Autophagy

You may have heard of the octopus that will eat one of its arms under stress. Well, Indonesia could be doing the same thing. I read the following words from a recent Jakarta Post article with chagrin: "He [Vice President Boediono] confirmed his commitment to serving the country, no matter if he had to lose his job," said organizational affairs chairman of the Indonesian Young Entrepreneurs Association (HIPMI) Kamrussamad, who sat with the beleaguered economist recently.

I am astonished that impeachment talk is still heavy in the air in Jakarta, even after months of inquiry by a House special committee and no evidence of criminal wrongdoing by the President, Vice President or other Ministers. And if impeachment isn't the ultimate goal of the political infighters, they apparently hope to settle for the resignation of some of the nation's best and brightest.

Jakarta media is rife with reports of "deal-making" to prevent the impeachment of the President and/or Vice President, with Finance Minister Sri Mulyani or other top officials as sacrificial lambs. Members just returning from Jakarta report that this is the hot topic of discussion. I suppose its akin to the calls for the resignation of Treasury Secretary Tim Geithner, as earnest and dedicated a public servant as you will find, or the "Cornhusker Kickback", the deal made to gain Nebraska senator Ben Nelson's vote on healthcare.

But, the stakes in a developing country with high levels of poverty and unemployment are very high. For the first time in several years Indonesia's economic future looks so much brighter. The government has made a good effort through its 100 day program to lay the groundwork for more foreign investment, especially in infrastructure, as well as reforms in environmental safety, education, healthcare, and agribusiness. Sovereign credit ratings have improved and prospects for increased foreign investment and trade are strong. It would be a shame to see all this stalled, a real danger since although the House committee is close to ending its investigation the Corruption Eradication Commission is just beginning theirs. Who knows what other revelations will be revealed? We can expect them, but doubtful they directly implicate SBY, Boediono, or Sri Mulyani. Meanwhile, they need to govern without facing a perpetual guillotine.

I suppose it was too much to expect that the coalition formed after the reelection of President SBY would "hang together" for the good of the country. Could it be that the democracy that Indonesia adopted after the fall of the Suharto regime is that of 1950-57, when Parliamentary coalitions were highly fragile, the Cabinet/Prime Minister changed ten times, the bureaucracy atrophied, and little was accomplished? Lets hope not.

Outlook for 2010: A Compromised Political Environment for Change

The world is such an interconnected place that the Presidents of both Indonesia and the US – two of the world’s largest democracies--are suffering deep political challenges resulting from the global recession. The 2010 story line will be the same in both countries: how to accomplish needed reforms and grow jobs in a compromised political environment. Elected by strong majorities in 2008 and 2009, President Obama and President SBY came in with what many thought was strong momentum. But each has seen their popularity drop and reforms challenged by an angry electorate and legislature unhappy with seeing big financial bailouts and little job creation. In Indonesia’s case, a scandal surrounding the bailout of a small bank, Bank Century, is diverting the government’s effort to build needed infrastructure and undertake judicial reform, and continues to threaten the career of one of the most competent and credible officials in the government: Finance Minister Sri Mulyani. US legislation to reform its healthcare and financial system is further not closer to passage following the special Massachusetts Senate election where voters continually raised the issue of big bonuses to Wall Street and little to Main Street. Should politics force out Sri Mulyani, the effect on investor sentiment would be negative even as Indonesia’s fundamentals remain positive. However, recent statements by SBY indicate that he will continue to back her. If SBY can successful navigate through difficult political shoals, a resurgent Asia and a recovering US and Europe will bring a better economy this year, advancing Indonesia closer to its target GDP for full employment of 7%.

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It’s a Matter of Time

When I first traveled to Indonesia I was introduced to the Indonesian concept of jam karet (rubber time). Appointments times were only a rough estimate and if someone said they were going to visit you tomorrow, it could be in two days or a week. Beginning in the 1980’s, as Indonesia engaged more seriously with the wider global community, jam karet began taking some serious hits. I once showed up for an appointment with a senior government official who was a bit angry at my tardiness, “Not all Indonesians expect to be late, some of us believe in doing a job according to a schedule”. In the 90’s businesses ran in-house training programs on time management, and stories began appearing in newspapers and journals on the topic. Clearly, attempts to change the relaxed attitude towards time were underway.

Now, 10 years after the new millennium, Indonesians, citizens of the world, answer email promptly, and are on social networking sites such as Facebook, Twitter, and MySpace. They get back to their friends immediately.

And so the country can be proud of the singular achievement of its flagship airport, Sukarno-Hatta, which is now ranked 2nd in the world for punctuality, behind two Japanese airports. Using data from FlightStats, the news portal forbesttraveler.com reports (noted by Bruce Gale in the Straits Times) that the airport for Jakarta has a 84.2% on-time arrival rate and 89.2% for departures. Travelers may still complain about customs, airport restaurants, dirty toilets and the traffic bottlenecks between the airport and the city, but in terms of arrivals and departures: no jam karet here !