After Soeharto: Are We Better Off?


IO – As Indonesia enters its 75th national holiday of commemorating the proclamation of independence on 17 August 1945, for many people it is not only a time of celebration. It is also a time of contemplation, moreover about the country’s history, which can roughly be thought about in terms of three periods– the Soekarno era, Soeharto’s New Order, and the post-Soeharto period. 

The Soekarno years, which can be ascribed as being a time of nation-building with the Soekarno presidency successfully forging a sense of national identity and unity, is an important point in history for Indonesia. It was marked by great pride in having successfully won its independence after centuries of Dutch colonial rule. 

Yet the ending of Soekarno’s presidency and the ushering in of his successor, General Soeharto, is a dark period in the mid-1960s that most Indonesians would prefer to forget. As in the Hollywood blockbuster film, The Year of Living Dangerously, it was a time of political violence, Western spies and intrigue, markìng the beginnings of an authoritarian regime that would last for three decades. 

Now, with more than 20 years having passed since Soeharto stepped down from power, what should we make of his legacies, and how should we judge his successors? 

Soeharto’s critics, of which there have been many, rightly argue his rule was marred by human rights abuses, a loss of civil liberties and rampant corruption. Yet there was a bright side to Soeharto’s New Order, especially when it came to economics. 

Inheriting runaway inflation and massive foreign debt after years of Soekarno’s cabinet mismanaging the economy, Soeharto understood he urgently needed help when he officially took office. Taking his pick of Indonesia’s best and brightest, his economics team–considered as amongst the best in the developing worid–focused on much-needed deregulation, balancing the budget and getting inflation under control. The results spoke for themselves: inflation fell from 650% in 1966 to only 13% in 1969. 

His team of economics whiz kids–commonly known as the ‘Berkeley Mafia’–went on to oversee decades of impressive economic growth, averaging more than 6% a year between the late 1960s and 1997. Within that period Indonesia emerged as one of Asia’s star destinations for foreign investors, masses of Indonesians were lifted out of poverty and industrialization took off as factories opened and started exporting across Asia and to the West. 

The onset of the Asian Financial Crisis in 1997, which was the beginning of the end for Soeharto, brought entire economies to a halt. It would take years to recover. Yet when Soeharto finally stepped down in May 1998, there was jubilation and expectations of brighter days. 

After a few years, the economy did manage to recover. Political reforms were passed as well–direct elections were held, the media became uncensored, local governments were empowered and Indonesians finally felt they were no longer restricted and under the watch of a repressive government. 

Yet, even with all of the political reforms taking place, there was something most people overlooked: while it was true Soeharto was gone, most of the politicians that once served under him were still around and holding positions of power. 

These figures–which political scientists describe as an ‘entrenched elite’ or even the ‘establishment–have been the main reason behind Indonesia’s failings in the post-Soeharto era. It seems there have been many changes since 1998, yet when you look at it more closely and scratch the surface, nothing much has really changed, at least where it counts. 

One thing that hasn’t changed dramatically since the fall of Soeharto is corruption. Although now there is the Corruption Eradication Commission, which has managed to prosecute some high-level cases since it was founded in late 2003, most Indonesians and the business community, both local and foreign, incessantly complain about government officials and their lack of ethics. 

One reason why corruption has persisted is the lack of change in Indonesia’s political culture. Rent-seeking, graft, embezzlement and self-dealing, all of which flourished during Soeharto’s rule, is still considered normal behavior by politicians and government bureaucrats. This is hardly surprising when one considers the fact that most of Soeharto’s underlings and key political operators, most of whom became rich during the New Order, simply remained in power after the fall of Soeharto. In other words, those pesky entrenched elites continued their game playing, and for the younger generation entering a career in politics or joining the bureaucracy, they quickly learned that only the corrupt can climb the ladder of power. 

Then there is democracy. Most people would argue that Indonesia is a fully-fledged democracy–yet again, when one scratches the surface it becomes obvious this is not entirely true. 

One example of where Indonesia’s democracy falls short is its electoral system. Sure, its elections are direct, but the problem starts with how candidates are chosen by political parties. Because parties are purely transactional, aspiring candidates have to pay to play. The higher the position, the more expensive it gets to be selected to become a party’s candidate. Most politicians are not independently wealthy, so more than often their only means of raising enough cash to be chosen as a candidate is to find the backing from a well-heeled businessman. 

Hence the problem of Indonesia’s patronage politics: choices in elections are limited to politicians that are beholden to the business elite, not the voters who put them into office. Not much of a choice, in fact. 

Then there is Indonesia’s failure to maintain the norms of democracy, such as the freedom of expression and the right to assembly. Once again, in modern Indonesian politics it might seem like such freedoms are respected, but in reality when a critical press or demonstrators are threatening to politicians in power, those freedoms are quickly scaled back. 

Which brings us full circle. One of the reasons that students led the charge to remove Soeharto from power was the level of corruption that Indonesians no longer found acceptable. Another reason was the students wanted Indonesia to become a democracy, something that wasn’t likely to happen under Soeharto. In the end, they managed to have him step down. But in reality, his ghosts remained.