Tuesday, April 14, 2009

The emergence of Indonesia

Tuesday April 14, 2009


Indonesia’s President Susilo Bambang Yudhoyono stands poised to lead Indonesia to the forefront of global players alongside Brazil, China and India.

THE global financial crisis is spawning – and exacerbating – an equivalent set of political shocks.

Over the next year or two there will be winners and there will be losers both globally and regionally, and the recent G20 meeting in London was as much about determining which nations would emerge on the right side of history.

For us in South-East Asia, with our trade-dependant economies, the impact has been near disastrous.

Moreover, nations such as Thailand, Malaysia and Singapore, with their rigid and inflexible political systems, are suffering an added whiplash as their respective peoples’ question the wisdom of age-old social contracts.

At the same time, the economic slowdown has laid bare deep-rooted divisions of class, race and geography that haunt our societies.

That this should be happening to the more stable nations within Asean is testament to the extent to which this crisis is upending the verities of global business.

This in turn is shaking the confidence of their respective elites – especially in Malaysia and Singapore – who’ve long proclaimed the wisdom of their model, namely, a combination of top-down, economic growth and limited civil liberties: in short “work damn hard and don’t ask questions, bro”.

As South-East Asia undergoes this painful transition, the centres of power and influence within our region are also shifting. Singapore will decline and Indonesia will emerge as the next power-house – witness the invitation list to the G20.

The city state’s economy with its extreme dependence on its neighbours’ weaknesses – in terms of regulatory frameworks, law and order and corruption – is undergoing considerable stress especially now, as Indonesia with Sri Mulyani as economic czar struggles to improve its internal governance and tax collection.

Moreover the global mood against off-shore financial havens is biting deep into the republic’s raison d’etre.

Geo-politics and economics are stress-testing the internal resilience of our nations. Countries that change with the times will prosper; those that won’t will get left behind.

In Malaysia, we’ve experienced an underwhelming transition followed by a set of by-elections that have reinforced March 2008’s political equation and the Barisan Nasional’s reversals.

Our new Prime Minister, Datuk Seri Najib Tun Razak, is a smart, well-read man.

Still we have to ask the following questions: Can he curb the mounting racial exclusivism within Umno long enough to start winning back the non-Malay heartlands?

Or have PAS and PKR already supplanted Umno as the preferred guardians of minority rights?

Can he continue to keep west and east Malaysia on separate political trajectories – especially given Sarawak’s impending state elections?

Will an enthusiastic media championing his “One Malaysia” concept make any difference given the rakyat’s deep distrust of established authority?

Has the Malay elite (my class), like its Thai equivalent (my good friend Abhisit’s class), become so obsessed with retaining power that they (we) no longer see the manifest injustice of what they (we) are doing?

In Singapore, too, a Cabinet reshuffle has taken place but, again, one has to question whether this will improve the flagging fortunes of the ruling PAP.

No one denies that its new ministers, like incoming Deputy Prime Minister Teo Chee Huan, are capable individuals. Nonetheless, we have to ask: have the resources and ingenuity of the Lee dynasty finally met its match?

Will the city-state’s investment banker-obsessed elite follow Lehman Brothers into perdition? Can they cope with the seething resentment of ordinary people who want to know what has happened to their nation’s wealth.

The situation across the Causeway calls for a radical remaking of the entire politico-economic model. Likewise, the events in Thailand last weekend should be instructive.

The storming of the East Asia Summit by pro-Thaksin “Red Shirt” demonstrators is a fatal blow to Abhisit Vejjajiva’s fledging Government and to Thailand, which once had aspirations of regional leadership.

It also shows how little Asean means to the average South-East Asian.

Abhisit failed to manage the disastrous rural-urban divide in Thai society. Instead he hid behind the fading power of the Thai monarchy and military rather than face the people and seek a legitimate popular mandate.

The one bright spark, on the other hand, is Indonesia, long-despised as a morass of instability. The recently-concluded legislative elections there have been a triumph of democracy.

The vast archipelagic republic is also showing signs of surprising economic resilience buoyed up by the sheer scale of its gargantuan domestic market.

President Susilo Bambang Yudhoyono (SBY), whose party, the Democrats, look set to win the legislative polls and who is now poised for re-election as President, will inevitably consolidate power and authority.

Genuinely popular, he will have a historic opportunity to lead Indonesia to the forefront of global players alongside Brazil, China and India.

Nonetheless, we need to take a reality check. SBY’s nation still has a long way to go in many regards. Corruption, while on the retreat, remains rife and the emerging scandal over alleged electoral improprieties means that countless issues remain unresolved.

Nevertheless, the freeing of the public sphere via open debate and a free press, as well as the decentralisation of power to the provinces and districts has thrown open a world of possibilities.

Democracy hasn’t destabilised Indonesia, it has made it strong.

SBY may well become a latter-day Suharto, a dominant sultan-like figure towering over the landscape. However, his authority is derived from his popular mandate, and that can quickly be eroded.

Hence these several case-studies. The nations that have been bold in reforming themselves by empowering the people (and dis-empowering the elites) are on the rise.

The ones that cling to the past now stagnate. Like it or not, Indonesia is back on the global map. Jakarta may well become South-East Asia’s dominant centre of power and influence.(*)