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Message from the Board

Message from the Board

June 2004


Dear members,                                             


The completion of the general election that elected members of the legislative body last April does not really surprise most of us. Golkar (the New Order party), PDIP (Megawati, the incumbent president party), and PKB (Gus Dur's party) are still leading, but none of them possesses majority control. We note, however, surprises from the results obtained by 2 small political parties, i.e. the Justice and Prosperous Party, which obtained 6 times the votes the party received during the 1999 election, due to its well-managed anti corruption campaign; and the new comer Democratic Party that obtained considerable votes based solely on the popularity of Susilo Bambang Yudhoyono.


The coming Presidential election to be held nationally on the 5th of July will lead us to another democratic phase of this young nation. Analysts and polling indicate the front runners will be Megawati and her running mate as vice president, Hasyim Muzadi of Nahdatul Ulama), Wiranto and Solahuddin Wahid (Gus Dur’s younger brother), and Susilo Bambang Yudhoyono (SBY) and Jusuf Kalla (representing the Eastern Indonesia). The vocal Amien Rais and Siswono (ex Suharto’s minister and businessman) are underestimated, as they are not privy to a big funding and political machine like the others, although they are at the moment interestingly gaining more and more popularity, which is still unfortunately insignificant. Hamzah Haz (the incumbent vice president) and Agum Gumelar are said to be happy in taking part of this election process, and see no prospect of getting special attention from the voters, either faithful or swinging.


They are all not without problems. Megawati is considered to be doing less than what she has been expected to do, as the incumbent president, to expedite reform efforts, and has also done nothing to eradicate corruption in her administration. Wiranto has a track record of having been involved or at least had the ability to prevent, human right abuses during Soeharto administration. SBY is also connected to some human rights abuses while serving as army general during Soeharto, and is characterized as a non-determinative person. Amien Rais has been known for his sharp opinion against the IMF-supported economic reform, his signaled sympathy to Islamic radical movements, and his propensity to change his opinion easily for a lot of issues, although compared to others he is considered as having less exposure to corruption, and his opinions have built a public image he is more reformist than the others. Hamzah Haz, who believed that women could not become leaders, has finally agreed to become the running mate of a female President. His family background does not give him good credentials to be an ideal model of an Indonesian leader. During Megawati’s administration, he is believed not to have given any contribution to improve Indonesia-under-crisis.       


At the level of public debate, no single pair of candidates offers any sort of strong and focused agenda, let alone a workable schedule. This gives a strong signal to the market that whoever wins, business will be as usual. Anyone who wins will have to face the following problems: (a) although macro economic indicators seem to improve, many basic economic problems are not settled, i.e., bank restructuring does give unsatisfactory return to the state, the White Paper policies need vigorous implementation, and privatization merely relates to answer problems in the state budget; at the end of Megawati administration Rupiah plunged again about 10%, and interest rate might have to be increased slowly;  (b) law reform is limited to the issuance of new laws and creation of new institutions, while judiciary reform is still far from expected results; (c) corruption level is still  enormous; (d) civil service reform is delayed by budget problems; (e) the role of the military and police needs to be revisited; (f) regional autonomy needs to be realigned; (g) education system needs reallocation of budget and a new direction to compete in the regional market, (h) Aceh and other social regional unrests; (i) and other lists of priorities that have never been addressed by the former administrations.  


Despite of a generally pessimistic reaction from the markets, some areas in the Indonesian businesses are starting to move on. Significant infra structure projects, oil and gas activities, property development and retails are flourishing. This reminds us of a jargon that used to be said in the past, that the Indonesian soil is so fertile, if you throw a seed it will provide enough food for people, and you do not need to work hard in this land. It’s true, but we do not want to live in a stone-age standard, we want to live in competition with developing countries. This requires a good and clean government; a better economy; a working political, legal, and social infrastructure; better law enforcement; and the commitment of the nation to unite in such efforts. The result of the presidential election will expedite, or in the worst scenario even delay, the efforts. We will wait and see after this 5th of July.


Arief T. Surowidjojo

Chief Executive Officer

[Last update: 2011-02-21 15:13:41]

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