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January 26, 2009 / 4:38 AM / 9 years ago

Indonesia struggles to cast off Suharto's shadow

By Sara Webb - Analysis

JAKARTA (Reuters) - Indonesia’s former president Suharto has been dead for a year, but the country he ruled for three decades until his ouster in a populist uprising in 1998, is still dealing with his legacy.

Every day, scores of visitors come to the Suharto family mausoleum near the royal city of Solo, in central Java, to pay their respects to a man known to some as “father of the nation.”

Yet even today, Indonesia is struggling to recover from the Suharto regime’s culture of corruption, economic mismanagement, and human rights abuses, in order to attract much-needed foreign and domestic investment for infrastructure and other parts of the economy that are starved of funds.

“Yes, Indonesia has made some reforms over the past decade. But the pace of reform has been disappointing,” said Prakriti Sofat, economist at HSBC in Singapore.

The outcome of this year’s parliamentary and presidential elections will determine the pace of political, social, and economic reform over the next five years.

President Susilo Bambang Yudhoyono, the former general who won the 2004 presidential election on promises to defeat graft, spur economic growth, and tackle security threats from militant Muslim groups, is the clear leader in the opinion polls, and many see him as Indonesia’s best hope for further change.

After Suharto stepped down amid the chaos of the 1997-98 financial crisis, Indonesia embraced democracy.

The armed forces were forced out of parliament, where the military had been allocated a set number of seats under Suharto, and the president is now directly elected by the people.

POLITICAL PARTY PROLIFERATION

The number of political parties has proliferated -- 38 are due to contest this year’s parliamentary elections on April 9 -- and Golkar, Suharto’s army-backed political machine, no longer dominates parliament, thanks to free and fair elections.

This year, for the first time, voters will be able to choose the individuals they want to represent them in parliament, shifting more democratic power to the electorate. Before it was up to the parties to make the selection, a process potentially fraught with corruption.

Following reforms, the military retreated from politics back to the barracks, though it is still involved in a number of businesses both legal and illegal. But the acquittal of a top military intelligence official in the murder of Indonesia’s leading human rights activist in December shows the armed forces remain untouchable, political analysts say.

Regional autonomy, another post-Suharto change, has shifted considerable power to the local and provincial governments, and provided Indonesians with further lessons in democracy.

Already some local officials have shown that they can deliver on their promises for better infrastructure, free healthcare and education, and training to help school-leavers and unemployed acquire skills -- and those that don’t are less likely to be re-elected.

But after just a decade, Indonesia’s democracy is immature, and its parliament is plagued by corruption, raising concerns about the way legislation is passed.

Few of Indonesia’s political parties are distinguished by clear policies, ideologies, or reform agendas.

Some are built around personalities. Golkar is still associated with the Suharto clan, while PDI-P is based around former president Megawati Sukarnoputri, the daughter of Indonesia’s first president, Sukarno.

Wiranto and Prabowo Subianto, two Suharto-era ex-generals associated with human rights violations, each have their own political parties.

Yudhoyono has delivered on several of his promises, but one of his main achievements has been to serve his full elected term, bringing a sense of stability to a country which had three different presidents in the period between Suharto’s fall in 1998 and Yudhoyono’s election in 2004.

Under Yudhoyono, Indonesia’s anti-corruption agency has brought several high-ranking officials to justice, including central bankers and government officials, while the notoriously corrupt tax and customs departments have been the focus of a huge clean-up as part of government efforts to improve revenues [ID:nJAK363913].

TOP KLEPTOCRAT

Yet despite the convictions and crackdowns, graft remains a widespread problem and many of the worst offenders have proved untouchable.

Suharto, who Transparency International ranked as the world’s top kleptocrat, with a fortune estimated at $15-35 billion, was deemed too ill to stand trial, while many of his family, inner circle, and close business associates have escaped justice.

Indonesia has failed to fully investigate and account for the billions of dollars that the central bank used to bail out well-connected banks during the 1997-98 financial crisis, while attempts to bring those responsible for human rights abuses have largely faltered.

So far, Yudhoyono’s power has been limited because his Democrat Party won only a small number of seats and relies on the support of other, less reformist parties in parliament.

But if Yudhoyono and the Democrat Party win a strong mandate in this year’s elections, he may have more scope to push ahead with his anti-corruption policies and reform of several key institutions.

Indonesia still ranks among the world’s most corrupt countries, and its judiciary, civil service, and police are regarded by many Indonesians and foreigners as ripe for massive overhaul.

Indonesia’s unpredictable courts make it impossible for businesses to operate effectively, while a recent survey by Transparency International found that one out of every two encounters with the police involved a bribe.

Additional reporting by Telly Nathalia; Editing by Bill Tarrant

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