Jakarta – The Indonesian government will be unable to introduce meaningful legal or political reform if the army remains involved in politics, a US academic expert on Indonesia said here Thursday.
"Anybody who believes there's going to be any legislative or political reform unless the army withdraws from politics is dreaming," University of Washington Indonesia expert Professor Daniel Lev told a seminar on bankruptcy.
Lev was also quoted by AFX-Asia, an AFP financial affiliate, as saying that Indonesia's legal paralysis dated from the late 1950s, prior to which it had a parliamentary democracy and the law was functional.
But with the increasing influence of the military during the later years of the rule of former president Sukarno, particularly during his so-called Guided Democracy, the law was "systematically and sometimes brutally" undermined, he said.
"By 1965, by the end of Guided Democracy, all of the major institutions of the legal system were destroyed," Lev told the seminar.
He said when president Suharto, a military man, took over and centralized power around himself and the army, all pretense at a rule of law was virtually abandoned.
"The president and judges became corrupt in ways that were beyond imagination," Lev said. "The legal system that existed in the New Order (Suharto era) was not a legal system at all, it was part of a bureaucracy."
Until the institutions that underpinned the old legal system were resurrected and the judiciary overhauled, legal reforms such as the revised bankruptcy law will face difficulty, he said.
"Let me say bluntly again that whatever is happening now – there are various efforts at new legislation and there are very good people working on this legislation – it's a little bit silly to talk about reform so long as there is no way of implementing the legal base of the reform," Lev said.
"There is no institutional base for the legal system right now. None. And before there will be one, there has to be fundamental political (reform)," he said.
"That is, in effect, there has to be something like the parliamentary system of the '50s before anyone can expect a real legal system; that is, an autonomous legal system, to begin to emerge."
Lev said he believes Indonesia's new commercial court system was "doomed from the outset" unless the government was prepared to undertake a proper overhaul of the judicial system.
In addition, the ministry of finance needed to do a more thorough check over of the country's banks before the commercial courts got underway.
He also warned of a possible nationalistic backlash to the country's current bankruptcy laws.
"If you look at the history of bankruptcy laws around the world ... you notice that it's always made with totally internal economic considerations in mind," Lev said.
"That is not the case here, and there is a perfectly good reason for people to suspect that those whose interests are most represented here are foreign creditors and that some of the assets ... will disappear into foreign hands."
Lev criticized the decision to chose judges from existing courts. Commercial courts, he said, would have been better served if they had used private sector consulting lawyers, who are more familiar with laws affecting commercial transactions, property, debt and bankruptcy.
"Not only do they (consulting lawyers) know commercial law, but they are relatively independent themselves," Lev said.
"It's not that they are clean – consulting lawyers (can be) wonderfully corrupt ... we shouldn't kid ourselves about that – but they are more likely to do a good job."
Indonesia's bankruptcy court was only set up in August last year under the wide-ranging economic reform pledged to the International Monetary Fund in return for multibillion dollar aid package to help the country overcome its current crisis.