International Business: Indonesia
Indonesia's Wahid: "We Are Beginning the Rule of Law"
Indonesia's President holds forth on the challenges ahead
Nearly seven months in office, Indonesian President Abdurrahman Wahid can claim great achievements. Despite his blindness and diabetes, he has negotiated a ceasefire with separatist rebels in the gas-rich province of Aceh and staved off a military coup in Jakarta. But things look bleak on the economic front. The Indonesian rupiah and the Jakarta stock market have both tumbled in recent weeks. Wahid is taking control over economic policy from his official economic policy czar, Kwik Kian Gie--a possible sign of turmoil inside his Cabinet. He also has drawn criticism for sacking the bearers of bad news, such as the head of the Central Bureau of Statistics, which just predicted a disappointingly low 1.5% growth rate for this year, less than one-third the growth rate predicted by Wahid himself.
Yet Wahid maintains that the economy is stronger than outsiders realize, while rumors of discord between him and Vice-President Megawati Sukarnoputri are wrong. On May 17, the Indonesian President spoke to Singapore bureau chief Michael Shari about these issues in the Istana Merdeka--a restored Dutch colonial palace that houses the President's home and office.Q: What have you accomplished since you took office?A: Most important, we have achieved preservation of the national integrity for Indonesia. This happened in Aceh and the Moluccas and in Irian Jaya. But that doesn't mean the danger has passed, because now there are so many challenges. Second, there were many things not taken care of by [former President] Suharto, especially in the economic field because of his leaning on the economy just for the benefit of his children and his cronies. I have to rectify that. That's a very hard thing to do. I just hope I will be able to finish that during my administration. Third, we are beginning the rule of law. [In the past,] the law was not practiced.Q: How are you taking the reins of the economy?A: The [cabinet] ministers should be coordinated. The Coordinating Minister for Economy & Finance, Kwik Kian Gie, is only a minister. In a sense, I become the Coordinating Minister's enforcer [laughter]. But we have to be careful to keep economic initiative in his hands. Otherwise, there will be a collision between myself and Kwik. If we collide, it will be disastrous for our economy. [But] I think the most important thing is that I should not look like the economic czar. That is Kwik's turf, not mine.Q: There is a perception that you're turning to trusted advisers. But are they capable of giving you the advice that you need?A: Look at it this way. I was forced to accept cabinet ministers whom I didn't know. So when they make mistakes, I take steps to rectify them. And in rectifying them, I have to rely on so-called close advisers. I believe them because I have known them for a long time. As for Rozy Munir [the new Minister of Industry & Trade], I have known him for more than 20 years. I know that he has the capacity to become a minister. But the press doesn't believe it.Q: What are some of the most immediate dangers?A: The danger of disintegration. You see, now it's very easy for people to protest. The unions strike on everything. Then there's the land rights of the tribes. Today [in the cabinet meeting] there was a report from the Minister of Education that nearly all the land used to build schools in Irian Jaya [a resource-rich province in the east] belongs to the tribes. They are protesting against the schools while their children are in the schools. It's crazy, you know?
Another danger is too much autonomy for the regions. One local government at the district level in North Sulawesi took Newmont Mining to court. It's rather wrong. There are contracts to be respected. It was because of this that we sent Minister of Mines & Energy Bambang Yudhoyono. He reached a kind of compromise in which Newmont provides the local government with $4 million of "aid."Q: How long will Indonesia have to depend on the International Monetary Fund for assistance?A: I think in two or three years, we will not be encumbering the IMF anymore. But the principles used by the IMF in helping us will stay there--cleanliness, openness, accountability--and staying within the confines of free world trade. In those things we will see the legacy of the IMF.