Indonesia is (not) a country on autopilot

By webadmin on 12:13 pm Mar 09, 2012
Category Archive

Wijayanto

If we Google the words “Indonesia
autopilot,” we will find a variety of news. Interestingly, the news
is not only about aircraft but also about Indonesian politics.
Recently, in several parts of Jakarta, a group of people disappointed
with the performance of the government have put up banners with a
concise but strong message: “Indonesia is an autopilot country.”

In other words the banner is stating
that “the government is sleeping.” The message has created
lengthy discussion – on both pros and cons – in the media and the
term “autopilot” has become very popular.
Coincidently, in July 2009 I wrote a
column in GlobeAsia entitled “Are we flying in autopilot
mode?”

However, I don’t think that the current critics were
inspired by my column, since the rationale they present is not in
line with mine.
In mid-2009, Indonesia faced a very
critical challenge. The global economy was on the brink of collapse
and at the same time we entered an important point in Indonesia’s
political life, with legislative and presidential elections.

Regrettably, most national leaders in
the cabinet were heavily involved in practical politics.

Most were
politicians, several were political party chairmen and some were
presidential hopefuls. Clearly, the power struggle was their main
focus and managing the country was probably not top of their list of
priorities.

Encouraging facts

Recently, the Central Bureau of
Statistics stated that Indonesia’s economy grew at 6.5% in 2011.
This number is significantly higher than predictions made by the
World Bank, International Monetary Fund and various experts.
Interestingly, manufacturing industry grew by more than 8% last year.
This is an answer to those who keep worrying that Indonesia is in the
process of deindustrialization.

This achievement came as regional and
global economic growth was plummeting, including in Asia’s
powerhouses China and India. Recently, Indonesia regained investment
grade rating, the first time since we lost that status in 1997. The
rating upgrade has attracted more foreign investment in the past few
months and hopefully this trend will continue over the next few
years.

Some progress has been achieved in
fighting corruption. Indonesia’s Corruption Perception Index
improved from 2.8 in 2010 to 3.0 in 2011.

According to Transparency
International, over the past eight years Indonesia has been the top
achiever in the region.
Today, Indonesia’s economy is
stronger than it was in any year post-1997. We could create a long
list of good news and I believe this is not only because of good
luck, but because of a lot of people in the government and millions
of people in the business community who have been working extremely
hard.

Personally, I know some people in the
cabinet and the senior ranks of government who work tirelessly night
and day to create a better Indonesia. It is true that during the 2009
election the country was on autopilot. However, in the wake of that
election we need to realize and appreciate that the pilot, the
co-pilot and the aircrew have tried to do their best. 

The challenge ahead

Last month I had a discussion with a
diplomat from an Eastern European country. He was new to Indonesia
and said he was surprised to see that discussion in the media on the
next presidential election is already very intense even though there
is still two years to go. This is even more surprising given that the
discourse on the issue has been ongoing since the first year of
President Susilo Bambang Yudhoyono’s second term.

Indonesia is entering a very critical
period. After a long period of marketing efforts – helped by global
trends that benefited the country – Indonesia has become an important
place for various countries and for multinational companies to
invest. Investment is flowing in because Indonesia is a huge market
and investors have the perception that it is a country with stable
politics and a relatively conducive business environment.

Despite this perception, several
obstacles arise. Among them are disputes over land and industrial
relations. Land disputes have occurred between large corporations and
local people in several places in Indonesia, including Lampung and
Bima. This could be the tip of an iceberg since more than 80% of land
in Indonesia has no clear title.

This legal uncertainty makes land a
potential source of social unrest in the future, while the economic
value of land has been skyrocketing over the last few years in line
with the growing economy.

The recent labor disputes in West Java
and some places in Sumatra also need government attention. Similar
disputes could erupt in other part of Indonesia. The government
should use not only an economic approach, but also a political
approach since there are clear indications that several cases have
been politically motivated.

To gain popular support in local
elections, governors or regents can increase the minimum wage without
proper calculation or consultation with other stakeholders. In this
case, a minimum wage rise is nothing more than vote buying. 

Maintaining trust is more difficult
than building it. The sustainability of investment flows will depend
on whether the perception is met by the reality. Preventing and
resolving land and labor disputes is instrumental for the further
growth of Indonesia’s economy. These are complex issues which need
solid and decisive action on the part of the government.
Unfortunately, new elections are
approaching. As in 2009, the power struggle will dominate the agendas
of most politicians and senior government officials.

Indonesia’s
leaders should realize that we are entering a critical moment and
should put the national interest first, beyond their short-term
personal interests.
Indonesia missed the opportunity of the
oil boom in the 1970s and 1980s and again during the ‘Asian
Miracle’ era of the 1990s. This time we have another opportunity.
The cost of being on autopilot mode again is enormous, threatening
the loss of our fourth chance of becoming a prosperous and
influential nation.  

Wijayanto is
the deputy rector of Paramadina University, and is the co-founder and
managing director of Paramadina Public Policy Institute. He can be
reached at
wijayanto@paramadina.ac.id