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Indonesia: Miracles, Hopes and Worries

OurIndonesia – An old article by prominent Indonesianist William Liddle catched my eyes recently. It is included in a collection of Liddle’s articles on Indonesian politics entitled Leadership and Culture in Indonesian Politics (1996).

Liddle is widely known in Indonesia for his almost-regular columns he contributed to Indonesian media and for Indonesian students he tutored in Ohio State University Columbus who, after returning home, become prominent pollsters and pundits of Indonesian politics. They include well-known names such as Saiful Mujani, Rizal Mallarangeng, Denny JA and Doddy Ambardi.

The article I referred to was published in 1994, three years before Indonesia was hit by Asian economic crisis that brought the three-decades old authoritarian regime down. Its title is quite intriguing: “Can All Good Things Go Together? Democracy, Growth and Unity in Post-Suharto Indonesia?”

Liddle wrote his article in a time when prospect of Indonesia’s transition to democracy was vigorously debated and discussed among intellectuals and activists. His tone was rather somber and pessimist. Many, back then, were mostly skeptic as to whether Suharto’s regime was to collapse soon. The state, so went the wisdom if that day, was too strong and the non-state actors/civil society were too fragile and internally fragmented.

There was, even worse, an ijma’ or consensus among Asianist that high economic growth in East Asian countries (including Indonesia) was made possible only by what was called an authoritarian-corporatist state. This is given solid proofs by the experiences of countries like Singapore, Taiwan, South Korea, and (to certain extent) Hong Kong. This consensus was certainly to the big amusement of Suharto’s regime, giving it a “scholarly” justification for its wanton practice of authoritarianism.

Pak Bill (as he is dearly addressed here) attempted in the above article at blowing a breeze of optimism. What he wanted to say can be summarized as follows: There is hope for Indonesia to transition into democracy, while still maintaining two other good things: rapid economic growth and territorial unity – what is termed here NKRI (Negara Kesatuan Republik Indonesia, The United State of Indonesia). In other words, all-good-things-go-together experience is not peculiar to American history, but may include Indonesia.

Some of what Liddle said in the article turned wrong, but most of his predictions were generally right. First of all, he was right when he predicted that Indonesia would eventually democratize while maintaining high annual economic growth. Except for East Timor, territorial unity was successfully kept intact despite pockets of secessionism in some remote provinces. This is what I call Indonesian miracle, and, yes, it shows also Liddle’s sharp and prescient observation of Indonesian political trends at that time.

Certainly, there is an unmistakable tone of pessimism and worries in Liddle’s article, sharing every one else’s worries in Indonesia in that era. I can detect some worries that troubled people like Liddle and others as follows.

First worry: Is Indonesia truly able to maintain high economic growth (around 7-8% per annum) when it transitions into democracy? As I had indicated, many people in the academia, business circle or general public came to believe that the prerequisite for rapid economic growth hinges on, as Stephan Haggard says in his Pathways From The Periphery (1990), a regime that manages to insulate itself from the mass pressures.

As Indonesian know all too well, the worry turned wrong. Indonesia changed drastically in 1998, transitioning into democracy, consolidating it, while at the same time maintaining the existing level of high economic growth. It is true that during the first few years into democracy, Indonesian economy faltered, but eventually managed to resume afterwards, particularly during the administration of President Susilo Bambang Yudhoyono (2004-2014), scoring a constant economic growth of 5,5-6% for ten consecutive years.

As to why Indonesian economy grew as such high pace despite rancorous political life that ensued after democracy, it is a long story and needs separate treatment. To cut the story short, let me enumerate few factors that made it possible: government’s success to maintain political stability, keeping political openness on track, preventing it from falling into sectarian politics, high domestic consumption (due, in most part, to robust domestic market) and the booming of commodities in the global market.

Certainly, there are certain legacies from the past regime that makes the job of post-reform government a bit easier in handling economic challenges. That includes policies such as fiscal prudence by keeping deficit in the national budget at low level (between 2-3% of GDP), price stabilization and fairly low inflation rate, apart from maintaining economic predictability by regularizing practices and rules, both in political and economic life, to secure confidence from the business society.

Second worry: Will democracy not trigger sectarian politics, narrow identity-based conflicts, be it religious or ethnic? Liddle’s tone was rather gloomy and pessimist. He, for instance, suspected that Islamic political parties blooming after “reformasi” would facilitate the resurrection of long-gone aliran (stream) politics – these political practices that marked heavily political life in 50s based on religious, ethnic and class affiliations.

This practice had for long been thought of as the source of political instability. Suharto’s regime always used this as a pretext for keeping people away from being involved in political activities that may instigate sectarian sentiments (called SARA), which tended to be self-destructive.

Liddle’s skepticism turned entirely wrong. Instead of provoking sectarian politics, Islamic parties contribute productively to the strengthening of Indonesian democracy. Muslim voters which constitutes biggest voting bloc in the election (so far there were four elections after democratized Indonesia) see democracy with strong approval. Islamic parties do not in any way promote sectarianism in Indonesian politics.

Source of sectarianism stems rather from different actors, but they are certainly not from within Islamic parties. They are un-civil actors who use religious language and sentiment to promote hatred and suspicion towards others with different faiths or interpretation of religious text. They include among others the jihadist/radical organizations such as The Jamaah Islamiyya (JI), or religious vigilante groups that took pride in raiding places they deem “sinful” such as FPI (Islamic Defender Front).

Despite some weaknesses here and there, the post-reform government manages to stem this radicalism with great success, disrupting the terrorist and radical network, putting perpetrators of sectarian violence into jail, including Abu Bakar Baasyir, the allegedly spiritual leader of JI.

Again, this is another Indonesian miracle. Experiences from other Muslim countries such as Egypt and Iraq, for instance, show that freedom and democracy can be the spring-board for sectarianism and illiberal politics as thoroughly discussed by Fareed Zakaria in his The Future of Freedom (2007).

Luckily Indonesia, in many respects and in a miraculous manner, survives the descent into this pitfall. I do not say that signs of sectarianism never flashed up in Indonesian politics, but the sober and moderate religious sentiment always prevails.

Third worry: Will Indonesia succeeds to maintain territorial unity as it democratizes? Will it not be falling into the balcanization syndrome in a way that is similar to what occurred to Yugoslavia and Soviet Union? Will democratization provoke ethno-nationalism which may put the unity of Indonesia in jeopardy? Is it not going to ignite separatism in provinces which harbored such sentiments for long time?

As we all know, this worry is proven wrong too. Indonesia surprisingly survived the balkanization by devolving more powers to provinces and districts in what is called regional autonomy (otonomi daerah). The credit for this must be accorded to certain figures such as Prof. Ryaas Rasyid and Dr. Andy Alfian Mallarangeng who brought up the discourse of regional autonomy into Indonesian political conversation in the wake of democratic transition.

We should be also grateful for the roles played by two post-reform presidents who succeed to insure the smooth execution of the autonomization of Indonesian political structure: BJ Habibie and Abdurrahman Wahid (aka Gus Dur).

The last worry has to do with the biggest political force in Indonesia’s New Order, ie ABRI (now TNI) or Indonesian military – what Liddle termed the Indonesian leviathan. Transitionist scholars such as Juan Linz, Alfred Stepan and others had come to conclude that one of the biggest obstacles to successful democratization is powerful veto-players such as military. Will they be ready to give up political privileges, bowing to civilian supremacy?

Many were skeptic in those years that Indonesian military will strike a deal to compromise, which turned again wrong. It surprised many that the military did not only made compromises, but also managed to launch a radical internal reformation, thank in most parts to roles played by reform-minded generals such as Susilo Bambang Yudhoyono and Agus Widjojo. One of the biggest compromises Indonesian military had made is to jettison what is called the dual-function (dwi fungsi) which allows military’s deep entrance into civilian politics.

For me, this is the most miraculous thing to happen in Indonesian politics. Many believed during the apex of New Order’s power in 80s that ABRI is the bulwark of Indonesian authoritarianism that never flinchs. But this belief is proven wrong as the military took a surprising step to resign back to barrack, succumbing to civilian supremacy. A recent development in which the current government of President Joko Widodo (aka Jokowi) showed signs of bringing the military back into civilian politics during few turbulent months into power in 2015 is certainly of deep concern.

Certainly, all of this does not in any way mean that Indonesian experience with democracy wraps up with a happy ending, with all good things going together, without problem, or worries. That is not the case, for sure. As Goenawan Mohamad, the Indonesian prominent poet, ever said, “Indonesia is the un-finished project”. The story is not yet over, and there are many worries we should be concerned with.

One of these has to do with the prospect of economic growth and prosperity. Big question here is whether the post-reform government is successful in keeping the growth at a high rate to ensure the employment of ever-increasing number of new workforce entering into labor market every year.

Economic growth is extremely crucial to maintaining people confidence in the plausibility of democracy as a system that will guarantee the prosperity for the people. Failure to live up to this popular expectation will certainly erode trust in the system, which means bad news for the consolidation of Indonesian democracy in the near future.

People’s moods turn a bit somber these days as Indonesia is struggling to cope with the slowing down of economic growth in the first and second quarter of this year (below 5%), in addition to plummeting value of rupiah against the greenback. The Fed’s next plan (probably in September) to end the easy money to bring dollars back home would certainly put much more pressures on Indonesian rupiah, a situation that makes the purchasing power of Indonesian household even lower.

Another worry that bothers many Indonesian economists is whether Indonesia is capable of avoiding a fall into the “middle income trap”. Indonesian income per capita today is around $4000 USD. For sure, Indonesian economy survived the turbulence of two major crises in 1997 and 2008, scoring a steady high economic growth for ten years.

The question is whether this growth can be maintained at more or less same level for a period of time that allows Indonesia to survive the trap, following the trajectory of South Korea. Judging from the global slow-down in the global economy today, the prospect of high growth is seemingly over for countries like Indonesia, unless the government successfully devises smart and creative policies.

In the mean time, we can only hope that Sadli’s wisdom of “hard times make good policies” still hold. (Note: Prof. Sadli is prominent Indonesian economist who held multiple ministerial posts during Suharto’s time).

Can Indonesia escape this middle income trap? Only time will tell. As many Indonesian say: Wallahu a’lam!