JAKARTA - Though there has been no
singularly mind-boggling achievement in his first
year in office, Susilo Bambang Yudhoyono's bold
decision to slash fuel subsidies not once, but
twice, puts him in a different class to any of the
three Indonesian presidents since Suharto.
While the International Monetary Fund
described the move to cut fuel subsidies a second
time as "wise and courageous", the painful
adjustment has angered many Indonesians who
complain the subsequent 126% hikes in fuel prices
were too high and will increase their suffering.
The cutting of fuel subsidies was just one
of numerous hot issues the president faced in his
first year in office.
During the past year
Yudhoyono has had to deal with the massive
December 26 tsunami - the country's worst natural
disaster - a
series of deadly
earthquakes, soaring global oil prices, outbreaks
of avian flu, polio and dengue fever, and, just
for good measure, triple suicide bombings in Bali
that killed 26, including the three bombers, and
injured more than 100.
Meanwhile, there
has been progress, as well as setbacks, on the
three main issues he pledged to deal with when
elected - the economy, corruption and security.
The international community's perception
of Indonesia is dogged by past human-rights
abuses, but Yudhoyono, a retired general, is
widely seen abroad as a capable and committed
leader who has raised his country's image and has
a genuine wish to increase investment, fight
terrorism and curb corruption. Yet, his popularity
on the home front is affected by perceived slow
progress on the same three issues.
Yudhoyono, who became the country's sixth
president on October 20, 2004, won 61% of the 141
million votes cast in the election - a world
record for the single largest number of votes in a
direct presidential election. His approval ratings
have been consistently higher than his
predecessors. After he was elected polls showed he
had a huge approval rating of 80%, but this month,
for the first time since he took office, his
popularity dropped below 60%. Indonesian Survey
Circle says its latest poll in October shows only
52.4% of Indonesians were satisfied with his
performance, down from 64.7% in August.
The economy, business and
investment Economic growth last year stood
at 5.1% while this year's target is 5.5%. Outside
help is vital to spur growth, create more jobs and
alleviate poverty; but two landmark cases that
could set back foreign investment to dangerous
lows have yet to be resolved.
Disputes
with Cemex and Newmont were said to be a high
priority for Yudhoyono, who said they'd be
resolved amicably by April at the latest. The
government wants to reach an out-of-court
settlement over a US$133 million civil suit the
Environment Ministry filed against Newmont Mining,
a multinational that is the world's largest gold
producer, over alleged pollution. Mexico's Cemex,
the world's third-largest cement-maker, has been
battling the government for four years over its
thwarted efforts to take over state-run Semen
Gresik, the country's largest cement producer, in
which Cemex bought a 25.5% stake with an option to
buy majority control. The proposed purchase was
blocked by local Gresik units and politicians
opposed to foreign ownership.
Meanwhile,
Minister of Trade Mari Pangestu is hard at work
with other economic ministries and chambers of
commerce to finalize a new investment law that
could result in a vastly improved climate for
business. The volatility of the rupiah is also a
major cause for concern. After hitting three-year
lows it has settled at a little more than 10,000
to the dollar, long considered a major
psychological barrier. Inflation is approaching
9%, and interest rates are rising fast.
Corruption Indonesia is slated
as one of the world's most corrupt countries but
Yudhoyono's anti-graft campaign, aimed also at
increasing foreign trade and investment is drawing
blood. The former governor of Aceh province,
Abdullah Puteh, has been prosecuted, convicted and
jailed for corruption. The former minister of
religion, Said Agil Hussein Al Munawwar, is on
trial for a graft scandal over funds for the
annual hajj pilgrimage to Mecca. Literally scores
of regional government officials and legislators
are awaiting trial on graft charges.
Security Yudhoyono has prompted
his law-enforcement agencies to work closely with
their international counterparts and share
intelligence, particularly in the Southeast Asia
region, where several agreements have been signed
to counter terrorism.
The president's
decision to give the green light to the military
to reactivate the territorial-command structure
(dispersing troops all over the archipelago) has
worried rights groups who fear a return to
repression. Yet, Indonesia, with more than 17,000
islands and home to the world's fourth-largest
population, is an almost perfect lair for
extremist groups that operate in conditions of
free movement and inconspicuousness. An arrest
last week serves to illustrate the challenges.
With police and the military on high alert
and warnings of more attacks being planned, police
arrested four people attempting to smuggle 350
kilograms of explosive ammonium nitrate, 900
Indian-made instantaneous electric detonators and
more than 1,000 meters of heavy
1.5-centimeter-thick fuse wire from Malaysia into
Indonesia. Mixed with diesel and high-explosive
TNT, ammonium nitrate makes a powerful bomb that
has been used in previous terrorist attacks in
Indonesia
Three women from Central
Sulawesi, where Christian-Muslim sectarian
violence cost hundreds of lives in recent years,
and a man from the West Java town of Sukabumi -
where the Australian Embassy bombers came from -
were captured on a speedboat heading for Sulawesi.
Jemaah Islamiah masterminds, Azahari
Hussin and Noordin Mohammed Top - both Malaysians
- remain at large. Activists have urged action to
stop radical Islamic groups from encouraging
intolerance against each other's faiths and taking
the law into their own hands to attack those with
different beliefs. They argue that by failing to
combat such radicalism, the government is unlikely
to be able to prevent terrorist attacks
Second year Yudhoyono's next 12
months in office could be every bit as
challenging. Although steady progress can be
expected from a clearly committed president, he
will need to battle to overcome the legacy of poor
governance he inherited. His prime task will be to
build on the confidence and trust he has
engendered so far and implement policies that
bring in greater investment and development,
ensure better law enforcement and address the
inequitable distribution of wealth. Almost 50% of
Indonesians live on less than $2.50 a day.
Short-term public expectations of more
jobs and a reduction in poverty have not been met.
Fifteen million jobs are needed to curb
unemployment, which remains about 9%.
As
well, an imminent crisis over avian flu is a
matter of grave concern. The Minister of Health
has warned that the country faces an epidemic
unless it can contain the outbreaks. Chairul A
Nidom, the microbiologist who first identified the
virus in Indonesia's birds, slammed the government
response to the virus claiming that if it had
acted sooner there would have been no outbreak.
"They have wasted so much time. What terrifies me
is that it just won't affect Indonesia."
Yudhoyono told a World Bank forum in
Helsinki via teleconference: "The pandemic will be
worse than the tsunami disaster, which killed
hundreds of thousands of people but stopped after
a few minutes. In a pandemic, the virus will
spread in minutes and will kill more people in
vast areas. It will be our worst nightmare."
Aceh Yudhoyono's response to the
tsunami disaster won accolades. Despite concerted
pressure from several generals and from
nationalist legislators, he approved the entry of
thousands of foreign soldiers and aid workers into
the province. The international community pledged
billions of dollars in aid but bureaucratic
infighting slowed the reconstruction of the
shattered province, which is still proceeding at a
snail's pace.
However the president seized
the momentum to resume peace talks with the
separatist Free Aceh Movement in February. After
five rounds of talks the Free Aceh Movement (GAM)
and the government carved out a deal and signed a
peace agreement in Helsinki on August 15, ending a
conflict that had claimed more than 15,000 lives
(mostly civilian). The accord resolved core issues
of demilitarization, local governance and the
future of GAM members.
Superpowers The president
visited the US in May and oversaw the signing of
several memorandums of understanding (MoUs) and
agreements. An interagency working group for
judicial issues is under way and trade and
investment talks have resumed.
In July he
postponed an official visit to China to manage the
domestic fuel crisis, but MoUs promising a total
of $7 billion in Chinese investment were signed
when he made the trip to Beijing three weeks
later.
Friends and
neighbors Indonesia's relations with its
southern neighbor, Australia, strengthened rapidly
under Yudhoyono's leadership and diplomacy.
Australian Prime Minister John Howard praised him
for having "great goodwill towards Australia".
Imron Cotan, the Indonesian ambassador to
Australia, was sacked by the president for
angering Canberra with a series of decidedly
undiplomatic and callous comments on the highly
politicized case of Schapelle Corby, a young
Australian woman who was convicted of smuggling
4.2 kilograms of marijuana into Indonesia.
A serious dispute with Indonesia's
northern neighbor, Malaysia, was avoided after the
president used his diplomatic skills to cool
tempers. In February, Malaysia's state oil
company, Petronas, granted Shell Corporation a
concession to explore oil reserves in the disputed
waters of the Ambalat block off northwest
Kalimantan. Indonesia responded by dispatching
four warships. Frequent street rallies saw
Malaysian flags burned amid calls to "devour
Malaysia".
Changed face of
parliament There are no fewer than 14
parties in the 550-seat House of Representatives
but Golkar and the Indonesian Democratic Party of
Struggle dominate it. Yudhoyono's own Democrat
Party holds only 57 seats. Following the
inauguration of legislators, house factions were
involved in a conflict over the elections of house
leaders and heads of the powerful parliamentary
commissions. The government also faced intense
scrutiny from the legislature on major policy
decisions. As a result, during the first year of
its five-year term, the house endorsed only 10
proposed legislation drafts.
Tommi Legowo,
director of the Indonesian Parliament Watchdog
Society (Formappi), points out that the house's
legislative function "clearly does not work, with
only 10 of 55 targeted bills having been
endorsed".
Nonetheless, since Vice
President Yusuf Kalla was elected Golkar leader in
December, government-sponsored polices may face
less opposition in the house. But first a
ministerial reshuffle is on the cards. Rumors are
gathering apace in Jakarta that two members of
Yudhoyono's "United Indonesia Cabinet" - Defense
Minister Juwono Sudarsono and Finance Minister
Jusuf Anwar - have requested permission to resign.
The consensus among local media is that
the president has indeed made a difference, and
there is hope of better things to come. But
Yudhoyono is often said to be indecisive and not
ready to take risks.
Yet, even a skeptical
media would be hard-pressed to dismiss the message
in Yudhoyono's latest appeal to his people. He
said that in facing tough challenges,the
Indonesian nation and people should not easily
give in to "complaints, frustration, loss of
confidence and mutual-condemnation". He called on
the entire nation to remain optimistic about the
future.
"The hardships we are facing this
year must not make us hopeless or lose our
fighting spirit to meet the future," he said.
Bill Guerin, a Jakarta
correspondent for Asia Times Online since 2000,
has worked in Indonesia for 20 years as a
journalist. He has been published by the BBC on
East Timor and specializes in business/economic
and political analysis in Indonesia.
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