If we take a look at most issues surfaces after the 2009 presidential election, it has been a series of huge blows for those advocating Indonesian economic and political reform towards a more market-oriented, essentially liberal agenda. One issue that absorbs more attention than any other issue is for sure the Century Scandal that put two of the most prominent icons of Indonesian economic architect since the fall of New Order Regime who are also considered part of the more liberal, pro-market, and right agendas, Vice President and former Central Bank Governor Boediono and Finance Minister Sri Mulyani Indrawati. The two figure’s involvement in the Century Bank bail-out turns out to be the most politicized issue in SBY’s second term so far. Then along the way and was a bit overshadowed by the Century scandal, there has been China-ASEAN Free Trade Area issue which has been modestly scrutinized by Indonesian public, especially with the worry that the agreement would do Indonesian economy more harm than good since the Chinese products superiority seems too hard to handle. These two issues have created a nightmare arena for the pro-market and liberal wing of Indonesian socio, economic, and political thought; while created a rising prominence for the left wing, essentially populist, factions. This is such an anticipated series of events for the pro-market reformer sides, given their hard work on the much domestically under-estimated achievement of Indonesia’s success on surviving the global economic crisis and raising Indonesia’s profile internationally as it is now a key member of the G20 grouping.
Far from the spotlight of the Parliament hearing of those involved in Century scandal, media interviews, and hoo haa regarding the Indonesian’s participation within the China-ASEAN Free Trade Area, we can notice that there are two distinctive economic and political thoughts competing one another in shaping Indonesian path towards development. One faction is the pro-market reformer, liberal and thus considered the right wing. This wing has been vigorously initiating market reform within a more market oriented agenda as well as integrating to the world’s economic agenda. To mention a few of their proposals are the reconfiguration of Indonesia’s gas subsidy policy (less but more direct and target oriented subsidy), reforming Indonesia’s investment climate so then it attracts more foreign investment needed for the growth, free trade agendas (ACFTA is just one of them), and more strategically permissive towards relationship with the West. This wing’s prominent figure includes Sri Mulyani and Boediono themselves, Chatib Basri (currently an advisor to economic ministry), Mari Elka Pangestu (Trade Minister), Faisal Basri (lecturer in University of Indonesia), Dorodjatun Kuntjoro-Jakti (former Indonesian’s chief negotiator for the IMF during 1997 crisis), the Malarangeng brothers, Anggito Abimanyu (director general of Fiscal Affair), Darmin Nasution (caretaker of Central Bank Governor). To sum it up, this wing has been practically behind every SBY’s economic initiatives since first elected as president.
Then there is another wing, which is more inclined to populist (or rather socialist), nationalistic, closed economic-political thinking. This wing’s major proposal is practically exactly the opposite of the right wing’s proposal. They propose a heavy government involvement in economy, especially large subsidy in every public goods; are always opposing any privatizations initiatives even when the state firms have been more of a burden for the state, are suspicious of any free trade agenda; and especially hostile towards foreign investment which perceived as detrimental to Indonesia’s environmental and local economy condition. Some prominent figures are Hendri Saparini (economist of Executive Advisory Group in Economic, Industry and Trade), former Economic Ministries Coordinator Rizal Ramli, academic Ichsanudin Noorsy and Sri Edi Swasono, economist and PAN politician Dradjat Wibowo, and former economic minister Kwik Kian Gie.
Before the whole showdown of Century Scandal and ACFTA issue, the stage was mostly controlled by the pro-market reformer. The fact that several of them are holding key government economic posts, which is essentially creating a close tie with Yudhoyono party, gets them the upperhand, while the left wing voice were largely unheard. In fact, SBY’s second term victory was an indirectly public’s relatively satisfaction of its economic performance. The politically (although economically supported) motivated gas price decline, foreign debt ratio decline to just 30% of GDP, positive growth despite the global economic crisis are just to mention a few of this wing’s achievement. Not to mention the successful unprecedented reform of the Finance Ministry under the leadership Sri Mulyani who were then awarded as the best finance ministry in Asia.
The happy story for the pro-market wing was then interrupted by the Century Scandal. There has been an opinion that the scandal is mostly politically motivated since the bail out decision itself was approved and the final budget report was unanimously approved by all parties before SBY’s triumph in 2009 election. This political stage provides a rare opportunity for the left wing group to take center stage. They wasted no time in attacking every policy taken by the opposite camp regarding the bail out decision and ACFTA negotiation. In the process, they have found the unlikely allies of several politicians opposing SBY’s administration even before the Century case surfaced. And at the same time, the free-market found some support from the equally politically motivated Democratic Party politicians. This coalition between academic figure and politician is quite unprecedented in Indonesian’s democracy as the blur economic-political thought has been the main characteristic of Indonesian various political parties. The prospect of the agglomeration of certain political parties with certain economic-political thought is one to be seen in the future.
For the time being, it remains to be seen how the pro-market wing can make comebacks from this mess. The political process is very likely decides its future. For the left wing, they’ve been gaining more and more momentum if the outcome of this Century scandal is in their favor. Recently, they formed an organization “Indonesian Economic Political Association”, calling themselves as “anti-neoliberal”, their claim of the pro-market wing. The opposition between the two will determine the path of Indonesia’s economic-political development, either pro-market and integrating to world’s economy or populist and rather nationalistic model.
patryapratama
