November 13, 2001 | Commentary on Foreign Aid and Development
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
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.
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