Indonesia: Democracy First, Good Governance Later

Southeast Asian Affairs 2007 INDONESIA Democracy First, Good Governance Later Douglas E. Ramage Indonesia in 2006 is a stable country, with a democratic and decentralized system of government. After two years of President Susilo Bambang Yudhoyono's leadership Indonesia is continuing on a path of democratic consolidation and taking important steps that will likely improve its economic performance over the medium to long term. Considering the depths of Indonesia's economic and political crises that preceded, and followed, the fall of the authoritarian regime in 1998, Indonesia ends 2006 in a rather enviable shape — the Republic is united and peace in Aceh was cemented with the remarkable passage by Parliament of the Law on the Governing ofAceh, justifiably having earned President Yudhoyono a nomination for a Nobel Peace Prize. The economy grew at 5.5 per cent, one of the highest levels in ASEAN and nearly matching the country's post-crisis high of 5.6 per cent in 2005. Most macroeconomic reforms are in place, although the investment climate — for both Indonesian and foreign firms — remains stubbornly unattractive. Indonesia is led by highly competent President Yudhoyono, with a generally strong political and macroeconomic cabinet team. In short, Indonesia is a stable democracy, facing a similar range of serious, though normal, challenges faced by other large developing democratic countries. To appreciate Indonesia as a normal developing democracy today it is worth recalling what has been achieved since it threw off authoritarianism in 1998: a thriving free media, free labour unions, free political parties, an elected parliament passing a battery of reform legislation and checking the power of the presidency, thorough-going decentralization ofpolitical authorities, and solid economic recovery. Douglas E. Ramage is the Country Representative of the Asia Foundation, Jakarta, Indonesia. 136Douglas E. Ramage Some reforms have even moved with alacrity and tend to be unremarked and taken for granted today, but which reflect drive and commitment to democratic reform that could not have been imagined even a few years ago, particularly the disappearance of the armed forces from most aspects of national life.1 And in the past 18 months Indonesia has racked up perhaps the best record of any state in Asia of combating terrorism. For the first time in six years no major terrorist attacks occurred in Indonesia in 2006. Democracy continues to be consolidated in Indonesia in 2006, exemplified most by hundreds of local elections, embedding both choice and radical glimmers of accountability, at the local level in Indonesia for the first time in its history.2 Indeed, Indonesians voted in more free and fair elections, and more often, than citizens of nearly any other democracy since 2004, including in 73 provincial, district, and city elections in 2006. It is "all elections, all the time" for Indonesia in the past year as district heads, mayors, and governors all submit to direct electoral contests between 2005 and 2009. Local officials are being held accountable to voters for the first time, with over 40 per cent of all incumbents (including many of the most corrupt local politicians) losing their bids for re-election — resulting in one of the democratic world's most competitive electoral systems.3 It is difficult to identify a single major area of needed reform in Indonesia in which there is not some movement or, at least, rhetorical or broad policy commitment to economic and further political reform. Indeed, after two full years in office, Indonesia's first-ever directly elected president, Susilo Bambang Yudhoyono, can legitimately lay claim to holding the "reformist high ground".4 Indonesia's leader is widely lauded for his integrity and decency. As 2006 ends and the President enters his third year in office he is riding high — Indonesians like their President and think he is a morally upright, hardworking leader. There are, as yet, no obvious challengers to President Yudhoyono for re-election in 2009.5 He is a leader Indonesians feel proud of. So not only is Indonesia stable and democratic in 2006, but its top leadership is both popular and highly competent. However, challenges for Indonesia remain significant, particularly in turning political and democratic gains into an improved economy and reduced poverty. Virtually unchanged from 2005, Indonesia...