DTE statement on the change of presidency in indonesia

London 31st July 2001

"Once again international attention has focused on the power politics of Jakarta while ignoring the fate of Indonesia's many millions of dispossessed people, particularly those on the 'outer islands'", says Frances Carr of Down to Earth – the International Campaign for Ecological Justice in Indonesia.

Foreign leaders and the World Bank have welcomed Megawati Sukarnoputri's appointment as Indonesia's new president on Monday 23rd July. What will the change bring for the vast majority of Indonesia's 210 million population which depends, directly or indirectly, on the sustainable and equitable management of the country's land and natural resources?

Indonesia is in the grip of long-term political and economic crises. There are increasing social conflicts, resulting in over one million internal refugees and countless human tragedies. There are local food shortages, rising infant mortality and a 'lost generation' of children whose parents could not afford to send them to school. The country is also suffering an environmental crisis. The devastating forest fires – now an annual occurrence – are the most obvious symptom of this.

The deposed president, Abdurrahman Wahid, has been portrayed as corrupt and incompetent, but this is not the root cause of Indonesia's current problems. For three decades, Suharto and his military-backed New Order regime brought about the systematic over-exploitation of Indonesia's natural wealth and the gross violation of human rights. The legacy of the Suharto years is a huge debt burden, widespread poverty and social unrest.

The myth of Indonesia's 'economic miracle' during the 1970s and 80s was based on state violence. Communities have been pushed off their land and denied access to forests, farmland and fisheries to make way for large-scale forestry, plantation, mining and energy schemes. A small, corrupt, powerful elite – backed by Northern governments, international donors and foreign investors - became fabulously rich. Meanwhile tens of millions of ordinary Indonesians paid the price. The indigenous peoples of Indonesia's outer islands and the rural poor throughout the archipelago have suffered the loss of their livelihoods and the degradation of their environment.

The much-needed process of political, economic and legal reform in Indonesia has yet to begin. Hopes that the downfall of Suharto in 1998 would wipe away the corruption, collusion and nepotism which characterised his regime were soon dashed. Indonesia's fledgling democracy has been undermined from the start by powerful vested interests in the military and business circles. In the last three years Indonesian governments have been plagued by political infighting. The result has been a series of decisions based on short-term political expediency, which ignore Indonesia's massive foreign and domestic debts (estimated at over US$250 billion) and the needs of the two-thirds of the population living below the official poverty line. Rural and forest peoples living outside Java have been totally neglected by Jakarta.

Forestry is a case in point. Some 60 million people in Indonesia depend on forests for their homes, food, water supply and livelihoods. Over 70% of Indonesia's tropical forests have already gone and much of the remaining 70 million hectares is fragmented and degraded. Deforestation continues at 2 million hectares per year – one of the highest rates in the world. Environmental issues - never high on the reform agenda - slipped even further as Wahid struggled to maintain power. Forestry ministers have come and gone in quick succession in cabinet reshuffles. There has been no coherent forestry policy. Any genuine reforms have been removed from new legislation at the drafting stage. There have only been two consistent features: increasing the exploitation of natural resources in order to reboot Indonesia's economic growth and side-stepping the fundamental issue of local communities' rights.

Indonesian NGO calls for a logging moratorium have been ignored. The timber barons who built huge business empires from the profits gained by stripping Indonesia's forest assets, now claim to be bankrupt. The wood processing and paper pulp factories they own are allowed to continue operating – despite violating indigenous land rights and depending on illegal logging – just in order to repay their creditors. Legal action has only been taken against a handful of the hundreds of companies illegally burning to clear forest land and only two cases have resulted in fines. Similarly in the plantation, mining and fisheries sectors, big businesses – including those backed by foreign investors – continue to act with impunity.

Megawati, who has now become Indonesia's third president in three years, has ridden a wave of nationalist nostalgia due to her father's role as one of the founders of the Indonesian nation. She has spent 21 months as an ineffective Vice President. Now, ambitious politicians, business figures and, most of all, the military will be the power behind the throne. Her cabinet will, no doubt, be carefully chosen to reward her backers. These include her multi-millionaire husband Taufik Kiemas and Suharto crony Arifin Panigoro.

Civil society and human rights groups risk being pushed to one side by these vested interests. The speed with which the leaders of the creditor nations abandoned their support for Wahid and recognised the new president raises the suspicion that democracy was not the first thing on their minds. Big business, including international oil and mining companies, would welcome the military if it meant more security and fewer labour problems for its operations. Efforts to promote legitimate demands for self-determination in Aceh and West Papua will come under even greater pressure. If the military is given full authority to uphold the unitary state, there will be no thought for dialogue or peaceful resolution.

The big unknown factor is regional autonomy. The laws on regional control and revenue sharing which came into force in January this year have added to the current chaotic situation. In theory, regional autonomy opens the door to grassroots democracy. In practice, it is creating new opportunities for local elites to scavenge what resources they can. Local authorities have been making up their own rules and defying central government. While district administrators and provincial governors battle with Jakarta for authority and revenues, the state is not functioning. Now the regions have had a glimpse of power, they are likely to resist any moves by a new president to impose national development plans. Megawati has criticised the regional autonomy laws for undermining the unitary state and amending it will be high on her agenda. This will almost certainly mean rolling back the tentative steps towards greater local democracy.

The reality is that no president could bring about a successful 'quick fix' to problems as grave as those Indonesia is experiencing – even in a well-established democratic system. It will take several years to tackle such issues as Indonesia's debt problem and the massive budget deficit. A complete overhaul of the judicial system is needed to make progress on wiping out corruption and protecting human rights. These are already part of the agenda of the urban, liberal reform movement.

Even more fundamental reform is needed to secure a sustainable future for Indonesia. The key is land reform and coherent natural resource legislation which recognises local communities' rights. These reforms could come through genuine democracy and dialogue between the government and civil society. The alternative does not bear thinking about.