Southeast Asia

Indonesia's military: Business as usual
By Richel Langit

JAKARTA - Barring the unexpected, Indonesia's powerful military will officially quit politics in 2004, five years ahead of the original schedule of 2009.

At the end of nearly two weeks of deliberations, Indonesia's highest legislative body, the 700-member People's Consultative Assembly (MPR), last weekend passed 14 amendments to the constitution that included direct elections for president and the removal of the military and police from political life.

For civil-society groups and university students who spearheaded the country's reform movement in 1998, the military's exit from politics is a dream come true. They have long campaigned for the scrapping of Indonesian military's (TNI) free seats in both the House of Representatives (DPR) and the MPR, the country's highest legislative body.

But given the country's situation, the Indonesian military's exit from the MPR, where currently it has 38 seats, is likely to boost, rather than lessen, its role in the country's political life.

TNI is the only most organized and disciplined political entity in the country that parties and civilian politicians have to reckon with. In fact, TNI has always been perceived as the only institution that can keep Indonesia united by putting an end to the ethnic and religious conflicts that have plagued the country since 1990s.

This situation is compounded by the fact that the country's civilian politicians are very weak - young and inexperienced - and are greatly divided because of their irreconcilable political differences.

Despite their claims, these politicians are incapable of running the country without the support of the military. So, come election time in 2004, these civilian politicians are likely to seek the military's support before running for the presidential and vice presidential posts as well as other high positions. Already early this week, Golkar, which served as former dictator Suharto's political bandwagon, recruited a retired army general as its general secretary, a move aimed at forging an alliance with TNI.

The trouble is that politicians will have to negotiate individually with the military and, given their weak bargaining position, will have to make political concessions with the military - including allowing the military to play a significant role in government - in order to win its support. The military will certainly throw its support behind presidential or vice presidential aspirants who make most political concessions.

This will bode well with the military's desire to stay in politics as long as possible. Just one week before MPR members were to convene to endorse amendments to the 1945 constitution, TNI chief General Endriartono Sutarto and police chief General Da'i Bachtiar invited chief editors of virtually all newspapers, magazines, and television and radio stations in Jakarta for a news conference. At the news conference, Sutarto called for a return to the 1945 constitution since, according to them, the fourth phase of constitutional amendment process had strayed from its original course.

A return to the 1945 constitution would had annulled the amendments affecting TNI's free seat in MPR, allowing it to stay in the MPR and DPR as long as possible.

Indeed, the military's exit from the MPR in 2004 comes as a logical consequence of the Assembly's decision to change the composition of the MPR into the House of Representatives (DPR) and the Regional Representatives Council (DPD) rather than military's conscious efforts to leave the political arena.

Under the new MPR composition agreed in the fourth stage of constitutional amendment and endorsed in the recently concluded MPR annual session, all members of both the DPR and DPD will be elected directly by the people during general elections. The agreement leaves no room for non-elected MPR factions such the military/police and the interest-groups factions to stay in MPR. All 38 of the current MPR representatives of the military/police faction were appointed.

TNI wants to stay in politics as long as possible because it wants to protect its economic interests - especially business enterprises - which had come under severe public scrutiny after the forced resignation of authoritarian leader Suharto in May 1998.

Through numerous cooperatives and foundations, TNI runs a wide range of business undertakings and invests in a number of state-owned enterprises.

The army's Strategic Reserve Command (Kostrad) currently controls 22 companies, including an insurance company. Run by a foundation called Darma Putra Foundation (YDPK), Kostrad also has considerable shares in a number of state-owned enterprises. YDPK itself was set up in 1964 by Suharto when he was still an army major. Together with its business partner, ethnic-Chinese Liem Sioe Liong, the foundation founded the Windu Kencana bank and two airline companies.

The Indonesian army has been involved in business since the 1970s. Through the Kartika Eka Paksi Foundation (YKEP), the army now owns a total of 26 firms and seven joint ventures. Currently, YKEP has two big companies - PT Bank Artha Graha and PT Danayasa Arthatama - which constructed an integrated business district worth US$3.25 billion at the heart of Jakarta's financial center.

Not to be outwitted, the country's navy also set up a foundation called the Bhumyamca Foundation. Currently the foundation oversees a total of five firms with combined assets of about Rp200 billion or $25 million. The air force has the Adi Upaya Foundation, which controls 17 firms, including a bank. The country's police has the Bhakti Brata Foundation, which has 10 firms, also including a bank - Bank Yudha Bhakti.

Since the reform movement started in 1998, the involvement of TNI and the police in business endeavors have been roundly criticized and blamed for their poor performance in maintaining peace and order throughout the country. Some analysts have charged that high-ranking officers are so busy doing business that they neglect their own duties.

Calls are also mounting that these foundations be handed over to the state so that both the military and police are not involved in business anymore. But the TNI leadership has resisted that call, arguing that the businesses are needed to augment security personnel's income.

Clearly, the military will use every means available to protect their economic interests, including entering into alliances with civilian politicians. In so doing, the military will eventually return to politics.

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Aug 16, 2002

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