Summary

In the expectation that Gus Dur cannot change and will have to be removed from the Presidency by impeachment, preparations are underway in the PDIP leadership for Vice-President Megawati Soekarnoputri to take over power. The likely timing is a Special Session of the MPR in July or August 2001.

PDIP thinking covers the formation of a solid coalition in the DPR, which will consistently support the necessary coalition Government.

A high priority will be insulating her, her family and her Government from the New Order forces who have corrupted both the Habibie and Gus Dur presidencies in a successful effort to preserve their assets and interests.

Megawati’s goal is correcting the mess created in Government by Gus Dur. Her aim is to achieve transparency, professionalism and open decision-making.

The quality of her Government will depend on the quality of the people she appoints to Cabinet and the bureaucracy. She may institute a vetting process by a panel of wise men. Ministers will include independents and individuals from TNI and the coalition parties.

There are likely to be policy changes in plans for autonomy for Aceh and Papua and in decentralisation policy. Megawati supports a strengthening of TNI. Her view is that, without it, Indonesia cannot hold together. She will emphasise legal reform.
If she can implement the strategies being developed by her people, she will be a better President than Gus Dur.

Disenchantment with Gus Dur

Indonesia’s bitter experience with Gus Dur colours Megawati’s own thinking and the thinking of her PDIP party about the shape of the coming Megawati Presidency.

More than Habibie before him, Gus Dur is increasingly seen as having come close to destroying civilian Government in Indonesia. He has been wilful and arrogant. He has neglected Government and the processes of Cabinet so that orderly, collective decision-making is near impossible. He has insulted and gone to war with other arms of the State, in particular the DPR. He is beyond advice. Policy development and policy implementation have become chaotic. The commonly believed cause: Gus Dur is mentally ill.

The decline of Gus Dur’s Government coincides with and has precipitated the decline in Megawati’s own relationship with the President. Initially Mega accepted the disappointment of the October 1999 MPR and had an easy enough relationship with Gus Dur. Good relations became increasingly difficult as he became increasingly arrogant and provocative. He began to lie. He openly derided and gossiped about her.
There is no single event or act, such as his corruption or his demands in late January to impose martial law to back up the dissolution of the DPR, which ultimately convinced Megawati that Gus Dur should be replaced. Rather, there has been a long accumulation of actions which have undermined Government and therefore her acquiescence in his continuing to rule.

Mega’s Leadership Style

Many Indonesians have low expectations of a Megawati Presidency on the grounds that she is not a vigorous politician with a reputation for getting things done. She has been silent for much of the past 18 months, even when slighted and ignored by Gus Dur. She is not Gloria Arroyo Macapagal, openly canvassing the impeachment of her President.

I think this judgment too harsh. Indonesia is a vastly different country to govern from the Philippines. As a woman, Megawati has to build a strong consensus among Indonesia’s diverse Muslim political groups that it is right and proper – and essential to saving the nation – that a woman become President. These commitments are being put in place right now in a way that she never thought necessary after winning the General Elections in 1999. She is politically smarter now.

Given the communal nature of Indonesian politics and political parties, she must also move slowly to unseat Gus Dur. Her and his supporters live side by side in the towns and cities of Java. There have never been communal problems between them. She knows she needs to avoid tearing apart Javanese society in the process of removing Gus Dur.

These are all signs of a person wiser in 2001 than she was in 1999. Then she assumed that, as the leader of the largest party, she would automatically be elected President. She infuriated her party and leaders like Amien Rais with her view that she did not need to lobby and build a coalition to win the Presidency. She learnt this lesson the hard way.

Mega’s Management Style

In her management of the Government, Mega will emphasise professionalism, openness and transparency. She will aim to make Cabinet work.

Central to this task will be measures to insulate her, her family and her Ministers from the corrupt influences of New Order cronies. These are the forty families who prospered during the New Order and whose massive debts still cripple the banking system.

The Indonesian Bank Restructuring Agency (IBRA) was created to resolve this massive indebtedness. It was expected that the assets of the New Order cronies would be taken over and sold. The assets would move into more productive hands, stimulating new investment and accelerating the recovery. The proceeds would help to manage the 562 trillion Rupiah of Government bonds issued to recapitalise the banks which failed under the weight of the debt.

This has proved a pipedream. The New Order cronies still manage and own their assets. Using their political influence with Habibie and by next suborning Gus Dur, they have avoided effective action against them. In many cases, they have managed to arrange deals with IBRA that reschedule their debts on very generous terms. Often IBRA takes a share of the assets even though IBRA has a very limited lifespan. Salim group assets are the only assets actually being sold at the moment to new buyers.

Despite the costs to the economy and country, these few families, which include Soeharto’s own family, have preserved the New Order status quo. They have survived four years of economic crisis by corrupting the Government from the President down to Ministers and bureaucrats. They expect Mega to be President soon. They are now infiltrating the PDIP and Megawati’s own family. Her husband, Taufik Kiemas, is a major problem in this regard.

To help insulate Mega and her Government from these New Order influences, one idea in the PDIP is to create a body of wise honest ‘old men’ as the front line advisors to the President. They would advise the President on appointments to the Ministry and bureaucracy and vet candidates. They would have the power to reject people they regard as dishonest. They would be expected to reject the inevitable attempts at bribery when they come. They would create a hardcore of incorruptibles to guide public sector reform. The names being canvassed include Frans Seda, Emil Salim, Ali Sadikin and Nurcholish Madjid.

There is likely to be a major change of personnel on the economic side of the Government, where the risk of corruption is greatest. For example, Rizal Ramli, the Coordinating Minister for the Economy, is unlikely to survive. He is identified as having improperly assisted Marimutu Sinivasan’s Texmaco group in its current financial difficulties because of Rizal’s prior business connections with Marimutu. Texmaco is now seeking to borrow again from Bank Mandiri, despite its massive debt to BNI bank.

The Megawati Cabinet

Megawati is rightly afraid that the Muslim parties which are currently urging her to replace Gus Dur will quickly turn on her. She is concerned that, once she is President, she will be faced with a DPR that still obstructs the Government.

To overcome these problems, negotiations are underway to forge a strong coalition with a common commitment to agreed policies and to supporting the Government in the DPR until 2004. These commitments are expected to be in writing. Documents will set out the goals and policies to be supported by the coalition and commit the component parties to supporting these goals and policies in the DPR for the next three years.

The parties which sign on to the coalition on the basis of these conditions will be able to put their candidates to Mega for appointment as Ministers. They will be vetted by the ‘council of wise men’. The Presidency, not the political parties, will decide who gets what jobs. The aim is that there will be no New Order people in the Cabinet.

TNI

Concerns have been expressed that Megawati is too close to the military, and will be overly influenced by them.

Her links to TNI she sees as part of restoring TNI’s capacity to maintain law and order. Her approach to TNI is not to meddle with senior TNI appointments and play favourites, as Gus Dur has done. His actions are seen as having weakened the leadership of TNI and the Police and created an opening for local warlordism and the corruption, indiscipline and paralysis which are now so evident.

The separation of the Police from TNI has served to drastically undermine law and order without any advance in performance and democratic accountability. Elements of TNI and the Police are clearly involved in much of the violence across Indonesia, as indicated in this month’s Indonesia Update report.

With a clear majority of the MPR, she believes a strong, effective TNI is essential to the preservation of law and order and national unity. Thus TNI must be reformed and strengthened, so that it can play its proper role of maintaining security across the country and bolstering the authority of civilian Government. Events in Central Kalimantan demonstrate the priority of strengthening TNI and Police effectiveness.

Legal Reform

There will be a strong focus on legal reform and rebuilding the justice system in a Megawati Presidency. One priority will be to bring to justice those involved over the years in violence in the regions. Another priority is strengthening the legal basis for genuine restructuring of the modern economy.

There will be an independent Attorney-General, who will have no party affiliations so that he can prosecute whomever he must. There could be a major cleanout of the senior levels of the Attorney-General’s Office.

Electoral Reform

A high priority for the PDIP will be the successful passage through the DPR of the current draft electoral reform laws. The PDIP will support direct election of members of the DPR from individual electorates, ensuring greater accountability of members to the voters.

Decentralisation and Autonomy

A Megawati Government is likely to change Laws 22 and 25 of 1999 on decentralisation, with a view to refocusing the devolution of powers at the provincial rather than the kabupaten/city level and slowing the process to achieve a better match between the powers and the existence of the capacity to carry out devolved functions.

Megawati also has strong reservations about the powers it is proposed be devolved to Aceh and Papua. Her reservations reflect her view that autonomy will undermine the unitary nature of the Indonesian State, which is her father’s legacy. She also believes that autonomy does not address the real problems of the Acehnese and the Papuans, namely the abuse of power and the injustices suffered by them. She believes that the justice and good Government her Presidency can bring are the best response to Acehnese and Papuan needs.

It is likely therefore that a Mega Government will attempt to scale back the powers to be devolved to Aceh and Papua, so that they are more in keeping with the powers devolved to other provinces.

A substantial winding back of decentralisation is likely to be strongly resisted by many kabupatens and cities. There will need to be concessions on both sides to achieve a workable consensus. The Ministry of Home Affairs and Regional Autonomy is already preparing amendments to Laws 22 and 25 to resolve problems and anomalies already evident. These amendments will go to the DPR later this year. This process could be the vehicle for a more substantial revision of the Laws by a new Government.

The wish to wind back autonomy for Aceh and Papua is more dangerous, particularly in the case of Aceh where autonomy is one part of an overall strategy to win back the Acehnese to the Republic.

The risk is that a Megawati Government will offer an inadequate package of powers to Aceh, and persist with a military solution to the separatist insurrection. In these circumstances, regular TNI and Police armed action against the rebels would continue. The irregular military and criminal activities of local TNI and Police elements outside the chain of command would also continue. A tougher approach is likely to be self-defeating. It would fuel the insurrection and make a peaceful solution impossible.
Disaffection in Papua is not as intense as it is in Aceh, but Papua could draw the lesson from such an outcome in Aceh that Jakarta’s stubbornness leaves independence and armed insurrection as the only solution for the province’s aspirations.

The Risks

It is probably five or six months before Megawati must finally address fundamental issues of her style of leadership, the shape of the coalition which will support her and the Cabinet which will set new directions for her Government.

If she can implement the measures her people are talking about to insulate the new Government from corruption and enforce tight discipline in the coalition behind her, there will be a real chance of significant change for the better.

If, however, she drifts into Government without any, or with few, of the measures set out here in place, Government in Indonesia will continue to be chaotic. The chances of strong economic recovery will also be limited. And the Muslim parties will soon turn on her.

The risks are great. Her husband is already deeply distrusted as a channel to corrupt New Order interests, which have so much to lose from a reforming presidency and the unraveling of the present deeply corrupt status quo. It will be clear within days of her becoming President whether she is determined to achieve political and economic change or to continue the current drift.

If she shows a determination to reform, there is then the real risk of retaliation from New Order status quo interests using their TNI and preman (organised crime) thugs. There could be a new wave of bombings across Indonesia and renewed religious and ethnic violence as New Order status quo interests struggle to weaken and distract the new Government.

Finally, if Megawati weathers these challenges, she may herself precipitate crises in Papua and Aceh with a stubborn insistence on minimal devolution of powers and a reliance on military solutions to separatism.

A Megawati presidency has the scope to repair at least some of the damage of the Habibie and Gus Dur presidencies. She could restore some hope and confidence to an Indonesia desperately in need of both commodities. Unlikely as it may seem to some people, she is the last hope.

3 March 2001