Tony Sitathan, Singapore – After last October's bombing in Bali, Indonesia's foreign investment was hit hard, sliding to a record low. According to the Investment Coordinating Board (BKPM), foreign direct investment (FDI) approvals plummeted by 35 percent to US$9.7 billion last year from $15.06 billion in 2001.
Many hope that the FDI slide will be reversed when foreign investors realize that Indonesia is not a political hotbed of contention, nor is its economy inherently unstable like some in South America and Central Africa. "When you compare the banana-driven economies of South America or the political turbulence in Central Africa, Indonesia still has tremendous natural resources and is ... a member of the Non-Aligned Movement and ASEAN that has both the support of the West as well as its fellow Asian member countries," said Agung Wahana, economics professor at the University of Gajah Mada in Central Java.
He was also confident that once the general elections are over in 2004, Indonesia will be better prepared to plan for its future and rebuild its national economy that has so far been plagued by rampant corruption. "You just take the case of Bulog, the state logistics agency that is responsible amongst many things for distributing cheap rice to villagers. During the recent floods it was discovered to the anger of many villagers that broken rice of up to 65 percent was distributed. Such quality of rice is not fit for human consumption but only for poultry feed," he said. "There are no checks and balances and the state coffers are plundered to provide Bulog such subsidies so that government officials can afford to line their own pockets without any concern for the poor villagers," he added.
It's not a new phenomenon, but it is hoped that such things will be ruled out when the new government comes into power next year. But Indonesians will have few real choices in the election, as the incumbent parties, according to several political analysts, are already firmly entrenched.
According to political analyst Peter Sayers, who has been based in Jakarta for the past three years, there seems to be a dearth of good candidates as well as parties that are free from blemish. "There are the incumbent parties like the Indonesian Democratic Party Struggle [PDI-P], Golongon Karya [Golkar], United Development Party, National Awakening Party, National Mandate Party and several other parties that are on the sidelines, like the People's Democratic Party, National Labor Party, Crescent and Star Party and the Army coalition. However, all of them offer something altogether different from the rest. What they offer seems to be keeping the status quo intact despite the fact that it would be the first time in history that the general public instead of the powerful Assembly would be electing their president," he said.
For many the 2004 presidential elections will be a watershed election that many hope will usher in a new period of national economic growth, distasteful as it may seem but similar to the economic growth as experienced under former president Suharto. Indonesia achieved steady economic growth of more than 6 percent for almost a decade and during that time the Jakarta Stock Exchange (JSE) saw market capitalization of companies reach almost US$117 billion by 1997. "Compare that to now, where even achieving a 2 percent growth for 2003 is uncertain while JSE market capitalization has dropped by almost 70 percent," remarked Iwan Yoniton, a stockbroker from Bahana Securities. "Indonesia needs a sense of unity and a common goal to accomplish its mission. With so many differing views prevailing among the various parties and the constant infighting between party stalwarts, there is a serious lack of national solidarity needed to drive Indonesia forward."
Even now the unity between the various parties and their factions has caused splits among the various political parties. Two of the largest parties, PDI-P and Golkar, are already facing intense internal pressure to change.
Golkar is experiencing a generational power struggle between the older, more conservative elements of the party that support Akbar Tanjung as its secretary general and the younger elements that prefer to elect someone without close affiliation with Suharto's regime. Akbar Tanjung has been indicted for corruption, accused of diverting funds intended for Bulog to Golkar during elections. He has refuted the indictment and is seeking to quash it in the Supreme Court of Appeals. PDI-P on the other hand is embroiled in an internal power strife between various ministers who are seeking to discredit one another. Kwik Kian Gee, State Minister for National Development Planning, has openly declared his own party, PDI-P, to be the most corrupt in the country. He said that such high levels of corruption would cause the party to disintegrate even before the 2004 elections.
Such grim charges were caused by what he felt was the ineffectiveness of combating corrupt tycoons who he said were nothing more than criminals who headed "black conglomerates". He was also displeased with a newly passed rule that allowed those who misused state loans to settle out of court once they had reached a payment deal with the government.
Kwik stirred up a hornets' nest in Jakarta, where money politics runs thick, when he decided to break with the party whip. He got an immediate reaction from Laksamana Sukardi, the state minister for state enterprises supervision, as well as several other PDI-P stalwarts including Taufik Kiemas, the husband of President Megawati Sukarnoputri; Taufik promptly labeled Kwik a traitor as well as being senile.
According to a source within the rank and file of PDI-P there have been unconfirmed reports that Megawati's party has managed to amass as much as Rp72 trillion in funds collected by party sympathizers as donations as well as by illicit means for its electioneering war chest. According to Zulfikar Hussain, a prominent lawyer in Jakarta, money politics is a necessary element in elections to buy votes. "Normally whichever party can give the most money to those in the Assembly and their cohorts of supporters determines success or failure. It has been going on since the days of Suharto but only now, due to the growing importance of regencies, legislators and assemblymen, the fee for [party] support has magnified by leaps and bounds," he said.
Money politics aside, it would be interesting to see Megawati's reaction when she sees the full and complete audit of personal assets and wealth of all senior state officers, including ministers, before the 2004 elections. It is to be hoped that she is prepared for many from her party to be called up for an explanation. Then there is the silent majority that is still waiting to cast its vote. Will they elect the still popular incumbent President Megawati and her party for another four years? Or will they be looking for someone more articulate and forceful in making decisions, someone who can take charge and call a spade a spade?
"By combining the leadership styles of an industrious motivator like the Thai Prime Minister Thaksin Shinawatra or paternalistically forceful like the former president of the Philippines Fidel Ramos or being politically adept to domestic changes like the Malaysian Prime Minister Mahathir Mohamad or as forward-looking as former Singapore prime minister Lee Kuan Yew is what someone would call a 'rounded personality' to take on the wings of government in Indonesia. But again having such qualities in a single person is rare," maintained Sayers. It would be easier to find a team of ministers that has such qualities and just one capable president to run a stable Indonesia without any political hangovers. More important, the next president has to create the right investment climate for foreigners to participate in and promise high returns on FDI besides promising peace and stability.