Thursday, July 7, 2011

Indonesian Indicators

Fortunes rise and fall, reputations wax and wane and Indonesian public life remains as dynamic and unpredictable as ever. Three separate and unconnected events over the past few months suggest the extent to which the republic’s political landscape could be about to experience yet another major shift.

First and most strikingly, in Thailand, Yingluck Shinawatra, the younger sister of political exile and telecom tycoon Thaksin Shinawatra, stormed her way to the Thai premiership last weekend with her party winning an unprecedented absolute majority, capturing 265 of 500 seats in the general elections. Drawing on her family’s considerable wealth and utilizing a vague if upbeat political message (offering tablet computers for all rural students!), her supremely coordinated campaign — reminiscent of a national product launch — outclassed the sober, soft-spoken and intellectual Democrat candidate, Abhisit Vejjajiva. Yingluck’s remarkable showing underlines the potential of overcoming a residual distrust of the super-rich.

Second, the ongoing implosion of President Susilo Bambang Yudhoyono’s once-dominant Democratic Party reminds us that in the post-Reformasi era, no political party has been able to win an outright majority of seats in the national legislature in successive elections. The uncertain standoff, with Muhammad Nazaruddin having absconded to Singapore (and now possibly elsewhere), at the heart of Yudhoyono’s electoral machine does not bode well for 2014.

Finally, the corporate maneuvers at Indonesia’s largest coal mining company, Bumi Resources, resulting in a reverse takeover of Nat Rothschild’s listed investment vehicle, Vallar, sees a prominent local business dynasty — the Bakries — securing a prestigious London listing for their corporate jewels. This will herald in a period of higher valuation and easier debt management, as well as the challenges of more stringent corporate governance and compliance.

These events should make us reassess our views of domestic politics. It may be time for observers to track the second-largest political party, Golkar, and its leader, Aburizal Bakrie, more closely. Its relative silence while the Democrats have been publicly flailing hints at Golkar’s mounting confidence and resolve. As one Golkar cadre told me, “Why get involved in other peoples’ internal problems? We have our own agenda going forward.”

So what are the factors that we should be looking out for?

First, it’s the movements on the ground, especially outside of Jakarta, in the provinces where the country’s natural resources are located. Unlike the Democrats, who have only emerged in the past 10 years, Golkar is embedded in provincial life. In short, the banyan tree party is deeply rooted and here to stay. Decades of interaction and engagement with local bureaucrats, community leaders and businessmen, as well as the close relationship with the branches of the chamber of commerce (Kadin) and the young entrepreneurs’ association (Himpi), have reinforced these important bonds. More than 50 percent of local chiefs in rural areas are either from Golkar or affiliated with the party.

Moreover, Golkar voters are the most loyal. According to an independent survey, 77 percent of Golkar voters in 2009 will vote Golkar again in the next elections, as opposed to 56 percent for Democrat voters.

Second, many of the smartest and most experienced lawmakers are from Golkar, ranging from Airlangga Hartato to Nusron Wahid. These are men who understand how the government ticks. They are attuned to public sentiment and know the levers that need to be pressed to secure outcomes.

Third, Golkar is taking a leaf out of the Thaksin playbook, adopting an assertively grassroots approach to membership with its 100-cadres-per-village campaign. This is matched by an emphasis on raising rural incomes through training and special loans. The close identification with the rural poor and farming communities is a new development for Golkar, situating the party firmly amid the masses.

Fourth, Golkar and the Bakries are going through slick, well-executed transformations both locally and internationally. At the same time, a new generation is being groomed and positioned as both business and thought leaders.

While the family and the man — Aburizal Bakrie — have detractors, they are clearly focused on 2014. For every Democratic Party misstep, Golkar and Aburizal are approaching the Istana. Having watched Yingluck’s dazzling victory, we have to ask: Could a Thaksin-like wave also sweep the Sumatran-born businessman into power?

By Karim Raslan columnist who divides his time between Malaysia and Indonesia

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