Wednesday, September 7, 2011

SBY’s Promises of Economic Stewardship? Official Miscues Don’t Inspire Confidence

Yohanes Sulaiman

In August, President Susilo Bambang Yudhoyono confidently declared that Indonesia would be able to weather the economic crisis engulfing the world. Many people reacted skeptically to his claim.

If the president is wondering about the reasons for the skepticism — or why his popularity has been slipping steadily both at home and abroad — he should look no further than the conduct of his officials over the past few days.

First there was the brouhaha over sentence reductions for people convicted of corruption. It is fascinating to see that the minister of justice and human rights, Patrialis Akbar, did not learn any lessons from last year’s uproar over the early release of Aulia Pohan, a senior Bank Indonesia official and the father-in-law of one of Yudhoyono’s sons, and Syaukani Hasan Rais, who was convicted in December 2007 on multiple counts of graft. The minister was again caught flat-footed in trying to explain why people like the infamous Gayus Tambunan deserved a reduction in their prison sentences.

Adding insult to injury, Patrialis justified his decision by saying “bribery is not a form of corruption.” Not surprisingly, this kind of verbal gaffe from a member of Yudhoyono’s administration makes a laughingstock of its quest to eradicate corruption.

Then, after anti-secrecy Web site WikiLeaks released US diplomatic cables suggesting that the thuggish Islamic Defenders Front (FPI) was funded by the police force, National Police spokesman Sr. Comr. Boy Rafli Amar rejected the veracity of the accusation — while also fueling the rumor mill by stating that “as a part of society, the FPI is our partner … in a positive way.”

The statement was ironic considering that several times in August, during the fasting month of Ramadan, FPI members attacked food stalls in Makassar and other cities, essentially breaking the law and causing public disturbances. These kinds of wanton acts of destruction are widely condemned and ridiculed by many Indonesians, but the police force remains unmoved to act.

In mid-August, the FPI attacked an Ahmadiyah office in Makassar. The action will further fuel anti-Indonesian forces abroad that will gladly seize on any sign of the government’s indifference toward minorities as a pretext to undermine Indonesian claims over disputed and restive areas, notably Indonesia’s sovereignty over West Papua.

If the FPI, with its violent actions that undermine the trust of citizens at home and governments abroad in Yudhoyono’s administration, is considered a “positive” partner for the police force, Indonesia truly does not need more enemies.

As the missteps pile up, they undermine the perceived trustworthiness of the government. This growing public antipathy is reflected in every single public opinion poll, which have shown a steady decline in public trust in both law enforcement agencies and the government itself.

This downward trend is not only devastating to the trustworthiness and effectiveness of Yudhoyono’s administration, but also, more perilously, to the prospects for Indonesian economic growth in the future.

To this point, Indonesia has largely been spared the impacts of the global economic crisis that has pummeled both the United States and the European Union thanks to its energy exports, notably coal and natural gas, to satisfy the growing appetite of China and India. But with the crisis showing no sign of abating, sooner or later it might spread to our shores.

What makes this economic crisis particularly dangerous is that it is fueled by a lack of public confidence. People everywhere are losing faith in the ability of their governments to successfully manage the economy.

In the United States, the once-popular President Barack Obama has seen his approval rating sink to below 40 percent, with only 24 percent of voters trusting his economic judgment. Thanks to the president’s earlier ramming through of health care reform over the opposition of Republicans, his relationship with the Republican-dominated House has become so poisonous that his opponents have been unwilling to compromise or give him any credit for anything.

The business community, seeing that the two branches of government are unable to work together, does not have the confidence that the government will be able to pass the required policies to pull the United States out of its economic tailspin and are unwilling to make investments. As a result, the US economy remains stuck in idle.

In Europe, the constant squabbling between Germany and France over the bailout of indebted EU nations has damaged investor confidence in the viability of the euro itself. Worse, as the governments of troubled Greece, Italy and Spain keep dragging their feet on introducing much-needed economic reforms because of the unpopularity of the austerity measures, it has caused tensions between the thrifty rich “Northern Europe” and the poor “Southern Europe,” which threatens to tear the euro zone apart and exacerbate the economic crisis.

Even though the Indonesian government has not been involved enough in encouraging economic growth, domestic industries have survived and even prospered against overwhelming odds, mostly from poor infrastructure, such as unreliable power supplies and poor transportation, unclear and vague regulations, and a corruption-riddled system. This resilience can only last as long as people believe that they can trust the government at least to maintain peace, order and security in this time of plenty.

With the looming threat of an economic crisis, the question is, considering how much goodwill has been squandered, would the government have enough sway left to persuade businesses that it would be able to pass the necessary policies.

There would be questions of whether the government would be willing to clamp down on groups such as the FPI and maintain social stability. There would also be questions about whether in desperate times it could be counted on to root out graft.

In the last crisis, the business community put its faith in the leadership of Yudhoyono, former Vice President Jusuf Kalla and Sri Mulyani, a former finance minister, to shepherd Indonesia safely through.

This time, looking at the performance of Yudhoyono’s administration over the past two years, the public has every right to be skeptical that the government has the nerve to do what is necessary to ensure that the country can withstand an economic crisis.

Yohanes Sulaiman is a lecturer at Indonesian Defense University.