Indonesia: Damaged Nation

2000

Professor M.C. Ricklefs

Indonesia was the nation most damaged by the Asian crisis which began in 1997. It suffered from weaknesses found elsewhere (including incompetently and corruptly managed banks, and massive private overseas debt); most of its people were poor despite the glitter of a few cities; its ruling clique – led by the ailing Soeharto – was arrogant, corrupt and out of touch with reality; and the economic and political crises were compounded by ecological disasters. Three years later, there is little real recovery. Business activity has revived in Jakarta and in some other cities, but this is fuelled largely by consumer spending of savings which were formerly deposited at very high interest rates that have now dropped. There is little new investment and poverty remains widespread.

Social tensions are evident across the country. Bloody Muslim-Christian clashes are widespread in Maluku province in east Indonesia. Hundreds have died there. Muslims elsewhere have demonstrated solidarity with Maluku Muslims by demanding government action to stop the killing. One group – called Laskar Jihad (Holy War soldiers) – travelled from Java to Maluku and there went into action with modern weapons. Soldiers of the Indonesian army themselves seem to have become personally involved. But the government in Jakarta has found no formula to stop the violence.

Elsewhere Muslims have fought Muslims, often across ethnic lines. Sometimes neither religion nor ethnicity explains conflict. Intra-village violence has consumed property and lives. Vigilante law often replaces the proper rule of law, which is effectively dead: the fruit of economic crisis and a judiciary and police force which have long been corrupt. In Aceh, a serious armed secessionist movement threatens the territorial integrity of Indonesia. In Papua, a less serious one seeks to do the same.

For the time being, President Abdurrachman Wahid (erroneously referred to as President Wahid in foreign media) heads this troubled nation. The infant institutions of democracy are trying to define roles for themselves in the midst of severe economic and social challenges and the corrupting force of big money. The President stands for an open, inclusive, pluralistic democracy, but he is surrounded by political leaders with other – and sometimes no – visions for the nation. He is unpredictable and in precarious health and his government displays little competence. The Soeharto family and their cronies are commonly believed to be using their immense wealth to destabilise the present democracy so as to protect themselves and their fortunes. [What is your judgment? Are they doing so?]

WATCHPOINT: Indonesia’s greatest strength has been its sense of nationalism. Will it be strong enough to carry the nation into a future democratic age?

 

About our company:

AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.

Go to top