PRIVILEGED ACCESS
(Subscribers/Members) |
 |
 |
 |
 |
 |
 |
 |
 |
|
|
 |
|
|
|
| Feature Reports |
Home » Feature Reports |
|
 |
The challenges ahead for SBY
Special Correspondent
11-01-2010
ATI ASIA2010 Magazine
JAKARTA – Concerns are growing that Indonesia’s re-elected President, Susilo Bambang Yudhoyono, may squander his newly-gained political capital, as he appears to be learning towards a “rainbow coalition” in his new Government.
At the time of writing, Indonesia’s leader – who was returned with an increased majority to govern in his own right – had not chosen the people who will help him run the Government.
Rizal Sukma, Executive Director of the Jakarta-based think-tank, the Centre for Strategic and International Studies (CISS), says some 128 people have been reportedly promised a post in the new Government. SBY will be sworn in on October 20, and has indicated that the new Cabinet will be announced the following day.
Yudhoyono won the election on July 8, clinching more than 60 per cent of the votes cast. His Vice President is the able technocrat, Boediono, who is well-respected in international financial circles.
Indications are that his new Government will include some of his political opponents – members of the Golkar Party and of the Indonesian Democratic Party of Struggle (PDI-P). Bakrie Aburizal, a former Co-ordinating Minister (and now Golkar’s Chairman), who lost the election to Yudhudono’s Democratic Party, is expected to be included in the Cabinet again.
Similarly, Taufik Kiemas (husband of Presid-ential challenger Megawati Soekarnoputri), who is the chief patron of the PDI-P, is expected to be the People’s Consultative Assembly Speaker.
Sukma, who was in Sydney recently for an Indonesian Update at the Lowy Institute, said the inclusion of the two men in Cabinet would be an attempt to remove some of the problems with Golkar and PDI-P in the first term.
“But we cannot be sure that this will reduce resistance to his Government initiatives,” Sukma said. “Support from the two parties is not guaranteed. He will still need to negotiate with them to get things done.”
Indeed, Sukma is concerned that, as things stand, an SBY Government without a right- hand man with the clout and toughness to deal with the provinces will have a problem.
Jusuf Kalla, Vice President in SBY’s first term (he split with SBY to run a joint ticket with Megawati), did all the tough negotiations with the regions – a task SBY prefers not to be involved with.
“Jusuf Kalla dealt with all the difficult issues in SBY’s first term. He was able to challenge and coerce recalcitrant regional leaders to work with the central government,” Sukma says. He adds that it was Jusuf who put the pressure on regional leaders to follow central government policy – essentially to create a conducive environment for foreign investors.
The main criticism of the first SBY term was lack of action. Political observers have said SBY played politics rather than governing the country. Sukma is afraid that, the way things are going with SBY’s Coalition government, Indonesia could unfortunately end up with more of the same in his second term.
Budy Resosudarmo, a Research Fellow at the Australian National University, says Indonesia has pressing issues which must be addressed.
He notes that Indonesia has not shown the signs of recovery now evident in other Asian economies. Investment fell from growth of 12.2 per cent in the September quarter of 2008 to 2.7 per cent in June 2009 quarter. And manufacturing output dropped from 4.3 per cent to 1.5 per cent in the same period. Exports fell from growth of 8.4 per cent to minus 0.1 per cent.
Indonesia did not go into recession and continued to grow at four per cent throughout the crisis, but Resosudarmo says the reason is that Indonesia is less globally connected, and has a small financial services sector. The Government also implemented a number of policies, such as lowering interest rates and reducing bank capital requirements and deposit guarantees.
The economy benefitted from both stimulus and election spending. Resosudarmo says the Government has a 78-trillion rupiah package in place, and has only spent 28 trillion of that package. But to sustain growth and to create jobs to alleviate poverty, the Government must remove the biggest hurdle to growth – lack of infrastructure.
Reosudarmo says SBY has announced a target programme for his first 100 days in office. Between now and 2014, he wants Indonesia to achieve annual growth of seven per cent, and to reduce unemployment to 5-6 per cent – down from 8.0 per cent-plus today. Reosudarmo says the Government plans to implement reforms in selected sectors, and wants to be able to showcase those success stories to the world. It will also attempt a major project, although the focus would be on “low hanging fruit”, where results are more easily attainable.
Under this plan, there will also be a greater focus on inter-island trade, and to achieve this, the plan is to improve infrastructure, particularly transportation between the islands.
SBY understands the need to move infrastructure development to the top of his priorities. Reforms are needed to ensure that projects get off the ground. Resoudarmo says the President’s main challenge will be an inflexible budget this year, although he could have better flexibility in his 2010 budget to deal with the problems that face the country. Political pundits generally agree that Yudhoyono now has a mandate to reform Indonesia’s controversial labour laws. As Rizal says, he had problems in the first term because of his political position, but in this term he is coming from a position of strength. “He needs to deliver to leave a legacy as the first democratically-elected President,” Rizal says.
|
|
|
|
| Previously in Feature Reports: |
|
|
 |
|
|
| |
| |
|
