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Friday, April 10, 2009
HEATED ELECTION CAMPAIGN IN INDONESIA
Today, March 16, 2009 Indonesian politics is entering its final stage of legislature election scheduled for April 9. The open campaign starts today. It means that there will be rally campaign in big cities and even villages throughout Indonesia. Political parties will rally support by organizing large group of people to gather in a field and then go around the cities. Usually major political parties will be able to do show-of-force campaign. PDIP (The Democratic party of Struggle) under former president Megawati who has a large support from urban poor always dominate big cities with this kind of show of force. On the other hand the ruling Demokrat party and Golkar party also have large support from the middle class. Another rising party is Gerindra party under Lieutenant general (ret) Prabowo Subianto. His ads on tv quickly make him one of the most popular figure in Indonesia. Hanura party under General (ret) Wiranto is also a strong new party. These two parties perhaps will also rally support by using the same method. Meanwhile rivalry is now not only among parties but also among legislature candidate of the same party. This means that the competition is more complicated and intense. Thus the conflict potential is greater than ever. Meeting these mob is very very dangerous. So you’d better avoid them.
Besides this dangerous political campaign, the more elegant and smart way of campaign has never done by any parties. Not even Amin Rais’ PAN (National Mandate Party) which has strong support from the middle class and the intellectual. So far only Gerindra party is the only one who publish their programs. Recently they put ads on the mass media about their program. It is called rebuilding the greater Indonesia which comprises eight action plan to build prople’s prosperity. The first is rescheduling of foreign loan. The fund that should be for foreign loan repayment will be allocated to finance education, health, food and energy program. The second is saving the country’s wealth to eradicate poverty. It comprises of a set of action such as :
· setting up state - owned enterprises as the spearhead of economic development.
· Stopping the sale of strategic state asset or those controlling interests of society.
· Reviewing all government contract that are detrimental to national interests.
· Enforcing national exporters who enjoy credit facilities from the government to save their fund in domestic banks.
· Building manufacturing industry to gain added value.
The thirs is implementing pro-poor economy. It comprises of a set of actions like the following :
· Setting up of two million hectares of new plantation soil to improve production of rice, corn, soybean, and sugar cane that will absorp about twelve million workers.
· Setting up of four million hectares of plantation for raw material of bio-ethanol that will employ twentyfour million wokers.
· Building fertilizer companies with capacity of four million tonnes.
· Improving capital of micro financial institutions to channel credit for small business.
· Building mass transportation mode.
· Modernizing traditional markets for small business people.
· Imroving per capita income from US $ 2000 to US $ 4000.
The fourth is eight programs for villages that comprises a set of actions such as :
· Village electricity.
· Banks and village finance institutions.
· Clean water for village.
· Village clinic.
· Village education.
· Infrastructure for village and coastal areas.
· Healthy housing for village.
The fifth is strengthening small and medium enterprises. Actions will include :
· Giving priority of bank credit to farmers, fishermen, and small businessmen.
· Banning channeling of government - bank credit to build luxurios housing and apartment, and other luxurious projects.
· Protecting traditional market business people by prohibiting the building of big department store that are against the law.
· Protecting and fighting for the rights of migrant wokers.
The sixth is energy independence which comprises a set of actions like :
· Building electricity generators with capacity of 10,000 MW.
· Providing energy resources by building oil refineries, bio-etahnol factories, and DME (LPG substitutes) factories.
· Opening 2 – 4 millions of forest for producing ethanol energy as oil substitutes. After seven years of plantation Indonesia will become the biggest exporter of bio fuel.
The seventh program is education and health. There will be a set of actions like the following.
· Cancelling the law on education.
· Eliminating tax on school books and cancelling the annual changes of school books.
· Giving at least one million lap tops to college students per year.
· Regenerating the family planning program.
· Improving the role of family education on wealth and health.
· Posting new fresh university graduates and doctors in slum areas.
· Organizing the white revolution by giving fresh milk to poor children.
The eight program is protecting nature and environment. Actions include :
· Reforestation of fiftynine million hectares of forests and conserving bio diversity and conservation forests.
· Securing and rehabilitating river.
· Preventing and punishing people who destroy nature.
· Protecting flora and fauna.
In my opinion these eight programs are excellent. They really meets Indonesia’a need at present. And so far Gerindra is the only party who publish their program. Last week when they published it Prabowo’s popularity rose significantly. Metro TV who conduct research found that he was the most popular figure last week. But April 9 is legislature election. The result of the election will be determine by many factors. Anything may happen over the last minutes. However, the eight program is a strong weapon for legislature candidate.
TWILIGHT FOR JUSUF KALLA ?
The Indonesian press write about controversial issues of the SBY – JK relationship these days. Mubarok, the vice chairman of Demokrat party told the press lately that his party has not decided to the vice president candidate because they are not sure whether Golkar party can win in the April legislature election. He estimated that Golkar will get only about 2.5%. Golkar leaders including its chairman Jusuf Kalla who is the Indonesian vice president reacted. They expressed strong concern to Mubarok’s comment. Later Mubarok told the television that he never made any such statement. He said that his statement was incorrectly cited by the press. President SBY on Tuesday February 10th hold a press conference. He told the press that he had warned Mubarok and that his party never have any intention of harassing Golkar party. Further he said that so far the relationship of the two parties is good.
This fact once again reveals a problem faced by Golkar and Jusuf Kalla. Golkar might face an internal conflict while JK may expect the beginning of the end of his political career. Golkar is in an awkward position. In 2004 Golkar remained the biggest political party. This position make Golkar members and elite think that Golkar should have presidential candidate of its own. But the problem is its top leader Jusuf Kalla, who is also Indonesian vice president, is not a popular figure. Latest poll indicated that his popularity and so his electability is very low. Tempo daily on February 10, 2009 quoted a poll by Lembaga Survey Indonesia conducted in September 2008. First rank is Sultan Hamengkubuwono X, the king of and governor of Yogyakarta and a member of Golkar leadership. He got 4% of votes. Jusuf Kalla ranks second with only 2% of votes. While the former top leader of Golkar, Akbar Tanjung also got 2%. LP3ES conducted its survey on December 2008. They indicated that Sultan Hamengkubowono X got 6.66% while Jusuf Kalla got only 3.76%. But LP3ES also revealed in his survey that Jusuf Kalla is the most popular candidate for vice president. He got 17.2% while Sultan HB X got 12.6%, Akbar Tanjung got 7.7% and Agung laksono the chairman of parliament got 3.8%. LSI conducted his survey again on December 2008. This time Sultan HB X got 5%, Jusuf Kalla only 2% and Akbar Tanjung got only 1%.
Those figures mean that Jusuf Kalla is in difficult position. It means that his best and only chance is becoming vice president to SBY. It is almost impossible for him to become vice president of other candidate. For SBY and Demokrat party, on the other hand, chances are almost limitless. SBY holds an ace card. At present he just wait and see the developments of events. He is waiting for the result of legislature election held in April. He needs a strong and loyal vice president candidate to support him. Some observers said that the finance minister Sri Mulyani is one of the candidate. Jusuf Kalla, however remain SBY’s best candidate because he has a strong party but he is not popular. So it is relatively easy for SBY to control him while JK has no choice but to obey SBY. JK realizes that his chance to become president is like a glass on the edge of a table, so he does not want his party to hold a convention to find a presidential candidate.
Golkar’s position does not satisfy its elite. They are unhappy with this embarrassing situation so they react. Akbar Tanjung who is the former top leader of Golkar several times commented about Golkar. He told the press that Golkar should hold a convention. JK strikes back. He said that there is no need for Golkar to hold such a convention because he does not have any legal problem. In the past, he said further, Golkar had to hold a convention because its top leader, Akbar Tanjung had a legal problem. Furthermore Golkar’s candidate general (ret) Wiranto lose in the presidential election. But Akbar Tanjung replied that there is no corelation between his legal problem with the convention. He said that the convention is a way to improve Golkar’s image and to show that Golkar is pro reform movement. He urge Golkar not to avoid such a convention.
Sultan HB X on October 2008 held a traditional gathering in front of his palace in Yogyakarta. He stated that he would run for presidency. Maybe this is an expression of his disappointment to Golkar because the door is closed for him to become presidential candidate. Without convention there will be no presidential candidate from Golkar. The door is closed for all members and leaders of Golkar party.
Other disappointment for Golkar’s elite and members are the facts that Gokar’s cadres losses in many local elections. Over the past four years there have been numerous losses of the party cadres in provincial and local elections. In addition there serious threat from new parties like Hanura and Gerindra. Hanura party is a new party led by the influential General (ret) Wiranto, the former armed forces commander. Gerindra party is led by Liutenant general (ret) Prabowo Subianto, the former commander of the army special force Kopassus. Both generals are so popular and influential that they will surely attracts a great number of voters. Since their supporter mainly come from the same background with Golkar, it is almost certain that they will reduce Golkar’s constituents. Furthermore Prabowo’s ads on tv are very effective to enhance his popularity.
Losing control in many provinces and districts and the rising threat from Prabowo and Wiranto will definitely reduce Golkar’s vote in the coming elections. This fact will improve elites disappointment in the Golkar leadership. This disappointment may lead to efforts to overthrow JK from the party leadership. Akbar’s statement in the press is undoubtedly his efforts to rally support from inside Golkar. With the growing disappointment inside the party, his appeals may be impressive for them.
If Golkar got little votes in the April election, then Demokrat party maybe will consider other figures as vice presidential candidate. So JK is in serious threat. This is a difficult time for him. Maybe this is the beginning of the end of his political career.
PROSPECTIVE INDONESIAN LEADERS
The Indonesian Tempo magazine on its issue of 21 December 2008 wrote a special report on the rivalry for presidential office in Indonesia. Tempo quoted several polls on the issue which stated that the strongest opponent for SBY is the former president Megawati. Tempo quoted three polls by Indobarometer, LSI and Cirus. Since May 2007 SBY’s electability always stands out except in June 2007 when Megawati surpassed SBY. In November 2008 SBY’s electability is 36,99% while Megawati’s is 16,20%. So far political observers agree that they have the highest electability among other candidates.
Two crucial determinants are choice of vice president and correct issue. Up to now they have not decided their running mate. Tempo wrote that Megawati’s prospective running mate is Hidayat Nurwahid, Sutiyoso, Prabowo, Sultan Hamengkubuwono X, or Jusuf Kalla. Hidayat Nurwahid is the former chairman of Partai Keadilan Sejahtera (the Justice and Welfare party) and at present the chairman of Majelis Permusyawaratan Rakyat (People’s Consultative Assembly). He holds 40,21%. Sutiyoso, the former governor of Jakarta, holds 11,91%. Prabowo, former commander of army special forces and chairman of gerindra party, holds 10,01%. Sultan Hamengkubuwono X is the king and governor of Yogyakarta. He holds 9,87%. The vice president Jusuf Kalla holds 9,43%.
In my opinion since there are two major faction in Indonesian society – nationalist and muslim- Megawati’s best choice is a prominent leader of muslim party. The question is who is this muslim leader. It is not an easy question. Nurwahid must wait for approval from key figures of his party to become Megawati’s vice president. This approval is almost impossible because the Justice and Welfare party wants to run their own presidential candidate. Furthermore having a woman as president is not an interesting option for an Islamic party. If she cannot find a perfect running mate from Islamic parties, she must find other prominent leader.
Sutiyoso is also a strong and effective leader. He has proved his capability as the governor of Jakarta. But he has no party, no organization and no money. Although he is a retired army general he has no control over any influential organization. This means that he has no significant supporter.
Prabowo Subiyanto is a rising star in Indonesian politics today. As the former son in law of the former president Suharto he has big business that can support his candicacy. Money seems to be no problem to him. He runs sn organization HKTI (organization of famers and fishermen). Besides he has full control of Gerindra party. His ads on tv effectively increase his popularity. If his party can achieve 20% of support in the coming legislature election, he will refuse to be Megawati’s vice president.
Sultan Hamengkubuwono is a prominent leader from Golkar party. His position as the king and governor of Yogyakarta is very influential since Yogyakarta is very strategic and Javanese people is the major ethnic group in Indonesia. But his position as Javanese king may become his weakness. This factor makes his popularity among other ethnic groups remain low. In a recent meeting Megawati made a gesture that she will offer the position of vice president to him but so far there is no deal between them. The Javanese king is also known to be muslim but his relationship with muslim community is not strong. It is impossible to rely on him to rally support from muslim community. In addition the Javanese people are dispersed in many political parties and there is no loyalty based solely on ethnic ties.
Jusuf Kalla is the chairman of Golkar, the biggest party. He has big companies to support his party. He has many choices. He has better chance to become vice president again if he support SBY. So there is no reason at the moment for him to support Megawati.
Other candidate for presidential office are Amin Rais and Wiranto. But Amin Rais is only supported by a small part of muslim community. He rely to Muhammadiyya community. In 2004 the Muhammadiyya community supported PAN (National mandate Party). But now there is a new Islamic party – Partai Matahari Bangsa (Nation Sun Party) that try to find support from the same social base with PAN. So it is most likely that Amin’s supporter remain or even decrease.
Wiranto is the former chief of staff of the armed forces. He is the chairman of Hanura party. He has strong financial support. He has support from retired military personnel. But his popularity at the moment remain low.
Promienent figures in Megawati’s party – PDIP – quit the party and established a new party – Partai Demokrasi Pembaruan (Innovated Democratic Party). They run small but professional party. It is certain that they will decrease Megawati’s supporter.
Last but not least, today there is no support from political situation to Megawati. Unlike ten years ago when political pressures to Megawati created sympathy frojm the public, today people think that Megawati is an incompetent candidate.
Megawati tries to win public support by choosing an issue of ‘expensive basic needs’. She claimed that her party focuses to this problem. But recently SBY decreased the gas price. Perhaps he hopes that this decision will increase his popularity.
Although Megawati is the most serious contender for SBY those factors created obstacles rather than support for her. Maybe her best role today is as a mentor to the best cadres of her party.
SBY and JK in 2009 : Running Mate or Rival ?
Indonesian election campaign has come to the 4th month now. So far Presidential candidate have not decided their running mate. Some weeks ago President SBY told the public that he is ready for the next presidential election and he gave sign that he is ready to take JK as his running mate. His party, however, has not decided any running mate. Meanwhile JK also gave sign that he is ready to be SBY's running mate as vice president. But the situation is not that simple.
Partai Demokrat (Democratic Party) stated lately that they are open to any vice president candidate, not just JK. Meanwhile Partai Golkar (Golkar Party) also stated that they have not decided anything. JK told the press that they focused their effort to legislative election first before deciding any strategy for presidential election.
Golkar is the biggest party in Indonesia. In the election 0f 2004 Golkar was number one. They gained more than 21 million votes. This position certainly create ambitions for its members to run for presidential office. They think that they deserve to win presidential office. But JK on the last polls is always rank low as presidential candidate. He just does not sell. If he runs for president, it is almost certain that he will lose. So Jk is in an awkward position.
In the last meeting of Golkar party leaders hel lately in Jakarta, there ten names appeared on teh list for presidential candidate. They are : Aburizal Bakrie, the coordinating minister for welfare. Agung laksono, the chairman of DPR (parliament). Akbar Tanjung, the former chairman of Golkar, former minister of cabinet secretary. Fadel Muhammad, the governor of Gorontalo. Ginanjar Kartasasmita, the chairman of DPD (council of province representative). Then Muladi, the chairman of Lemhanas (educational institute). Priyo Budi Santosa, member of parliament. Ryamizard Ryacudu, the former army chief of staff. Sultan Hamengkubuwono X, the king and governor of Yogyakarta. Surya Paloh, a wealthy businessman, the owner of Metro TV and a number of newspaper. SBY, the incumbent. Sutanto, the former police chief. Syamsul Maarif, politician. The hardest competitor are Akbar Tanjung and SBY.
Although Akbar Tanjung is no longer in the leadership of Golkar party, many people believe that he is still very influential in the party. He still has many loyalist in the party and he has followers outside of the party. If he decides to run and he uses all his resources to support him, he still has chance to win.
Golkar's losses in many provincial and municipal elections over the past several years create disappointments about JK's leadership. There is no doubt that local party leaders are responsible for those losses but JK's role can be uestioned. At least JK's competitor has another ammunition to attack. If the disappointment spread nationwide among party members, his competitor like Akbar will be a serious threat for JK.
If JK can fully control Golkar so they have to decide him as a candidate, then they have to face another prolem. As the biggest party they deserve to run for president but unfortunately JK's rank is always low. Vice president is a more realistic target for him. And if JK decide to run with SBY, he certainly have to accomodate his constituent to ask for high condition to SBY. The uestion is : will SBY meet his demands ? If the condition is too high, SBY has to find another running mate which is not easy. Megawati and her party PDIP (Indonesian Democratic party of Struggle) will never accept any offer as vice president. She will run for president. But in case SBY find another mate from isalmic parties or nationalist parties, probably JK will get nothing.
Indonesian politics is very interesting these days. Political leaders like SBY, Amin Rais, Wiranto, Prabowo, and Megawati watch very closely on the last developments as they are on slippery road. Choosing a running mate is very crucial now. Just one blunder can make them finish. SBY will certainly run for president, his problem is finding a perfect mate that wil, support him. JK's position is uncertain whether to run for president or vice president. His party pushes him to run for president but his popularity makes it risky. In case he joins SBY again as vice president then his problem is controlling the disappointed members in his party from making a powerful coalition with his rivas like Akbar. A powerful coalition inside Golkar can overthrow him from party leadership at anytime.
Towards Dynastic Politics ?
Kompas daily on its edition of October 21, 2008 wrote on its headlines an interesting phenomenon in Indonesian politics today. It is about dynastics politics in Indonesia. Kompas wrote that similar phenomenon take place in some countries like the Phillippines, Pakistan, India and even the United States. Indira Gandhi from India, the daughter of Prime Minister Nehru, proved to be a capable Prime Minister. So was Benazir Bhutto from Pakistan. Gloria Macapagal from the Phillippines is also a very capable President. The Indonesian case, however, is unique. Puan Maharani is the daughter of former President Megawati who is the chairwoman of PDIP, the second biggest party in Indonesia. Now Puan Maharani is number one legislature candidate from PDIP. There is no reasonable cause why she should be number one. It is clear that the real reason is because she is the daughter of the boss. There is a surprising similar phenomenon in PAN (National Mandate Party). Even the hardest critic to nepotism practices nepotism. Although Amin Rais is no longer the chairman of PAN, there is no doubt that he is still the king of the party. Surprisingly PAN has two sons of Amin Rais as legislature candidate. During the new order era Amin sharply criticized Suharto for corruption, collusion and nepotism. How is the posible consequences of nepotism to Indonesian politics ?
Amin Rais was the chairman of Muhammadiyya, the second biggest muslim organization in Indonesia. It is also called as the modernist muslim organization because its members and followers live in cities and sufficiently educated. They are also known as rationalist people. Muhammadiyya is also anti tradition so the influence of traditional values on its members are relatively limited. Traditional values like hereditary leadership has no meaning for them. In this perspective nepotism contradicts to rational consideration of meritocracy. Party cadres who have supported PAN for years may feel disappointed sincethe recruitment process is disrupted by nepotism. Therefore Amin's nepotistic actions may reduce support for him and his party in teh coming general election. Furthermore there are many Islamic parties like the fast-growing PKS (Social Justice Party) which may become an alternative to PAN in aggregating muslim's interests. PKS is more modern and better organized. There is no single central figure in PKS. In short, PKS offers something that modernist people want - a clean, professional, rational and reliable party which is based on islamic values and not nepotistic in nature. So it is most likely that a significant percentage of PAn and Amin's constituents will swing their votes to PKS in the coming general election. Consequently PKS will rise and PAN will decrease. If Amin decides to run for President, it is most likely that he will lose again.
Meanwhile Megawati's constituent has a very different characteristics from that of PAN. Most of them are not devout muslims plus non muslims. They are very incline to traditional values. Hereditary leadership, therefore, is one of its core beliefs. They believe that leaders are born, not made. They believe that the offfspring of a tiger will be tigers and the offspring of a cat will be cats. In this perspective Megawati is the best candidate for President just because she is a Sukarnoputri (the daughter of Sukarno, the former President). And Amin Rais is nobody because he is nobody's son. Consequently Puan Maharani most likely will get significant votes. Besides, there is also Puti Guntur Sukarnoputro, the grandaughter of Sukarno. PDIP will also reap significant votes. So from the perspective of increrasing potential vote, nepotism is an appropriate step. Since this action will disrupt recruitment procedure, some party cadres and constituent wil feel disappointed and may swing their votes to more modern parties.
On the other hand there is another segment in Indonesian society. They are the traditionalist muslims. They are loyal supporters of the Wahid dynasty. The former President Abdurrahman Wahid aka Gus Dur is the son of Wahid Hasyim, the minister of religious affairs under Sukarno. Gus Dur is also the grandson of Hasyim Asyari, the founder of Nahdlatul Ulama, the biggest muslim organization in Indonesia. Anyone who wants to become leader in this community must be descendant of the Wahid dynasty to win their support and respect. Modern muslim like Amin Rais will never win their respect and support. Therefore PKB, the party for traditionalist muslims must rely on the Wahid dynasty. Key leaders of the party must come from the dynasty. Otherwise they will lose in the election. Unfortunately PKB is split. The faction which is supported by the government and the election commision is led by Muahimin Iskandar. Consequently Gus Dur's faction cannot take part in the general election of 2009. Since Gus Dur is the real king of PKB it is most likely that PKB will lose a great significant number of its votes. They will either be abstain or cast their votes to anyone else depending on Gus Dur's order.
Golkar is the biggest party in Indonesian in the election of 2004. It is also a modernist nationalist party but also nepotistic and paternalistic in nature. No wonder that there are new faces in the legislature candidate's list who are family members of its elite. Dave is the son of Agung laksono, the cahirman of DPR (parliament). The son of President SBY is also a legislature candidate of Partai Demokrat (Democratic party).
As noted earlier dynastic politics is a common phenomenon in Asia. It has several advantages and disadvantages. For several parties like PDIP, Golkar, PKB and many others which rely their support on traditionalist voters, this method is very effective to find support and respects of their constituents. But for parties which rely their support on modernist constituents like PAN, thsi method will have negative effects. Their voters will most likely cast their votes to a better and more modern party. In either case, party cadres will be disapppointed and maybe they will leave or create conflict. Furthermore, this method give way to unqualified mediocre leaders. Selection and recruitment process is disrupted. There is no fit and proper test to become legislature candidate. World history has shown that even great empire rotted and stumbled because they were led by incompetent leaders who were not capable to meet the hard challenge of their empire.
In short, dynastic politics is growing in Indonesia. So is the threat not only to parties but also to the whole nation. If Indonesia is led by mediocre leaders then just wait for its time to fall.
Indonesia, Amin Rais and Globalization
Amin Rais, no doubt, is one of the initiator of the reform movement in Indonesia known as reformasi in Bahasa Indonesia (Indonesian language). He was born on April 26, 1944 in Surakarta (Solo). He passed from Muhamaddiyya elementary school, junior high school and senior high school, in his hometown. He also studied in Mamba'ul Ulum and Madrassa al Islam in Solo. After that he continued his study at International Relations Department, Gadjah Mada university, in Yogyakarta. He also studied at Tarbiyya department of Sunan Kalijaga Insitute of Islamic Studies in Yogyakartas where he achieved his bachelor. Then he continued his study to United States where he got his master degree from Notre Dame University in 1974 and his Ph D degree from Chicago University in 1981. In 1978-1979 he studied at Al Azhar university in Cairo, Egypt. After Soeharto fell from his office he established Partai Amanat Nasional (national mandate Party) and he became the chairman. In 1999 he became the chairman of Majelis Permusyawaratan Rakyat (People's Consultative Assembly). He failed when he ran for presidential election in 2004 and since then he went back to Yogyakarta to teach. Today although he is no longer the chairman of National Mandate Party, he remain one of the prominent persons in Indonesian politics. Recently he just launched his book - Agenda mendesak bangsa - Selamatkan Indonesia (Urgent Agenda - Save Indonesia) . Here is the abstract of his book.
Chapter I : History repeats itself.
He wrote that what happened in Indonesia over the past several decade of 20th century and the 1st decade of 21st century, in many ways, is just repetition of our experience during colonial period. the difference is merely in format. Long time ago they used to occupy us using military power while today they use other power. To some extent we lose economic sovereignty that weaken our political, diplomatic and military power. He appeals us to learn from the lessons of history. He cited a Spanish philosopher George Santayana who said that 'those who fail to learn from the lessons of history are doomed to repeat them'. He further wrote that the Dutch East Indies company and the Dutch government could exploit Indonesia for more than three centuries due to mechanism of corporatocracy. The Dutch East Indies company could occupy Indonesia because the Dutch government gave full support , including military support. Banks also supported it. So did mass media so that stories about colonization had been distorted. Black sides of colonialism never revealed. Intellectuals also gave their support. Snouck Horgroje was an adviser to Dutch viceroy Van Heutsz. He gave his advice on how to conquer Aceh where fifty thousand to one hundred thousand people killed. The local elite also gave their support. Sultan Amangkurat I and II from Mataram opened the way for the Dutch company. At the end of 17th century Paku Buwono I gave even greater concessions to the Dutch. By 1755 territory of Mataram kingdom had been seized by the Dutch, and only small part remained. The consequences of long colonial rule also damaged our mentality and mindset. We have mentality of inlander (literally means native people but with pejorative meaning) who have inferiority feeling. At present the Indonesian elite bowed down to corporatocracy powers so that they destroy our economic sovereignty.
Chapter II : Weakening Globalization.
Globalization is a process of rising interconnection among many societies so that events in a country will influence other societies. Globalization refers to rising economic integration among nations, mainly through trade and finance. Consequently forces of market and financial centers break through national boundaries and smash economies that are not ready. IMF insisted that free market economy assumes efficiency through competition and division of labor and will lead to better access to capital flow, latest technology, cheaper import and wider export market. World Bank stated variations of view on globalization. One sees it as a process of impoverishment of the world's poor and enrichment of the world's rich and damaging environment. The other see it as the best way to develop universal peace and prosperity. The core is a process of sharing world economic activities by three activities : international trade, foreign direct investment and flow of capital market. Jan Aart Scholdt describes five definitions of globalization in literature : 1.globalization as internationalization as seen in international activities encompassing boundary of each individual country that will create inter dependency regarding mainly trade and capital. 2.Globalization as liberalization refers to process of erasing various political restrictions so that world economy will be more open and unlimited. 3.Globalization as universalisation of information, communication and transportation of other activities of world society. 4.Globalization as westernization that means the spread of the West's modernity structure regarding capitalism, industrialism, bureaucratism, etc at the cost of local cultures. 5.Globalization as deterritorialisation that means reconfiguration of geography, so that social sphere no longer defined by territorial map, distance and territorial boundaries.
Three pillars of globalization : IMF, World bank and WTO are based on ideology of Washington Consensus designed by John Williamson. There are ten recommendations for developing countries : 1.Fiscal policy discipline. 2.Redirection of public spending subsidies. 3.Tax reform. 4.Interest rate that are market determined and positive in real terms. 5.Competitive exchange rates. 6.Trade liberalization. 7.Liberalization of inward foreign direct investment. 8.Privatization of state enterprise. 9.Deregulation -abolition of regulation tat impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions. 10.Legal security of property right. The three pillars of globalization are very powerful. Jim Garrrison who wrote America as Empire : Global leader or Rogue Power ? stated that they dictated the direction of globalization, which rule to obey, which country to be awarded and which country to be punished for resisting them. The United States with three hands of globalization wants to integrate all national economies into one free market while Washington Consensus wants 'to break down national barriers to trade, end protectionism, expand free markets and free zones and allow capital to flow anywhere with minimal restraints or regulations. John Rolston Saul in his book The Collapse of globalization, wrote that promises of globalization like : -authority of nation states fade away. -those nation states may collapse. -power lies in the global market in the future. -economy, not military, that shapes events. -global economic market, if let free, will reach international economy equilibrium. -boom and bust will end. -free market will push trade that will in turn improve world economic growth. -prosperity will wipe out dictatorship and replace with democracy. -the new democracy will erase narrow nationalism, irresponsible racism and political violence. -in economy, substantial market growth needs bigger corporations. Big corporations make bankruptcy impossible and assures international stability. -leaders of trans-national corporations will lead civilizations for market control. -world corporations will become a kind of state and their dominance will not easily penetrated by local prejudices. These conditions will lead to good government and debt -free government and history will indeed be dead.
Globalization and economic imperialism.
Dr Mahathir Mohammad, former prime minister of Malaysia, reminds us about the danger of neo-colonialism when he said:"neo-colonialism is not a fancy term carried by President Sukarno. It is real. We feel it as we come under the control of agencies owned by our former colonial masters".
He further reminds us that if Asian countries want to develop they have to change their mindset to be truly free and sovereign. Amin agrees with him.
Since foreign economic expert said that the most productive economic system is market-friendly ones, some of us echoed the appeal that our economy should be market-friendly. They forget that market just search for profit. Joseph Stigliz reminds that the invisible hands theory is not real.
Globalization is in fact economic imperialism. There are three characteristics. First, there wide gap of prosperity between colonial countries and colonized ones. Second, the relationship between the colonial and colonized are exploitative. Third, colonized countries lose sovereignty in its widest sense. The present condition is no similar. By the end of 1990's 20% of the world population in developed countries enjoyed 865 of world income while 20% of the lowest only got 1% of the world income. 1,3 billion people or 1/6th of the world population earn less than one dollar a day. Per capita income in more than 80 countries in 1990's are lower than in 1980's.
Noam Chomski reminds :"globalization that does not prioritize the right of people will very likely degenerate into a form of tyranny, perhaps oligarchic and oligopolistic, based on concentrations of tightly-largely unaccountable top the public". James K Galbraith said that economic and social gap in the globalization era is a perfect crime.
Exploitative economic relationship in the globalization era basically lead to concept of "one-size-fit-all golden strait jacket" of Thomas Friedman that comprise of :low payment for labor to control inflation rate, privatization of state owned companies to global security market s, erasing tariff and quota
so that good may fully penetrate state boundaries, prioritizing production of export goods and opening all economic sectors to foreign ownership.
This concept is of course beneficial to strong states at the cost of weak ones. This system will eventually fail. Advance countries like US, UK, France, Japan, and Canada give billions of dollars to support their agricultural products while developing countries are under heavy pressures to ope their markets. Indonesia was pushed by WTO to receive US chicken, consequently thousands of local chicken breeder went bankrupt. Indonesia also had to receive sugar, textile, and many other commodities. No wonder that Henry Veltmeyer wrote that globalization sponsored mainly by US is economic imperialism.
Globalization based on new economic model or neo liberalism went smoothly for big countries interests. One of the doctrine is to drive countries to integrate their economy into a single global economy. The doctrine comprise of : trade liberalization, deregulation of production, capital and manpower, and downsizing state role, regarding mainly economic and social development program.
The main objective of the structural reform is to minimize role of state and replace it with private institution and release economic powers from regulations so that market economy moves freely with minimum control.
George Bush said :"the forces of economic and political freedom could flourish, vanquishing the enemies of freedom and obstacles such as government regulations, capital controls and restrictions on the movement of goods and capital.
Among US elite there are new conservatives who established Committee on the Present Danger, whose dream of American foreign policy is imperialistic. They are Donald Rumsfeld (former defense secretary), William Kristoll, Irving Kristoll, and academicians like Richard Pipes, Paul Wolfowitz, Richard Perle.
George Soros in The Bubble of American Supremacy, reminds us that what happened in America today is a combination of market fundamentalism and religious fundamentalism. Jim Garrison, chairman of the state of the world Forum reminds us, in America as Empire : Global Leader or Rogue Power ? that US has changed from a republic into an empire. He further predicts that one day America will decline.
Exploitative economic relationship and imperialism create gap and erase sovereignty of weak states. Indonesia is one of those victims.
Chapter III : Internal Sharp Criticism.
Criticism to globalization come from within like Joseph Stiglitz who won Nobel prize in economics in 2001, John Perkins who wrote Confessions of an economic hitman, NGO activists like Naomi Klein, Susan George, Arundhati Roy, Tariq Ali, Stephan Lendman, Chalmers Johnson, Noam Chomski, James Petras, Walden Bello, Howard Zinn, Kenneth Galbraith and many others.
Joseph Stiglitz wrote three books on globalization : Globalization and Its discontents (2002), The roaring Nineties : seeds of Destructions (2003), and Making globalization work (2006). In his first book he wrote that free- market economy never result in efficiency because there is asymmetrical informations of market.
Stiglitz corrects IMF's theory that economic openness and liberalization are panacea. Sates that open to free trade, and deregulate their markets and privatize state- owned companies suffer from economic and social setbacks.
Developing countries become victim of hot money that rise real estate but then when investment market change, their money is pulled and result in bust. Boom and bust.
Stiglitz said that privatization never take into account the importance of corporate culture, under estimate problems of building the needed institutions and that many government cannot create just regulations.
Sustainable development needs not only liberalization and privatization but also programs to ensure all segments of society take advantage of globalization.
IMF neglects impacts of wealth distribution. By demanding financial austerity, driving liberalization, IMF erase legitimacy of many governments.
Stiglitz said that United State's control over world bank and IMF is too strong, consequently they become instruments of Us foreign policy that push developing countries.
World Trade Organization reflects gap and hypocrisy of developed countries. They push developing countries to open their markets for their products, but they closed their markets to developing countries, especially in agriculture and textile products.
They push developing countries not to give subsidy to farmers. US talks about excellence of competitive market but protects its industry of aluminum and steel when they are under threat.
US push for liberalization of financial sector but oppose liberalization in general, include construction and maritime.
In his book, Making Globalization work, Stiglitz wants to save capitalism through market reform.
He wrote about paradox of plenty and oil curse. natural resources make nations lazy, unproductive, and lowering manufacturing industry, agriculture and decrease export. Corruption make situations worse.
Stiglitz praised China, India and Malaysia who can develop their economy without following Washington Consensus and take globalization selectively. Globalization in east Asia shows good result. Over the past thirty years they grow six percent annually while in Africa they decrease by 0.2 % per year.
Stiglitz said that oil, gas and mining companies try to assure governments of developing countries to gain as little profit as possible while helping them find foolish reasons that gaining little portion is better.
If governments of developing countries are sure that most profit are for those companies and the host countries get minor portions, developing countries like Indonesia have no future. Those companies become a state above a state.
We respect pacta sunt survanda but we forget an important clause - rebus sic stantibus ( things thus standing). It means that our agreement is no longer applicable when there is fundamental change in the context. If an agreement make one party suffer from great losses, then the party can ask for renegotiation.
Indonesian position.
Stiglitz reminds Indonesian to get rid of false understanding of globalization. He said that liberalization pf capital market is not a solution. Amin Rais insisted Indonesia to find a new agenda like land reform and investment in education and renegotiation of mining sector. This actions will make greater profit.
Malaysia, Brazil, Chile, and Norway that operate their mining sector by themselves achieve greater profit than what corporates give them. Latin American countries show how renegotiation give more profit. There is no contract that cannot be renegotiated.
There are at least four reasons for Indonesia to demand renegotiation. First, the doctrine of pacta sunt surbanda must be understood as a unity with the clause of rebus sic stantibus. If a contract is detrimental to a party, then the party has a right to renegotiate the contract.
Second, article 1(1) of the International Rights Covenant on Civil and Political Rights stated :"All peoples may, for their own ends, freely dispose of their natural wealth and resources without prejudice to any obligations arising out of international economic corporations, based upon the principle of mutual benefit, and international law. In no case a people be deprived of its means of subsistence".
Third, interpretation of Universal Declaration of human Rights give us confidence that protecting and managing our natural resources is one manifestation of human rights. Article 3 and 4 of Universal Declaration of Human Rights ensure everyone's right to enjoy life, freedom and security. An expert said :" each people's right to its resources is a human right".
Fourth, the 1945 constitution, article 33(3) :"The land, water and natural resources are controlled by state and shall be managed to the maximum of people's prosperity". Contract in mining of oil and gas and others are harmful to Indonesia and excessively beneficial to foreign investors.
Since the operatorship of most mining are under foreign corporations, they always mark up the cost recovery.
Most probably Indonesian leaders are narrow minded and they have vested interests. They search for profit for themselves, for their family, and for their clique and they neglected the interests of their nations.
Amin questions Exxon be given operatorship of Cepu bloc rather than state oil company Pertamina while Indonesian geologist stated that they are capable of operating the bloc.
By 2036 when contract with Exxon terminates and by 2041 when contract with Freeport ends, our mining wealth will diminish and our environment will be destroyed. Joseph Stiglitz advice is similar to Amin's and some Indonesian leaders'.
Chapter IV : Pax Americana
Post World War II US became world leader but they went too far. Arrogance made US intervene in Vietnam and many other parts of the world. Under Clinton there was a cabal or group of intellectuals, journalists, politicians, who dreamed of a Pax Americana. Those new conservatives want invincible military supremacy and their view on international politics is identical to that of Israel.
The root is Defense Planning Guide, designed in 1992 by seven persons : defense secretary Dick Cheney, Andrew Marshall, Paul Wolfowitz, Zalmay Khalilzad, Lewis Libby, Richard Perle and Albert Wohlstetter. The main points are : US military spending must increase so that none may come close to US military anywhere in the world, preventive and preemptive strike mat be carried out anytime if it meets US global interests. US has a right to intervene to any conflict, in any place, although not in US interests directly, but of its allies to keep international stability.
In fact, preventive and preemptive strike is to protect, to expand and to ensure US economic interests, including to control oil and natural resources in developing countries. But Clinton declined it.
Then the group joined Project for the New American Century. They designed a document called Rebuilding America's Defense. First, US military supremacy must be retained. Second, global hegemony must be kept with any means. Third, US military build up include nuclear weapons. War theater is not limited to space but also outer space and cyber space.
These neo-cons are now inside Bush administration. In 2002 White House issued a document called The National Security of The United States of America. This documents is based on RAD and and PNAC documents.
Bush Doctrine
This doctrine refers to NSS designed by neo-cons. It is contrary to morality and international law. What happened in Iraq, Afghanistan, Guantanamo are examples. Bush is similar to Hitler and Caligula.
It is not only about politics and military but it is also about economics. Chapter IV : "Ignite A New Economic era of Global Economic Growth through free markets and free trade". It is just s repetition of Washington Consensus plus keeping environment and global weather. But US did not sign Kyoto Protocol.
NSS 2002 is renewed in NSS 2006. Political and military aspects remain and economic doctrine is confirmed especially about free trade while erasing protectionism. In short Bush doctrine is equal to globalization theory of IMF, World Bank and WTO.
Chapter II : Champion Aspirations for Human Dignity is ridiculous. It said the world has seen expansion of freedom, democracy and human dignity. Afghanistan is said to be a success story while Afghan people feel their life is much better before US occupation. Iraq is said to be a success while everybody knows that Iraqi government is a puppet.
NSS 2006 also stated that Lebanon, Egypt, African countries, Latin America and Asia (but not clear which one) are successful in keeping democracy, rule of law, free court, economic growth and improving human rights. At least a part of it is an insult to human intelligence.
Criticism to Pax America.
The US supremacy is in the brink of collapse. Today there are 4000 deaths of US soldiers in Iraq with one trillion dollar losses. If America lose in Iraq, they will lose against stronger North Korea and Iran. Second, there are internal weaknesses obvious during hurricane Katrina. The world knows that there is a part of US which is poor and under developed and has no future. When Mississippi bridge fell they revealed that 28% of all bridges are structurally deficient.
Third, US economy is weakening. The trade balance is suffering from deficits. Foreign loan is soaring. Unemployment is also rising.
Amin is sure that the US and its allies in the near future will decline. US has passed the peak of its political, military, social achievement. It is about time for them to go down.
Amin cited Cornelius Tacitus, Arnold Toynbee. He also cited J.B Foster and R.W. Mc Chesney who wrote Pax Americana. They wrote that Pax Americana changed into Pox Americana. Amin further reminds US to be humble and to learn from history lessons.
Chapter V : Corporatocracy.
The word corporatocracy , introduced by John Perkins who wrote Confessions of an Economic Hitman, is "the new elite who had made up their minds to attempt to rule the planet".
1.Big Corporations.
There are several differences between ordinary crime and corporate crime. First, creating law or more precisely dictating law through executive, legislature and judicature. Second, the damage and loss caused by corporate crime is much greater than ordinary crime. Third, they have political power so they always win the legal process. Fourth, they are so strong that many judges and attorneys back them instead of justice. Fifth, legal institutions like police, judiciary, and attorney do not have capability and courage to fight corporate crime. The clean ones do not have courage. Corporatocracy is beyond the reach of legal institution.
2.Government.
Actually government are stronger than corporations because they have legitimacy, military power, and legal institutions. But in reality many of them surrender to economic interests of big corporations.
The easiest way for corporations to control political power is by giving campaign fund when candidate run for public offices. Elected president then will give favor to those who had helped him/here come to power. Campaign fund remain a complicated problem in America.
There is a more effective way fir American big corporations to control government. It is by by directly controlling important posts. Dick Cheney was a CEO of Halliburton based in Dallas, Texas. Condoleezza Rice, US secretary of State, was director of Chevron. Both Bush Sr and Bush Jr used to do oil business.
It is not exaggerating to say that the real reasons behind US occupation in Iraq is ambition to seize Iraqi oil fields and to serve the interests of big corporations. The reason that associates existence of weapons of mass destruction is just a lie.
It is clear that the most important element of corporatocracy - the big corporations - cannot reach their objective without political power from governments.
3.Banking and international financial institutions.
World Bank and IMF are pillars of globalizations. Both play the role as instruments of international capitalism, maximizing profit to big corporations and preserving economic dominance of US. World Bank give long-term loans to developing nations to finance development projects like dams, roads, power stations, bridges, harbors, schools, and many other infra structures. IMF chooses which country need aid to achieve economic and financial stability and give directives (pressures) to aid-receiving countries.
Countries wanting to receive aid must apply Structural Adjustment Programs dictated by IMF and WB. They must sell their state-owned companies. They must forget about or minimize budgets for education, health, child care, pension fund, and must deregulate their economy, open their market, decrease subsidy for local industry, open national economy so that big corporations may come, decrease import barrier, give license and facility to foreign corporations to gain direct access to natural resources with cheapest price, and never fix currency rate.
Jeffrey Sachs, Jesse Jackson are among critics of their role. But the hardest critics come from Latin America. Hugo Chavez, the president of Venezuela, said that WB and IMF are tools of US imperialism. Venezuela resigned from WB and IMF on reasons that they just preserve poverty by dictating economic policies that are detrimental to public.
By 2002 Venezuela with Bolivia and Nicaragua resigned from International Center for Settlement of Investment Dispute. Then Bolivia insisted to reconstruct all contract with mining companies that used to be harmful to their interests to become profitable to them. Venezuela and Argentina did the same and now they enjoy greater profit then before.
4.Military.
Michael Chossudouski in his book America's War on Terrorism, wrote that US military has a close tie with international financial institution and oil companies that their interests become identical. C.Wright Mills in his book The Power elite, called them the power elite. They can manipulate the public to support their ambitions. William J. Lederer wrote A Nation of Sheep to describe how easy American public be deceived by their elite. Gradually US military grow as a global oil protection service.
5.Mass media.
Mass media is the fourth estate of democracy. But now the main mass media that shape public opinion has become tools of corporate interests. Noam Chomski and Edward Herman wrote Manufacturing Consent : The Political Economy of Mass media. They stated that mass media voiced interests of big corporations. Chomski used the term propaganda to describe their effort to influence public opinion.
There are four filter to real truth. First, the size, ownership, profit orientation, lay out, manner, and head lines. NBC, ABC, CBS, and CNN are owned by General Electric, Walt Disney Companies, Viacom Inc, and AOL-Time Warner. Leaders of New York Times sit in Carlyle Group, Eli Lilly, Ford, Johnson and Johnson, and Hallmark. Leasers of Washington Post sit in Lockheed Martin, Coca Cola, Dan and Broadstreet, Gilette etc. Leaders of The Tribune sit in 3M, Allstate, Caterpillar, Conoco Phillips, Krafts, Mac Donald, Pepsi, etc.
Policy of mass media must conform with that of corporations. Journalists must apply self censorship to survive. Once Pulitzer prize winner were fired for writing report that reveals bad sides of big corporations. Jane Akre was fired for writing reports on Monsanto. Twenty journalists were fired for similar reasons.
Second filter is corporate power to advertise or not to advertise. Corporations can push mass media not to write certain report by threatening not to advertise. Third filter is source of news. News from center of power and center of corporations are decisive. Fourth filter is flak. It is a series of criticism and threat that discourage mass media, a call from White House to journalist or editor and anti media campaign is effective way to push mass media.
It is clear that mass media are controlled by corporations so they express interests of corporations. Theory about free press that controls then executive, legislature and judiciary, in reality is just theory or illusions. Lies about Weapons of Mass Destruction of Iraq under Saddam Hussein and also Osama bin Laden are lies that can assure American people prior to American aggression to Iraq in 2001.
6.Intellectual.
An intellectual is someone who has an appropriate knowledge that he/she can absorb the phenomenon in the society, nation and state and who has commitment to defend the interests of his/her nation and is ready to bear the consequences in the struggle for justice and truth. Intellectuals have decisive role in social change, even revolution in their countries.
There are three kinds of intellectuals. first, those who dedicated their lives to truth, justice and universal humanity. They come from universities, religious communities, NGO activists, journalists, artists, and scientists and sometimes even from the military. In short they are people who follow the trail of prophets.
Second group are those who oppose change. They prefer establishment instead. They do not want any risk. They are safety players. It is impossible to expect change let alone revolution from this group.
Third group is the "neutral" ones. They do not prefer social change nor status quo. Most of them just want to wait and see. They wait for direction of wind. They wait for the winer t come out. When change happen they will quickly go to the front lines. Sometimes they call themselves pacifist intellectuals. They never oppose evil things because they think pacifism taught peace. But being passive when we observe evil things is immoral.
Today intervention of corporations to universities is greater because universities face financial problems. Corporations are ready to give financial support. Research are conducted for corporations. donations are given with certain conditions. Consequently there are many of them work for the interests of corporations.
7.Sick national elite.
Developing countries that become subordinate of developed countries are those whose leaders suffer from mental illness. In other word they have enemy within. The enemy is their psyche who feel inferior and suffer from defeatism disease. This mental condition results in inertia, confusion, and lack of self confidence.
Amin Rais worries that Indonesian leaders suffer from the same mental disorder. He remembered when Indonesia took a very long time to consider support to PLO office in Jakarta. Consequently Indonesia lose diplomatic support of about twenty Arab nations in UN on Timor case. He also noted the way the Indonesian government handle their forest. Indonesian tropical forest are dominated and exploited by illegal loggers. Indonesia is the world champion in deforestation. In 2006 the Indonesian public was surprised when three debtors of Liquidity Aid from bank Indonesia (central bank) came to state palace. Foreign domination in banking is getting stronger. foreign investors may own up yo 99% of share in Indonesian banks. By the end of 2005 foreign asset in banking reached 48,51%, government only 37,45% and the rest owned by private business, probably the expansion of foreign corporations. Central bank do not limit foreign ownership to BI investment instruments.
Slave mentality is also obvious in the way they handle mineral wealth. Freeport Mac Moran mine gold, silver, and copper in Papua since 1976. The second contract was signed in 1991 for fifty years. Amin said that the American corporation committed several crimes. First, to environment. Everyday they dispose about 300 000 tons of tailings that destroy the environment in the river Agwagon-Otomona-Ajakwa. Thousands of square kilometers of forest around Grassberg now become desert. Second, tax crime. In 1990 Amin wrote that Freeport did not pay amount of tax in accordance to their obligations because their position was only number eight or nine of highest tax payers. The following year Freeport was in the first rank. Third, ethic and morality crime by giving bribe to police and military officers. New York Times in December 27, 2005 wrote about Freeport. They even wrote the names of officers who received the bribe. Fourth is crime against humanity. Seven ethnic groups of Papua were forced to abandon their lands. Some of them shot to death. It was estimated that 160 persons died between 1975-1977 in the mien area and its surrounding. Fifth is crime of exploiting Indonesian wealth by manipulating administration and make the mining area a mysterious and secret area. Freeport's asset is much greater than what is revealed in their official report.
Besides Freeport, there is also Cepu bloc in central Java. Its operatorship was fully given to Exxon Mobile until 2036. If Cepu bloc were operated by state oil company Pertamina, Indonesia would gain additional asset worth US $ 40 billion. Kwik Kian Gie wrote that "if after sixty year of independence there is no Indonesian capable of exploiting the bloc, there are two possibilities : all of them are bribed by Exxon Mobile or all of them still have slave mentality". Amin said Kwik forgets the third possibility : combination of both.
Another case is the stealing of sands by dredgers from many countries who do business with Singapore. There are 54 dredgers operating around Riau. Then they sell the sands to Singapore. By 1960 the territory of Singapore was only 581,5 square kilometers but by 1980's it became 650 square kilometers. By 2010 they plan to expand to 820 square kilometers. Where are the sands and the land come from ?
By 2001 the official data of sand export was less than 75 million cubic meters. While Singapore imported sands as much as 300 million cubic meters. The difference means that the unmonitored ones is illegal sand business with sole buyer : Singapore. The sellers are dredgers from many countries. It means billions of dollars. This business can operate well because there is protection from "strong" men from Jakarta.
Palapa satellite and Indosat are now owned by Temasekfrom Singapore. The other case are sale of large tanker from Pertamina, and Defense Cooperation Agreement with Singapore. Amin wrote that the present leaders is similar to Sultan Amangkurat I and II from Java who gave opportunity to Dutch EIC to rule over Java.
Chapter VI : State Capture Corruption
There are three ways for a corporation to conquer a developing country. First is by using brutal military power. Afghanistan and Iraq are present examples. Second is by using pressures ans threats. Third is by using subtle way, without military violence. Indonesia belong to this group. They control the economy, in fact also politics and to some extent defense, by the so called state capture corruption or state-hijacked corruption. The three pillars of government serve foreign interests.
State capture corruption is manifested in purchase of various decree and law by corporate sectors and abuse of power. Corporations through the ruling government can purchase law, dictate contract in mining, banking, education, health, water supply and others. Government is just the expansion of corporations. Consequently the state wealth, including its natural resources are exploited for many years with the help of legislation, rationalization and justification of government. This is what happen is Indonesia.
Amin is sure that Indonesian government by itself or by colution with legislature, too often facilitate and protect exploitation of Indonesian natural resources by big corporations. It happened long before SBY era.
Habibie era.
The government passed law number 7/1998 about banking. This law is more explicit in driving one agenda of Washington Consensus - liberalization of financial and trade sectors. But it was done too far, without taking measures to cope with risk.
The spirit of liberalization is written in article 22(1b) which let foreign individuals or legal body to establish general bank in partnership with Indonesian people or legal body. The article 26 (2) which let foreign citizen or legal body to buy shares of general bank directly or through stock exchange.
Under the law foreign people may own up to 99% of bank shares in Indonesia. This is much higher than in WTO which was initially 49% then 51%. Indonesia is more liberal than USA, Australia, Canada, Singapore that apply limitation to bank ownership. Consequently at present six out of ten biggest banks in Indonesia are owned by foreigners with majority ownership. They can buy those banks at price of only 8-12% of the total recapitalization and reconstruction cost paid by the government. In addition the state must pay interests of about 50 -60 trillion IDR annually until 2030. Today more and more smaller banks are acquired by foreigners.
Megawati era.
The Megawati government passed law number 19/2003 about state-owned companies. The basic concept is pro Washington Consensus than pro Indonesian people. The following are examples. first, in the general chapter of the law, point II, first paragraph, it is written :"state-owned companies are also one of significant state resources in the forms of various kinds of tax, dividend and privatization".
From the budget perspective this sentence is wrong, because privatization is not income but cost. The sentence implicitly acknowledge that privatization is a source to finance budget deficit. This is a manifestation of Washington Consensus - macro economic stabilization, especially budget stabilization by selling state-owned companies to cover deficit.
Second, in the general chapter, point III and IV it is written about the failure of state-owned companies to meet their objectives, how global environment change due to globalization, privatization as solution and privatization does not mean state lose its sovereignty. These are all arguments of Washington Consensus about globalization - that state ownership is source of problems and failures. so the solution or reducing or erasing state ownership.
Actually the main reason for poor performance of state-owned companies is intervention from political parties and bureaucracy that make management do not comply with principles of corporate management. Ideally the solution is by erasing the intervention of elite. Temasek is a proof that state-owned companies can become competitive global player.
Third, the criteria of state-owned companies that will be privatized is like giving blank check to privatization committee - make it easy to be abused. Article 76 stated that companies must at least : (a) competitive (b) its technology changed rapidly. With these criteria, most state-owned companies can be sold.
Fourth, mechanism of privatization was carried out with minimum control of parliament. Article 79-83 give very great power to privatization committee - Coordinating Minister for economics as chairman, Minister of state-owned companies, Finance Minister, and the linked Technical Minister. Their decision is just "consulted" to parliament and do not need approval of parliament.
So there is no legal barrier to privatization. This is a big victory for Washington consensus.
Another case is when the Megawati government gave "release and discharge" to debtors worth trillions of IDR. Finance minister, chief of BPPN (agency of national banking reconstruction) minster of state-owned companies, attorney general, and coordinating minister , designed Master of Settlement and Acquisition Agreement to serve the interests of several conglomerates who owned failed banks. In essence MSAA is releasing debtors that broke legal lending limit and non performing loans or in other words stealing state money.
Salim group's debt worth 52 trillion IDR and they gave their asset said to worth 50 trillion IDR to receive R&D. Later it was revealed that the asset worth only IDR 29,5 trillion. Then Bank Indonesia building that kept R&D documents was on fire. Losses from R&D is hundreds of trillions IDR but it is not comparable to those involving big international corporations.
SBY era.
Government broke the constitution four times in education. The 1945 constitution states that at least 20% of state budget be allocated to education but in reality they allocate only 8%. The state has no money for reforestation, armament, health etc.
Hendri Saparini said that law number 22/2001 about oil and gas management is confusing. Amin estimated that it is sold to foreigners for debt. SBY do not correct the situation. Production sharing contract is 85%-15%. It sounds good for Indonesia but operatorship holder calculate cost recovery first. This must be paid first to foreign corporation then the nett is divided. Indonesia get 85% and contractor get 15%. Kwin Kian Gie said that actually Indonesia get 58,98% and contractor get 41,02%.
Amin quoted other experts who wrote in details about Indonesia's great losses. Details are in appendices.
Since law number 22/2001 about oil and gas is excessively beneficial to foreign corporation, some members of parliament tried to submit judicial review to Constitution Court (Mahkamah Konstitusi) in 2004. Unfortunately it is only partially amended on several articles : 12(3), 22 (1) and 28 (2). But up to the end of 2007 the government neglect the verdict of Constitution Court.
Then eight members of parliament submit material test on article 11 (2) to Constitution Court. They argued that it is contrary to the 1945 constitution, because it stated that the government shall only inform the parliament rather than talk. Unfortunately the submission was declined. The Constitution Court said that they did not have legal standing.
It is clear that Indonesia is controlled by foreigners through state capture corruption due to slave mentality. The executive, legislature, and judiciary have become actors of state capture corruption.
Foreign control is also obvious in national waters. Siswono Yudo Husodo revealed that 46,8% waters is controlled by foreign flag ship. Indonesia's export using national ships is only 5%. telecommunication is also in foreign hands : Temasek controls Indosat, 35% of Telkom, and 98% of XL. So is otomotive business.
Law number 25/2007 about investment is a result of collusion between executive and legislature. It is the final nail on the coffin. Chapter V : treatment to investors is more liberal than that of developed countries because there is no escape clause to safeguard domestic interests.
In article 6 (1) : "the government should give equal treatment to all investors from any country ......according to law".
This article is an application on "non discriminatory" principles of World Trade Organization. This principle forbids any country to give special treatment to domestic investors, if the treatment id not given to foreign investors. Foreign investors must not be treated differently unless there had been certain multi lateral or bilateral agreement.
Based on this article a state may be sued by foreign investor if it gives protection to traditional shops and markets that are under heavy pressures of foreign hypermarkets. State may also be sued if it give tax and credit facilities to domestic investors who want to develop national car industry, steel industry, or any other manufacture. The same thing can be applied if a state gives protection to sectors threatened by imported goods and services like agriculture, animal husbandry, textiles, shoes and many others.
On the other hand, in developed countries the non discriminatory principles is applied using escape clause to protect their domestic interests. It may be in many forms usually related to environment, health, and consumer safety. European Union, for example, applies conditions of ecolabelling and health to import products from China, accompanied by campaign that Chinese products are not safe. Indonesia applies the principle without escape clause, consequently national industry and business people find difficulty to survive, not to mention acquiring technology.
Article 7 (1) states :"the government shall not take actions like nationalization or take over of investment, except by law". Article 7 (2) :"If government nationalize, the government shall give compensation in accordance to market value. If the government and the investor do not reach agreement, then the settlement shall be done through arbitration.
Chapter VII : Conclusion : Action Plan.
Suggestions :
* Prepare alternative national leadership who have free and independent mentality.
* Alternative leadership should be young people who have national and international horizon, and ideally should be cross-ethnic, religion, party, economic and social background.
* They must understand that power is people's mandate and therefore must work hard for people and must be honest to them. Power is not for accumulating wealth for personal interests.
* The new leadership must promote the importance of national independence. Free and sovereign in economy, politics, law, defense and education.
* Cooperation with foreigners must be based on equality and mutual benefit. Indonesia must not become servant who serve interests of big corporations.
* The New leadership must stop being a part of state capture corruption that bring Indonesia to poverty, unemployment, and multi dimensional backwardness. State-capture corruption must end.
* State -capture corruption is the prime reason for setback so the new leadership are expected to know this.
* Economist are needed to join KPK or Commission for Eradication of Corruption in the future because they can help find economic crimes.
*All production sharing contract on oil and gas must be reexamined honestly and rationally. Renegotiation is a must.
Indonesia must respect pacta sunt survanda but must not forget the clause of rebus sic stantibus. National interest is number one, Corporate interests must not above national interests.
* Indonesia must stop ecocide or ecology killing. Corporations have ecological debts to Indonesia. All tax, profit and royalty from them is not enough to rebuild the destroyed environment.
* The new alternative leadership must establish national agency for arbitration.
* Examination to revise of all license to forest exploitation cannot be delayed because they exploit Indonesian forest excessively that Indonesian forests are destroyed.
* All holders of license to exploit forest that destroy Indonesian forest must be punished. If cabinet ministers protects them, they must be prosecuted. Even the president, if he is involved, must be prosecuted. There is no one above the law.
* There are many license holders destroy Indonesian forest. All of them must be prosecuted.
* Theft of Indonesia's sands by foreign dredgers must be stopped, once and for all.
* Erasing debt addict is an urgent agenda. High deficit state budget must be stopped.
* The alternative leadership must stop neglecting Indonesian farmers and peasants.
* All strategic law must be reexamined. Law on mining, investment, state-owned companies, agriculture, plantations, electricity, waters, forestry, that are detrimental to Indonesia must be reexamined and replaced by more beneficial ones.
* Assuming that there are detrimental law that excessively beneficial to foreign corporations, the next house of representative must have one orientation - protect and uphold national interest. They must beat bribery.
* Mass media as fourth estate and watchdog must take over parliament's role as social control agent if parliament is too weak to defend people's interest.
* It is necessary to restate that executive and legislature conspiracy is obvious in legislation process and policy-making process which are 'orders' of corporations. The evil conspiracy operates through various financial institutions like World Bank, IMF , Asian Development Bank, economic hitmen, and economic jackals. They are public enemy number one. Not to mention high- ranking officials, slave intellectuals and politicians that defend foreign corporation's interest.
* Renegotiation of foreign debt payment is a must - they are odious debt, and if calculated, all installments far exceeds the debts. Revision to excessive Indonesian commitment to international fora, especially WTO, is a must.
* The national leadership post 2009 must totally reconstruct Indonesia's economic policy, from the present pro-foreign creditors and investors into pro-people and domestic investors. Equally urgent is prioritizing utilization of land, water, outer space, and natural wealth for domestic people, including native business people. Article 33 of the 1945 constitution is the basic guideline in Indonesia's economic development.
* The national leadership post 2009 must enact law enforcement without discrimination.
Six References :
1.The National anthem is a source of inspiration to keep on uniting and developing a free Indonesia, and to fully awaken toward a great Indonesia.
2.The national flag of red and white shall be above flags of party, group and any other components. Different flags may exist but under the two colors.
3.Bahasa Indonesia (Indonesian language) as a lingua franca.
4. The National Motto : Bhinneka Tunggal Ika (Unity in diversity). None may feel superior and none may feel inferior.
5.The national armed forces and police are above all groups and shall be instrument of national unity. Their vow guarantee dedication to the whole nation, not limited to a certain group or element.
6.Panca Sila (the five basic principles) as foundation and philosophy of our state.
Soeharto in Brief
The second President of Indonesia passed away on January 2008. He is the
most controversial among Indonesian Presidents since 1945. There are many
controversies about his root, his role in 1965, his policies and his corruption
cases. Here is a brief story about him.
The Family root.
There are many stories about his family. Pop magazine wrote in 1974 that
his father was RL Prawirowiyono, an official from the Yogyakarta palace. R
Rio Padmodipuro was his official name from the palace. But soeharto denied
this story and later he banned the magazine. The editor was then jailed. He
told the public that his father was Kertosudiro from Kemusuk, a small village
in the outskirt of Yogyakarta.
Several years later Tempo weekly magazine wrote similar story in the special
edition of January 2008. Rio was his father. When Soeharto was about six
years old Rio married the daughter of Jayengprakosa, a powerful official from
the palace. That is why Rio had to move Soeharto and his mother Sukirah to
Kemusuk. Later Sukirah married Kertorejo, a village official who took care of
irrigation. This is the second marriage for both of them.
Unfortunately several years later they divorced. Once again young Soeharto
had to move. This time to Wuryantoro, Wonogiri in Central Java where he
spent his student days. He lived with his aunt Mrs Prawiroharjo, wife of Mr
Prawiroharjo and sister of Kertorejo. His uncle was a low rank official who
took care of agriculture. One of his sons is Sudwikatmono who later became
a prosperous businessman when Soeharto was in power.
after graduating from high school Soeharto joined the Dutch army. But when
the Dutch colonial government collapsed he joined the Japanese army. When
the Japanese army in Indonesia was defeated and the Dutch army came back
to Indonesia Soeharto fought them.
Under Sukarno he served the nation as an army officer and once he was
posted in Central Java. In 1962 Major General Soeharto led the Mandala
operation to liberate Irian barat or the present day Papua from colonial rule.
Soeharto rose to power gradually out of severe political conflict in 1960's.
He won the conflict with PKI ( Partai Komunis Indonesia) and in 1968 he was
appointed as acting President of Indonesia.
Economic success.
when Soeharto came to power in 1968 he inherited severe economic and
socio-political problems from Sukarno. Inflation rate reached 600%. Public
facilities and productivity were very poor.
Seoeharto then recruited ecenomic experts mostly from prestigious
Universitas Indonesia in Jakarta to become his ministers. They designed
five-year plan to build Indonesia's economy. On the first five - year plan
Soeharto put emphasis on afgricultural development. He built facilities like
roads, elementary schools, small hospitals, electricity and many other
suporting facilities mainly in Java island. Soon rice production rose. In 1985
Indonesia reached self sufficiency in rice. Trade and industry were booming
that people were optimistic that Indonesia would become a new Asian tiger.
Human right cases.
Besides his success in leading Indonesia's economic development Seharto
left darks sides. Here is a brief note on his suspected human right
violations.
In the early morning of September 30, 1965 political conflict that would
become bloodshed broke out in Jakarta. a group of armed men suspected to
be communist killed seven key army generals including army chief of staff
General Ahmad Yani. Amazingly Soeharto was not on their list, although he
was the commander of Kostrad or army Strategic command.
Shortly after that violence broke out and spread to many parts of the
country. Anti-communist elements in the army and civilians arrested and
attacked communist members and supporters. Nobody knows for sure the
exact number of victims. Estimates starts from hundreds of thousands to
millions of people lost their lives, wounded or persecuted. Most of them
never stood trial.
thousands of people categorized as 'B' class, including a famous writer
Pramoedya Ananta Toer, were exiled to Buru island in the eastern part of
Indonesia for many years. during this period he wrote his welknown Buru
quartet. Those categorized as 'C' class or suspected to be 'influenced'
communism, were forbidden to become teacher, civil servant, army and
police members, politicians and even vote on elections.
Despite all the facts that there were so many human right violations
following the abortive coup, it is very difficult to blame Soeharto from the
legal perspective.
Mysterious shootings.
In 1983 people in Java often found dead bodies left on the roadside. Later
they were identified as bandits. Rumor said it was the military who shot
them, but they denied all the allegations. Armed forces commander General
Benny Moerdani stated that those killings were the result of gang war; that it
was not a government policy. He admitted, however, that some of them 'shot
to death by officials because they fought those officials'.
several years later Soeharto wrote in his autobiography published in 1989
that it was a shock therapy for them. He said that they 'went too far beyond
the limit of humanity', so he had to take firm actions. He added further that
only those who fought were shot to death.
General Moerdani said that up to July 1983 there were three hundred victims
but perhaps the exact number far exceeds that number. Mulyana W
Kusumah said that there were two thousand victims while Dutch foreign
minister stated three thousand.
Talangsari.
On February 7, 1989 there were shootings in the village of Way Jepara,
province of Lampung, in the island of Sumatra. The troops attacked a group
of moslem under the leadership of Warsidi. The military accused them of
preparing an Islamic state.
The case began on January 27, 1989 when the camat ( sub-district chief,
under regent) of Way Jepara told the local military command that there were
suspicious religious activities in Talangsari. On February 5, 1989, five
members of the religious group were arrested by security officials. Then the
next day commander of the local military command captain Soetiman came
to Talangsari. Hostility escalated and captain Soetiman was killed.
The number of casualties is not clear. The military said twenty-seven people
died but NGO's estimated 246 deaths. (Tempo special edition of January
2008). KONTRAS (commission on disappeared persons and victims of
violence) noted that 27 persons killed, 78 were disappeared involuntarily, 5
persons kidnapped, and 23 were arrested unlawfully. (Kompas, March 4,
2008).
Today this case remain a hot political issue in Indonesia. KOMNAS HAM (The
National Commission on Human Rights) conducted investigations on the
case. They called several key generals involved in the case but they refused
to come. Former Admiral Sudomo was the only one who came to KOMNAS
HAM . Other generals like Hendro Priyono, who was the local commander
at the time, and wismoyo Arismunandar who led the Central java command,
never sowed up in KOMNAS HAM. Minister of defense Juwono Sudarsono
made a comment that the retired generals are not obliged to obey KOMNAS
HAM. the statement generate sharp criticism from human right activists,
academicians and journalists.
Tanjung Priok.
On September 1984 there was a poster in a small mosque in Tanjung Priok,
North Jakarta, appealing moslem women to wear veil. On September 7,
1984 a soldier from the local military command asked moslems to remove
the poster. The moslems refused. The next morning the soldier came
again ands soon removed the poster. Shortly after that rumors spread that
the soldier did it without putting off his shoes when he entered the mosque
which means violations of courtesy and humiliation for moslems and
religion. People got angry and then they attacked the soldier.
The military command retaliated. Some people were arrested. Amir Biki a
local moslem leader led the protest demanding the release of their friends.
More and more people joined the mob then they went to the local military
command. Riot broke out and the army shot them. The government
stated that there were 27 casualties but people said there were
seven-hundred including Amir Biki. Several people were arrested. After the
fall of Soeharto demand to investigate the case grew stronger . Several
generals stood for trial but the verdict is that they are not guilty.
Books about Soeharto.
So far there are many writers, experts, and journalist wrote books about
various aspects of his life. There are many books in Bahasa Indonesia
(Indonesian language) and English. The latest one is written by Retnowati
Abdulgani Knapp, the daughter of Roeslan Abdulgani, former foreign
minister under Sukarno. She wrote her book in English : The Life and Legacy
of Indonesia's second President. Another book is : Indonesia in the Soeharto
years : Issues, Incidents, and Images, edited by John H Glyn, Oscar
Motuloh, Suzanne Charle and Bambang Bujono. Then there is Geoff forrester
who wrote Post-Suharto Indonesia : Renewal or Chaos ? Kevin O' Rourke
wrote : Reformasi : The struggle for power in Post Suharto Indonesia. RE
Nelson wrote : Suharto : A Political Biography. Adam Schwartz wrote : A
nation in waiting : Soeharto's Indonesian in 1990's.
Celebrating Ten Years of Reform Movement
The month of May is important for Indonesia. Ten years ago Suharto fell from his office following students demonstration protesting his corrupt regime and asking for reformasi or political reform. These days students, journalist, academicians, press and politicians are celebrating ten years of reformasi.
Koran Tempo (tempo daily) wrote a special issue to celebrate it. There is, among interesting articles, an interview with Major general (ret) Suharto, commander of the Indonesian marine corps at the time. He told Koran Tempo that the day when the riot broke out he was flying over Jakarta in a helicopter with the navy chief of staff to monitor the situation. He saw his troops deployed in strategic places but he did not see army troops. So he questioned their whereabouts and the firmness of the top armed forces leadership at the time.
Koran Tempo also wrote about casualties of the riot that broke out on May 13 - May 15, 1998. There were 1,217 people died according to volunteers team. The police said there were 451 persons died. Military command said there were 463 people died. The Jakarta local government said there were 288 people died. Many of them died because they were burned alive in shopping malls when they were looting. There were rape of women. Initially fact - finding team reported there were 168 victims but then they said there were 92, then changed into 85 and at last they said there were 52 people. The figures and the events are never clear.
Buildings were burned by angry mob. There were 2,479 damaged shop houses, 1,6045 shops, 1,119 cars and 821 motor bikes, 1,026 houses, 40 shopping centers, and 13 markets.
Riots took place in 108 locations that caused damage. Arson happened in 99 locations. Looting took place in 96 places. Attacks to housing complex happened in 14 places.
ANTV also hold a series of interview with intellectuals, volunteers, academicians, and politicians about the riot and reform movement.
Meanwhile Metro TV hold dialog with prominent figures in teh country. They invited Amin Rais who is known as the initiator of reformasi and other prominent figures like vice president Jusuf Kalla, economist Kwik Kian Gie, who was the chief of Bappenas or the government agency for development planning, and Hendro Priyono who was the chief of army intelligence unit. Both Professor Amin Rais and Kwik Kian Gie blamed the government for the present economic situation.
Amin Rais stated that there are reform in the political structure but reform movement failed to bring prosperity to people. He even wrote a book with the title of Selamatkan Indonesia or Save Indonesia.
100 hot books
Indonesian Foreign Policy and the Dilemma of Dependence
Book Title : Indonesian Foreign Policy and the Dilemma of Dependence from Sukarno to Soeharto.
Author : Franklin B Weinstein
1.The Dilemma of Dependence.
As developing country Indonesia has political and economic deficiencies. Therefore Indonesia must find foreign resources to aid its development. Total self reliance means slow or even no development. But reliance on foreign aid may compromise its independence.
Frank Weinstein explores the relationship between underdevelopment and foreign policy by focusing on the difficult choice between independence and reliance on foreign support.
Indonesian leaders realize that their country's weaknesses make them need foreign assistance. They need funds, expertise, credit, loan, investment, business partners, military training and diplomatic support.
For Indonesian leaders independence means more than just free from colonial rule. Since Indonesia is a big country they believe that they should take leadership role in Southeast Asia. But it is impossible to play the role without economic, political and military muscles.
There is another factor that make the situation more complicated - political competition. Isolating Indonesia from the West means giving advantage to PKI (Communist Party of Indonesia). And that created tensions among political powers.
This book is a study of attitudes and politics. Weinstein examines the Indonesian elite's perception of the world. Then he also examines the process of its interaction with political competition to find resolution of the aid-independence dilemma. Data were collected in a series of interviews during 1969 and 1970 with members of the Indonesian foreign policy elite. They were divided among generations, political associations, and professions. They were from the army, the foreign ministry, technocrats, members of PNI (Nationalist Party of Indonesia), members of PSI (Socialist Party of Indonesia), Islamic political parties and Catholic parties.
2. First Impressions of the International System.
The 1928 generations like Hatta and Sjahrir who got Western education aware that their inferior status was a consequence of the prevailing international order. They were the first who committed to end the foreign rule and they were optimistic that there were outside aid. They were influenced by nationalist and marxist ideologies.
The 1945 generations were suspicious to the world due to their classroom experience. Political science and economic courses shaped their world view. Hans Morgenthau's Politics Among Nations made them aware of the danger of struggle for power. Economist Professor Sumitro Djojohadikusumo thought that specialization in production on the basis of comparative advantage only perpetuated existing disparities. And that international trade was strongly influenced by monopolistic elements. Prices of raw materials also decreased relative to industrial ones. But Americans education gave the optimism on capitalism. They had trust on economic development theories.
Participation on study clubs and student associations also shaped their impressions on the world. Marxist and anti colonialist writings influenced them. In brief their initial view of international system was that the dominant capitalist powers sustained themselves by exploiting Asia and Africa. And that any strong nations would inevitably seek to expand its power at the expense of the weak. But they had hopes that outside forces would help them achieve independence.
The 1966 generations received Indonesian educations that shaped their strong anti-communist view. Participation in study clubs also shaped their world view. Most of them had negative initial impressions on Marxism. Some due to family background and some due to religious training. Their most distinctive characteristic, however, is pragmatism. But they absorbed Sukarno's conception that Indonesia is a leader of nations struggling for independence in a world dominated by exploitative powers.
3.Perceptions of the Major Powers.
The United States.
The 1928 generations had positive initial impressions on the US. They were impressed by Wilson's support for self determination so they believed that the US would support their struggle for independence. The Phillippines experience made them more optimistic. Similarly, the 1945 generations also had favorable impressions on the US. American revolution, American films and disposition to self determination, were among positive sides in their view. They were disappointed when American support for the proclamation in 1945 was meager. However they felt that US helped them more than it helped the Dutch but US help was below expectations. US policy on rebels, on Irian case, on Vietnam, led to erosion of confidence. Travel to US made negative impressions worse. Most of them cited racism, poverty, ignorance about Indonesia, decadency, rudeness and excessive materialism. Three-quarters of the leaders doubt that the US would symphatize to Indonesia. US was seen as imperialist and interventionist. Therefore it was hard to rely to US to assist Indonesia.
The Soviet Union.
Most of foreign policy elite (six of eight) had a negative initial impression on Soviet Union. For them Soviet Union and PKI were no different and therefore it was unreliable partner for Indonesia. But for some of Soviet Union had a positive side because it was a threat to European colonialist. The positive impressions got better when in 1946 the Soviet Union support their struggle in the UN. The Soviet policy on Irian (West Papua) issue, rebellions and confrontation with Malaysia strengthen the positive impressions. But the negative impressions remained. they cited dictatorship, closed society, favorable to PKI. So their suspicion remained stronger than their trust.
China.
The 1928 generations viewed China with mixed emotions. They did not like the local Chinese but the Chinese revolution of 1911 made positive impression. The 1945 generations had no clear impression on China as a nation. Later they were suspicious to China when Beijing interfered to domestic policy toward local Chinese. In the 1960's they were suspicious that China backed PKI and other communist rebellions in Southeast Asia. Since 1966 China was perceived as a threat.
Japan.
The 1928 and the 1945 generations had positive impressions on Japan. They cited Japan's 1905 victory over Russia, industriousness, and economic development. So when Japanese army came in 1942 they were welcomed as liberator. But the wartime experience, no doubt, made negative impression and distrust. since 1966 japan was seen as a threat.
The foreign policy elite's world view in brief was an evolution from hope and trust to suspicion and concern. This perception is the product of experience. Exposure to the outside world produced more suspicious view. Those with the highest degree of exposure are the most suspicious ones. But religious and social economic background also play a role in shaping their world view. Domestic politics also influence their perception. In short, there were many road lead to their perception of the world as a threat to Indonesia.
4. The Nature of World Politics in the 1970's.
The Cold War.
They viewed the Cold War as an opportunity and threat. great powers gave more attention and materials to Indonesia. They took advantage in the struggle for Irian (Papua). In the 1970's they saw the threat as diminishing. Most of them thought the Cold War was caused by ideological conflict and since ideology was less important in international relations the cold War was over. But they also feared that Indonesia had to face collution of great powers that pose a threat for them. They also feared Chinese expansionism.
The Middle East conflict.
Since Sukarno era Indonesia had supported Arab countries. For Sukarno Israel is an outpost of imperialism. The support of post -Sukarno elite diminished. They did not think it as important. In brief they thought it was another evidence of a hostile world.
The Vietnam War.
This conflict was not of prime concern either. Leaders from all political spectrum saw it as an evidence of big powers pursue their interest at the expense of weaker ones. Sukarno clearly backed Viet Minh (North Vietnamese). In post - Sukarno era there were ambiguity. North Vietnamese were communist while Indonesians were anti-communist but they saw North Vietnamese as anti imperialist. for them the communist Vietnam was not a threat.
The NEFOS - OLDEFOS Conflict.
The NEFOS or New Emerging Forces for Sukarno is the "progressive revolutionary" forces included Soviet Union and "revolutionary elements" in Western countries. Most of the elite from all generations and from all political spectrum agreed with this world view. Even the bitterest opponent of Sukarno saw rich and poor countries relationship as exploitative one.
5. The Meaning of an Independent Foreign Policy.
In early 1950's " Jakarta would avoid tying itself to either Cold War bloc". For Prime Minister Ali Sastroamidjojo it involved not merely staying out of a pact but also creating a reasonable balance in Indonesia's relation with the two blocs. Active policy was understood as one marked by vigorous steps to oppose the remnants of colonialism in Indonesia and elsewhere. By early 1960 Hatta wrote that an independent foreign policy meant being "free from the influences of either United States bloc or the Communist bloc, whether the influence be of capital or ideology". Sukarno said that the independent and active policy had to be "step-by-step reflected in foreign economic relations, so that they do not lean to the West or to the East. By 1965 an active policy mean that Indonesia should take a leading role in bringing together the "progressive forces of the world in an international front for independence and peace in opposition to imperialism-colonialism". Whereas in 1950 foreign policy had been "independent and active, based on national interest and aimed at world peace" and in 1960 it was "independent and active. Anti imperialism and colonialism....aimed at promoting the interrelated struggle to win full independence for Indonesia, national independence for all the people of the world, and world peace.
For Soeharto foreign policy must serve the country's economic needs and maintain balance relationship with blocs. The elite's view, however, were ambivalent. Some of them wanted foreign policy as aid- seeking efforts while the other wanted it to be truly independent and active. Most of them defined an independent policy as maximum effort to maintain balance in relation with power blocs. Smaller numbers defined it as balanced relation desireable but not essential. About the same number defined it as just no pacts.
Most of them thought that economic aid from Communist countries is very important to avoid total reliance on the West. They also thought that Indonesia must refrain from joining a pact because pacts are ineffective and it would endanger Indonesia's independence.
Active policy means that Indonesia should play an international role in Southeast Asia and even world role. They wanted to be a leader of the third world. Most of them thought that Indonesia must take a leading role at international conferences at least in Southeast Asia. But they thought that ASEAN would not achieve anything significant within the next decade.
6. Evolving views on Foreign Aid.
1945- 1954 : First thought about Aid.
to cover the balance of payment deficit, to finance development projects, and to facilitate the purchase of rice, medicine, and cheap textiles. Foreign investments also needed. The official development plan was drawn up with expectations of foreign aid.
1954 - 1965 : Aid under Attack.
In late 1950's the attack on foreign aid grew stronger. Sukarno saw that foreign nations would retain "economic and political imperialism" and they would "suck Indonesia's blood". He saw Indonesia's failure to develop is due to foreign economic and political intervention and experiment with liberal democracy. It was time for socio- economic revolution to "transform a colonial economy into a national economy". He took over Dutch companies and in 1959 investment law was repelled. But the Eight Year Plan of 1960 relied heavily on anticipated foreign investment to finance Indonesia's economic development.
Foreign Credits.
In 1956 foreign minister Abdul Gani said Indonesia's development did not have to depend on foreign aid. The chairman of the national planning board opposed financing eight year plan with extensive foreign loan on the ground that the burden of debt repayment would be too heavy. By 1962 Sukarno warned the danger of foreign credits and underestimating Indonesia's own capital. Since 1956 Indonesia began to receive substantial amount of foreign aid from Soviet Union and East Europe.
Development Strategies.
There were also thoughts about industrialization, agricultural self -sufficiency and overcoming inflation through an increase in production.
1966-1975 : Putting Aid first.
The New Order leadership had fixed a set of economic policies which emphasized stringent monetary measures aimed at stabilization, heavy reliance on foreign loans and foreign investment. In 1969 the government inaugurated a five - year development plan with the goal of achieving self-sufficiency in rice, rehabilitating the infra structure, raising the production in export - oriented mining industries through foreign investment, and increasing production in agriculture related industries. Approximately 73% of the total financing was from foreign sources, including private investment. Close to 80% of the government's development budget was met by foreign aid.
The Price of Aid.
Indonesia must adjust its policies to the desire of the creditors. Ending conflict with Malaysia is the first case. Also cooperation with IMF to design economic development. There were also pressures from Washington to change Indonesia's position on Vietnam issue. In diplomacy there were pressures from Washington and Tokyo for Jakarta not to support China's entry to UN in 1971. Washington also sabotaged Indonesia's establishment of ambassadorial relations with South Yemen. When Singapore executed two Indonesian marines convicted of sabotage activities Indonesia was under heavy pressures to prove their commitment to a "responsible" foreign policy.
7. The need for aid and the fear of dependence.
The Indispensability of Aid.
Eighty-one percent of elite viewed aid as indispensable. They cited the insufficiency of domestic capital, the predominantly low level of education and technical skills, and the ineffectiveness of the bureaucracy. They (48%) thought that if they cut aid drastically there would be a political crisis that the government may fall. Thirty-three percent thought just slower development. Others thought there would be political crisis but the government would survive by becoming more coercive.
The Dangers of dependence.
Most members of foreign policy elite were very worried about dependence on aid. That believed that aid givers tried to influence policy for their interest. They thought that IMF's influence on economic policies was excessive. Vast majority was worried that Japan is using aid to exploit Indonesia. They believed that nations give aid to achieve their own economic and political goals.
Development Strategies and the Perpetuation of Dependence.
Most of them (62%) wanted to do more to raise production and worry ; less about inflation. They also expressed strong concern about foreign investment. They perceived the risk of dependence was dangerously high. In principle they did not reject foreign aid but they objected the terms and its apparent effect on economic development and national independence.
8. Perceptions, Politics, and Foreign Policy.
Political incentives and risks in the Indonesian system were shaped by elite's view of the world and made stronger or weaker by changes in the intensity of political competition.
The Early Years.
Hatta voiced intention to draw international support for Indonesian struggle. Sjahrir's policy was to combine military struggle with a search for foreign diplomatic support while Tan Malaka called for an all-out struggle and confiscation of all foreign factories and agricultural estates to inspire the mass to "fight as lions". In 1949 the Dutch, due to American pressures, had to agree to transfer of sovereignty to Indonesia but the terms was also hard for Indonesia. The most significant were : the Indonesian government's assumption of the debt of the Dutch administration which meant it would be paying the operations that had been carried out against the Republic. Also the retention by the Dutch of west Irian (Papua) and safeguards for Dutch economic interests in Indonesia.
Those experiences taught them that foreign powers were unreliable and that a policy of negotiating concessions which appeared to compromise the nations independence carried dangerously high political risks. The downfall of the Sukiman cabinet is a consequence of the commitment made by Foreign Minister Subardjo to win American aid.
Sukarno's guided democracy.
Leaders who advocated of putting independence first came to center stage in this period.
The Structure of political competition.
The pattern of political competition was complex, Sukarno, army and PKI were maneuvering for political advantage. They used foreign policy to maximize their political assets and minimize their weaknesses. The army needed American military aid like equipment and training. Western aid also rose their power in decision making process vis-a-vis the PKI. For PKI independent-oriented foreign policy is a way of isolating the army from their foreign sources of support. They favored aid from communist powers to balance Western influence and to keep Sukarno protecting them.
Perceptions and Politics.
Policies viewed as compromising the nation's independence in exchange for foreign support proved politically hazardous. Irian campaign gave advantage for PKI. as Soviet military aid grew, so did PKI's role. As victory over Irian was achieved through diplomacy and not military operation, PKI and Sukarno took advantage. Meanwhile the stabilization program was a threat to PKI and political disadvantages for Sukarno. Confrontation with Malaysia was profiting PKI than the army. Under guided democracy interaction between the elite's view of the world and intensely competitive political system created substantial incentives for all principal contenders to support a foreign policy that gave priority to full independence and aid-oriented policy almost prohibitive.
Soeharto's New Order.
Striking changes in policy was possible because the political incentives for carrying out confrontative foreign policy no loner existed and the risks of criticism and aid-oriented policy also diminished.
Incentives for putting aid first.
Indonesia's economic problem was very complicated. It was very difficult to mobilize local resources. The administrative machinery was in decay, corruption was rife, and ability to control distant area was limited. In the context of the Cold War an anti-communist Indonesia was a bastion Western powers. It was time to get their aid. But suspicion of the outside world remain high.
Recent trends and Projections.
The pattern would continue if there was low political competition. The sharpening criticism of dependence on foreign aid and rising social inequality, the frustration and alienation of a large segment of the political elite, and the intimation of political action to compel a change, sooner or later would lead to intensification of political competition and a foreign policy that accords greater priority to independence.
9. Conclusions : Implication of the Indonesian case.
The elite's world view as a hostile place found confirmation on their bitter experience with major powers. Their weaknesses forced them to seek aid. The two regime responded to the problem differently. The intense political competition of the guided democracy years created a strong incentive for a foreign policy that put independence first. In the much less competitive political situation of the new order, the obstacle to aid-seeking policy disappeared.
Where the foreign policy elite of an underdeveloped country perceives the world as hostile, intense political competition will lead the country toward a foreign policy that puts independence first, while less competitive situation will permit a policy taht accords priority to the search for aid.
