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Transformation from an Authoritarian System to a Democracy in a Pluralistic Society: The Experience of Indonesia 1

Bacharuddin Jusuf Habibie 2

Indonesian society – living in the only “maritime continent” in the world – has always been a pluralistic society comprising hundreds of ethnic groups each with their own language, culture and traditions.

The majority of people in this maritime continent identify themselves as Indonesians, after several hundred years of facing common challenges together of being colonized, and their natural resources exploited by other nations.

Colonial exploitation and abuses became the unifying force that band together hundreds of ethnic groups against the colonial powers that had caused many people to suffer. Indonesia’s pluralistic society has always longed for prosperity and stability that is acquired freely with the liberty to determine its own future. The plural nature of Indonesian society was often taken advantage of by the colonial powers through divide and rule to advance their own interests. Yet through the advance of modern education the young leaders of the various ethnic groups in the Indonesian Archipelago in the early twentieth century began to be aware of the fundamental causes of their country’s subjection. They, therefore, transcended their differences to forge a common national Indonesian identity.

From being a weakness, pluralism has become Indonesia’s strength, giving birth to the motto “ Bhinneka Tunggal Ika – or Unity in Diversity”. Indonesia’s diversity became the strength and basis for Indonesia’s independence on the 17 th of August 1945 which gave birth to the Unitary State of the Republic of Indonesia. Currently Indonesia has a population of over 245,613,043 (as of July 2011), which consists of around 600 ethnic groups, living on an area of 1,904,569 km2 (land and sea), with over 17,508 islands, with a territory that spans 5,244 km from West to East and 1,888 km from North to South.

Essential to Indonesia’s pluralism is the diversity of religions, which synchronizes with the diversity of local traditions, shaping the unique social‐cultural landscape of Indonesia.

1 Presented at the Global Policy Forum 2011, Yaroslavl, Russia, 7 – 9 September 2011 2 Former President of the Republic of Indonesia

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With the national consensus to respect differences in the spirit of Unity in Diversity, Indonesian society can concentrate on her priorities of increasing productivity and competitiveness of its human resources. This requires the positive synergy of three basic elements; culture, religion and science & technology in an atmosphere of freedom with human resources that are responsible, egalitarian, and non‐discriminating of race, ethnicity, and religion.

National independence gained in 1945 was then completed with the socio‐ political “freedom” obtained in 1998 through political liberalization. This second national liberation was achieved without changing the essence of the Constitution but was done through successive constitutional amendments starting with the General Assembly of the People’s Consultative Assembly (MPR) in November 1998. During the early transition period from authoritarian rule to democracy Indonesia underwent steady and consistent transformation through an accelerated evolution which prioritized:

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Human Rights

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Human Responsibilities

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Granting Regional Autonomy to the regions (both existing and newly formed ones) in order to safeguard and preserve the local culture.

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Granting the freedom of speech, expression, beliefs and the freedom to establish political parties that were in line with the Constitution.

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Granting amnesty and releasing all political prisoners – including those who had differing political views from those of the President or the current government – as long as they remained loyal to the Constitution

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Granting the freedom to peaceful protest/demonstrations without endangering property or lives.

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Granting the freedom of the press to all media – print and electronic.

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Immediately within 1 year (1999) to conduct free and fair elections with the old and new political parties participating.

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Develop an independent justice system that is free from corruption, collusion and nepotism.

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Ensuring the independence of the Central Bank that is free from the control of the Government/President.

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11. Ended the social‐political role of the armed forces and develop a politically neutral and professional military.

12. Separation of coordination of the National Police from the Armed Forces (Army, Air Force, and Navy)

13. Peacefully resolving existing Foreign Policy matters – in this case it was the matter of East Timor – within the guidelines of the Constitution.

14. Developing, improving, and forming democratic institutions at the national and regional levels.

Prioritizing economic and political issues at the beginning of the Reforms of 1998 was indeed very critical as the first steps. Policies based on the 14 points above had to be expedited and executed in a timely, precise manner ensuring the quality and minimizing the potential risks. These efforts were also important in order to avoid a complete fragmentation of the Unitary State of the Republic of Indonesia – which had been under authoritarian regimes for 40 years, starting with the onset of Sukarno’s Guided Democracy in 1959 and followed by Suharto’s New Order from 1966 to

1998.

The Asian financial crisis which began in July 1997 in Thailand, that triggered the downfall of authoritarian rule in Indonesia, can be described as follows:

The World Bank forecasted in its 1997 report an average economic growth for Indonesia of 7,8 percent. However, in the midst of this rapid growth the economic crisis erupted in the middle of the year.

The decline of the value of the Baht, the currency of Thailand, was followed by a decline of the value of other currencies in several Southeast Asian and East Asian countries, including the Philippines, Malaysia, Indonesia and South Korea. All of these countries had economic structures that were not all that dissimilar from that of Thailand, and they were all experiencing ‘bubble economies’.

The crisis precipitated a flight of foreign capital from these countries and resulted in their banking systems collapsing one after the other. Bank Indonesia tried to apply various policies to defend the rupiah, but the monetary crisis, accompanied by a collapse in confidence, made the rupiah increasingly difficult to control.

As the result of the monetary crisis, the Indonesian banking system could no longer function properly for a considerable period of time. Thus, it was

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not possible to encourage growth in the real sector and business world. As a result, business stagnated.

The supply of goods, especially essential commodities, was disrupted, including both of those intended for domestic consumption and export. As a result, a food and essential other commodities crisis became unavoidable. The situation spun rapidly out of control and evolved into a prolonged multidimensional crisis that affected various fields. The effects of the crisis caused extreme hardship for the people.

The monetary crisis that hit Indonesia was part of the domino effect rippling out from the decline of value of the Thai Bath against the US Dollar. The peak of the crisis in Thailand was reached in December 8, 1997, when 56 of the country’s 58 most important financial institutions were closed. Despite of the International Monetary Fund (IMF) assistance, since 8th of October 1997, the crisis afflicting business resulted in many companies laying off workers, leading to a massive increase in unemployment.

The monetary crisis’ impacts on employment in one year from 1997 to 1998 were as follows:

1. Underemployment rose by 13,8 % from 28.2 to 32.1 million

2. Unemployment rose by 16,7 % from 4.68 to 5.46 million

All of these in turn led to social crises, as well as public disorder and security problems. Those who could not find jobs in the formal sector in the end were forced to work in the informal sector, which suffered from much lower productivity levels.

Public disquiet and fear became commonplace as the situation got worse. Indonesia, which had previously achieved macro‐economic stability, showed itself incapable of weeding out corruption.

Just the opposite, in fact, Indonesia under President Suharto’s New Order, proved itself to be a fertile ground for graft. Corruption was commonplace at both the central and local government levels, and affected all levels of administration, from the highest to the lowest.

Collusion, frequently manifested in the granting of monopolies, further increased the gap between the rich and poor, as only a small group was able to take advantage of the special opportunities and facilities available in the economic field. For the majority of the people, however, life continued to be a struggle, with most people living below the poverty line.

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Another problem was the concentration of the fruits of economic development in Java, while most areas outside this island remained mired in backwardness and poverty. Globalization and the emergence of a transparent world community, and much greater access to information have brought about a period of rapid change throughout the world.

The Indonesian people responded to this change by demanding freedom, transparency, justice, and democracy based on human rights, responsibilities, and security.

These new demands came to the fore within a relatively short period of time. The people now benefit from much greater freedom and greater transparency, and are braver but also more confused, more pessimistic about the future and sometimes even more indifferent.

The rapid changes taking place at both the global and national levels led to growing uncertainty among the people. This uncertainty affected the credibility of politicians and the economy. Triggered by the monetary crisis,the confusion and unease felt by the public led to demonstrations, particularly those organized by students.

Initially, demands that President Suharto resign were few and far between. However, as time went on, it became more apparent that the students, supported by the public at large, wanted to see the ouster of the Suharto government which had controlled Indonesia for over three decades. In the end the students were no longer satisfied to hear promises of political and economic reform from the government, but demanded a total regime change.

The economic crisis suffered by Indonesia undermined the basis of legitimacy upon which Suharto’s New Order government was built. Long period of economic growth had muted criticisms of the regime’s monopoly of power and limitation of civil and political liberties. However, with the onset of the economic crisis the people’s patience wore out. Economic hardships, revelations of human rights abuses and blatant corruption of those closely related to the ruling family eroded any supports left for President Suharto.

Day by day, the demands for President Suharto to step down grew increasingly loud and strident. The convulsions taking place in society were clearly apparent from the reports carried in the media.

While the Indonesian media had been previously restricted in what it could report, it was now willing to take a stand and assert its independence. The

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media started to report freely what was happening, and the opinions and views being expressed in the community. This initial euphoria of press freedom was made possible by a softer approach from the authorities in line with the demands for reform.

The seemingly unstoppable series of demonstrations reached their climax with the Trisakti University tragedy on May 12, 1998. At the time, students from Trisakti University were staging a demonstration but were confronted by the security forces. A clash occurred, during which 7 students were shot dead by live ammunition.

This sparked a spate of widespread rioting and disturbances from May 13 to 15. President Suharto was in Cairo attending a meeting during this momentous period.

The riots broke out simultaneously in a number of areas and left hundreds of people dead and widespread damage to property in their wake.

The rioting, looting, burning and rape left a bitter legacy for the Indonesian nation. The extent of the violence came as a shock to many, especially in a country which had always claimed that its people were polite and friendly.

The House of Represntatives and the People’s Consultative Assembly (DPR and MPR), which till that time had continued to express loyalty to President Suharto, became alarmed that the escalating situation could result in widespread social conflicts that may endanger national unity.

After hours of difficult negotiations the leadership of the House finally urged President Suharto to resign and called on the people to exercise restraint and maintain national unity so that an orderly and constitutional change of government could take place. It is greatly to President Suharto’s credit that he stepped down without demur, saving Indonesia from a prolonged political crisis and conflicts which could result in a great many deaths and leave a deep scar within society, as have recently happened in some countries.

In accordance with the 1945 Constitution, as Vice President I was sworn in to become president immediately after President Suharto announced his resignation on 21st May 1998. The new government was tasked to carry out wide‐ranging reforms or “Reformasi” as demanded by the general public. In the 17‐month Democratic Transition period of my presidency, I personally led national efforts to overcome the multidimensional crisis and lay the foundation for Indonesia’s transition to democracy.

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I developed a systematic approach for finding solutions to various issues that are often related to one another and could be best described as follows:

1. Ensured that in the shortest time possible uncertainties were transformed into certainty through making large‐scale changes.

2. Avoided making large scales changes through a “revolution” that could yield unpredictable results, but rather developed “accelerated evolution procedures” which were planned and implemented based on agreed rules and regulations, but at an accelerated pace.

3. Relaxed existing unproductive constraints to social, political and economic progress and prevented the formation of additional constraints.

4. Immediately became more transparent and continuously informed the people of the changes that were taking place.

5. Ensured that freedom of the press was given the highest priority to allow high quality of information to reach the people at the right time.

6. Guaranteed the freedom of speech and the freedom for people to voice their opinions, also if needed through peaceful protest and demonstrations.

7. Immediate release of all political prisoners

8. Allowed the creation of new political parties that must recognize and accept the existing Constitution.

9. Made it clear that the Constitution is a living document, allowing for amendments, without changing the basic principles and philosophy of the Nation.

10. Swift decisions taken to improve macroeconomic indicators, employment creation measurements, and prevention of the outflow of capital to achieve economic and political stability.

11. Solved immediately domestic and national issues without ignoring regional and international constraints.

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12. Legislative and Presidential elections brought forward, to be held immediately within 12 months.

13. Affirmed the clear division of duties and responsibilities between the military and police forces.

14. During this transitional period, every National Leader must be fully aware that his/her main duty was to ensure “low cost, high quality and timely delivery” of the necessary changes that needed to be implemented without misusing the trust and opportunity given. An important change in power paradigm in the reform era:

an opportunity to lead was NOT given as a means for the leaders to maintain power for as long as possible.

15. A strong national consensus was a necessity to ensure nation‐ wide acceptance of the overall road map in time of turbulence. People must be encouraged to use legitimate political procedures and follow the appropriate political processes to voice their aspirations and avoid using “street parliament” in order to have strong and sustainable political institutions.

16. Motivated the youth to participate constructively in politics by allowing for freedom of assembly and freedom of expression to ensure that they are channeled in the right way. The younger generations have a tendency to explore various ways to express social and political criticism, and many are active in the many NGOs that have been established, in particular through the use of various new media – twitter, facebook and other virtual social platforms – for political and non‐political purposes.

17. Ensured freedom for assembly and for the formation of political parties with no bias or restrictions based on race or religion, including Islamic‐based parties. Allowed the formation and survival of political parties taking its natural course.

18. Enacted and implemented measurable policies to eradicate corruption. Enlisted a buy in from all arms of government to support and commit to measures to eradicate corruption in all sectors. In Indonesia, the People’s Consultative Assembly issued a

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decree to “investigate and confiscate assets, and proceed with the prosecution of corrupt officials”. This decree was followed with the establishment of a National Corruption Eradication Commission.

19. Introduced an anti‐monopoly law and later established an independent commission to ensure fair business practices that broke up existing economic monopolies and prevente new ones from developing.

These were some of the steps that Indonesia carried out in the early years of transition from authoritarian rule to becoming a true democracy. Despite the numerous transformative steps being taken Indonesia still has some way to go to consolidate and improve the quality of its democractic governance more substantively. However, notwithstanding its many shortcomings Indonesians firmly believe that a transparent, participatory, accountable and inclusive political system such as provided by democracy is the best way to bring us to our desired collective future.

Since the “Reformasi” in May 1998, 205 new regions have been formed which includes 7 new provinces, 164 regencies, and 34 new cities. With these new additions, Indonesia currently has 33 provinces, 398 regencies and 93 cities.

The prediction of a number of experts that indicated that this signaled the beginning of a fragmentation of the Republic of Indonesia into several smaller states was proven wrong, as the implementation of the 14 points mentioned above in turn strengthened the Republic.

In the midst of the uncertainties of the global economy, Indonesia’s economy is growing at a steady 6.5% fueled by the agriculture, manufacturing, service and mining sectors. The Rupiah exchange rate as of July 2011 appreciated by 4.93% compared to the same time last year with an interest rate of 6.75%.

Indonesia’s GDP in 2010 increased by 77% compared to the beginning of Reformasi in 1998 while the debt ratio against the GDP decreased from 58% in 1998 to 27% in 2010 and 21.6% in June 2011.

All in all, Indonesia has come a long way since the turbulent early democratic transition period. Indonesia, the largest Muslim majority nation, is now recognized as the world third largest democracy with a

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vibrant economy and plays an increasingly active role in regional and global affairs.

With its predominantly moderate variant of Islam, Indonesia acts as a bridge between the West and the Islamic world through the promotion of interfaith dialogues.

Indonesia is now a member of the G 20, being the world’s 16 th largest economy, while within ASEAN Indonesia has played a leadership role in ensuring the attainment of an ASEAN Community based on the principles of democracy, human rights and rule of law.

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