Is Boediono the Man for Veep?

There were quite a few questions asked at the time Susilo Bambang Yudhoyono (SBY) chose Boediono as his running mate and Vice President. Not of the Boedi who type, but rather an analysis of why the incumbent president chose the former Coordinating Minister of Economic Affairs and, at that time, the Head of the Central / Reserve Bank (Bank Indonesia). Yet, the rationale might have been as simple as, "at least it is not Jusuf Kalla!".

That is not to say that Boediono is not an accomplished individual and worthy of the nomination that turned out to be his ticket to the vice presidency, and a heartbeat from the big chair. However, he is certain not to be a constant pain in the proverbial with off the cuff statements about the state of play in Indonesia. JK was renowned for his ability to produce news bites that did not always show SBY's administration in the best light.

Now, Boediono has stepped into the VP slot, or has he?

This photo is doing the rounds on the internet. It has a "Kompas" tag to it. But, I had a quick squizz on Kompas and could not find the photo to link to. But, it is interesting even if it is a photoshop job. It is interesting for the statement that it makes, particularly if you are a cynical pundit like I sometimes can be.

Hope you have all had a good weekend.

Presidential Election -- Indonesia

The "Quick Count" numbers are suggesting that the ticket of the incumbent president, Susilo Bambang Yudhoyono, and his running mate, Boediono, are going to win the election outright. The current numbers suggest that a September 2009 run-off will not be necessary.

The Indonesian Survey Institute (Lembaga Survei Indonesia / LSI) has SBY / Boediono running at 60.25%. Megawati / Prabowo are trailing in a distant second on 27.44%, and the incumbent vice president, Kalla, and his running mate, Wiranto, are trailing in a very distant third with a mere 12.31% (as of 17.20 Indonesian West Time). The other survey agencies are indicating that they have similar numbers based on their respective polling.

The site "Indonesia Memilih", as produced by Kompas has lots of good coverage and continual Quick Count updates. It is in Indonesian, but the Quick Count numbers are easy enough to follow for those with an interest in this presidential election but limited or no Indonesian language skills.

In many ways I am glad that I did not have a right to vote in the Indonesian Presidential Election. There was not a pair of candidates that I could have voted for and then walked out of the polling booth feeling comfortable with what I had done. I would have had to go home and take a shower and hope that karma forgave me in the long run.

I am someone who believes that if you have a right to vote, and you can exercise that right to vote then you must do so. In the Indonesian case, where so many have sacrificed so much to gain this right, then there is an even greater obligation to exercise that right. There has in the modern era been a movement in Indonesia to exercise the democratic right not to vote. This movement is known as "golput" or golongan putih, the white group. The idea is that if one refuses to vote this is the best way of expressing one's displeasure at the lack of viable choices to choose between.

I would have voted, if I had the right to do so, and marked my ballot in such a way that it was invalid. I would have exercised my right to vote and would have expressed my inability to choose any of the candidates as they are all as poor as each other in terms of ability.

That's just me. And, no one else is me. To each their own. I respect other people's right to express their displeasure by exercising their democratic right not to vote. I would hope that in similar circumstances those people would also respect my right to vote in the way that I choose.

Someone has to win this thing, and with world renowned abusers of human rights on each of the other tickets, the process of elimination leaves the ticket of SBY / Boediono. Unfortunately, during his first five years in the job SBY has not shown himself to be particularly adept at resolving the critical issues facing Indonesia in the short, medium, and long terms.

Nevertheless, Viva Democracy!

Will There Be A Runoff?

This is probably not the biggest question of the day but nevertheless it is an interesting question for Indonesian politics with charges being leveled at the various surveying agencies involved. The question is whether the incumbent president, Susilo Bambang Yudhoyono or SBY, will win the presidency in one round or two.

The Indonesian Survey Institute (Lembaga Survei Indonesia / LSI) issued survey results last week that suggest that SBY will win in one round as he polled somewhere around 70% support of those who were surveyed. These results were questioned as the survey was commissioned by Fox Indonesia. Fox Indonesia has links to the SBY campaign.

However, it is worth noting that the LSI conducted the survey and not Fox Indonesia. If the claim is that the LSI produced the results that Fox Indonesia wanted, then this brings into question the credibility of LSI. However those claiming that the results lack credibility have offered nothing more than the fact that Fox commissioned the survey.

In contrast to the LSI survey, the Information Research Institute (Lembaga Riset Informasi / LRI) conducted a survey of its own and achieved some very different results. It is clear that the LRI has links to the Kalla - Wiranto campaign through Kalla. The LRI went to some length stating that the survey was not commissioned by the Kalla - Wiranto campaign.

However, these links should not automatically disqualify the survey results obtained. What is interesting is that the Director of LRI, Johan Silalahi, has stated that if SBY wins in one round he would be willing to dissolve the LRI. He then issues a similar challenge to LSI on their credibility if the LSI results are not borne out in the presidential election.

The LRI survey still has SBY in front of the crowd but the difference suggests a two-round election process. The LRI survey results suggest that SBY has about 33% of the vote, Kalla trails on 29%, and Megawati is a somewhat distant third on 20%.

The argument for the difference in these results is that the has been a recent, and obviously rapid, movement of support to Kalla. This is being attributed to Muslims who are uncomfortable with SBY, particularly relating to the wearing of the jilbab and racism. Zulkieflimansyah of PKS (Prosperous Justice Party / Partai Keadilan Sejahtera), one of parties supporting SBY, has suggested that the members and followers of that party might support Kalla as his wife wears the jilbab.

The racism charges stem from the following comment by Ruhut Sitompul, who just happens to be a member of Partai Demokrat (Democratic Party / PD) Central Board (which happens to be SBY's party), "Arabs have never done anything for Indonesia." Reminds me of the film Forrest Gump, stupid is as stupid does. So, Ruhut, don't hold back; tell us what you think of Indonesians of Chinese, Indian, or Dutch descent.

So, who is right with these surveys? I suppose we will find out on 8 July 2009 when the presidential election is to be held. In the big scheme of things, and surveys aside, it would be interesting to hear and read what the actual policies of each of the candidate pairings are as this might be a little more relevant to the future of Indonesia.

Indonesian politics, lovin' it!

Is Boediono a Neoliberal?

Susilo Bambang Yudhoyono or SBY as he is affectionately known by the masses has selected the now resigned Central Bank Governor and former Coordinating Minister of Economic Affairs, Boediono, as his running mate for the upcoming presidential elections (photo courtesy of Kompas). There has been mixed reaction to the selection not only from members of the coalition of parties that declared their support for SBY in the period after the general election, but there has been considerable criticism levelled at Boediono from all quarters about his supposed neoliberal attitudes.

The word, neoliberal, is being bandied about like it is some kind of poison chalice that has the potential to sink the SBY march towards a second term. This is fanciful thinking at best considering most polls have SBY running so far ahead of the other candidates that a run-off election is looking unnecessary. In fact some polls have SBY securing more than 70% of the vote if the presidential election was held today.

Even if some of the other parties gain a little bit of traction on this neoliberal point which is a catch word for being pro-capitalism, pro-markets, and anti-little people. It has to be noted that on each of the other two tickets you have men who have made fortunes exploiting the little people and being actively involved in the free markets and the capitalist ideal. Jusuf Kalla is going to get no traction from this.

Megawati and Prabowo are also not going to gain much from running a neoliberal argument. Prabowo is, according to the recently submitted wealth reports, the wealthiest of them all. This is funny in that perverse kind of a way considering that Prabowo's whole campaign has been based on his ability to empathize with the little people, the farmers, the small scale traders, the poor. How does a man with IDR 1.7 trillion in assets and cash empathize with the daily grind that is the life of a sharecropper in the rural areas of Indonesia? When was the last time Prabowo lived from harvest to harvest in a period of sustained drought?

So, what is neoliberalism anyway. You can find an interesting article on it here. Nevertheless, most tend to agree that neoliberalism contains the following key elements: free markets, slashing public expenditure, deregulation, privatization, and replacing the idea of community with individual responsibility.

Now, the case for Boediono being a neoliberal is that he is beholden to the free market and as such a sell-out to foreign interests and must even be considered as a traitor to his own people. Somewhat extreme, but this is Indonesian politics in action, some might argue democracy in action. Boediono has pointed out in response to this criticism that he was chosen by SBY an Indonesian, and if he was beholden to foreign interests then SBY would never have selected him to be VP. This is hardly a convincing or strong argument against being neoliberal.

The better response he has made to these charges are that there is, in any economy, a need to participate in the free market. However, this is to be moderated with effective state intervention to ensure that the interests of the state and in essence the interest of the little people are protected. To this end Boediono oversaw a number of programs that were definitely pro-poor such as the Direct Cash Assistance (Bantuan Langsung Tunai / BLT) program.

However, his critics quickly point out that it has been under Boediono's watch that some 40 State-Owned Enterprises (Badan Usaha Milik Negara / BUMN) have been vetted for privatization. I am not for privatization for privatization's sake, but sometimes a poorly performing state-owned enterprise can benefit from the escape from government bureaucracy. The government can set strict rules to ensure that the assets are not completely lost or that the privatization must take into account particular interests.

In this sense, Boediono is more an economic realist. He realizes that there is some benefit to be enjoyed from the better economic management of government interests and exposure to the free market might provide greater benefits than the oft claimed negatives.

In any event, the claims have seen a heated little battle between Boediono and Kalla emerge to the fore. Kalla claiming that Boediono's neoliberal ways will see the collapse of the Indonesian economy and all Indonesians being destined to become migrant workers in their own country (awesome visualization if you can get your head around it as most Indonesians are familiar with the trauma that most Indonesian migrant workers suffer at the hands of unscrupulous foreign employers). For Boediono, his dig was that a vote for Kalla is a vote for a family firm that is destined to employ all means of state to developing and supporting the family business.

I am always keen for a little bit of to and fro during an election cycle.

The outcome here is that the SBY ticket is likely to offer up a mixed bag on the economy. Specifically, there are likely to be elements of the free market (with the emphasis being on fair trade rather than free trade) and perhaps explicit protections from an over-deregulation or privatization of natural resources, particularly those in the mining, oil and gas, and forestry sectors.

Is Boediono a neoliberal?

Not 100% neoliberal.

The Indonesian Economy in 2011 -- 8% Growth

The fun and games have begun in terms of promising the world. Jusuf Kalla (photo courtesy of Viva News and showing the current Vice President's plan for balancing the budget) has promised the Indonesian Chamber of Commerce and Industry (Kadin) that if he is elected president in the upcoming presidential elections that his government will deliver economic growth of 8% per year starting in 2011.

However, what is more interesting is the probable means that are to be employed in funding this proposed growth. According to Kalla 8% growth can be achieved because his government would be decreasing state spending (read slash already limited public spending) slashing public spending is most likely to impact most heavily on the poor and those less able to absorb any cuts to public spending.

The second part of the plan is a progressive tax system. It is unclear whether the intent here is to broaden the tax base or ramp up the amount of tax paid by higher income earners or simply better collection practices through enhanced enforcement of the current code. Nevertheless, it is unclear how investors or both domestic and foreign origins will feel about bearing a greater tax burden.

The next plank of the 8% growth platform is a decrease in fuel subsidies. Now, this is always a winning policy amongst the masses, not! However, it seems that Kalla believes that the conversion program from kerosene to gas has worked and that any reduction in fuel subsidies is unlikely to draw the negative public reaction that it has in the past. My guess would be that he might need to think again on this one. That is not to say I am not against the idea of a continual reduction in fuel subsidies, but rather going into a presidential election with this as part of one's election platform is risky at best and silly at worst.

The rest of the measures appear to be linked ot administrative and bureaucratic reforms. The idea of reforming the administration and the bureaucracy is a standard policy platform adopted by just about everyone. However, in the more than 10 years of reformasi to date, it is arguable how much the regimes of Habibe, Gus Dur, Megawati, and Yudhoyono have delivered on reform of the administration and bureaucracy platform. Personal experience on this front would suggest very little at the lower levels of the chain.

I guess if you are inclined to believe Kalla and his arguments for 8% growth then you should vote for him and then if enough people are convinced of his claims then you can wait and see until 2011 and see if he delivers.

My guess is though that people will still choose the incumbent president and his new vice-presidential candidate. SBY needs to hope that not everyone who supports him thinks he is a shoe-in and actually get out to vote. Don't you just love a potential upset?

Gus Dur Supporting Prabowo for President

Speechless!

Well, almost...but good readers I am sure you are already aware that it will take more than this foolhardiness to stump me for words.

This support apparently comes with strings attached. There is a sizable push for Yenny Wahid (aka Zannuba Ariffah Chafsoh Rahman Wahid) to be placed on the Prabowo ticket as the Vice President.

For me this support makes Gus Dur (Abdurrahman Wahid) increasingly irrelevant on the Indonesian political stage. I am also surprised that Yenny Wahid is going for this. Yet, in the big scheme of things this foolhardiness is not all that surprising. Gus Dur is a bitter man and still feels that the PKB, which was his political vehicle, was wrenched from his control by traitorous enemies and the complicity of the government. He is likely to do anything to redress this wrong, even supporting Prabowo.

Prabowo Subianto and his political vehicle might indeed have some similarities to Gus Dur and those that support him. However, the reality is that Prabowo's skeletons are real and they are nasty. The man may have been honorably discharged from the army, but there are remaining questions as to whether this was deserved. There are still unanswered questions as to his imvolvement in the Rose Group and his responsibility in the kidnapping and disappearing of activists in 1998.

The interesting thing about Gerindra is that the party has adopted some real socialist ideas in trying to garner support from farmers and blue collar workers under the guise of Pancasila. Pancasila has always been viewed as an avid tool to be trotted out in the fight against communism and socialism. Although, it is easy to argue that the social justice elements of Pancasila in fact lend themselves to a socialist democratic platform. There is certain irony in the support of Prabowo and Gus Dur for these ideals.

In any event, even Gus Dur's support is not going to be enough for Prabowo to be relevant in the coming presidential contest. This is at best a three-way horse race at the front with SBY, Kalla, and Megawati, with SBY being slightly in front as the incumbent. The dark horse will be PKS and whoever it is that they nominate.

Hopefully, after this little charade Prabowo and Wiranto can be prosecuted for their alleged crimes and then fade into history.

Yes, a dream, but without dreams there is no point in living.

Bakrie Brings Out the Lawyers

It seems that Tempo Magazine has got under the skin of the Coordinating Minister of Bakrie Welfare (AKA People's Welfare) with a few special reports that it has done on the financial woes of the Bakrie Group. These woes do not seem to be getting any better if the press conference of yesterday is anything to go by. This press conference ended with a call for the attendees to pray for a successful outcome. The reality is that the Group is manoeuvring to put itself in a position to obtain alternative financing and / or to ensure that it does not lose majority control of Bumi Resources.

Bakrie had his lawyers send a letter demanding that Tempo give the Coordinating Minister of Imploding Welfare the right to respond or if Tempo was unwilling to grant a right to respond then they should just print a retraction and an apology. Generally, when the attack dogs (AKA lawyers) come into the frame it means that things are getting a little too hot and hitting a little too close to home.

There is a threat of criminal action which is kind of interesting as this would suggest that Bakrie is prepared to go to court and have Tempo prove the truth of their claims. According to the Bakrie lawyers the claims to date are untrue, false, slanderous, and damaging. I would have thought defaming would have been in the mix as well.

It seems that Bakrie's biggest beef with the articles in Tempo is the alleged campaign donation Bakrie made to Susilo Bambang Yudhoyono and Jusuf Kalla during the 2004 election campaign. The implication is that this secured his cabinet post. I am not sure that Kalla needed the funds as he is a pretty wealthy fella in his own right.

Bakrie's other beef is with a 17 November cover of Tempo that depicts a forehead with 666 on it. The lawyers for Bakrie feel that the forehead belongs to their client and the suggestion that he is the devil is unfair. For this perceived slight the lawyers for Bakrie are demanding that the magazine run an apology in seven consecutive editions. If they refuse then the lawyers have suggested that they will file both a civil and criminal complaint.

Let the fun and games begin.

Bakrie -- Will They or Won't They?

The Indonesian Stock Exchange (IDX) announced on Wednesday (5/11) that they were going to lift the suspension on trade that had been in effect on PT Bumi Resources. However, not long after this announcement was made, and presumably a few phone calls later, another announcement was made. The second announcement was that the suspension in trade would remain in force.

The issue is seemingly becoming less transparent and more complex. The press release issued by the Bakrie Group of Companies suggested that the deal was between Northstar and Bumi Resources with a number of SOEs also buying into the USD 1.3 deal. Word on the street is that the role of the SOEs is far from certain as is any stake they might take up. It seems that the current state of affairs is that there is a tentative deal in place for Northstar to provide finance.

In terms of the announcements, there are relieable sources suggesting that the current Coordinating Minister of Economic Affairs / Minister of Finance, Sri Mulyani, was in favour of lifting the suspension. This would suggest that the subsequent announcement to reinstate the suspension came from someone higher up the food chain. This would most likely be the President.

It is unlikely to be the Vice President. Simply, the more trouble Bakrie is in the easier it will be for Kalla to exert his influence over Golkar. It is reported that the current President ascended the top job in part because of funds supplied by Bakrie (this might explain the loyalty shown to one of cabinet's most poorly performing Ministers). The reality is that the deeper the hole Bakrie finds himself in the less likely it is that he can be King or Queen Maker in the upcoming elections.

Nevertheless, the mere fact that the government became involved in the lifting of the suspension is a loser in the "court of public opinion", as it will be seen as protecting the interests of a cabinet Minister and not about protecting the interests of the State. Whether this is true or not is irrelevant in the court of public opinion, if it smells bad and it looks bad, then it is bad! The fact that the presidential spokesman comes out and says that Bakrie companies are not his concern is hardly reassuring.

That said, the logic on keeping the suspension in place is that as soon as the suspension is lifted it is likely people holding Bumi shares will seek to offload even with a purported deal in place.

The deal between Northstar and Bakrie plus the SOEs is supposed to be complete within 28 days. I wonder whether the suspension will stay in place until the deal is signed, sealed, and delivered?

Ah, must be nice to be the Coordinating Minister of the Bakrie Family Welfare, oops I meant to say the Coordinating Minister of People's Welfare (photo -- always smiling and why wouldn't you be?).

Jusuf Kalla and the Toyota Prius Hybrid

The Vice President, Jusuf Kalla, was in West Cikarang (West Java) on 4 September to open a Toyota Spare Parts Center. Kalla was invited by PT Toyota Astra Motor to do the honors and was given a new Toyota Prius hybrid car for agreeing to step up and do the opening.

It has been suggested that this was only a symbolic gesture. However, considering the latest spate of corruption arrests it is better to play it safe than to be sorry later.

Kalla to his credit reported the "gift" to the Corruption Eradication Commission (KPK). It is an interesting gift to get. However, in his report to the KPK Kalla was unequivocal that the car would not be for his private use. This kind of seems obvious as he could easily afford to buy one or two anyway. I am not sure that Toyotas are his cars of choice anyway.

I wonder what PT Toyota Astra Motor was thinking when the decision was made to give the Veep a car for opening a spare parts center?

Is the Veep's decision to report the car a sign of the changing times?

The Powers of Persuasion

The Indonesian Vice President, Jusuf Kalla, is of the opinion that the Ahmadiyya sect can be brought back into the Islamic mainstream through gentle and consistent persuasion. The VP uttered some classics during a recent visit to the Syeh Zainuddin Nadhlatul Wathan Islamic Boarding School in East Lombok while talking about the appropriateness of the government's response to the Ahmadiyya situation.

These include:

"Should there be any teachings incongruous to mainstream Islam, our job is to provide religious guidance and avoid violence, because this is not the Stone Age."

"It is the duty of all Muslims to make our brothers realize the truth and return to the fold of true Islamic teaching." (I guess there are no female followers in the Ahmadiyya sect or if they are then they just do not count!)

True Islamic teaching doesn't condone violence. We have to imitate the Prophet's proselytizing methods, especially since it is easier now because of the mass media, such as newspapers and television."

I wonder what the VP's approach will be when his methods of persuasion fall short. The followers of Ahmadiyya do not appear to be abiding by the joint decision prohibiting the practice of their religious activities. It seems that the persuasion idea still has a long way to go!

Election Laws - President

The packet of election laws is slowly but surely navigating its way through the parliamentary system. The most recent of these is the draft law on the Election of a President. This is a law that has significant and long-term ramifications for Indonesian politics. The current thinking sees a return to the party politics of the past which is counter to the intent in the post-Soeharto period of making the post of President one that was elected directly by the people.

The current law requires that candidates have the support of at least 15% of the parties elected to parliament. This in theory gives the smaller parties more clout in nominating a candidate that might have broad public appeal. This is how it worked for the Democratic Party in 2004 and particularly for their candidate, the current President, Susilo Bambang Yudhoyono (SBY). The Democratic party secured about 10% of the popular vote but after forming an alliance with other parties got of the nominating threshold.

The proposal is that the threshold be raised to 30%. No one party secured 30% of the popular vote in 2004. The closest was Golkar with 28% and PDI-P with almost 23% followed Golkar. It would seem that increasing the threshold would most benefit these parties because the smaller parties would have to align themselves with the bigger parties if they wanted to get a say in the nominating process. However, if a smaller party came up with a candidate that had widespread name recognition and a high-level of electability then perhaps the larger parties might throw their support behind the smaller party. In this sense, Indonesia already has a history of doing this as SBY was nominated by the Democratic Party and was supported by Golkar who then put Jusuf Kalla on the ticket.

Yet, more critical to the debate here is that the new thresholds seem designed to keep the smaller parties at bay and institutionalize the Presidential nominating process in such a way that new and younger candidates who are not affiliated with a 'big' political party will never see the light of day.

Many people wonder why Indonesia is taking so long to reform on the legal, political, and social fronts after Soeharto fell from power but a quick look at the entrenched interests involved in stalling the reform process reads as a who's who of the New Order's school of politics. A reading of the list of past Indonesian presidents highlights that all of Indonesia's presidents since the fall of Soeharto have cut their political teeth under a regime that was rotten to the core.

So, I am not surprised that the parties of the past and seeking to return electoral laws to the past in a somewhat draconian measure to remove potential political opposition.

The mantra that change takes time is beginning to wear thin and it will not be too far into the future that Indonesian citizens will demand more radical change, at least radical in terms of the amount of time they are prepared to wait to see this change happen.

It would seem that if Golkar and PDI-P manage to insert this 30% clause into the draft and then force it through the DPR that the biggest beneficiaries of this will be Jusuf Kalla and Megawati Soekarnoputri...