY and Boediono are being attacked from all sides, but nothing is based on tangible facts,” Yudhoyono said.

“We’re concerned about this and I ask the Lord to restore the good senses of the black campaigners, so they stop.”

He said he hoped that his supporters would avoid slinging mud, because it was a sin against God, democracy and the people.

“It is not good for them to reach their goal by any means,” he said.

“They should tell the people what is true, honest and noble. Do not attack, slander and discredit SBY by spreading untrue stories and turning religion upside down.”

The incumbent, heavily favored to win the election, has been on the defensive in response to a number of allegations.

Charges against Yudhoyono include criticism of comments that he allegedly made against the Corruption Eradication Commission (KPK), as well as vice presidential candidate Boediono’s supposed status as a “neo-liberal.” Some opponents have also suggested that Boediono and his wife Herawati were not Muslim enough.

On Friday, Yudhoyono, who is running on an anticorruption platform, was forced to deny that he had ordered the Development Finance Comptroller to audit the KPK, which drew immediate criticism from anticorruption watchdogs.

The campaign team of presidential candidate Jusuf Kalla — who in the past has himself made comments that could be considered critical of the KPK’s efforts — used the situation to say that the KPK should be improved.

“We hope the KPK becomes more effective in handling the investigation into allegations that certain institutions have caused the state to lose money,” campaign team spokesman Chairuman Harahap said on Saturday.

On Sunday, Yudhoyono lashed out at comments that were apparently directed at Kalla, who criticized Boediono during last Thursday’s presidential debate for not agreeing with his 10,000-megawatt electricity project.

“[How could] internal cabinet meeting issues be disclosed to the public?” he asked, adding that he, in his capacity as president, needed to protect his ministers to support their ability to carry out their government duties.

Boediono, Yudhoyono said, had only asked the government to be careful in approving the development of the 10,000-megawatt electricity project. The government eventually approved the program to prevent a possible energy crisis.

Yudhoyono responded to Kalla, who said in a presidential debate on Thursday that Boediono did not support the project. Kalla repeated his statement several times, noting that he was angry with Boediono.

Kalla’s campaign team, meanwhile, also had to deny allegations that it had engaged in money politics and that the team was involved in the distribution of photocopied news stories saying that Boediono’s wife was a Catholic, during a campaign event in Medan, North Sumatra.

Chairuman said the campaign team had no plans to deliberately smear its rivals. “Our goal in the campaign is to introduce the programs of our presidential candidate to the people.”

Tren Elektibilitas Capres-Cawapres Menjelang Pilpres 2009

Pemilihan Presiden 2009 memasuki fase genting dan menentukan bagi ketiga pasang capres dan cawapres. Waktu yang tersisa menjelang tanggal 8 Juli 2009 menjadi ajang menaikkan elektabilitas kandidat. Hampir semua cara telah dicoba, mulai dengan memaksimalkan “perang udara” dan “perang darat”. Strategi pencitraan dengan memoles kandidat juga telah dilakukan masing-masing tim sukses dan konsultan. Isu-isu panas dan menyengat juga sudah ditebar, saling rebutan klaim keberhasilan, hingga deretan isu-isu kampanye negatif dan black campaign telah mewarnai peta politik sebulan terakhir.

Dalam survei LSI 15-20 Juni 2009, SBY-Boediono dipilih oleh 67%, Mega-Pro 16%, dan JK-Win 9%. Keunggulan jauh yang sedikit menurun ini konsisten dengan sejumlah indikator makro, terutama kepuasan pada JK yang sedikit naik, dan pada SBY yang sedikit turun. SBY-Boediono mengalami penurunan sekitar 3% (dari70%) dalam 20 hari. Bila penurunan ini dibaca secara konservatif, SBY-Boediono sekarang berada pada posisi 64%. Berarti mengalami penurunan sebanyak 4%bila survei sebelumnya juga dibaca secara konservatif (68%, bukan 70%).

Bila penurunan ini linear dan dibaca secara konservatif SBY-Boediono kemungkinan akan turun lagi sebanyak 4% pada hari H, sehingga perolehan suara pada hari H kemungkinan 60%. Penurunan linear ini mungkin terjadi karena tekanan dari lawannya kurang kuat. Mega-Pro cenderung stabil atau bahkan menurun, sedangkan kemajuan JK-Win kurang kuat, hanya sekitar 5% dalam 20 hari bila dibaca secara optimis untuk JK-Win.

Kalau tidak ada peristiwa luar biasa, dan tak terkendali, kemungkinan JK akan naik, secara optimis, menjadi 20%.

Download RILIS SURVEI LSI : RELEASE SURVEI LSI 24 JUNI 2009.pdf

Second Presidential Debate Sees Candidates Come to Life - The Jakarta Globe

Presidential candidates Megawati Sukarnoputri, Susilo Bambang Yudhoyono and Jusuf Kalla participate in a televised presidential debate in Jakarta on Thursday night. (Photo: Romeo Gacad, AFP)

June 26 - After a listless first debate more than a week ago, presidential candidates on Thursday gave a much livelier performance during their second nationally televised public debate, with criticism of their rivals finally making its way into the discussion.

The debate, focusing on the eradication of poverty and unemployment, saw the participants more comfortable with the format as they exchanged political barb s.

“Tonight’s debate was much better,” said Andrinof Chaniago, political analyst of the University of Indonesia.

Hendri Saparini, an economics analyst with Econit, a privately owned think tank, said, “The major thing here is that now people can see the differences between the candidates.”

Analysts and observers, however, agreed that Vice President Jusuf Kalla and President Susilo Bambang Yudhoyono dominated the show, while the third candidate, former President Megawati Sukarnoputri, contributed little to the discussion.

Kalla was credited by many for instigating a more robust debate .

“He was the star tonight, making the debate much more lively,” said Effendi Gazali, a communications expert from the University of Indonesia.

Kalla also initiated an attack on policy, commenting on a recent campaign statement by Yudhoyono, who had warned that local entrepreneurs might endanger the country with their vested intere sts.

“I regret that local investors are considered bad, because without their existence, who would create jobs in this republic?” the vice president asked.

Kalla, who is vying for the presidency with Gen. (ret.) Wiranto as his running mate, also took a shot at Yudhoyono’s vice presidential choice, former central bank Governor Boediono, saying that he had allowed bank interest rates to reach high levels and had failed to support the development of a 10,000-megawatt power generation project by initially refusing, as the nation’s top economics official, to issue the necessary guarantees.

Coming to the rescue, Yudhoyono said the decision was later reversed and that the guarantees had been agreed upon.

Prompting laughter and applause from the audience, Kalla teased Yudhoyono for using a popular jingle for an instant noodle product as his campaign tune, saying that it would only lead to an increase in wheat imports.

Yudhoyono parried, saying, “Perhaps the noodle you eat is made from pure wheat, because my noodle is a mixture of wheat, sago and cassava.”

Although observers agreed that no new content was revealed during the debate, the moderator, economist Aviliani, was praised for delivering probing questions.

“As for the substance of the responses, Yudhoyono and Kalla had better answers compared to the previous debate,” Andrinof said. “But there were no innovative answers that we hadn’t already heard.”

“In the question-and-answer section, Megawati seemed not to have progressed at all. She lives in the past and gave no better insights than in the previous debate,” he added.

However, Hendri said that Megawati was consistent in her intentions to reduce state debt and emphasizing the need to revise the Labor Law.

“Megawati and Kalla stressed the importance of revising the Labor Law, but Yudhoyono was against it. It shows that he supports market liberalization. He claimed past government successes but lacks vision on how to reduce poverty and the unemployment problem,” Hendri said.

The three presidential candidates will meet for their third and final debate next Thursday.

Tabiat Buruk Prabowo Bencana Untuk Bangsa

SUARA INDONESIA RAYA (23 JUNI 2009) Prabowo Subianto, calon Wakil Presiden dari koalisi PDI Perjuangan dan Partai Gerindra dinyatakan lolos tes kesehatan oleh Tim Dokter Ikatan Dokter Indonesia (IDI) yang dipimpin dr Fahmi Idris.

Tes kesehatan ini ternyata tidak benar-benar mengecek kesehatan para calon, terutama menyangkut kesehatan jiwa mereka.

Prabowo Subianto diketahui menderita semacam kehilangan pengendalian diri dan sekarang dalam tahap penyembuhan. Ia sudah mengikuti terapi 'anger management' di Bali selama tiga tahun dan belum sembuh hingga kini.

Baru-baru ini Suryadharma Ali, Ketua Umum Partai Persatuan Pembangunan (PPP) menjadi korban peristiwa kehilangan kendali diri dari Prabowo.

Dalam sebuah rapat Koalisi Besar yang dipimpin Prabowo, di rumah Prabowo, Suryadharma menyatakan mundur dari Koalisi karena partainya memutuskan bergabung dengan Koalisi Partai Demokrat. Prabowo tiba-tiba marah dan melempar handphone ke arah Suryadharma. Lemparannya meleset.

Prabowo keluar dari ruangan, mencuci mukanya, dan kembali duduk di ruang pertemuan. Sambil menuding Suryadharma, Prabowo membentak, ''Saya paling benci pengkianat!''

Hal serupa tidak hanya dialami Suryadharma. Sekretaris pribadi Prabowo, seorang perwira TNI, pernah ditampar di depan para fungsionaris Partai Gerindra hanya karena salah menulis cek.

Ketika Prabowo masih aktif sebagai tentara, tongkat komandonya sering patah karena dipukulkan ke tubuh anak buahnya. Prabowo, ketika menjadi Komandan Jendral Kopassus, pernah memukul dan menantang duel seorang wartawan ekonomi karena menulis tentang Yayasan Kesejahteraan Korps Baret Merah.

Indonesia's High Hopes For The Next SBY Term

Far Eastern Economic Review, Jakarta, James Van Zorge, June 19 - There are few people in Indonesia who doubt that the incumbent president, Susilo Bambang Yudhoyono, widely known as SBY, will win the July 8 presidential election. Mr. Yudhoyono's competitors, who include his predecessor and erstwhile boss, Megawati Sukarnoputri, and his current vice president, Jusuf Kalla, are trailing far behind in popularity polls. Pundits and pollsters alike doubt Ms. Megawati can win more than 20% of the popular vote, and Mr. Kalla would be considered extraordinarily lucky if he could manage 10% of voters' support in his bid for the presidency. Barring some unforeseen disaster on the campaign trail, Mr. Yudhoyono will walk away with a simple majority of the vote and once again become the leader of the world's third-largest democracy.

The president's broad appeal compared to Ms. Megawati and Mr. Kalla is no mystery. The primary reason is economic performance: Under Mr. Yudhoyono's leadership, over the past five years the Indonesian economy has registered strong growth, more than 6% in 2008 and perhaps reaching 4% in 2009, a respectable performance for any economy during today's global financial crisis. Poverty, underemployment and income distribution remain an issue, yet there are signs that poorer Indonesians have seen an improvement in their standard of living and the middle class continues to grow.

The international and domestic business communities also praise Mr. Yudhoyono's administration for its macroeconomic management. In particular, the stewardship of Minister of Finance Sri Mulyani has stood Indonesia in good stead, and the country is well positioned to receive direct and portfolio investment flows when the global economy starts to recover. A few multinationals are already taking the plunge -- Volkswagen of Germany, for example, recently inked a deal to develop a large manufacturing facility in Jakarta to serve the domestic and regional markets.

Another reason why voters find Mr. Yudhoyono an attractive presidential figure is his image as a clean politician, a rare commodity in Indonesia. Unlike his predecessors, he has managed to steer clear of scandals, and his administration has clamped down on corruption throughout the country. Retired ministers, governors, members of the House of Representatives (DPR) and a former central banker have been brought to court on charges of corruption and, in many cases, given stiff prison sentences. As recently as five years ago, public officials viewed their stay in office as an opportunity to steal from the state's coffers with impunity. Now they have to think twice before taking the risk.

Indonesians remember Mr. Yudhoyono's predecessor, Megawati Sukarnoputri, in a dramatically different light. As the daughter of the country's first president, Sukarno, she initially evoked sentiments of nationalist pride and hopes for a return to the imagined glories of her father's era. Using the Sukarno name as her main calling card, most Indonesians did not seem to notice her lack of depth in policy issues. But not soon after rising to office, very quickly Ms. Megawati's supporters realized that she was out of her league.

Aloof and apparently taking very little interest in managing affairs attendant of her office, most of Ms. Megawati's time was spent on ceremony and pomp. Meanwhile, the policy vacuum was filled by her husband, businessman Taufiq Kiemas, along with a gang of crony politicians and their financiers in the corporate world. Not only was there little reform, there was a palpable sense the country was going backward.

Whereas Ms. Megawati suffers from the public's memories of her lackluster performance in office, Vice President and Golkar Party Chairman Kalla fares even worse. Touted as faster and better than Mr. Yudhoyono, Indonesians might concede that their president is not much of a decision-maker, but they are not necessarily convinced Mr. Kalla would make a better head of government.

Most Indonesians would probably agree that Mr. Kalla has shown himself to be a more decisive leader than Mr. Yudhoyono. The president is widely viewed as risk-averse and painfully slow when it comes to making policy pronouncements. As one cabinet minister recently told me, "I have been going to cabinet meetings for almost five years. Not once did the president make a decision during any of those meetings."

Yet Mr. Kalla consistently polls less than a 5% approval rating as a presidential candidate. One possible reason is his background. As a successful businessman during the former Suharto regime, Mr. Kalla is placed in the same class as another Golkar Party leader, Aburizal Bakrie, a billionaire who also happens to serve as Mr. Yudhoyono's coordinating minister of people's welfare. Mr. Yudhoyono might not fit everybody's image of the ideal president who takes charge, but Mr. Kalla is viewed as something worse: a political dinosaur.

Certainly Mr. Kalla and Ms. Megawati have not helped their chances of winning through their choices of running mates. Mr. Kalla picked retired General Wiranto, a former Suharto adjutant commander-in-chief of the Indonesian armed forces. Ms. Megawati joined forces with Prabowo Subianto, another retired general and former in-law of Suharto. Both vice presidential candidates share a tainted past. Mr. Wiranto is thought to be responsible for bloodbaths in East Timor, while Mr. Subianto has admitted to being behind Operation Rose, a special forces operation ordered by Suharto in 1998 that involved abductions, torture and the murder of student activists.

In stark contrast, Mr. Yudhoyono's running mate is Boediono, a professional economist and widely respected technocrat who until recently was head of Indonesia's central bank. Holding a doctorate in business economics from Wharton, the soft-spoken Mr. Boediono is not only recognized as a highly competent public official, but clean as well.

So far, opposition candidates have tried a variety of tactics to attract voters. Mr. Kalla and Ms. Megawati are, for example, trying to woo voters with a nationalist platform, and have charged Mr. Boediono with being a "neoliberal," implying that he is overly inclined to support foreign investment and open markets at the expense of the welfare of poorer Indonesians.

Unfortunately for the opposition, a nationalist platform is unlikely to elicit much excitement or support from lower-income Indonesians, primarily because they have seen their household incomes improve substantially during Mr. Yudhoyono's tenure in office. Calls for retreating to inward-looking policies might be attractive to a minority of voters, but when the economy is doing well it is hardly a winning platform.

Both of the opposition candidates are also claiming that they will be able to grow the economy faster than Mr. Yudhoyono. In a recent business forum, Ms. Megawati said she could grow the economy by 11% -- when she was queried how she would achieve growth rates exceeding China's, her only reply was that she did not yet have any specific policy ideas. Lacking substance, it is unlikely Indonesians will be buying Ms. Megawati's tales of future prosperity.

Mr. Yudhoyono should not assume a victory in July would necessarily result in a more vibrant business climate. Indonesia is definitely better placed now than some of its regional neighbors in attracting investment, especially when one looks at the economic challenges facing Singapore, South Korea and Taiwan, and the political turmoil in Thailand and Malaysia. Still, some questions need to be asked about the direction Mr. Yudhoyono will be taking Indonesia for the next five years.

Investors will be watching for Mr. Yudhoyono's choice of a cabinet. They will also be waiting to see if he will be able to parlay a mandate from the electorate into a pliant DPR -- at least one that is more cooperative than during his first term in office. Finally, the international and domestic business community will be anxious for the president to articulate a more detailed blueprint for economic policy for his new administration, hopefully addressing some of the more pressing issues that previously remained untouched.

Hopefully, Mr. Yudhoyono will not yield to the temptation to stitch together a coalition cabinet. He tried this during his first term in office, as did his predecessors, based on the mistaken belief that bringing politicians from other parties into the cabinet would result in greater support for his policy initiatives inside the DPR. Not only did cabinet positions fail to buy loyalty, it also resulted in cabinets with little redeeming value, more often than not burdening the president with ministers who were more focused on advancing their vested interests, and in more egregious cases used their offices as a source of largesse.

At the very least, Mr. Yudhoyono will need to reserve some of the more critical economics-related and judiciary cabinet postings for seasoned, reputable professionals if he is to instill confidence and win the respect of the business community. Mr. Yudhoyono's choice of Mr. Boediono as his vice president is an early sign that he will probably lean in this direction. Still, it is too early to tell whether or not Mr. Yudhoyono might succumb to political pressure from party bosses and make unnecessary compromises.

Assuming the president does select a cabinet based primarily on merit, that opens up a related question: If a coalition cabinet does not ensure loyalty to the president from coalition members inside the DPR, then what will? Indeed, it has become increasingly difficult for Indonesian presidents since the demise of Suharto and his Golkar party to find ways to work effectively with the DPR. The powers of the DPR have increased substantially, and members are eager to exercise them.

Moreover, the number of new parties has mushroomed since 1998 (32 parties participated in this April's elections, and nine ended up with sufficient votes to seat members inside the DPR). To make matters even more complicated, leadership within parties tends to be fractured. If chairmen find it difficult to lead their own parties, how can a president be expected to deal with nine individual parties at once?

One possible solution is to give the president more help inside the palace. In terms of professional support staff commonly found in mature democracies, the Office of the Presidency currently has scant resources. For example, there is no equivalent of the U.S. White House Office of Congressional Affairs, which is staffed with scores of analysts and skilled operators whose sole purpose is to improve prospects for congressional approval of the president's legislative agenda. There are rumors in palace circles that Mr. Yudhoyono is thinking about creating a legislative liaison office to help him realize his policy agenda.

What then will Mr. Yudhoyono try to achieve during his next five-year term? So far there are few signs of new directions on the policy front. It is probably safe to assume that one of Mr. Yudhoyono's priorities will be continuing efforts to combat corruption. It is also widely assumed that his core economics team will stay in place, and therefore sound monetary and fiscal policies will remain a hallmark of his administration.

The business community hopes for more -- the investment community believes that the president should leverage the country's political stability and economic recent successes, and use his public mandate for pushing ahead with policies that could reposition Indonesia as the destination of choice for business in Southeast Asia. Business leaders put the priority on three areas: expanding and modernizing the country's antiquated infrastructure, overhauling uncompetitive labor laws, and improving the legal and regulatory framework underpinning regional autonomy. Whereas infrastructure is primarily an issue requiring increased government spending and could be easily accommodated because of Indonesia's low budget deficit, the latter two areas would require some political risk-taking from Mr. Yudhoyono.

Indonesia's labor laws, in particular excessively high severance pay, have long been a source of complaints from local and foreign business, causing many labor-intensive manufacturing industries such as textiles and footwear to relocate to China, Vietnam and Bangladesh. Corporations also complain frequently about local governments' cavalier attitude toward business and excessive rent-seeking.

Reforming Indonesia's labor and regional autonomy laws would require the president to challenge labor leaders and heads of local governments. The prototypical Javanese, Mr. Yudhoyono avoids conflict and seeks consensus above all else. Those are precisely the types of character traits that many find troublesome, especially those who hope for more change in the future. Whether or not Indonesia's president is capable of finding the strength to tackle the next stage of reform remains to be seen.

---

Mr. Van Zorge is a partner in Van Zorge, Heffernan & Associates, a consulting firm in Jakarta specializing in business intelligence and government relations.

The Candidates for Indonesia’s Future Bear a Strong Resemblance to the Past

Jakarta Globe, James Van Zorge, June 18 - When I think about how to describe the current crop of Indonesian presidential hopefuls, I have a vision of the past. All three contenders are, in their own way, creatures of Indonesia’s past. Just a decade into the reform period, the major political figures in this country all came into prominence during the Suharto era. Among them, I see one as a classic Suharto-esque businessman, another as a woman longing for a return to the glory days of her father and the third as a transitional liberal willing to break with the past but uncertain how to do so decisively.

Golkar standard-bearer and Vice President Jusuf Kalla belongs to a class of businessmen who seem to view politics as a branch of the family business. Under Suharto, there was nothing wrong with growing one’s business while supposedly serving the public. In this rarefied Manichaean world, monopolies can be a good thing and competition from outside the club is treated with contempt. This is a conservative world where the tenets of democracy might be tolerated but it is hardly a place of liberal values and policies.

For businessmen who thrived under the Suharto regime, growing an empire was predicated upon the grace of the president and his family. Rent-seeking, not competition and open markets, was the magical key for building wealth.

It is small wonder that Kalla and his cohorts wax eloquently about the Suharto years. More than once Kalla has voiced his opinion that democracy has gone too far in Indonesia. I worry that if he were to have his way, he would more than likely dismantle anticorruption agencies, place a muzzle on the media and clamp down on civil and human rights activists.

Given his personal history and values, it is no coincidence that Kalla has chosen retired Gen. (ret.) Wiranto as his running mate. At a young age, Wiranto was taken under Suharto’s wing and served faithfully as the president’s adjutant. In the eyes of Suharto and his children, Wiranto would have made a perfect successor, mostly because he could be trusted to protect the family’s interests and keep the clan firmly in power.

If you think I am exaggerating, consider this: By virtue of where they sit, crony businessmen think of democracy as an intrusion, an unnecessary import from the Western world and, given the potential stakes, which is the dissolution of an old order they came to thrive upon, something to be inherently feared. In the words of a famous liberal US Supreme Court justice, Louis Brandeis: “We can have democracy in this country or we can have great wealth concentrated in the hands of the few, but we cannot have both.”

Megawati Sukarnoputri, in contrast to Kalla, is far from being an avaricious industrialist. Neither does she dream of returning Indonesia to its Suharto-run past. But for sure, she is thinking deeply about another past — her father’s.

When I first met Megawati in 1997, I asked her about any plans she might have for a political future and what she might consider as a strategy to reach higher office. Our ensuing conversation, with her eyes swelling in pride whenever I raised the name of Sukarno, was most telling: “Of course I will one day be the president. I often have conversations with my father about that. But as far as a strategy, you Westerners don’t seem to understand. I have no need for a strategy. Instead, I rely upon something else: Factor X.”

True to her word, Megawati did eventually become president. And as far as I could tell, she certainly did not have a strategy. What she did have in mind, however, was following in her father’s footsteps, and if you listened to what she said and even the countries she visited when she was president, it was eerily in lockstep with Sukarno’s own philosophies and travels.

Today, there should be little doubt that what Megawati wants more than anything else is to build a sort of Sukarno dynasty. In that sense, she is similar to another famous woman politician, the late Benazir Bhutto of Pakistan, whose father, former Prime Minister Zulfikar Ali Bhutto, was, just like Sukarno, an avowed nationalist with socialist leanings who was eventually ousted by a military coup.

Unfortunately, there are also some striking dissimilarities between Megawati and Benazir. While Benazir experienced, in her own words, some of the happiest days of her life in the West during her university years and hence was decidedly pro-Western in her views, Megawati leans toward the opposite side of the aisle. One can only surmise that perhaps her dislike for the West is linked somehow to her knowledge that the United States was no friend of her father.

What, then, given her background, can the electorate expect of Megawati? There is much we know already from her previous stay in office, and many people would conclude from that experience alone that she would not prove much of a leader. Megawati claims, however, that she has learned from her past mistakes. She has also chosen a dynamic running mate, Prabowo Subianto, also a Suharto-era general, who presumably would compensate for her well-known weaknesses.

Still, one must wonder. Megawati’s life experience can’t be erased. Aloof, an avowed nationalist with a strong aversion toward the West, seemingly uninterested in and incapable of grasping the policy issues that are required of a president, and primarily driven by a dynastic impulse for power, there is little reason to believe that Megawati would be a better president if given another chance.

Finally, there is the incumbent, Susilo Bambang Yudhoyono. How to describe him? I might choose a well-known political figure from the past with similarities to Yudhoyono: former US President Jimmy Carter. Much like Carter, who was also a military man, Yudhoyono’s politics are liberal. Both men are innately reserved and studious. Both are highly educated and considered to be intellectuals.

But the similarities go much deeper. Like Yudhoyono, Carter was criticized while in office for paying too much attention to details. He was also viewed as being indecisive, something which both the Jakarta elite and the electorate recognize as one of Yudhoyono’s most glaring deficiencies. Finally, Yudhoyono shares with Carter an inability to roll up his sleeves and develop the types of political relationships outside the palace grounds that would serve him well in building support for his policies.

If re-elected, many Indonesians are hopeful that, somehow, Yudhoyono will become more assertive and leave more of an imprint and legacy behind him.

Personally, I find it difficult to believe he will change very much in his ways. Adjusting policies is one thing, and there are many examples of presidents who have had second thoughts about their previous stances and took on new courses. But the weaknesses that are so apparent in Yudhoyono are not related to policy. Rather, like Carter, it is a question of character and temperament. Should we expect a mature man entering his sixth decade in life to suddenly and radically change his behavior? Of course not. As the old saying goes, what you see is what you get.



James Van Zorge is a partner in Van Zorge, Heffernan & Associates, a business strategy and government relations consulting firm based in Jakarta. He can be reached at vanheff@gmail.com.

Neo-liberalism a Dirty Indonesian Word

Asia Times, Jakarta, Megawati Wijaya, June 11 - Indonesia's presidential election campaign has swung towards economic policy debate, with challengers to incumbent and frontrunner Susilo Bambang Yudhoyono raising questions about his government's commitment to neo-liberal capitalism and offering voters an alternative "people-based economics", known locally as ekonomi kerakyatan.

Hopefuls for the first round of voting on July 8, Jusuf Kalla, the incumbent vice president, and Megawati Sukarnoputri, a former premier, have both taken critical aim at Yudhoyono's neo-liberal credentials, claiming his pro-market policies have cow-towed to Western business interests at the expense of grassroots Indonesians. Should either manage an electoral upset, Indonesia could see a surge in economic nationalism under their leadership.
Kalla's and Megawati's criticism has been mainly motivated by Yudhoyono's surprise decision in mid-May to tap Bank Indonesia governor Boediono, who is not affiliated with any political party, as his vice presidential running mate. A respected technocrat, the Wharton business school-trained Boediono has earned kudos for his handling of the Indonesian economy, both as Yudhoyono's coordinating minister for the economy and as central bank governor, a post he took up in May last year.

As a minister, he oversaw reforms to Indonesia's outdated 1967 Foreign Investment Law that have facilitated greater foreign participation in the economy. The new law, passed in 2007, simplified the former 150-day investment permit process to a one-stop, 30-day registration process, gave stronger and longer property rights to investors, expanded tax incentives, provided greater guarantees against investment expropriation, and allowed for the free repatriation of expatriate capital.

As central bank governor, his monetary easing, including six interest rates cuts since December, has helped to cushion the impact of the global economic meltdown and promoted more spending at home. While Southeast Asia's more export-geared economies tumble towards recession and negative growth, Indonesia's gross domestic product (GDP) expanded 4.4% in the first quarter this year and is expected to grow at 4.5% for all of 2009.

Last week the International Monetary Fund (IMF) revised up Indonesia's projected growth to 3%-4% from its previous 1-2% forecast, a strong foreign endorsement of the economy's management in tough times. Boediono also served as a finance minister in Megawati's administration and was widely credited with restoring macroeconomic and currency stability after the country went spectacularly bust in the wake of the 1997-98 Asian economic crisis.

At the same time, Boediono's selection has sparked political ripples, including a sense of pique among Yudhoyono's committed coalition partners. The Islamist Prosperous Justice Party (PKS), the United Development Party (PPP), and the National Mandate Party (PAN) have all launched attacks on Boediono's selection. Djoko Susilo, deputy chairman of the PAN faction in the House of Representatives, said Boediono's "neo-liberal Western economic perspective" was not suited for Indonesia's economic situation and that PAN is "suspicious of possible American interference behind the decision" to choose Boediono.

Those criticisms have since been echoed by Yudhoyono's election rivals. Golkar party candidate and incumbent vice president Kalla said that Boediono's neo-liberal tendencies, including the sale of national assets to foreigners, could cause the collapse of the Indonesian economy and turn Indonesians into "migrant workers in their own country". Kalla has instead proposed a "people's economy" approach, entailing grassroots involvement in managing the economy, encouragement of traditional markets and providing micro-finance facilities for small- and medium-sized enterprises.

Meanwhile, Megawati and her running mate, former soldier Prabowo Subianto, have likewise jumped on the populist bandwagon, saying if elected they will emphasize improving the livelihood of those at the bottom of the national income scale, including farmers, fishermen, and small traders at traditional markets. They have vowed to achieve double-digit GDP growth of 10% (compared to Yudhoyono's promised 7% and Kalla's 8%) with "minimum foreign loans and investment".

Yudhoyono's team has defended itself against the opposition's politicized charges. At a press conference arranged by Yudhoyono's election team, his supporters boomeranged the neo-liberal slight onto Megawati, who they noted sold the country's top telecommunications company Indosat and offshore tanks of state-owned national oil and gas company Pertamina to foreign investors during her presidency, which spanned from 2001 to 2004. They also highlighted Kalla's big business background and deals he's brokered with big foreign investors.

IMF legacy
The neo-liberal versus pro-people economy debate has its ideological roots in Indonesia's hard-knocks experience during the 1997-98 Asian financial crisis. The onerous conditions attached to the IMF's US$43 billion bailout package remain hugely controversial due to lingering perceptions they favored foreign over local interests.

Those measures included sovereignty eroding demands to privatize state enterprises, liberalize domestic markets to more foreign competition, and implement trade and tariff reforms that were hugely unpopular among the local commercial elite and economic nationalists. Average Indonesians, meanwhile, faced galloping inflation and lower spending power from a sharply depreciated currency.

When Megawati took over the premiership in 2001, she handed the economic reins to Boediono, who served as her finance minister. In a politically risky maneuver, he shunned economic nationalists in parliament and moved forward with the IMF's neo-liberal prescriptions. Ever since Boediono has overseen Indonesia's deepening market reforms, spanning both Megawati's and Yudhoyono's administrations.

He currently serves as the IMF's governor for Indonesia, a position that gives him the power to vote on IMF decisions and responsibilities for implementing the Fund's policies towards Indonesia. While his dual role and potential for conflict of interests has sparked the opposition campaign against his candidacy, the opposition criticism has been misleading, say some economic analysts.

Since former dictator Suharto's tenure, Indonesia's economic policy has always been a mix of market forces and state intervention, where calibration has always been "a fine tuning process", according to Yohannes Eko Riyanto, a lecturer in economics at the National University of Singapore. Yudhoyono has endeavored to accelerate market reforms, including through the rationalization of the banking and telecommunication industries and overhaul of the Foreign Investment Law.

As a member of the World Trade Organization (WTO) and signatory to various free trade agreements, Indonesia is legally required to dismantle tariff barriers and promote free competition across various local industries. Despite the populist posturing, neither Kalla nor Megawati is poised to drag the country back to the protectionist 1960s, when import substitution and infant industry protection were en vogue.

Ikhsan Modjo, executive director of Jakarta-based think-tank Institute for Development of Economics and Finance Indonesia (INDEF), notes that Yudhoyono's government has incorporated various pro-people policies into its economic mix. He points in particular to the government's direct cash assistance program, fuel price subsidies, and programs that have aimed to encourage economic empowerment, job opportunities and financial independence for grassroots villages.

Both Modjo and Riyanto raise red flags about Megawati's and Kalla's call for more so-called people-based economics, including unaddressed questions about how such policies would be implemented and financed. They also note that the personal backgrounds of both presidential aspirants have historically been more pro-business than pro-poor, despite each candidate's best efforts to cast themselves on the hustings as sensitive to the country's large number of people living under the poverty line.

Some analysts and investors raise concerns about the anti-Western sentiment in both Kalla's and Megawati's campaign message. To be sure, many Indonesians still believe the IMF's neo-liberal prescriptions plunged the country deeper into crisis and prolonged the period of economic suffering. The economy whipsawed from positive 7% growth to negative 13% at the height of the 1997-98 meltdown.

"Indonesians do not want to taste the same bitter pill again,'' said former finance minister Rizal Ramli. "It was an economic depression on a scale we had never experienced since independence from Dutch in 1945," he added.

Economic and financial analysts believe Indonesia is better positioned to weather the current global downturn. Analysts note that Yudhoyono was confident enough in the country's fundamentals to refuse an IMF US$2 billion short term lending facility offer to boost the country's flagging currency at the time of the G-20 meeting in Washington last November. On several measures, Indonesia has weathered the current global crisis better than many of its wealthier, more export-oriented regional neighbors, including Singapore, Malaysia and Thailand.

Although the neo-liberal versus pro-people economic debate is largely politicized, they also reflect your average Indonesian's worries about the economic future, say analysts. While economic growth has held up relatively well, due to resilient local markets, local industries such as steel and textiles have repeatedly asked the government to tighten import barriers and encourage "buy local" provisions to help them survive the downturn.

More significantly, the gap between rich and poor has recently widened and Yudhoyono has plainly failed to meet key economic targets set in the beginning of his tenure. Both Yudhoyono and Kalla promised to reduce unemployment, which peaked at 9.9% in 2004, to 5.1% when their term expired. The current unemployment rate still stands at 8.5%. Meanwhile the percentage of people living below the poverty line is stuck at 15.4%, down from 16.7% in 2004, but lagging badly behind their set goal of 8.5%.

Yudhoyono kicked off his campaign for a second term last week by saying that a "just and equitable" economy will be his priority if re-elected. He also introduced a new catchphrase to counter the neo-liberal mudslinging, a policy approach he referred to as the "middle-way" economy. Indonesia will not surrender everything to the free market, he said, but would embrace the efficiencies of a well-functioning market mechanism while ensuring more equitable wealth distribution.

According to opinion polls, Yudhoyono has hit the right economic notes. A recent poll conducted by the Indonesian Survey Institute showed that Yudhoyono's popularity now hovers around 70%. To narrow that gap, Kalla and Megawati are expected to attack his economic record during the three rounds of upcoming presidential debates to be telecast live on national television.

Pollsters and analysts say Indonesians are concerned mainly with bread and butter issues that directly affect their livelihood and are unlikely to be swayed by abstract philosophical debates over neo-liberal and people-based policies. And if the preliminary polls have it right, the election is Yudhoyono's to lose.

"Rather than debating on economic philosophy, the challengers should concentrate on elaborating their own concrete policies to fight the country's most urgent problems: poverty and unemployment," said Modjo.

Megawati Wijaya is a Singapore-based journalist. She may be contacted at megawati.wijaya@gmail.com

Source - http://www.atimes.com/atimes/Southeast_Asia/KF11Ae01.html

Indonesian Presidential and Vice Presidential Candidates

The three campaigns now have their own websites. Timothy Simamora kindly provided the URLs to me via Facebook. Here they are. I've appended the Alexa traffic ranking for today in each case. The rankings add another set of numbers to public opinion polls in Indonesia. Lower numbers mean more traffic. Like most of those polls, it looks like a walkover for SBY-Boediono. Their site gets a surprising high level of traffic for an Indonesian political site.


Susilo Bambang Yudhoyono-Boediono
http://sbypresidenku.com/
Alexa ranking - 59,778

Megawati Soekarnoputri-Prabowo Subianto
http://megaprabowo.com/
Alexa ranking - 1,563,135

Jusuf Kalla-Wiranto
http://jk-wiranto-2009.com/
Alexa ranking - 3,364,705

Looks like money, and even long-established branch networks, don't conquer all. But iit remains a politics of personality system.