INDONESIA Briefing Jakarta/Brussels, 10 September 2001 THE MEGAWATI PRESIDENCY OVERVIEW • Maintain national unity • Continue reform and democratisation • Normalise economic life Megawati Soekarnoputri, eldest daughter of • Uphold law, restore security and peace, and Indonesia’s founding president, Soekarno, was eradicate corruption, collusion and nepotism sworn in as president on 23 July 2001 after the • Restore Indonesia’s international credibility dismissal of her predecessor, President • Prepare for the 2004 general election. Abdurrahman Wahid. The new government faces daunting challenges in almost every field. The Her cabinet choices, her emollient remarks to the economy has yet to recover from the financial people of Aceh and Irian Jaya, her warning that her collapse of 1997-98; territorial integrity is family should avoid corruption and her statement threatened by an active insurgency in Aceh and a of clear priorities are all good signals. But there are potential insurgency in Irian Jaya; radical concerns that her government may prove unwilling decentralisation has shaken up government or unable to follow through with the reforms that structures but is not working well; ethnic and Indonesia needs, instead preferring incremental religious violence is commonplace; the steps that do little to remedy the problems. bureaucracy and legal system continue to be Megawati now needs to move rapidly beyond riddled with massive corruption and require symbolism to the implementation of clear policies extensive reform; and popular confidence in on the economy, security and judicial reform. Indonesia’s fledgling democracy is fading. The overall mood continues to be pessimistic. Her choices for ministers have been mostly praised. She has chosen technocrats for the top Although the outlook is still dim, the installation of economic jobs and has generally favoured policy Megawati as president was greeted with relief by professionals over party politicians. Her choices the Indonesian public which had become alienated for two key coordinating ministers – former by Wahid’s erratic and ineffectual leadership. The academic and ambassador Dorodjatun feared social conflict and national disintegration of Kuntjorojakti to run the economy and General which Wahid had often warned did not happen and Susilo Bambang Yudhoyono in charge of security the nation more or less returned to normal after his – have met with cautious approval. Both are 1 fall. However, beyond her nationalist rhetoric, sophisticated actors on the political stage in Megawati had given little indication of the policy Indonesia but they face key challenges that require directions her government would take. Her swift and decisive management. Dorodjatun must announcement of her government’s six-point handle the demands of the IMF and international working program, on the day that she appointed investors that Indonesia privatise assets taken over her cabinet, provided only the broadest of after the economic collapse in 1997 and overcome guidelines. The six points are: obstacles placed in way both by corrupt former owners and an increasingly nationalist parliament. Indonesian governments have shown skill in the past at macro economic management but what is 1 Wahid had warned that there would be a social now needed is a deft handling of micro-economic revolution, six provinces would declare their independence reforms. and that the DPR/MPR building might be burnt down if he were deposed. The Megawati Presidency ICG Indonesia Briefing Paper, 10 September 2001 Page 2 As Coordinating Minister for Political and Security I. THE NEW GOVERNMENT Affairs, Bambang Yudhoyono faces a pressing situation in the rebellious province of Aceh. To defuse demands for independence, the government Whatever Megawati’s capacity to lead the needs to move quickly to end human rights abuses government, she enjoyed wide popular support and and implement a special autonomy package. her party – exploiting her family name – won more Reform of the military, including a reduction in votes than any other party in the 1999 general their role in government across the archipelago and election. But, with only 33.8 per cent, her party, radical changes to the way it is financed, will test the Indonesian Democratic Party – Struggle (PDI- Yudhoyono’s credentials as not only a reformer P) has only 153 of the 500 seats in parliament but as a decisive manager. (DPR) and only 185 of the 695 members of the People’s Consultative Assembly (MPR) that elects While Megawati has won praise for steering clear the president.2 Megawati – perhaps naively – of officials with a reputation for corruption, her thought her ‘victory’ in the general election would delayed choice for Attorney General has injected a ensure her election as president and showed little note of real concern. M.A. Rahman is a little interest in doing the deals necessary to build a known career prosecutor who has spent 35 years in winning coalition. In the end she felt betrayed the notoriously corrupt Attorney General’s Office. when her old friend and ally, Gus Dur, as Wahid is The appointment has signalled that Megawati may commonly known, stitched together an improbable not take the robust steps against corruption that coalition at the last moment to snatch the Indonesia desperately needs. It has also led to presidency from her hands in October 1999. anxieties about the lingering influence of those military leaders who are determined to avoid Megawati continued to believe that the presidency prosecution for their role in human rights abuses in was rightfully hers but refused to take the lead in East Timor and elsewhere. Rahman was earlier undermining Wahid. As opposition grew to his responsible for a limp investigation into abuses in leadership, Megawati remained silent but allowed East Timor. He is seen as an unlikely figure to take younger members of her party to join the growing on the corruption that in recent years has spread band of members of the DPR who had lost from the centre of power and become ubiquitous confidence in the president. Although she might and unpredictable. well have accepted a compromise deal which would have given her control over the government and left Wahid as the nominal president, a firm offer was never made and – saddened by the insulting remarks that he often made about her – she simply insisted on following the constitutional course that she knew would result in the president’s dismissal and her own succession.3 The composition of the new government provided some clues to Megawati’s priorities. The cabinet 2 Under Indonesia’s presidential constitution, the president and vice president are elected – separately – by the MPR whose 695 members consist of the 500 members of the DPR, 130 regional representatives elected by regional legislatures and 65 appointed members representing special interests in society. Thirty-eight appointed military and police officers will continue to sit in the DPR until 2004 and in the MPR until 2009. 3 On the process that led to the dismissal of President Wahid, see ICG Briefings, Indonesia’s Presidential Crisis, Jakarta/Brussels (21 February 2001) and Indonesia’s Presidential Crisis: The Second Round, Jakarta/Brussels (21 May 2001) The Megawati Presidency ICG Indonesia Briefing Paper, 10 September 2001 Page 3 met several key criteria. First, its membership Coordinating Minister for Political, Social and provided representation to the main political forces Security Affairs, retired General Susilo Bambang in the DPR. Gus Dur’s fall was partly due to his Yudhoyono. During the first two rounds of voting unwillingness to cultivate political support in the no candidate achieved an absolute majority but in DPR – and, indeed, his tendency to raise issues the final round Hamzah Haz scored a comfortable that brought him into direct confrontation with victory over Akbar Tanjung. major sections of the parliament.4 Second, while the political parties needed to be accommodated, it Hamzah’s party had won only 11 per cent of the was important to appoint qualified ministers to key votes in the 1999 general election but he also policy-making positions, regardless of political represented the loose alliance of Muslim parties – affiliation. This was especially true in the case of known as the Central Axis – that had been formed the economics team because Indonesia could not by the speaker of the MPR, Amien Rais. The expect essential international support unless the Central Axis parties and its allies had won about economics ministers enjoyed international 20 per cent of the votes in the general election and confidence. And third, given that one of the held around 140 seats in the MPR. In 1999 the charges against Gus Dur related to his failure to Central Axis bloc had provided crucial support for implement an MPR decree on eradicating Gus Dur, not because they were attracted to him corruption, it was important that the cabinet should but due to their total opposition to Megawati. They not include leaders who are blatantly vulnerable on had doubted Megawati’s Islamic credentials, that score. suspected that she was excessively influenced by Christian politicians in the PDI-P, and in any case believed that a Muslim country could not be led by A. THE VICE PRESIDENT a woman. But circumstances had changed by 2001. Under Indonesia’s constitution, the vice president Hamzah’s victory was assured when the PDI-P is elected by the MPR separately from the swung its votes in favour of Hamzah and he president. Megawati had initially preferred to leave gratefully accepted them. Megawati’s calculations the vice presidency unoccupied. The constitution probably included three considerations. First, makes it clear that a deposed president can only be Hamzah was seen as the least threatening of the succeeded by the vice president. In the absence of candidates. Hamzah is essentially a party politician a vice president, therefore, it would be necessary whose appeal hardly extends beyond his own for the diverse parties in the MPR first to reach party.