January, 2002

Political Stability in post-Wahid Indonesia

Mohammed Fayez Farahat

There were various perceptions about the future of political stability in Indonesia after Megawati Sukarnoputri, daughter of former president Sukarno, took the presidency from Abdur-rahman Wahid. Despite the positive implications of the peaceful transfer of authority, questions were raised about the future of political stability and the process of democratic transformation. The formation of the new government reflected a full realisation on the part of Megawati of the rules of the political game in Indonesia in the light of recent political crises.

The latest political crisis revealed the influential role that the Indonesian parliament and army can assume in the political system in a state of clash with the presidency. The crisis also highlighted the major problems that the government faces, chief among which are those relating to foreign debt, cooperation with the International Monetary Fund and the radical steps that should be taken with regard to privatisation and economic reform. Megawati managed to form a government that guarantees representation of all political and religious powers, as well as the army. The new government includes members with varied expertise and diversified backgrounds which enable Megawati to face the nation's problems efficiently. Megawati has entrusted the ministries responsible for economic affairs to supporters of cooperation with the IMF and international economic institutions who favour promotion of the privatisation programme. The choice of these ministers sends a significant message to international monetary markets and underscores the persistence of Megawati to continue along the path of economic and financial reform. On the political level, Megawati has provided space for the representation of all the main political powers, including Islamic political powers, and the army. The political and professional composition of the cabinet guarantees political stability in Indonesia in the coming era.

Hafez Haz, Megawati's deputy, enhances the opportunity for stability by virtue of the role he could assume in attaining balance in the political system between the presidency and the legislative institution. Hamza, leader of the United Development Party, which controls 70 seats in the People's Consultative Assembly, would provide the presidency with the majority support of the legislative institution if Haz can achieve such balance.

Megawati's legitimacy is a result not only of her being elected by the Consultative Assembly, but also because of the outcome of the June 1999 elections in which her party, the Indonesian Democratic Party (IDP), obtained the highest number of votes. These elections finished with the IDP obtaining 34 per cent of votes, compared to 22.4 per cent for the Golkar Party and 12.6 per cent for the National Awakening Party, led by former president Wahid.

This does not rule out the possibility of competition within the presidency or between the presidency and the parliament, particularly considering the increasing aspirations of Haz and the differences between the political and religious backgrounds of Megawati and Haz. Furthermore, president of the People's Consultative Assembly Amien Rais looks forward to assuming power, which increases the opportunities for competition inside the government.

The Megawati government, if it maintains political stability and brings back the rates of economic growth that existed before the 1996 crisis, will face a number of challenges. These include the treatment of economic problems, management of the economic reform process, and controlling the negative social and economic impact of the process on the Indonesian people. Another problem is represented in the separatist movements in East Timor and Aceh. The difficulty of handling the economic crisis is mainly due to the anticipated negative economic and social consequences of the economic reform programme, which might re-ignite social and political disturbances, especially as the programme includes reduction of governmental expenditure on services and subsidies, and the acceleration of the privatisation programme.

Megawati followed a more flexible approach in dealing with the problem of Aceh by offering the people of the region more economic incentives and political freedom to persuade them to concede their demand for independence. Yet the discrepancy between the visions of the government and separatist leaders still impedes the attainment of any real settlement. The army is also deeply opposed to any form of separation.

The Megawati government is not expected to encounter any substantial challenge until the 2004 elections. For now, though, Indonesian political powers consider the government a transitional one, pending the results of the coming elections.