It is indeed not unintentional when Kompas daily featured Sri Mulyani’s article “Winning the Transition” (5 August 2011) one day after Partai SRI (Serikat Rakyat Independen or Independent People’s Union), a new political party registered with the Ministry of Law and Human Rights to run for the general elections in 2014.
Partai SRI also took the opportunity to declare Sri Mulyani as the presidential candidate for the upcoming elections in 2014.
This piece of writing shall not discuss the issue of Sri Mulyani’s candidacy by Partai SRI, but is intended to emphasize on matters which Sri Mulyani has unintentionally (or intentionally) overlooked when discussing the political dynamics unfolding in the Middle East (Arab Springs) and comparing it to the political transition in Indonesia.
Sri Mulyani’s account of the political transition in Indonesia seems incredibly linear. The change process is assumed to advance smoothly when there is regulatory reform in governance, liberalization of political life, guarantee of procedural democracy and economic policy reform. Identifying challenges to the transition process then becomes an easy task: corruption, bureaucratic culture and weak law enforcement.
A linear explanation can identify problems only at the surface. It is therefore necessary to adopt a more historical approach in order to delve deeper and unearth root causes which may harbor potential risk to impede the political transition in Indonesia.
In her article, Sri Mulyani fails to elucidate on her views concerning the incompetent management of Indonesia’s natural resources as the main capital for Indonesia’s economic development and to attract foreign investment into the country. Bear in mind that Suharto’s downfall was partly triggered by injustices in reaping profits from natural resource management between Jakarta and the regions. To this day, such issue remains to be the cause of economic disparities and violent conflicts between corporations and the common people vulnerable of falling victim to human rights abuses.
Another issue that escapes Sri Mulyani’s attention concerns economic sovereignty and the responsibility of international financial institutions. At the end of her article, Sri Mulyani asserts, “We needed external assistance, but we never surrendered “ownership” of the reform process.” This statement is clearly comforting to hear, but its truthfulness must indeed be proven. Have the people of Indonesia truly triumphed over the transition?
World Bank’s politics of applause
The reform process, which Sri Mulyani contends has led to the enactment of various new laws, ratification of public finance laws and affirmation of the central bank’s sovereignty, is inseparable from the conditionalities of debt politics which Indonesia is imposed with when it became an IMF dependent from 1998 to the implementation of the post-program IMF monitoring which ended in 2006. The passing of legislation in compliance with conditionalities of debt politics even continues to this day through the Development Policy Loan scheme shelled out by the World Bank.
Concerning the future of Indonesia (as mentioned in Sri Mulyani’s article), Daoed Joesoef criticized the Government of Indonesia’s pride in becoming a dependent of IMF and the World Bank (Kompas, 4 August 2011). The leaders of this nation and those interested to become one must break away from this blight.
In 1993, Indonesia was proud of being hailed as “Asia’s Emerging Tigers” as extolled by the World Bank in its report “The Asian Miracle: Economic Growth and Public Policy”. This accolade further spurred Soeharto to reinforce his powers. The accolades however, did not stop there. In 1997, the World Bank yet again applauded Indonesia’s economy in its report, “Indonesia, Sustaining Growth with Equity”. However, such commendation became meaningless when a year later, Indonesia was hit by the regional crisis in 1998 and revealed the country’s extremely frail economic fundamentals. They are not as sturdy as the statistics published by the World Bank.
The World Bank’s politics of applause in fact is also applied to countries in the Middle East and North Africa prior to the crisis. The World Bank’s regional report on the impact of the global crisis in 2008-2009 for the Middle East and North Africa (one of regions which Sri Mulyani is responsible for as a World Bank managing director) stated that the region shall be among other areas which will recover from the crisis albeit at a slow pace. In the report “Doing Business 2011”, Egypt is even mentioned as a country with brighter prospects. Region-wide, the World Bank predicts that economic growth, income per capita and export will continue to see an upward trend until 2011. In reality, since the end of 2010 until now, the region remains mired in crisis.
Wahyu Susilo Program Manager International NGO Forum on Indonesian Development (INFID)
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