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What about democracy?

Although Indonesia has successfully transformed itself from a military autocracy under former strongman Suharto into a fledgling democracy, this has not translated into any meaningful improvement in living standards for the poor even though it is now more than twelve years since the devastating financial crisis broke out in Asia. In fact, many poor people actually hanker back to the time when Suharto ruled supreme. This nostalgia for the “good old days” helped Suharto’s former political vehicle - the Golkar Party – to success in the legislative elections in April in 2004, when the party took some 20 percent of the national vote in a highly fractured contest that involved 24 political parties. Even the radical Islamic based Prosperous Justice Party did well in the elections, taking seven percent of the national vote by enticing voters on the back of its strong anti-corruption stance despite the fact the party is a strong advocate of sharia or Islamic law.

The main reason that democracy has not improved the welfare of the poor is because the nation’s new leaders, like those before them, have failed to struggle for the people’s interests. Little has been done for example to reduce the nation’s endemic corruption that results in a high cost economy, and allows a small number of fortunate individuals to become absurdly rich while the majority are burdened by a high cost economy. And things are not getting better. In fact, corruption has actually become more of a problem since the collapse of Suharto’s New Order regime in May 1998, as shown by a Transparency International study that now ranks Indonesia as the world’s fifth most corrupt nation.

Moreover, Indonesia’s leaders have backed away from confronting international lenders such as the World Bank, the International Monetary Fund and the Asian Development Bank over their reckless lending policies. Prior to the onset of the financial crisis in 1997, these global institutions lent vast sums to Indonesia. But while some of the money was invested in factories and infrastructure, much of it was actually squandered on unproductive projects and some of it was no doubt stolen. World Bank officials reportedly knew that a third of the capital going into Indonesia had been pocketed. The tragedy of this irresponsible lending is that it is the Indonesian people who have had to pick up the tab.

At the same time, the politicians have also failed to bring to justice former bank owners who misused billions of dollars of funds given to them to prevent their banks from going bust during the crisis. Most of the money they received was never paid back to the government. It is because of the cozy relationship between the political and business elites that the huge cost of bailing out the Indonesian banking system had to be born by the general public and not the bank owners themselves. Is this really fair?

And the future?
Life will remain a hard struggle for Jakarta’s poor in 2009. They don’t really have much to look forward to. Wages will remain at levels that are not enough to live on, while public facilities – schools, transportation, hospitals etc – are unlikely to improve much given that the cash-strapped government has to spend a substantial amount of its budget on servicing its sovereign debts. And while private development will continue unabated in this huge city, it is unlikely to improve the lot of the poor. And if you just simply want to sit outside in the park or other open space? Just forget it…





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