Originally Published 2004-10-28 05:26:01 Published on Oct 28, 2004
Dr Susilo Bambang Yudhoyono, the fifty- five year old former Army General and the leader of the Partai Democrat (PD, Democratic Party) emerged as winner in the first-ever direct Presidential election held in Indonesia ( Revised election law of March 2003
Indonesia - Change of guards
Dr Susilo Bambang Yudhoyono, the fifty- five year old former Army General and the leader of the Partai Democrat (PD, Democratic Party) emerged as winner in the first-ever direct Presidential election held in Indonesia ( Revised election law of March 2003 provided for such an election) and took over as Sixth President of the country on October 20, at the Plenary session of the People's Consultative Assembly .In the election, Yudhoyono defeated his rival, Megawati Sukarnoputri , by receiving 60.6% of the total vote, compared to the latter's 39.4%.The fact that he could win in almost all 32 provinces including in Megawati's known strongholds of North Sumatra, Central Java and Yogyakarta, makes the victory a landslide one.. Megawati came first only in four regions - Bali, East Nusa Tenggara, Maluku and West Kalimantan.

Why Megawati lost?

Many expected that some achievements made during the last three years of Megawati regime, would to a certain extent help in brightening the electoral prospects of the outgoing President. Admittedly, Megawati could bring in some amount of badly required political stability, in the aftermath of East Timor separation. Signaling her maturity as a leader, she even chose to personally attend the East Timor independence celebration. In the economic field, inflation was brought down and foreign exchange reserves rose. Still, Megawati lost and it appeared that the people were fed up with rampant corruption, soaring unemployment and continuation of Islamic fundamentalist terrorism and wanted a change. Yudhoyono's personal popularity among the public which was on rise, especially after his fiery speech against terrorism subsequent to the Bali bombing, received further boost when he resigned from the post of the Minister for Political and Security affairs in March 2004 as a result of a row with Megawati's husband. From this time onwards, an upward swing in favour of Yudhoyono as an alternative to Megawati has been more and more discernible. The election result could also have been due to another factor - Megawati was aloof in her election campaign in contrast to Yudhoyono's style of reaching out to people.


What challenges Yudhoyono is likely to face as new President? In this regard, the pre-poll speeches of the leader and his close associates were noteworthy for their focus on four points - stimulating economy, fighting corruption, countering terrorism and curbing separatist tendencies.

On economy, it is estimated that the current GDP growth is 4%, with a per capita income of US$ 968.Yudhoyono revealed in August this year that his target for the next five years would be boosting the GDP growth to 7.6%, raising the per capita income to US$ 1731 and cutting the present double digit unemployment rate to 5.1% (Indonesia presently has10 million unemployed and 30 million under employed). These targets are difficult to achieve in the absence of enough investment. It was assessed that Indonesia may need about US$ 150 billion over next ten years to manage an average growth rate of 6.5%. As against this requirement, for the last six years, the Foreign Direct Investment (FDI) growth in the country was negative. Specifically, in the first half of 2004, investment in Indonesia dropped by more than a third. Yudhoyono is therefore being required urgently to improve investment climate. His other priorities would include checking inflation (presently 5%) and cutting down budget deficit (2.8% in 2001).

Fighting corruption is another equally important task for the new President. In the list of worst corrupt nations, compiled by the Transparency International, Indonesia ranks fourth. State institutions are seriously affected in this regard and investigations into the working of 377 of them are reportedly in progress. An unpredictable legal system compounds the problem further. The newly empowered courts have harassed the FDI sources. On fighting terrorism and separatism, Yudhoyono has a style different from that of other politicians. He is careful on imported terrorism, but at the same time acknowledges the growth of militancy within the country. Interestingly, he took care in seeing that terrorism was not an issue in the elections .Yudhoyono may not ban Jemaah Islamiah as it would not be prudent to alienate the country's predominant muslim population. Regarding separatism, unlike other leaders, the new President is in favour of a dialogue with Aceh and Papua rebels, aware of the fact that the latter two do not enjoy any international support, unlike in the case of East Timor. Interestingly, Yudhoyono revealed (September 23) that he would employ 'new tactics' for solving the Aceh conflict. 


The formation of Yudhoyono's 35-member " National Unity Cabinet" on October 21, was on expected lines .In a balancing act, Cabinet posts have been given both to those who gave Yudhoyono political support in the elections including from GOLKAR and Islamic parties, and others who are experienced former bureaucrats and professionals. The need for a such balancing apparently arose in the context of the poor representation of PD in the parliament ( 10% of the total seats) and the political necessity to widen the support for Yudhoyono, with an eye on smooth passage of legislations essential for revival of economy etc. The most prominent political appointee was Abu Rizal Bakri, a prominent businessman, former Chief of Chamber of Commerce and an activist of GOLKAR, who took over as Senior Coordinating Minister for Economy. Bakri's selection was despite his bad reputation - his company incurred a debt of roughly 1 billion US dollars during the 1997 Asian Financial crisis. Other political appointees to the cabinet include those representing the radical Islamic Crescent Star Party and the National awakening Party. Bakri, along with the new ministers for Trade and Finance , Ms Marie Elka Pangestu and Jusuf Anwar( of Asian Development Bank) respectively, would play a crucial role in boosting the economy. The inclusion in the Cabinet of Supreme Court judge Abdul Rahman Saleh as Attorney General with the rank of a Minister, is seen as an effective move in combating corruption and creating a transparent legal system. The new Defence Minister Juwono Sudarsono is a civilian, reflecting Yudhoyono's policy of abolishing military interference in state affairs. The appointment of Purnomo Yusgiantoro as Oil and Mining Minister has come at time when Indonesia has become a net oil importer and could show the new regime's intention to retain Indonesia's presidency of OPEC till the end of this year. Other notables in the cabinet are - Senior Minister for Security Widodo Adi Sucipto (former Armed Forces Chief ,for carrying out the much needed military reforms) and Foreign Minister Nur Hasan Wirayuda ( also of Megawati cabinet). The Junior Minister for National Planning Sri Mulyani Indrawati was former regional head of the IMF ( could face opposition from anti-IMF lobby). 


To sum up, challenges before Yudhoyono looks formidable. Notwithstanding the presence of political appointees in the Cabinet, the selection of professionals for the key portfolios is expected to strengthen the hands of the new President in pursuing his agenda for governance. However, with Megawati's Indonesian Democratic Party of Struggle and Akbar Tandjung's GOLKAR jointly holding 307 of the 550 seats in the Parliament, passing legislations will not be easy. Megawati did not concede defeat and was not present in the Presidential swearing-in ceremony. Under such a situation, the stability of Yudhoyono's government would, to a large extent, depend on a consensus building approach. How far the new leader will be successful in this regard, needs close watch. In foreign policy field, the new regime is expected to make no radical changes. The retention of Megawati cabinet's foreign minister is a sign of continuity.The economic priorities demand Indonesia's participation in the forthcoming ASEAN summit (LAOS) and APEC Forum (Chile). Relations with Australia appear to be important, as Yudhoyono had suggested signing of a new security treaty between the two sides. This may not come immediately as the visiting Australian Prime Minister John Howard downplayed the proposal during his recent visit to Jakarta to attend the swearing-in ceremony.

The writer is Research Fellow, ORF, Chennai Chapter.

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