Unlikely champion

PUBLISHED : Friday, 17 April, 2009, 12:00am
UPDATED : Friday, 17 April, 2009, 12:00am

Cast your mind back five years or so. Which Southeast Asian country would you have put as a beacon for economic and democratic hope? Thailand would rank high, perhaps top, of the list; the perennial favourite, the Philippines, would have been close. No one would have given Indonesia much of a chance.

Yet, in the depths of financial meltdown, Thais have decided that what they have gained should be thrown away through political infighting. The Philippines is among a handful of nations the Asian Development Bank forecasts will enjoy economic growth this year, although its democratic institutions are under severe strain. Plunging exports have shot to pieces the economies of Singapore and Malaysia. Vietnam is automatically excluded by its one-party system. Indonesia is left at the top of the heap.

Anyone predicting such a situation in 2004 would have been a laughing stock. Indonesia's economy was crushed by the Asian financial crisis in 1997 and its plight worsened by excessively tough International Monetary Fund bailout requirements. The end of Suharto's iron-fist rule in 1998 ushered in an awkward democracy. From absolute political stability came a revolving-door presidency and parliament. The human rights violations were not as egregious, but rampant corruption remained.

Think Indonesia and we generally turn to those poor Transparency International showings. Bird flu has been badly managed. Indonesian airlines have Asia's worst record.

But as Indonesia expert Peter McCawley pointed out to me on Tuesday, perceptions can be deceptive. The visiting fellow at the Australian National University and former dean of the ADB Institute in Tokyo said the manner in which parliamentary elections had been held on April 9 and a reasonable projected growth rate of 3.6 per cent laid to rest ideas that the nation was a basket case. Smooth polling and sensible bargaining among parties seemed to prove that the system was functioning healthily. Conservative fiscal measures directed by good technocrats had strengthened the banking system and were getting the budget into shape.

President Susilo Bambang Yudhoyono is not Asia's most dynamic politician; some may say he is dull. But during his 41/2 years in office he has done what we should expect of a leader: hold the team together, broker compromises and make decisions. This is happening in Indonesia and the system is working. It is not in Thailand, as events of the past few days so plainly show.

Let's add another optimistic factor. US President Barack Obama's Indonesia connection augurs well. The fact he lived there for four years as a child means that, for the first time, an American leader has an acute awareness of the country. Being the world's third-biggest developing nation, its most populous Muslim state and seemingly now Southeast Asia's most promising democracy, he has even more reason to put it high on his agenda.

Dr McCawley cautioned that considerable challenges remained. Elections had been peaceful, but presidential polls in July could still prove disruptive. Dr Susilo is the favourite in opinion surveys, but former leader Megawati Sukarnoputri cannot be discounted. More than two contenders are probable, making it unlikely that the winner will get more than 50 per cent of the vote, forcing a run-off in September. Uncertainty abounds as to what would happen if Dr Susilo were not to win a second term.

The nation's economic fortunes can be put down to strong domestic demand shielding its economy from export and banking slumps elsewhere. Just how deep the global crisis will be is still unclear, though. Indonesia may yet find its progress reversing.

Then there's corruption, continued difficulty in governing territorial extremities like Aceh and Papua, improving the judicial system, lessening human rights abuses and keeping a lid on Muslim fundamentalism. Dr McCawley believes it will take another 30 or 40 years to fix these problems. The country is far from perfect. But, given the evidence, I agree that Indonesia is steadily becoming Southeast Asia's natural leader.

Peter Kammerer is a senior writer at the Post