Strength at the helm

PUBLISHED : Friday, 01 August, 2008, 12:00am
UPDATED : Friday, 01 August, 2008, 12:00am

Indonesia was, not that long ago, considered by some less-kind observers a basket-case country, a nation where crisis and turmoil seemed an everyday occurrence. A scan of the headlines of late reveals - well, not a lot. There are still natural disasters, and Muslim extremism is of concern, but there is little to indicate much else untoward. The country is, to quote Indonesia expert Andrew MacIntyre, 'normal'.

Professor MacIntyre, the director of Australian National University's Crawford School of Economics and Government, contended in a study published in May that Indonesia was stabilising as a middle-income, big democracy, much like Brazil, India or Mexico. He acknowledged that it still faced many economic problems and a number would continue for a long time. But, he told me this week, it was not falling apart or going backwards, but was instead 'moving forward, consolidating its democratic governance and gradually improving welfare'.

An Organisation for Economic Co-operation and Development assessment on July 24 backed the view. Indonesia's growth performance had accelerated to more than 6 per cent a year after being mired in years of 3 per cent to 4 per cent levels in the wake of the 1997-1998 Asian economic crisis, it observed. Rising domestic demand was driving growth, investment was picking up and anti-corruption measures were making headway. Even higher growth could easily be achieved through concerted efforts by President Susilo Bambang Yudhoyono's government.

Indonesia is clearly looking up. Putting the achievements down to the country having a democratically elected government would seem to be a valid reason. So why, then, do some Indonesians anecdotally still look fondly back to the days of dictator Suharto?

Suharto, who died in January, was forced from office a decade ago in the wake of the financial crisis after 31 years of strong-arm rule. While in power, Indonesia experienced annual average growth rates of at least 7 per cent. Professor MacIntyre's colleague, Ross McLeod, said governments since had not been able to match the record.

Suharto built himself into such a strong position that, when he decided a particular new economic policy was needed, he could simply make it happen. As Dr McLeod, editor of the Bulletin of Indonesian Economic Studies, explained, when the dictator said jump, all Indonesians jumped. That is markedly different under democracy, where interest groups can easily hijack a policy by mounting a protest that prompts the government to backtrack.

Dr Susilo's government has repeatedly done this, from desperately needed labour laws through to scrapping the economically debilitating subsidy on oil. The subsidy mostly benefits middle- and upper-class Indonesians and saps as much as US$20 billion from the national budget each year. Money that should be going into building infrastructure, schools and health care facilities, among much else, is instead being chewed up to provide cheap petrol and diesel.

Indonesia has made significant progress since Suharto. Challenges remain, though, among them the culture of corruption, the poor legal system, an inefficient bureaucracy, lack of military accountability and concern about the rights of minorities. Tackling such problems is difficult with a leader like Dr Susilo, who, as Dr McLeod put it, 'has a habit of going to water when faced with objections, no matter how small'.

There is no doubt that democracy is superior to dictatorship or autocracy. Free speech and movement are basic and fundamental rights. But democracy is of limited value without a leader willing and able to ensure that it is effective.

As Indonesia proves, unless democracy is coupled with strong leadership, it is difficult to implement good policies. When it comes to a happy marriage of both, think of America's Franklin Roosevelt, Britain's Winston Churchill and Margaret Thatcher, India's Indira Gandhi and the Philippines' Fidel Ramos. These were people who were democratically elected and had the ability to get things done.

Peter Kammerer is the Post's foreign editor