A companion article could be found here at the Center for World Conflict and Peace.
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2011 Is Here and Gone, but Eight Stories Will Live On in Indonesia in the New Year
Yohanes Sulaiman | December 30, 2011
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| The Democratic Party’s former treasurer, Muhammad Nazaruddin, has leveled several accusations at fellow party members during his ongoing corruption trial for alleged bid-rigging. (JG Photo/Afriadi Hikmal) |
Troubles in Europe
This will be remembered as an annus horribilis for the European Union. The facade of European unity was finally shattered by its currency crisis. The crisis laid bare the fact that regardless of all the talk about equality among nations, in the end the marching orders were issued from Berlin and Paris — though it took so long that a spooked market ended up exacerbating the crisis.
Even if the EU survives, Europe may face a long recession. That will have an impact on the global economy, especially in China, one of Indonesia’s top trading partners.
Chinese obstacles
While China seems to have been able to weather the economic crisis so far, the deadly high-speed train crash in July and the incompetent handling of the crisis highlighted flaws in an economic model that focus more on exports and infrastructure and less on domestic consumption. The accident brought into question growth that is the result of poorly built, state-driven projects, while also exposing the reality that state-owned companies are prone to corruption.
None of this bodes well for China’s economy in the new year. Its export-oriented economy remains exposed to the global slowdown, with local consumption unable to pick up the slack.
And as China is the biggest consumer of Indonesia’s energy products, any slowdown there will hit Indonesia’s budget hard.
US deadlock
The year 2011 saw the Democrats and the Republicans deadlocked, unable and unwilling to compromise to create a coherent plan to fix the US economy in order to end the recession. Both parties are trapped by their core constituents: the Republicans have to pander to the tax-cutting, budget-slashing Tea Party, while the Democrats are cajoling the spend-to-grow labor union and anarchist Occupy movement, whose demands aside of taxing the rich remain unclear.
Expect to see more partisan sniping and deadlock in the United States in 2012 as the presidential race heats up. The uber-partisanship will further prevent the United States from being a global engine of growth, which could have repercussions for the Indonesian economy, especially if China experiences a slowdown.
Arab Spring
While the long-term effect of the Arab Spring remains unclear, its short-term impacts were spectacular: causing the downfall of dictators in Tunisia, Yemen, Libya and Egypt; threatening the regimes of King Abdullah of Jordan and Bashar al-Assad in Syria and arguably inspiring various protest movements from the Occupy Wall Street in the United States to the anti-Putin campaign in Russia.
In Indonesia, the impact so far has been minimal. Even though Sondang Hutagalung’s action was presumably inspired by Mohamed Bouazizi’s self-immolation act that spurred the Arab Spring in Tunisia, the lack of a compelling narrative to accompany Sondang’s act and the relative prosperity of Indonesians meant his death failed to resonate and gain traction widely. Still, should the global economy remain bad and Indonesia’s economy start to worsen, expect to see more Arab Spring-inspired protests in 2012.
The Nazaruddin show
If economy does not sink President Susilo Bambang Yudhoyono’s popularity, scandals will. While the Bank Century case was too technical with its arcane language of economics and unclear “heroes” and “villains,” and while the Nunun Nurbaeti case was a symbol of the government’s lack of seriousness in tackling corruption, the Muhammad Nazaruddin scandal is a straightforward tell-all scandal that attracted the public’s undivided attention.
It generated enough outrage that it most likely did in the presidential ambitions of Anas Urbaningrum, grievously damaged the Democratic Party’s brand and sent the president’s popularity plunging.
Ahmadiyah and GKI Yasmin
The slap-on-the-wrist punishments for those who attacked Ahmadiyah followers and the government’s effeminate response to the mayor of Bogor’s blatant disregard of the rule of law bring into question Yudhoyono’s commitment to protect religious freedom. At the same time, the central government’s lack of spine has emboldened the country’s religious fanatics. A Catholic church in Bogor is still under siege. Not surprisingly, the human rights watchdog Setara Institute awarded West Java the dubious honor of being the “least tolerant province.”
With both economic downturn and election season on the horizon, expect more incompetent officials and politicians pandering to religious fundamentalists for support.
Police brutality
This year also saw the police using unnecessary and excessive violence against demonstrators that left many dead and injured. The end-of-year mayhem in Bima and recent revelations of brutality in Lampung sent a misguided signal to many people that the police were in cahoots with big industry. Sadly, legitimate industries will have to pay the price through more red tape and more social resistance, which will lead to reduction in capital investment.
The government would be wise to remember that it was police misconduct that led Bouazizi’s self-immolation in Tunisia, not just social inequality or corruption in high places.
Commission VIII
Few people probably remember a trivial and yet important incident that happened in May, when legislative members from Commission VIII on religious and social affairs were grilled by Indonesian students in Australia. The lawmakers’ feeble answers elicited guffaws. While there had previously been criticism of the costs of House members’ international excursions, the incident was the breaking point when Indonesians finally saw the uselessness of such trips. The incident further brought into question the quality of legislative members and made it all the easier to oppose House Speaker Marzuki Alie’s white-elephant project to build an expensive new building for the House.
One hopes that lawmakers will be wiser in the year ahead.
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trueblue
2:54pm Jan 1, 2012
@yohannes.Two brief comments. A few days ago the respected DrDez bemoaned the fact that the Indonesian media had not extensively reported the Arab Spring. You have at every opportunity raised this issue, and have been fearless in the potential domino. Can we have a piece reflecting entirely on this issue? A comprehensive op-ed would be enlightening. With respect to US/China, I would suggest that the US$ reserves now held by China and increasing quarterly by billions is of a greater economic threat than a resources slowdown. North Korea is also a loose cannon.New year greetings.
DrDez
5:40pm Jan 1, 2012
TrueblueYohannes is an excellent commentator on home affairs, and if I feel one of only a few who seem to grasp the issues that threaten our medium term prosperity. The fallout from what will be the Arab winter is yet to be understood and I am yet to see anything that can give an overall picture or direction. My own view is that the Arab nations are screwed and screwed by a mix of Islam and political/military greed.
With respect to China the reality is their own internal debt issue is at least as bad at the US. The US on the other hand do not have to ensure 1 billion mouths are fed to stave of a revolution. The US debt issue is in many ways unimportant - China cannot afford to call them in because the US will just impose an import tax (rather like we do) and the reduction in Chinese purchases would devastate the Chinese economy within months.
2012 ... phew what a year in prospect
Yohanes-Sulaiman
6:22pm Jan 2, 2012
Dear DrDez & Trueblue:Merry Christmas and Happy New Year to both of you and other readers. Thank you for your kind responses and my apology for unable to reply until today due to my internet-free vacation (yeah, I cheated as I twitted).
Actually, I have discussed a bit about the implication of the Arab Spring, though not in this revered publication, but in my friend's blog (Center for World Conflict and Peace). Still, I am kinda tempted to write an anniversary piece on Arab Spring, especially its implication on Indonesia -- why it failed to catch fire here, regardless the fact that back in March (I believe) even Sultan Hamengkubuwono X had raised the threat of Arab Spring in Indonesia and the Sondang's incident, as I mentioned in this piece, also failed to catch the imagination.
I will look at it. Maybe I should make it this week's topic, as I am still groggy from vacation and my mind is currently blank thus too lazy to think of new topic.
Yohanes-Sulaiman
6:28pm Jan 2, 2012
One more thing about US-China: it is interesting that very few people actually realize that China dug a deep hole by getting US debt. You see, logically, when you keep exporting goods and others keep importing it, sooner or later, your currency should be stronger and others' get weaker. Yet, China tried to negate this by buying US debt, and thus making US$ unable to depreciate that would make China's export to be expensive. At the same time, as China's currency was artificially depressed, the Chinese population was, to some degree, subsidizing the US' imports, thus China was taxing its own people, and depressing the local demands (and thus local consumption). Of course, as the international economy is going kaput and Chinese consumers unable to pick the slack due to this "involuntary tax," then China is put in a major bind, that its economy is dependent on the US.
Thus, this year will be a very interesting year for Chinese economy. I'd advise to pull out from Yuan.
DrDez
5:36am Jan 3, 2012
YohanesHappy New Year to you & your family - may it be filled with peace for us all. May our authorities start accepting their responsibilities & apply the law equally. May the silent majority remove their head from the sand.
Re China - huge internal debt is also a major challenge. As % of GDP it is suggested that they have more debt than the US..Al J last year
If you do write an Arab Spring article here I would implore you to look at the situation in Syria. It seems to be the forgotten conflict and yet there are an estimated 16000 political prisoners and maybe as many as 10,000 dead and 40,000 wounded.** The Arab League are simply embarrassing as are the Muslim Groups (cannot blame the West so they are silent). It is open conflict and will I fear spread. Iran is using Assad for sure to create mass instability. I am certain they actually want a war & the consequence would be global.
**outcry when an Israeli shoots a Palestinian burglar. Silence when Assad kills 10,000... :) amazing
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