November 13, 2001

November 13, 2001 | Commentary on Foreign Aid and Development

Hypocrisy in Jakarta

If nothing else, give the president of Indonesia credit for impeccable timing. First, Megawati Sukarnoputri snubs Australian leader John Howard at the recent Asia-Pacific Economic Council (APEC) meeting in Shanghai, only to have her husband suffer a heart attack a few weeks later and have to go to Perth, Australia, for treatment because no adequate facilities are available in her country.

Then, she stands before a cheering Indonesian Parliament on Oct. 31 and demands the United States stop bombing Afghanistan during Ramadan, the Muslim holy month. Meanwhile, the same day, a spokesman for the Indonesian National Military (TNI) announced that Indonesian security forces won't stop their campaign against insurgent forces in the country's Muslim Aceh region during Ramadan. The opposition forces also refused to stop fighting.

Alas, such instances of hypocrisy and sanctimony from this quarter no longer surprise. They've become all too familiar to those who attempt to deal with Megawati's government.

Howard avoided criticizing the snub in Shanghai, but he must have wondered why Megawati passed on the chance to mend relations or at least discuss them. And he and other world leaders must wonder why Megawati doesn't seem to understand the need to take serious steps to turn her country around.

Indonesia's economy is one of the least reformed in Asia. After the 1997 financial crisis, most countries in Asia underwent fundamental changes in their financial and economic institutions. As a result, the Asia-Pacific region has shown some of the most dramatic gains of any region in the "Index of Economic Freedom," a country-by-country survey published annually by The Heritage Foundation and The Wall Street Journal.

But Indonesia's score in the Index -- which measures the amount of business regulation, the availability of foreign capital, the strength of the banking system and the rule of law (making sure contracts are honored, for example) -- began a steady decline in 1998. It's improved slightly over the last year, but Indonesia is still classified by the Index as "mostly unfree."

Megawati picked a competent team when she first took office, which created hope that she would begin to implement some desperately-needed reforms. But she has never followed through. Indonesia's failure to enact the reform plan it agreed to with the International Monetary Fund and Megawati's hints that she may seek to restructure the country's massive debt has sent the rupia to its weakest exchange rate since she took office.

Today, Indonesia's monetary policy, banking and finance sector, level of regulation, black-market activity and property rights protection are so bad that it ranks in the Index below quite a few countries in sub-Saharan Africa.

"Why can't this government see the direct linkage between the rule of law and economic recovery?" a World Bank official said recently. "We keep telling them no one will bring money here unless and until Indonesians demonstrate a sense of probity and commitment to law. But Megawati's missed this point from the start."

It's difficult to understand why Megawati chose this moment to announce her opposition to the American military campaign -- or why she didn't anticipate how it might harm Indonesia's international standing. Protests in front of the American Embassy in Jakarta have dwindled dramatically. Indonesians seem far more worried about the abysmal state of their own economy than about a war in Afghanistan that doesn't concern them.

But Megawati faces a considerable amount of opposition from Muslim parties in parliament, and it appears she sought to appease her detractors. Many of those critics oppose her simply because she is a woman, however, and as such are unlikely to appreciate her sacrifice.

Her statement won't help her much on the world stage, either. It put Indonesia firmly outside the coalition of countries fighting terrorism. Even in Pakistan, where terror -- and the war -- present significant problems every day, the leadership has not called for cessation of air strikes during Ramadan.

Indonesia faces crippling political and economic crises, virtually all related to its government's inability or refusal to act in its citizens' best interests. Megawati says she thinks American bombing will "weaken the global coalition." But perhaps she'd be better off tending her own problems first. 

Dana Dillon is a policy analyst at The Heritage Foundation, a Washington-based public policy research institute.

About the Author

Dana Robert Dillon Senior Policy Analyst
Asian Studies Center

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