Indonesia: corruption scandals spoil SBY’s
honeymoon
SUSILO BAMBANG Yudhoyono (SBY)
hoped for a bit of a honeymoon after being re-elected in the Indonesian
presidential election in July 2009. Instead, his government has faced a
series of scandals surrounding the Corruption Eradication Commission and
the bailout of the PT Bank Century. SBY won with 60.8% of the vote,
while the Megawati-Prabowo ticket received 26.8%. The Jusuf
Kalla-Wiranto ticket received 12.4%.
There was barely any
difference between the candidates who all come from one or another wing
of the establishment. SBY’s vice-presidential running mate, Boediono,
was Megawati’s finance minister before becoming SBY’s economy minister
in 2005. SBY had been a minister in the previous Megawati government.
Wiranto and Probowo were formerly armed forces commanders. Working
people have no enthusiasm for SBY but, in the absence of any real
alternative, voters decided to stay with the incumbent on this occasion.
The only minor disagreements
were on economic policy. The US had backed the SBY ticket as the best to
implement the neo-liberal reforms necessary to open up the country to
foreign investment. Megawati and Kalla put forward more populist and
protectionist programmes aimed at protecting local capitalists.
The issue of corruption was
also a feature. Corruption is a normal part of capitalist society, but
in an underdeveloped country like Indonesia it is widespread. Trillions
of rupiah are spent legally and illegally every year by big business to
buy political influence. SBY had pledged to fight corruption in his
second term. In reality, he has no interest in attacking some of his
closest backers and has done as little as possible. Unfortunately for
him, corruption has been forced to the top of the agenda creating
tensions within the new ruling coalition and fuelling popular anger
among the poor and working class.
It has been alleged that more
than $600 million of government funds were given to Bank Century, on
condition that part of it was used to fund SBY’s election campaign. SBY
and Boediono (the central bank governor at the time) are both implicated
in the scam. Bank Century’s management had been riddled with corruption
and had purchased millions of dollars worth of risky bonds. The official
reason for the bailout was that, had the bank failed, the debts could
have spread to other banks, the stock exchange, and could have caused
severe problems for the entire Indonesian economy.
While the workers and the
poor have major concerns about the economy, they were not at all happy
about the government bailing out bankers while they continue to live in
poverty. Public outrage started to develop, especially as the cost of
the bailout rose by the day. One newspaper estimated that it was the
equivalent of building more than 13,000 new schools!
These problems have been
quickly followed by scandals around the Corruption Eradication
Commission (KPK). The KPK had been set up by SBY to deal with the graft
that is so common at all levels of the bureaucracy, especially at the
top. The KPK, however, has not targeted them. There have been several
prosecutions, but mainly of lower-ranking officials.
But, when the KPD was forced
to go after some police officers and officials in the attorney general's
office, some sections of the establishment tried to undermine its
effectiveness. Among other things, the chairman of the KPK was arrested
as part of investigations into an alleged murder, and it was claimed
that several KPK officials had received bribes. During court
proceedings, taped phone conversations have implicated several
high-ranking officials, and even mentioned that the president was
working to undermine the KPK. The tapes rocked the nation and have
seriously undermined the government.
SBY has responded by calling
for investigations into the police and the attorney general’s office
but, at the same time, he has watered
down the powers of the KPK. SBY is also working hard to keep the full
story surrounding the Bank Century scandal and his election funding
hidden.
The saga has exposed the
deep-rooted corruption within Indonesia’s ruling elite. The public has
started to turn against the police, public prosecutors and the
government.
70% early in 2009, some
polls now show that he has less than 40% support. Editorials in
Indonesian newspapers have called him weak, and people have started
expressing their anger in a series of protests. On 28 January, thousands
took to the streets to mark the 100th day of SBY’s second term. About
10,000 people gathered across Jakarta, including at the presidential
palace and parliament, where they called for a full investigation and
for key ministers to resign. Facing a heavy police presence,
demonstrations were also held in 20 other cities including Medan,
Yogyakarta, Makassar, Surabaya, Solo and Bengkulu.
The newly-formed Indonesian
People’s Opposition Front (FOR) was one of the groups which organised
the presidential palace protest, using the slogan: ‘Change the regime,
change the system!’ FOR is an alliance of trade unions, student unions,
small farmers, women’s organisations, human rights groups and left
political parties. It is planning more protests over the coming months.
SBY responded by trying to
shift attention away from the crisis by warning against ‘violence’ and a
‘return to 1998’. Clearly, the spectre of 1998 and the mass protest
movement which led to the downfall of the Suharto dictatorship still
haunts the ruling class in Indonesia.
Things are not getting any
better for SBY. While Indonesia seems to have weathered the economic
storm better than most of its neighbours, the reality is that the
economy rests on very weak foundations. Growth rates have fallen from
6.1% in 2008 to an expected figure of around 4% in 2010. Official
unemployment stands at around 8%, but more than 70% of the labour force
work in the informal sector. The economy is largely based on low wages,
with the current minimum wage set between $84 and $140 a month. However,
more than half of the 230 million people in the country live on less
than $2 a day.
The government introduced a
$7.1 billion stimulus package last year which included cash handouts,
tax cuts and higher wages to more than a third of government employees.
This has helped, temporarily, to offset rising prices, and has propped
up consumer demand. It has also massively increased the budget deficit.
The government’s own conservative estimate is that the budget will not
be freed from deficit for at least the next five years. In order to
reduce the deficit, savage cuts will be implemented driving people even
further into poverty.
Falling oil prices have
allowed the government to reduce fuel prices whereas, previously,
cutbacks to state subsidies would have led to higher fuel costs,
provoking protest movements such as those in 2005 and 2008. While
protests and industrial action have so far been limited, such is the
anger brewing that this may not last. A steady stream of job losses and
price rises are adding to the social tensions. Another economic downturn
or further corruption scandals could set the country alight.
Although Indonesia became an
independent nation in 1945 and formal, parliamentary democracy has been
in place since the fall of the Suharto regime, none of the major
problems facing workers and the poor have been solved. Democratic rights
are still being undermined while poverty continues to increase. Just as
under Suharto, a tiny minority continue to plunder the county’s wealth
and resources. If this situation is to change, it is vital that the
lessons are learned from past struggles.
The movement which led to the
overthrow of Suharto is one such example. The mainly student protests of
1998 led to the resignation of one of the world’s most brutal dictators.
Then, as now, there was a lot of debate as to what position the
developing left forces in the country should take, how best to remove
the corrupt regime, eradicate poverty and introduce real democracy.
These tasks are tied up with
the socialist transformation of society. A socialist system based on
public ownership, planning and democratic control is best placed to use
the country’s resources to provide for the masses. Democratic control
and management by workers is the only way to eradicate corruption and
give people a real say over their lives.
In the late 1990s, however,
many on the left maintained that the movement had to limit itself to
purely democratic demands. They argued that, given the fact that
Indonesia was an underdeveloped country, a period of ‘capitalist
development’ was needed before there could be any talk about introducing
socialism.
This led many on the left to
support so-called ‘progressive’ bourgeois candidates in the elections,
including Megawati Sukarnoputri herself, who were seen as lesser evils.
Yet, after twelve years of ‘capitalist development’, poverty and social
inequality have only worsened. Many of these alleged progressives have
proven themselves to be loyal servants of big business and just as
corrupt as Suharto, particularly Megawati.
In a period of renewed
economic crisis, capitalism can only continue in Indonesia by demanding
more and more sacrifices from the working class and poor. Therefore, the
struggle against corruption and for genuine democracy is inevitably
linked to the struggle for an end to capitalism. Calls for reforms
without highlighting the need for socialism will only sow illusions in
the already discredited capitalist system. That is why, while being the
best campaigners against corruption, the left today needs to take an
independent class position and outline a clear socialist programme based
on the interests of workers and the poor.
Neither SBY nor any of the
establishment parties have a programme that is capable of taking things
forward. The only way to lift the majority of people out of poverty and
to eliminate corruption is on the basis of democratic socialism. Workers
and the poor need to reject all of the capitalist parties and fight for
a system that puts their interests first. The tensions that are
developing in Indonesian society are bound to sharpen in the period
ahead. Through the course of struggles, more and more people will see
the need to build a party that fights for democratic socialism and is
unashamedly based on the idea that working people are best situated to
implement lasting change.
