Wednesday, March 31, 2010

Indonesia's Place in the Global jungle

Its people agree that their democratic country should play a bigger global role; but what?

BY DINT of size, population and potential wealth, Indonesia has long loomed large over its own backyard. The archipelago nation bestrides the world’s busiest sea lanes. Some 231m Indonesians account for two-fifths of the population of ASEAN, the ten-country Association of South-East Asian Nations. A young and reasonably educated population offers perennial promise, as do vast deposits of oil, gas and minerals, forests and palm-oil

plantations. For all that ASEAN operates according to its famed consensus, Indonesia has been its stealth leader.

But President Susilo Bambang Yudhoyono has bolder aspirations. A liberal internationalist, Mr Yudhoyono convincingly won a second term last year, and monopolises the foreign-policy apparatus. He has brought Indonesia closer to Australia, its big southern neighbour with which it has a troubled past. He was supposed to have signed a “comprehensive partnership” with Barack Obama by now, but the American president delayed the trip in order to push his health-care reforms through Congress.

Mr Obama will return in June. He spent four boyhood years in Jakarta and a huge welcome awaits his pulang kampung (homecoming). Before then, Indonesia will mark the fifth anniversary of another (this time “strategic”) partnership, with China, when the prime minister, Wen Jiabao, visits in late April. Indonesia, Mr Yudhoyono likes to say, has “1,000 friends and zero enemies”.

Indonesia now wants to raise its diplomatic game, acting the part of a regional power with a global impact. One sign of this is a desire to be ranked among the BRIC economic club of Brazil, Russia, India and China. Another is to send peacekeepers as far away as to Lebanon and Darfur. A third is Mr Yudhoyono’s admirable wish to make democracy and human rights a plank of foreign policy. But the country’s rising ambitions are best epitomised by more urgent talk about how Indonesia can capitalise on its membership of the G20 group of major economies.

A powerful impetus for all this comes from its Asian neighbourhood. In both economic vitality and security importance, Indonesia pales beside both China and India. China’s rise from regional to global power poses the biggest challenges for Indonesia, as its policymakers see it. But it is India’s √©lan, both in terms of its economy and a newly polished image, that has got Indonesians worrying about their own image.

Compared with Indonesia, India has even more atrocious infrastructure, more intractable insurgencies, more terrorist attacks, and often awful relations with neighbours. Yet investment and tourists pour unfairly in, Indonesians complain.

Meanwhile their country, a largely peaceable place with few terrorist attacks since the Bali bombing of 2002, is deemed unstable—and with a negative Muslim identity to boot. Australia, for all the improvement in relations in recent years, nevertheless advises nationals to “reconsider your need to travel to Indonesia”. Total Australian investment in Indonesia is less than it was in 1996. An Indonesian cabinet minister says that his country needs to change perceptions by aping India’s “Incredible India” promotion that took Davos and the business world by storm in 2006.

Foreign perceptions are unhelpful in other areas too. The commonest description you hear when Indonesia is praised by Americans—that it is the world’s most populous Muslim democracy—is a tag that thinking Indonesians chafe at. They think it limiting and certainly misleading. Indonesia prides itself on being a secular state that happens to have a Muslim majority. Moreover, they say, America is fooling itself if it thinks that Indonesia’s brand of Islam can help the superpower with its problems in the Middle East, Iran or Afghanistan, where faraway Indonesia’s syncretic practice is as likely to be abhorred as admired.

As for the elevation of the G20 to global prominence, Indonesians sometimes appear hardly able to believe their luck. The question is what they can do with it. On the one hand, Indonesia weathered the global financial crisis that gave the G20 its sense of purpose. On the other, it did so because Indonesia is still shockingly ill-integrated into the global economy. Besides shoddy infrastructure, it has an economy distorted by subsidies, a business climate hostile to foreign investment and a bureaucracy and legal system shot through with corruption. With a bit of joined-up reform, which after six years of stops and starts Mr Yudhoyono may be on the point of beginning in earnest, Indonesia’s annual growth would surge from the present (admittedly respectable) 4.5-5.5% to rates closer to India’s or China’s.

Leadership begins at home

More than most admit, Indonesia’s international ambitions rest on shaky domestic foundations. Mr Yudhoyono has committed Indonesia to sweeping cuts in emissions of greenhouse gases, risking unpopularity among other developing nations. But thanks to widespread deforestation, much of it illegal, the country remains among the world’s biggest emitters.

And despite the admirable advances of democracy and of sound fiscal management, prosperity is not entrenched. One in seven Indonesians still lives below the poverty line, and many more perch perilously just above it. By several measures of development—life expectancy, health care, sanitation—Indonesia scores well below the middle-income country it is.

Poor governance at home has a bearing on soft-power aspirations abroad. A reputation mainly for having resources to plunder colours the views of Indonesia by India and China, huge buyers of Indonesian commodities. In countless areas, from illegal logging and fishing, to climate change, people-smuggling and extremism: a failure to prosper at home would turn the spotlight away from Indonesia’s desire to solve global problems, and towards its capacity to generate them. Banyan Blog The Economist

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