Two decades ago, Indonesia was on the cusp of becoming a failed state. Southeast Asia’s largest nation looked like a splintering Yugoslavia on steroids. Indonesia was buckling under a triple tsunami — the 1997-1998 Asian financial crisis, a devastating El Nino drought and social unrest, which toppled president Soeharto.
Famine looked imminent and Indonesia’s neighbors were preparing for long regional instability, a replay perhaps of the bloody Vietnam era. The world’s largest archipelagic collection of islands, diverse ethnicities and beliefs and a population of 260 million only magnified the risks.
The fact that none of these fears materialized and Indonesia two decades later is a thriving democracy with a stable economy is a tribute to its political leaders, policymakers, and ultimately its people. Faced with near collapse, they responded with maturity and audacity. As illiberal democracy and one-man rule is becoming the norm, Indonesia is the stand-out exception by proving it is possible to be the world’s largest Muslim nation and simultaneously embrace democracy and globalization.
Indonesia’s remarkable political and economic transformation, imperfect in many ways and still a work in progress, has received little global attention. This proves what I have been told over the years — that Indonesia is the largest country which very few people have heard of.
What was the “secret sauce” which enabled Indonesia to transform and thrive, while many other nations, notably in the Middle East, have failed in the difficult transition from revolution to good governance?
Indonesia’s secret sauce, in my view, is composed of three Ds — democracy, decentralization and development. Democracy was not a new concept for Indonesians when they started debating the post-Soeharto political architecture. The 1945 Constitution provided important protections for human rights and the formation of political parties, protections subsequently undermined by presidents Sukarno and Soeharto in their combined five-decade stewardship of the country.
Yet when the time came in 1998 for Indonesia’s fractious leadership to determine the country’s post-1998 political architecture, they had no hesitation in embracing democracy, built on the foundational principles of fixed terms for the president, a fully-elected parliament which would exercise legislative powers, and a free press.
Indonesia has had four successful presidential and parliamentary elections since 1999, with the fifth scheduled for next year.
Although electioneering has become more toxic and divisive, Indonesia’s democratic process is still a sight to behold. Indonesians will acknowledge that it was not democracy alone which helped embed stability, decentralization played an equally critical role. The defining feature of the Dutch colonial period and the Sukarno-Soeharto eras was over-centralization of power. This became unsustainable in the immediate aftermath of the fall of Soeharto — dominant Java and Jakarta had to share power with the country’s large periphery.
Indonesian leaders feared that in the absence of a grand political and fiscal bargain with 27 provinces and over 300 regencies and cities, the center would not hold and the unitary state would be undermined. East Timor had voted to secede in 1999 in a bloody referendum and uppermost in the mind of then president BJ Habibie and his successors was to ensure that other provinces did not follow. In a political master-stroke, they decided that power would be devolved to regencies and municipalities rather than the provinces. This has enabled Jakarta to retain political leverage with the provinces, curbing secessionist tendencies. Elections have been held successfully at the ground level, throwing up new leaders like President Joko “Jokowi” Widodo, whose impactful stewardship of a small Central Java town captured the imagination of Indonesia and catapulted him to the highest office of the land in 2014.
Voters have repeatedly demonstrated little fealty to provincial governors, all-powerful during the Soeharto era, and have placed their faith in home-grown leaders like the President, whom they hold accountable for good governance.
While decentralization has served as the glue holding the country together, it has been a mixed blessing in other areas. Resources for development are fragmented, particularly for desperately needed infrastructure, and more than a few local leaders have shown a proclivity for building trophy projects and poor governance.
Indonesia’s report card since the fall of Soeharto will show a few As for building secure democratic foundations and a scattering of Bs, Cs, and even Ds in many areas needing radical improvement. Three areas needing radical improvement, which I call the three Cs, are combating corruption, dealing with climate change and fostering an inclusive culture.
The country has a strong institutional framework in dealing with corruption via an independent Corruption Eradication Commission (KPK). which has shown little hesitation in going after corrupt political leaders and bureaucrats. The KPK has, however, become a victim of its own success with the parliament making successive efforts in diluting its remit and independence. President Jokowi, elected in 2014 on a platform to combat corruption, should stand up to his political peers by protecting the independence of the KPK. Corruption has enabled the destroying of vast swathes of Kalimantan rainforests and Indonesia’s timid response represents a major setback for global efforts to combat climate change.
Like the Amazon, Kalimantan could be a giant factory to capture carbon and contribute to climate mitigation like few other countries can. Indonesia’s climate strategy has been half-hearted with serious implementation gaps. Protecting Indonesia’s rainforests, if done well, could be the most powerful manifestation of the country’s soft power.
Speaking at the University of Indonesia in 2010, then United States president Barack Obama waxed nostalgic about his childhood in Jakarta and proclaimed that in the years since the country had “charted its own course through an extraordinary democratic transformation — from the rule of the iron fist to the rule of the people”. He added that the spirit of tolerance, as written in the Constitution, is the foundation to Indonesia’s example to the world.
Indonesia’s inclusive culture, fostered by each of its post-1998 presidents is at risk because of divisive politics fuelled by increased religiosity and dog-whistle politics. The jailing last year of Jakarta’s former Chinese-Indonesian Christian governor over spurious blasphemy charges is a sign that next year’s elections will be vicious in tone and messaging.
President Jokowi, still incredibly popular if opinion polls are to be believed, has the historic task of fighting divisive politics and remaining true to his vision of an open and inclusive Indonesia. If he fails, the doomsayers of 1998 will be back.
The writer, a former journalist who covered the fall of Soeharto, is the author of Resurgent Indonesia – From Crisis to Confidence. He lives in London and works for Standard Chartered Bank. Views expressed in the article are personal.