VIdeo scandal ... the torture of Papuans remains unpunished.
JAKARTA: In September the Indonesian leader, Susilo Bambang Yudhoyono, was moved to write to Barack Obama.
He was agitated about the plans of the Florida pastor Terry Jones to burn Korans on the anniversary of the September 11 attacks. If allowed to proceed, it would ''humiliate'' Muslims around the world and threaten world peace, Dr Yudhoyono told the US President.
The sentiments were a reflection of how many people felt, but in the country with the world's largest Muslim population the reaction was somewhat unexpected. Dr Yudhoyono came under fierce criticism from the mainstream media and tens of thousands of Indonesians who took to social media to vent their displeasure.
The reason? For much of the previous six months in Indonesia there had been an alarming escalation in attacks by hardliners on Christians and followers of Ahmadiyya, the minority Islamic sect with some 200,000 members and a history in Indonesia going back to 1925.
While the rants of a fringe preacher on the other side of the world upset him, Dr Yudhoyono had been silent about the surge in sectarian violence in his own country.
In many ways, the incident was emblematic of so much of what was disappointing in Indonesia in 2010. A year when the economy motored along but when worrying signs emerged that the very Indonesian values that earned Mr Obama's praise when he visited last month - democracy, tolerance and ''unity in diversity'' - were under pressure.
Indonesia remains an overwhelmingly moderate country, but religious violence has risen, directly aided and abetted at times by the police force. Dr Yudhoyono's response, when it came, was to appoint a new police chief with close ties to militant Islamic gangs linked to attacks on Christians.
Concerns about the security services were further inflamed when soldiers were captured on video torturing prisoners in Papua. Despite swift condemnation and assurances of justice by Dr Yudhoyono, the soldiers remain unpunished.
Meanwhile, Indonesia's leading reformer, the former finance minister Sri Mulyani Indrawati, was forced to quit due to pressure from Dr Yudhoyono's coalition partners, including the head of Golkar, Aburizal Bakrie, whose companies were under investigation by Dr Indrawati's ministry for unpaid taxes.
Despite Dr Yudhoyono's thumping election win on the back of an anti-graft platform, the fight against pernicious, ingrained corruption faltered. Almost no legislation of note passed through parliament.
As Dr Yudhoyono's spokesman, Daniel Sparingga, remarked to The Jakarta Post this month about the year in politics: ''We have achieved almost nothing of substance, to be honest.''
For investors though, corrupt officials are an inconvenient part of doing increasingly lucrative business. Much of the economic growth in Indonesia has been driven by resource extraction aided by rising commodity prices. Gas, oil, coal and palm oil production is booming.
But the country's burgeoning middle class and pool of cheap labour are also attracting foreign investors, anxious to tap into a market of more than 240 million people and a workforce where the minimum wage is less than $200 a month.
Foreign direct investment rose by a third to $14 billion in 2010, while the sharemarket picked up 40 per cent.
Investors like Indonesia's relative stability. And it is remarkable, given the chaos of 1998 that heralded Indonesia's adventure in democracy.
Still, while every man and woman has the vote and elections are fair, the institutions that underpin that democracy - the parliament, the judiciary, security forces and bureaucracy - are deeply corrupt and inefficient.
Graft, the selective use of the rule of law and crumbling infrastructure remain a curb on Indonesia's growth. If - when - the terms of trade shift unfavourably and the hot money retreats, the continued failure to tackle these scourges is likely to be felt more keenly. By Tom Allard, Jakarta, for The Sydney Morning Herald
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