Friday, August 26, 2011

Indonesia and Reform: SBY Could Borrow Brazil's Broom

Last weekend a group of 29 public figures sent an open letter to President Susilo Bambang Yudhoyono deploring the culture of corruption that permeates Indonesia and warning of systematic attempts by the bureaucracy and vested interests to destroy the Corruption Eradication Commission. This is a public rebuke to a president whose political campaign was built upon his credibility, integrity and unwillingness to tolerate corruption.

With his popularity declining and his credibility under constant assault, especially with the daily unfolding drama concerning the case of graft suspect and Democratic Party lawmaker Muhammad Nazaruddin, Yudhoyono would do well to take a page out of Dilma Rousseff’s playbook.

Rousseff is the president of Brazil, a large and proud country that shares similar problems to Indonesia: entrenched systemic corruption among its politicians and bureaucrats, a high poverty rate and a legislature comprised of multiple parties.

Similar to Yudhoyono, she is also heading a ramshackle coalition government comprised of parties ranging from communists to right-wing populists, though most of them simply have no ideology at all. The Economist newspaper bluntly described the main interests of these small parties as “extraction of jobs and money — for personal gain or party financing — from government.” Many Indonesians can relate to that kind of description.

Unlike Yudhoyono, who won his second term decisively with 61 percent of the vote, Rousseff started from a fragile position. Se had never held elected office before and her victory came thanks to her riding the coattail of her popular predecessor, Luiz Inacio Lula da Silva. Even with his blessing, she did not win the election straightaway, but in a runoff poll. Considering her position, many predicted her presidency would be weak, dominated by Lula, and that she would just be a four-year placeholder for the former president so he could skirt the constitutional presidential term limit and run again.

Yet she has proved her doubters wrong. She has tolerated no drama in her administration, immediately firing her chief of staff when he became too much of a distraction due to his past influence-peddling. His firing was followed by the mass firings of many officials implicated in graft investigations, including three cabinet ministers. Later, the minister of defense was fired after saying he was “surrounded by idiots” in an interview.

While many of her critics were justified in arguing she took action only after media investigations cast a spotlight on the misconduct, none of these critics disagreed that such decisive actions were needed to maintain both public and investor confidence. In fact, recent surveys show that even though her popularity took a beating due to an economic slowdown and rising interest rates, her tough handling of the scandals and her fight against extreme poverty has kept her public support rating at a high point of 70 percent.

It is still too early to judge whether Rousseff’s presidency will be successful in its quest to eradicate corruption and poverty, but what is clear is that people are willing to support leaders who challenge entrenched interests and clean up the Augean stable of political and bureaucratic corruption.

Yudhoyono started his term from a very strong position. He had a strong mandate, with a clear majority of the electorate supporting him, citing his willingness to tackle corruption. At one point, Yudhoyono’s popularity was at 85 percent, meaning that in theory he could do just about anything he wanted to push for much-needed reforms. While the fractured legislature was often cited as the main reason Yudhoyono had to be very cautious in pursuing reforms, the body was one of the state’s most unpopular institutions. Its paltry 24 percent support rating paled in comparison with Yudhoyono’s stratospheric support, meaning the president could pressure and bully the legislature into passing reforms.

Despite his advantages, Yudhoyono, unlike Rousseff, seemed to have no seriousness in tackling the issues of corruption, governmental waste and bureaucratic machinery, or in getting rid of ministers in the habit of putting their feet in their mouths.

Yudhoyono’s inability to act decisively caused the government to be paralyzed every time a scandal erupted or somebody said something stupid. Not surprisingly, Yudhoyono’s popularity declined steadily as people tired of his wishy-washiness.

To make the situation worse, Indonesia desperately needs drastic reforms to curb waste and inefficiency. As Finance Minister Agus Martowardojo has noted, many provinces in Indonesia spend a bulk of their budget on civil servants’ salaries — one province spends a whopping 70 percent — leaving very little money for development.

Some 80 percent of district, provincial and village governments are also in debt, to the tune of Rp 7.8 trillion ($910 million). Such bloated bureaucracy will only add red tape and create more waste.

While Indonesia thankfully is still enjoying healthy economic growth, the question is for how long. With the market hammered every day with bad news coming from the euro zone due to the inability of European governments to form credible policy, the global economic crisis will only worsen and at some point in the future, Indonesia may have to make hard choices in order to survive.

Yet, the government might end up paralyzed due to a succession of crises. Marwan Jafar, the chairman of the National Awakening Party (PKB), has complained that there were seven drafts for important laws that remained untouched thanks to the Democratic Party’s distraction by the Nazaruddin scandal. Such governmental paralysis each time a scandal strikes is very troubling considering the worsening global economic climate.

Yudhoyono could have spared himself much grief had he acted decisively in the beginning by committing to clean up the government. With people perceived to be his close colleagues making statements undermining the authority of the Corruption Eradication Commission, and by seemingly turning a blind eye to accusations of corruption among his close confidants and his own party, he is undermining his own credibility, and prompting people to question his commitment to reform a rotten system.

By Yohanes Sulaiman lecturer at the National Defense University

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