Investment Grade Indonesia?
There’s something different about Indonesia today than there was, say, 3 years ago. Among businesspeople, I sense a new optimism about Indonesia’s growth prospects. A decade of 6-7% growth will do that for you, I guess. As will the lifting of Indonesia’s sovereign credit rating out of the “junk bond” category.
Sure there are complaints about infrastructure, transport, and legal reforms, but the big players seem to know “how the game works” now, at least enough to make some money.
The question is whether or not this sense of optimism, excitement, and promise about Indonesia’s future is shared by Indonesia’s 99%. Here I’m not so sure. Public opinion about the current administration is down, and the very biased sample of non-elite Indonesians I’ve talked to don’t seem particularly optimistic that steady 6% growth means a steady increase in their material prosperity. Complaints about decentralization and the lack of a perspektif jangka panjang at the center are rife. The “I miss Soeharto” syndrome is alive and well.
Where does that leave us? Hard to say. Indonesians over the past 20 years (well, more like 45 years) have proven that they have an almost unlimited ability to absorb the inattention and the malfeasance of their country’s political and economic elites. But I stress almost unlimited (see 1965, 1998). This leaves me cautiously optimistic about Indonesia’s national economic performance, but only guarded about the prospects for continued stability under the current political architecture.
Having spent the last three months speaking to a (doubtless equally unrepresentative) sample of several hundred non-elite Indonesians in the “daerah terpencil”, I would say the problem lies not so much with people’s perception of their own prosperity (which is, by and large, growing as a result of otonomi daerah). Rather, people are frustrated, even furious, at the gap between their own prosperity and that of the Dewan and Bupatis that are supposed to be representing them/ working on their behalf. While their prosperity inches ahead, that of the elected kleptocracy leaps forward in bounds they make no attempt to disguise.
My own reflections on investment grade Indonesia here: http://portraitindonesia.com/2012/01/indonesia-gets-investment-status-but-wheres-the-investment/
Is there a way to be notified of new posts by e-mail? (RSS feeds are too much for the band-width of most of Eastern Indonesia.)
Thanks for reading, Elizabeth. I would say that in Jakarta, at least, the perception of stagnation is there, at least among some. In the daerah, things are likely different (although I’d hesitate to conclude that material prosperity is increasing because of otonomi daerah–see http://journals.rienner.com/doi/abs/10.5555/1598-2408-11.3.337).
You and I could not agree more, though, about the problem of elected representatives who fail to represent. Some colleagues and I are trying to think of ways to study this issue more formally, and to see if there’s any way that the NGO sector can do anything concrete about it. Email me if you want to know more.
If you’re interested in getting an email every day that I post something, check out this (free) service: http://www.feedmyinbox.com/
On the “I miss Soeharto” syndrome, I believe it’s not that they miss Soeharto per se, but they miss the presence of the state.
Indonesia during Soeharto can be categorized as a developmental state, but what South Korea and Singapore did and Indonesia didn’t, was to invest on the capacity of its institutions. Power and wealth grew and centralized along the lines of Soeharto Inc. Post-Reformasi, inequality grew between the elected and the constituent (of what Elizabeth Pisani mentioned), partly I believe because power is no longer centralized in the President. Hence, oligarchy is very apparent in the daerah (regions).
I’ve made a post on the missing-Soeharto syndrome here: http://fikafawzia.wordpress.com/2011/05/25/can-indonesia-afford-to-go-back-to-authoritarianism/
Thanks for the comment, Fika. I mostly agree with you but not entirely (and thanks for sharing that very interesting blog post). I think that there is no question that many Indonesians miss the presence of the Indonesian state (although they forget the bad things that came with having a very present state).
But I think that you may underestimate the extent to which they miss Soeharto himself. I have no systematic evidence of this, but I think that “state strength” and “Soeharto” are tightly linked in many people’s minds. I do not think, for example, that most of the people who say that they miss Soeharto would be equally happy with someone like Megawati or Wiranto leading a strong and muscular Indonesian state.