Problems for SBY at home in Indonesia

President Susilo Bambang Yudhoyono’s recent visit to Australia has been widely regarded as a success and the Indonesian leader would have been delighted with the standing ovation he received at the end of his address to a joint sitting of Parliament.

It was in stark contrast to the recriminations, political manoeuvring and disillusionment that have set in at home since he was sworn in for a second term last October.

This is the view of a panel of Indonesia watchers at a seminar on the prospects for reform in the country, organised by the ACT Branch of the Australian Institute of International Affairs.

Marcus Mietzner, a lecturer in Indonesian Studies at the ANU, said local media were describing the first 100 days of President Yudhoyono’s new term as a “political disaster” and his appointment of Boediono, the former Governor of Indonesia’s Central Bank as his vice president “a major strategic blunder”.

The Boediono problem has it roots in the $700 million bailout of Bank Century, once Indonesia’s 13th largest bank, after it had defaulted on several major loans during the height of the Global Financial Crisis in late 2008. Parliament questioned not only the scale of the rescue package, but also whether some of the money might have been diverted or embezzled.

Although no serious commentator suggests Boediono, who was Bank Indonesia Governor at the time, was implicit in the affair, he has been widely criticised for not exercising a close enough watch over the way the bailout was conducted and just where the funds were going.

Dr Mietzner also claims that the fact Boediono is a non-party figure robbed Yudhoyono of the opportunity of nailing one of the major groupings in the often tumultuous Indonesian Parliament to his banner.

“He believed his previous vice president, Jusuf Kallar, who was also chairman of the Golkar Party, had brought political loyalties into the issue of governance, and by selecting a vice president without these political ties he could separate policy-making from politicking,” Dr Mietzner said.

“But by giving away the vice-presidency to a non-party figure he squandered the opportunity to bind Golkar to his administration. Between them his Democrat Party and Golkar would have controlled 40 per cent of the seats in Parliament, making it much easier for him to build a stable coalition.”

Instead the ruling coalition was in disarray, with distrust and disharmony reaching into the Cabinet itself. While attempting to keep a calm public persona, Yudhoyono is reportedly outraged at the turn of events, but undecided about how to deal with it.

One possibility would be the removal of his vice-president - a huge embarrassment for Yudhoyono so soon after endorsing him - but possibly preferable to allowing the Bank Central scandal to continue to distract his administration.

However, a consultant on governance and political change in Indonesia, Stephen Sherlock, points out that Boediono was elected to office on a dual ticket with Yudhoyono and has a direct mandate from the people. That mandate can only be removed by a series of impeachment-style procedures involving hard evidence of illegal activity that must convince Parliament, the Constitutional Court and a third body made up of parliamentarians and members of the House of Regional Representatives or DPD.

While such a drawn-out process could ultimately be more destructive to the Yudhoyono Government than leaving Boediono in place, Dr Mietzner does not rule out the possibility he could be persuaded to resign.

“I think resignation is a possibility because he is a very honest man, clearly not suspected of corruption himself, who has dedicated his life to service in government. I am sure he must be very hurt going out every day and seeing banners accusing him of being a thief and so on,” Dr Mietzner said.

“So I could imagine a situation where he says ‘I never wanted to be vice-president in the first place, I was persuaded by the president, so that’s it for me’.”

Whatever the outcome Dr Mietzner believes that the bright hopes that surrounded President Yudhoyono’s re-election have all but faded, leaving the Indonesian leader casting about for an issue that could put his administration back on track.

“At the height of the Bank Century scandal he visited a children’s prison because his advisers had told him this could be a big topic he could develop - a commitment to social justice, reform of the prison system, social security and so on - but it has not really formed the platform for the trademark project he seems to be looking for,” Dr Mietzner said.

In fact the ANU academic believes there is a real danger of reforms already in place being rolled back. “There are discussions about getting rid of local elections and we have had a wide-ranging debate over about curtailing the authority of the KPK (Anti-Corruption Commission).

“There have also been drafts circulating from the Ministry of Information about curtailing freedom of information on the internet, while trade liberalisation is likely to take a back seat following a public backlash over the signing of a Free Trade Agreement between ASEAN and China.”

However, he believes that for the time being Indonesia will continue to be a reliable partner for Australia to work with as long as we do not place our hopes too high. “You can look across South-East Asia and see the crisis in Thailand and stagnation in the Philippines and you realise that Indonesia is still doing very well, with the military firmly out of the equation and the power centre definitely resting with Parliament, the civilian Government and the political parties,” he said.

“Despite some policy instability and quite a bit of infighting, I believe Yudhoyono will make sure Indonesia remains a rational, moderate and trustworthy partner both for Australia and other nations.”

While this may be true, it seems that at best the second term of Susilo Bambang Yudhoyono will be taken up with domestic reform, not on the issues concerning Australia, including people smuggling or terrorism. The standing ovation he got in Canberra may just be as good as it gets.