The music is better than it sounds
Indonesia Rising
by Stanley A. Weiss

JAKARTA--Headlines say "Investors Flee Lawless Indonesia," "Corruption Riddles Indonesia Courts," "Christians Massacred." But, as the saying goes, anyone who claims to understand what's going on in Indonesia isn't fully informed." Indonesia has yet to recover fully from the 1997-1998 economic crisis. Exports are down. Investment is lagging. Few state-owned businesses have been privatized. Foreign and domestic debt is sky-high. More than half the population lives on less than $2 a day.

Familiar faces of former President Suharto's New Order regime remain, as does public anger with KKN - corruption, collusion and nepotism. The recent murder trial and conviction of Suharto's son Tommy is still the exception in a culture of virtual impunity for those who can afford to buy their freedom from crooked judges.

Yet, as U.S. Ambassador Ralph Boyce quips, "Indonesia is better than it sounds." Subsidies on fuel and electricity are being phased out. Inflation and interest rates are down. The rupiah is up. Relations with the IMF are better. Economic growth might reach 5 percent next year.

Since regional autonomy was implemented last year, the economy is even booming in a few provinces. Whereas Jakarta once received all the tax revenues from Riau, for example, local authorities now receive 15 percent of oil, 30 percent of gas and 80 percent of timber revenues. Riau's innovative governor, Saleh Djasit, is investing in education and attracting new investors to "the next Brunei."

The West need not fear that the world's most populous Muslim nation will trade its tradition of religious tolerance for the veil of an Islamic theocracy. Despite the efforts of hard-line Islamic groups, there is virtually no chance that Parliament will support the imposition of Islamic law.

Any day now Parliament is expected to amend the constitution to allow for Indonesia's first direct presidential vote in 2004. The secular nationalist president, Megawati Sukarnoputri, is favored to win re-election, if for no other reason than that she is the country's least unpopular politician. People say, "If not Mega, who?" Determined to avoid an alliance between the Islamic parties and the twin pillars of the Suharto regime, his Golkar party and the military, she is courting all three.

The military and the police are now expected to relinquish their coveted Parliament seats in 2004, five years earlier than planned. The coordinating minister for people's welfare, Jusuf Kalla, says "political and social stability has been restored."
Nor should the world worry about a balkanized Indonesia. The CNN-ization of media unfairly magnifies the rantings of small rent-a-mobs. Separatist revolts in Aceh (population 4 million) and Papua (2 million) and religious violence in the Moluccas (2 million) do not define this nation of 228 million.

These conflicts may be rooted in politics and religion, but to understand why they persist one must follow the money. In Aceh and Papua, today's fighting is less about independence than about who pockets oil, gas and timber revenues. Laskar Jihad, which wages jihad against Christians in the Moluccas, is a Frankenstein monster born of the police's use of local thugs in Java to extort shopkeepers.

In the post-Sept. 11 world, progress since Suharto's downfall doesn't sell newspapers. Religious and ethnic violence and the war on terrorism do.

Indonesia is not unlike other places that have made the slow and painful transition from dictatorship to democracy. Four years and one failed coup after the collapse of the Soviet Union in 1991, Russian voters hungry for law and order handed the Parliament back to the Communist Party.

Four years and hundreds of billions of dollars of economic investment after unification with West Germany in 1990, the provinces of the old East Germany saw unemployment soar and birthrates plunge. Four years after South Koreans ousted their military dictatorship in 1987, public outrage over inflation, crime and political scandals sparked big anti-government protests and a violent police crackdown. If the world wants to help this diverse, vibrant nation realize its potential, it should understand not what the West would have it become overnight but what it is today - a country reborn after decades of dictatorship and struggling to live up to the one headline that matters: "World's Third Largest Democracy."

The writer is founder and chairman of Business Executives for National Security. The views he expresses are his own.