Indonesia’s elections and what to expect next

IO – As I discussed in a previous col­umn, democracies around the world are under serious threat. Backslid­ing in numerous countries is occur­ring at an increasingly alarming rate. Civil rights are being removed, the media is under attack, and freedom of expression is in danger, as well.

Equally sobering is the fact elec­tions are being turned into circuses. Turkey, Russia, Egypt and Cam­bodia are contemporary examples where opposition figures are being intimidated, jailed and in some cas­es even murdered by the ruling elite to ensure they ‘win’ elections to stay in power.

Electoral fraud and manipula­tion is widespread, as well. Hackers for hire can enter voter registration databases and help their clients to alter, add or delete data. This en­ables a party or coalition of parties to obstruct voters from entering polling stations in opposition strongholds as a means of stealing elections.

The recent case of Cambridge An­alytica and its shenanigans in the U.S. presidential race reveals yet an­other worrisome development: how big data firms can be used by un­scrupulous parties to create smear campaigns, propaganda and fake news as a means of manipulating voter preferences.

So what about Indonesia? Media has portrayed past elections as a ‘celebration of democracy’. The sad truth is, there is little to cele­brate—like in many other democra­cies today, our elections are subject to widespread cheating and manipu­lation.

Indonesians are still ignorant of the fact our democracy is being hi­jacked by the ruling elite. Political operators and election officials are, however, quite aware of what really happens during elections. There are mountains of unpublished audit trails and first-hand accounts of how Indo­nesia’s ruling parties and their coali­tion partners have, in fact, exploited the electoral process and machinery to cheat and steal in past elections.

There are numerous instances where security officials have been bribed to block voters from gaining access to polling stations in districts where opposition parties are popular. Dirty parties also frequently bribe election monitors working for opposi­tion parties to leave polling stations during voting hours. This leaves the door wide open for dead and flying voters to enter polling stations and cast their choices for candidates on the ballots belonging to ruling coali­tion parties. And it also means there is ample opportunity for unethical of­ficials to tamper with the ballots.

There is a high risk the upcoming 2018 and 2019 elections could be even dirtier. As we reported in last week’s Independent Observer, insid­er sources have revealed that Cam­bridge Analytica executives have been in talks with members of the ruling coalition. Given the extraordinary damage Cambridge Analytica exact­ed upon the legitimacy of the U.S. presidential elections, Indonesians should be outraged with the pros­pect of foreign blackhats being hired to manipulate our elections.

More leaks coming from our sources now reveal an even more disturbing story. According to these sources, there are on-going efforts by a foreign team of hackers to enter the e-KTP biometric database, a system that is owned by a private Indonesian company and provides data to the ministry of home affairs. If the data­base has already been hacked into is unknown, but if they have succeed­ed or will succeed in the future, then the potential consequences for the upcoming elections could be disas­trous. By manipulating e-KTP data, hackers could alter scores of voter identities and hence assist unscru­pulous parties to manipulate and tilt the elections on an unprecedented scale.

Given these risks now being placed at the front doorstep of Indo­nesia’s democracy, what should be done?

First and foremost, it is the re­sponsibility of our president to dis­play firm moral leadership and take action to ensure Cambridge Analyti­ca is not engaged by members of the ruling coalition to play their digital trickery. Jokowi should also order immediate and credible investiga­tions to discover what damage has been done, if any, to the integrity of the e-KTP biometric identification database and who is responsible for hiring the hackers.

If Jokowi only throws up his hands in protest about these brewing scan­dals but does nothing to take remedi­al action, or of he tries to attack the credibility of these stories, he should at least be aware his legitimacy is at risk, as well. He should only imagine what Indonesian voters would think about his presidency in the event Cambridge Analytica is secretively hired by the ruling coalition and the truth is eventually revealed to the public. He should also imagine the permanent damage that would be done to his legitimacy, and his leg­acy, if the e-KTP database system is compromised under his watch as president.

Finally, Indonesia’s elections mat­ter not only to Indonesians. They should also matter for our friends and allies, especially the United States. There is a long tradition of America playing the role of being a guardian of democracy. Over the past two de­cades, Washington has praised Indo­nesia for its going down the path of democratization. Now Washington’s leadership should realize the chal­lenges we are facing as a democracy and provide Indonesia with its exper­tise and technical assistance to en­sure our future elections are fair.

future economic growth and its entry to the global economic stage.

During the 1980s, China began to expand in international trade and al­lowed foreign direct investment (FDI) into the country. The most noticeable symbols were the four Special Eco­nomic Zones (SEZs), which were cre­ated in 1980 – in Shenzhen, Zhuhai, Xiamen and Shantou.

The SEZs were successful in at­tracting foreign capital, pioneering reform experiments and creating an export-oriented economy. In 1991, China only attracted US$4.37 billion in FDI. From then, the absolute size and proportion of FDI into China rose significantly, reaching US$126 billion in 2016.

Thereafter, China gradually opened up coastal and border cities, major cities in the hinterland, and finally the rest of China. This has attracted labour-intensive manu­facturing industries from advanced economies to China. Today, the SEZ model has evolved to a new breed of 11 Free Trade Zones across the coun­try, which now act as sandboxes for future reform on a national scale, in particular in services and innova­tion reform.

A key phase of reform sought to change the country’s economic system is improv­ing the governance of State-Owned-En­terprises (SOEs), i n t r oducing a gradual liberalisa­tion of prices and fiscal decentralisa­tion and establishing a fully-fledged modern banking system.

SOE reform aimed for the enlarge­ment of enterprise autonomy, reduc­ing government intervention, creating market institutions, opening up more industrial sectors to competition from private enterprises and converting the economy from an administra­tively driven, planned economy to a price-driven market economy.

The process of SOE reform is still on-going. In addition, Beijing is con­tinuing to streamline and modernise its state-owned sector and create conglomerates capable of competing globally. The reforms have involved the restructuring of SOEs through reorga­nizations and mergers, reductions in excess capacity and the relocation of workers.

In order to fulfil China’s commit­ment to the WTO to liberalise finan­cial markets for foreign participation by the end of 2006, the Chinese gov­ernment accelerated financial reforms at the end of 2003.4 The reforms fo­cussed on the main areas of China’s financial services – banking, securities and insurance. This included diversi­fying banks’ equity structures, en­hancing banks’ corporate governance, introducing a prudential regulatory regime and transforming state-owned banks into joint-stock banks. Key se­curities companies were restructured, whilst reforms in the insurance sector also progressed.

China has recognized the importance of a high-func­tioning financial system for improved al­location of resources within the economy. The government has instituted a number of reforms in recent years. Bank deposits and lending rates have now been fully liberalized. Commercial banks can now set these rates freely, though the PBoC still sets reference rates to guide banks. An explicit bank deposit insur­ance programme has been in opera­tion since May 2015.

Another key phase of reform is fo­cussing on what is known as China’s Going Out policy

Through a cautious and gradual approach over the past 40 years, Chi­nese authorities have been opening China’s capital account via tightly controlled programmes such as QDII/ QFII (Qualified Domestic Institution­al Investor/Qualified Foreign Institu­tional Investor), and the recent Stock and Bond Connects to allow more foreign participation in China’s cap­ital markets.

The country’s capital account is becoming increasingly open in de facto terms. China now has the sec­ond-largest equity market in the world today. From a total market capitalisa­tion of US$513 billion in 2003, it has grown 17 times to US$8.7 trillion in October 2017. The country’s domestic bond market is now the third largest in the world.

Significant progress has already been made to internationalise the ren­minbi. Just over a decade ago, renminbi usage was largely confined to mainland China. Today, more than 10 per cent of China’s trade is set­tled in the currency. Today, various cross-border schemes allow foreign investors to buy stocks and bonds in mainland China.

The renminbi’s role as a reserve currency is also gradually appearing. The currency was formally included in the International Monetary Fund’s Special Drawing Rights (SDR) basket on 1 October 2016, joining the US dol­lar, the euro, the yen and the pound.