[Kabar-indonesia] ST: Third year in office will be crucial for Yudhoyono

[Joyo at aol.com]

The Straits Times (Singapore) 
Saturday, September 2, 2006

Third year in office will be crucial for Yudhoyono

He has made some progress, yet his popularity has
slipped markedly

Shefali Rekhi

CALIFORNIA Governor Arnold Schwarzenegger does not
often figure in Indonesian politics. But the former
Hollywood action man got a honourable presidential
mention last week.

Indonesian President Susilo Bambang Yudhoyono, well
known for his popular touch, invoked the Terminator
and his readiness to transform himself - from
bodybuilder to movie star and then political leader -
to make a point.

This adaptability has enabled Mr Schwarzenegger to
keep himself relevant over the years, noted Dr
Yudhoyono last week. So too must Indonesia if it is to
remain sought-after in the world.

He was speaking last week at the Asean 100 Leadership
Summit in Jakarta, attended by business and community
leaders from around the region.

The annual event, organised by media company Asia Inc
Forum, was being held in Jakarta for the first time.

Its highlight was a dinner with President Yudhoyono,
as well as talks by Vice-President Jusuf Kalla and
Finance Minister Sri Mulyani Indrawati.

But among participants at the summit and elsewhere,
there was much chatter about Dr Yudhoyono's rosy
prognosis for the Indonesian economy.

Many tongues wagged about the President's statement
that his government had succeeded in reducing poverty
from 23.5 per cent in 1999 to 16 per cent in 2005 -
only to have it pointed out that later data showed an
increase in poverty due to the fuel-price hikes.

Few were impressed with the remarks made by Central
Bureau of Statistics chief Rusman Heriawan, who was
quoted in press reports as saying that his
organisation had not had the time to compile the data
ahead of the President's speech.

Opposition leader Amien Rais, who was addressing
another gathering at the same time that the conference
was taking place, put it more starkly.

He charged that the episode was like 'rice turning
into porridge'. The administration, he said, was not
delivering on its promises.

Yet, to be fair, Indonesia has been attracting the
attention of the business community over the past few
months, with its economy moving ahead at a slightly
higher pace of growth after the downturn last year.

An indication of this: the value of newly approved FDI
(foreign direct investment) projects between January
and July increased by 13 per cent year on year, as
signs of higher growth became imminent.

In his state-of-the-nation address in the middle of
last month, Dr Yudhoyono also made much of the fact
that the Indonesian economy's growth is expected to
reach 6.3 next year, up from this year's revised
estimate of 5.8 per cent.

A draft budget presented by him promises an 8 per cent
increase in spending, with most of the 746.5 trillion
rupiah (S$128 billion) to be spent on improving
infrastructure, rural welfare programmes and the
health and education sectors.

Progress is also being made - albeit slowly - on the
long-talked-about push to develop special economic
zones, although investors are watching to see how
planned reforms to labour and tax laws play out in the
months ahead.

Despite these developments, many in Jakarta, however,
seem to think that it is too early to start reaching
for the (non-alcoholic) champagne.

'People are not satisfied with the achievements of his
administration and the President's popularity rating
has dropped significantly,' said Mr Endy Bayuni, chief
editor of the Jakarta Post, who attended the summit.

'The state of the economy remains the top concern,' he
added.

'The President has been criticised for using outdated
figures about poverty alleviation in his state-of-the
nation address, and right now people are worried about
jobs.'

>From a high of 79.7 per cent in September-October
2004, only 37.9 per cent of people now say they are
satisfied with his performance, the latest survey
released in May by the respected Lingkaran Survey
Indonesia (LSI) shows.

At the top of most people's minds is their concern
about jobs, with many pointing out that fresh
graduates in the country are finding it difficult to
find work.

With the economy expected to grow at the rate of 6.3
per cent, the problem will likely persist.

Indonesian Employers Association secretary-general
Djimanto was quoted in local media reports as saying
that, at the current rate, the economy will not be
able to absorb the 2.3 million new job-seekers
entering the market.

Other common concerns among Indonesians these days is
high inflation, now hovering at about 15 per cent,
following large fuel price hikes last year. High
interest rates also continue to dampen consumer
spending.

Last Friday, for example, upmarket malls in downtown
Jakarta were relatively quiet.

Wider questions are also being asked about the
government's seriousness in tackling corruption.

Observers point to several high-profile cases which
have been making their way through the courts, but at
a glacial pace, presumably because some of the key
players are well-connected.

Reform issues apart, another looming challenge for the
President will be keeping his coalition together.

As Dr Yudhoyono reaches the halfway mark of his term,
there is much talk about an impending reshuffle of his
Cabinet, with the jockeying that usually precedes it.

The Golkar party - which has the highest number of
seats in the Lower House - is said to be demanding
more seats in the Cabinet in line with its strength,
while another important coalition member - the popular
Islamic Prosperous Justice Party (PKS) - is demanding
the same.

Much turns on the outcome of such negotiations, not
least since many believe that next year will be a
critical make-or-break one for the administration,
when key reforms and decisions will have to be put
into effect before the politicking starts in the
run-up to the next election in 2009.

'The next few months will be quite interesting for
President Yudhoyono's administration,' International
Crisis Group's Jakarta director Sidney Jones told The
Straits Times.

Almost as interesting, perhaps, as one of Mr
Schwarzenegger's Hollywood blockbusters.

The writer is an Assistant Foreign Editor. She
attended the Asean 100 Leadership Summit in Jakarta
last week.

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Joyo Indonesia News Service
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