Indonesia turbulence

INDONESIA: The Year of Continuing Turbulence
Author(s): Irman G. Lanti
Source: Southeast Asian Affairs, (2002), pp. 111-129
Published by: ISEAS - Yusof Ishak Institute
Stable URL: https://www.jstor.org/stable/27913204
Accessed: 13-05-2019 23:43 UTC
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Southeast Asian Affairs 2002, pp. 111-29
INDONESIA
The Year of Continuing Turbulence
Irman G. Lanti
The first year in the third millennium was marked by continuing political
turbulence and economic uncertainties that have been characteristic of
Indonesia since it embarked on reforms and democratization in 1998. By and
large, the adverse conditions in 2001 were the continuation of the unstable
conditions of the previous year.1 But in contrast to 2000, which was marked by
a high expectation for stabilization at the beginning of the year, only to be
quashed by political infighting at the end, 2001 started out on a gloomy note
and was coloured by a heightened sense of optimism in the middle, and then
ended showing signs of strain, and the seeds for possible future tension.
The impeachment of President Abdurrahman Wahid (popularly known as
Gus Dur), his replacement by Vice-President Megawati Sukarnoputri, and all
the accompanying drama and tension both before, during, and after the process,
were th? main events of the year. Additionally, there were signs of a possible
resurgence of Islamic extremism, which gained much publicity after the 11
September terrorist attack on the United States and subsequent retaliation
against the alleged perpetrator, Osama bin Laden and the Al-Qaeda
organization, and the Taliban regime in Afghanistan accused of harbouring
these terrorists. These developments in Indonesia brought anxiety to its
neighbours as well as the international community in general.
In the political arena, the democratization process in Indonesia underwent
a severe test as the nature of relationships among the high state bodies was put
into question. Indeed, the controversies surrounding Gus Dur's impeachment
have put forth the idea that a totally amended Constitution is needed.
Understandably, this issue became one of the main subjects of contention
during the annual assembly of the MPR (Majelis Permusyawaratan Rakyat, or
People's Consultative Assembly ? Indonesia's highest state body).
The country's economy remained in a precarious position. If anything, the
situation has gone from bad to worse. In the preceding year, foreign investment
had already been difficult to come by because of the lack of confidence in the
Irman G. Lanti is a Researcher at the Center for Information and Development Studies
(CIDES), Jakarta, and a Visiting Research Associate at the Institute of Defence and
Strategic Studies (IDSS), Nanyang Technological University, Singapore.

112 Irman G. Lanti
country's economic and investment policies, as well as in its legal system.2 In
2001, the situation was made worse by the loss of confidence of the nation's
largest creditors, namely, the International Monetary Fund (IMF) and the
World Bank, who made a number of postponements in disbursing the previously
agreed-upon loan and credit in their economic recovery package.
KKN (korupsi, kolusi, n?potisme, or corruption, collusion, nepotism) remained
a thorny issue and was heatedly debated throughout the year. While being
pursued politically over alleged KKN cases himself, Gus Dur's administration
was particularly active in trying to nail down corruption cases against a number
of his political opponents. In the post-Gus Dur period, KKN remained a
controversial issue as investigation of corruption charges put the country's
second largest and former ruling party, Golkar (Golongan Karya, or Functional
Groups), on the brink of dissolution and risked plunging the country back
into political infighting after a coalition of major parties had been successful
in bringing about the much-needed political stability.
The Impeachment of Gus Dur
The problems that beset Gus Dur's presidency, which had originated from
political infighting in the previous year, continually worsened in 2001. After
surviving the MPR annual session in August 2000, Gus Dur seemed to have
failed to build on the momentum. He continued with his controversial style in
governing, and with his much-criticized stance that the PKB (Partai Kebangkitan
Bangsa, or National Awakening Party)3 must be afforded the chance to become
the ruling party, while the others should become the opposition. The problem
with this claim laid primarily in the fact that Gus Dur did not come to power
as the leader of PKB, a moderate-sized party, commanding only 11 per cent of
the seats in Parliament. It was due to his image as a neutral figure who could
mediate the divisive environment prior to the presidential election in 1999
between the supporters of Habibie and Megawati. Had it not been for the
support from other parties, Gus Dur would not have been elected President.
Therefore, his attempt to reshuffle the government by sacking ministers from
other parties and replacing them with PKB members, or those deemed to be
close to him, alienated the major political power blocs.
Gus Dur's eventual impeachment by the legislature may have been presented
as legal due process. While at times the problems may appear to be legal, both
in terms of criminal and constitutional law, they were in fact highly political
in nature. Legal arguments were used merely as justification. Officially and
legally, the charge against Gus Dur was based primarily on two financial scandals.
One involved the financial scam of Bulog (Badan Urusan Logistik, or the State
Logistics Agency), popularly known as "Buloggate", allegedly perpetrated by
Gus Dur's masseur, Suwondo. The other was the failure to disclose a financial
contribution said to have been made by the Sultan of Brunei, known as
"Bruneigate". But, when the legal authorities dropped these two cases, it became
clear that they were pretexts for political expediency by the President's enemies.

Indonesia: The Year of Continuing Turbulence 113
This was especially apparent in the shift in the issues that led to the expedition
of the impeachment proceeding from the two scandals to another unrelated
matter of the unconstitutionality of the removal of National Police chief,
Bimantoro. In the final impeachment proceeding, the two scandal cases were
hardly mentioned.
Gus Dur himself also used a legal constitutional argument in an effort to
save his presidency. Citing the text of the 1945 Constitution, whereby no provision
for the President's removal from office during his or her term can be found, he
called the impeachment proceedings unconstitutional. However, at the same
time, he also repeatedly issued a threat to disband Parliament, and eventually at
the last minute issued a decree to do so on 23 July. Such an act was equally
unconstitutional, for the 1945 Constitution clearly states that the President cannot
disband Parliament, except in the event of a state emergency.
Gus Dur's tumultuous remaining period of presidency was also marked by
numerous Cabinet reshuffles. Ministers resigned, were sacked, or transferred
in an effort to save Gus Dur's presidency. The year began with the resignation
of two key ministers: Dr Ryaas Rasyid, who previously had held the portfolio
of regional autonomy but later transferred to a less strategic post of
administrative reform, finally made good on his intention to resign, citing
differences of opinion with the President regarding regional autonomy; and a
difference of opinion was also the reason cited by Dr Yusril Ihza Mahendra,
who resigned from his post as Minister for Justice in February 2001. The
parties that backed Gus Dur's bid for presidency had practically withdrawn
their support by this stage. In March, PAN (Partai Amanat Nasional, or National
Mandate Party)4 dismissed two of its cadres, Dr Yahya Muhaimin and Al-Hilal
Hamdi, who had previously been told to resign from the Cabinet but failed to
do so. These events marked a complete breakdown in the relationship between
Gus Dur and the Poros Tengah (Middle Axis ? an alliance of Muslim parties).
Offer of Power-Sha?ng and Megawati 's Rejection
A number of reconciliation efforts were launched by Gus Dur, or by those who
were concerned that his impeachment would bring chaos, as it was feared that
many of the President's supporters would take offence at his dismissal. Particular
attention was paid to reconciling the President with Vice-President Megawati
Sukarnoputri, the leader of the largest party in Parliament, the PDI-P (Partai
Demokrasi Indonesia-Perjuangan, or Indonesian Democratic Party-Struggle).
A number of power-sharing proposals were said to be in the offing. Efforts to
mediate between the two leaders still took place as late as the end of June,
ahead of the scheduled MPR impeachment proceeding in early August. But
the response from Megawati had been less than favourable. Megawati and the
PDI-P's rejection of Gus Dur's power-sharing proposal was based on the lack
of clarity of the proposal itself and its apparent half-heartedness. The
presidential decree on the transfer of power to the Vice-President, issued
following the MPR's annual session in 2000, merely involved routine and

114 Irman G Lanti
procedural matters. The power of appointment and the setting out of policy
directions remained firmly in the hands of Gus Dur. Following the 2000 decree,
Gus Dur had again replaced a number of Cabinet ministers with people deemed
loyal to him. Already angered by Gus Dur's failure to share power, it came as
no surprise that Megawati treated approaches for power-sharing in 2001 with
suspicion and scepticism. The volatile nature of the President and his
controversial habit of changing his mind would have kept everyone guessing
as to how serious and permanent any power transfer arrangement would be.
Observers doubted that Gus Dur would stay out of politics, and, with the
strong powers invested in Indonesia's presidency, he could always decide to
take executive power back at any time of his choosing.
Meanwhile, the other major parties followed PDI-P's suit in blocking a
negotiated settlement. All the major parties, except for PKB, boycotted a
meeting called by the President at the presidential palace in Bogor in early
July. By this stage, they had become more open in showing their support for
Megawati's takeover, signalled by their attendance at meetings called by the
Vice-President in both her private and official residences.
As the date for his impeachment approached, Gus Dur's actions became
more volatile and erratic. He carried out a number of political manoeuvres
aimed at deterring his opponents. The following three major steps were used
as a means to weaken Gus Dur's opponents.
Corruption Cases as Deterrence
First, legal means were used to pursue the charges of corruption against some
proponents of the opposition. One of the high-profile cases that was pursued
by the Attorney-General's office involved Ginandjar Kartasasmita, a former
Cabinet minister and high-ranking Golkar party official. Said to be next to be
investigated were Arilin Panigoro of PDI-P, Akbar Tanjung, the chairman of
Golkar, and Taufik Kiemas, Megawati's husband. While no doubt many of
these figures were either functionaries in the past Soeharto regime or people
close to the power centre in the past, and therefore, susceptible to charges of
corruption, the timing for the legal action was suspect due to the proximity
to the scheduled impeachment proceeding.
When it became apparent that the Attorney-General, Marzuki Darusman
of Golkar, was too slow in pursuing these legal actions, and even at times
reported to have been attempting to stall the process, Gus Dur replaced him
with a "clean" legal crusader, Baharuddin Lopa, in early June. Lopa did not
hold the post long enough to make good his promise to fight corruption, as
he passed away in Saudi Arabia on 3 July. But Gus Dur remained firm in this
strategy. He appointed Marsilam Simanjuntak, a long-time close associate and
former State Secretary, as Attorney-General a week later.
Divide and Rule the Nationalists
The second strategy was an attempt to divide the nationalists and divert the
support from this group for the PDI-P and Megawati to her sister, Rachmawati

Sukarnoputri. As Gus Dur's relationship with Megawati turned sour, he quickly
took advantage of the rift within Sukarno's family. For quite some time, it has
been public knowledge that Megawati and her younger sister, Rachmawati, are
not on particularly good terms. Rachmawati, as well as Sukmawati, another
daughter of Sukarno, has refused to be involved in Megawati's PDI-R Sukmawati
instead joined another nationalist party led by Mrs Supeni, an elder PNI (Partai
Nasionalist Indonesia) activist. (Rachmawati runs an educational institution,
Bung Kar no Educational Foundation.)
Gus Dur's quest for support from Sukarno's family finally paid off when
Rachmawati expressed her disagreement with the MPR's special session.
Rachmawati also claimed that she, instead of Megawati, should become the
vanguard of Marhaenism (Sukarno's term for "people's power"). Her version
of Sukarno's teaching was more radical than Megawati's seemingly conservative
outlook. She identifies strongly with the wong cilik (commoners) and has taken
a hardline stance against the old regime. By coming closer to Golkar and the
military in attacking Gus Dur, Megawati, in the view of her sister, had consorted
with society's enemies. Gus Dur had found the perfect foil for Megawati in
Rachmawati.
During the centennial celebration in June held in Blitar, Sukarno's birth
and burial place, the public were presented with an exchange of rhetoric
between Rachmawati, Gus Dur, and Megawati. In her fiery opening speech,
Rachmawati attacked the old regime and once again warned that the MPR's
special session was an attempt by the old forces to return to power. She also
said that the people would not forgive what the New Order regime had done
to Sukarno and his family. Gus Dur in turn glorified Sukarno's achievements
while stressing again that he would stay until 2004. Cornered, Megawati, who
was not scheduled to speak, asked to come to the podium and also delivered
a speech. In her short unscripted speech, the usually silent and reserved
Megawati talked about the need to forgive and forget, in a direct response to
her sister's rhetorical attack on the New Order regime.
Threats and the Eventual State of Emergency
The third tactic was to issue warnings of a coming chaos if there were an
impeachment. Gus Dur made these remarks on a number of occasions. There
seemed to be two dimensions to such warnings. The first was related to a
possibility of provincial secession. In a speech on 19 April, Gus Dur conveyed
a "message" from a number of leaders in troubled regions such as Aceh,
Papua, Riau, and others that they would declare independence from Indonesia
if he was removed from office. The other had to do with the actions of his
supporters, especially in East and Central Java, which in the months leading
to the special session of the MPR had grown more vociferous, and sometimes
involved intimidating Gus Dur's political opponents. He warned that bloodshed
was imminent if the impeachment process were not stopped. Using these two
dire possibilities as pretexts, on a number of occasions throughout May and

116 Irman G Lanti
June, Gus Dur threatened to declare a state of emergency, which would then
allow the President to dissolve Parliament and other state bodies.
Such a threat was met with defiance from the opposition leaders. MPR
Speaker Amien Rais stated that an emergency decree would be met with the
expedition of the special session of the MPR to impeach him. A number of
TNI (Indonesian military) high-ranking officers, both in the Cabinet, such as
Susilo Bambang Yudhoyono (Co-ordinating Minister for Politics, Social Affairs
and Security) and Agum Gumelar (Minister for Transportation), and in the
military itself, including TNI commander Widodo, Army chief of staff
Endriartono Sutarto, and Strategic Reserve (Kostrad) commander Ryamizard
Ryacudu, strongly advised the President against taking such a decision.
But Gus Dur remained firm in his stance. Realizing that he would not
receive support from the military and that he would still need a force of some
sort to be able to enforce the state of emergency, he turned to the police. He
was hoping that Bimantoro, whom he appointed as chief of Polri (the national
police) earlier in his tenure, would support him. When it turned out that even
Bimantoro also advised against declaring a state of emergency, Gus Dur then
engaged in a plan that would ultimately compel the parliamentarians to expedite
the impeachment session. Realizing that he could not replace the chief of the
police without having to seek approval from the Parliament first, he appointed
Chaeruddin Ismail as deputy chief of the police and made Bimantoro non
active on 1 June. This move was rather odd because earlier in the year, through
a presidential decree, Gus Dur approved a restructuring of the police
organization that, inter alia, had liquidated the office of deputy chief. Also,
Bimantoro did not acknowledge his non-active status and continued to show
up at work every day and still carried the command baton that signifies the
power of command. When Gus Dur tried once again to remove him by offering
him the role of ambassador to Malaysia on 1 July, he declined the offer citing
that he was not qualified for the job.
The move had nonetheless created a considerable rift within the police
rank-and-file. The middle-ranking officers tended to side with Chaeruddin,
while the high-ranking ones with Bimantoro. Unfortunately for Gus Dur, with
regard to the enforcement of the decree, the police commanders in the field,
such as the commander of Brimob (Brigade Mobil, or police paramilitary
unit) and the Jakarta chief of police, were united behind Bimantoro.
In order to secure his power base and push through his plans, Gus Dur
also carried out further Cabinet reshuffles. After having quite stable Cabinet
formations during Soeharto and Habibie's administrations, the rate of Cabinet
reshuffling that Gus Dur undertook was unprecedented. (It was even more
extensive than in the era of parliamentary democracy in the 1950s.) There
were five Cabinet reshuffles in the period from June to mid-July.5 The policies
and personnel reshuffles appeared to be directed at mustering support for a
declaration of civil emergency. On 28 May, Gus Dur issued a confusing executive
order to render special power to the Co-ordinating Minister for Politics, Social

Affairs and Security, Susilo Bambang Yudhoyono, to take action in restoring
security to Indonesia. When it appeared that Bambang was also against declaring
a state of emergency, three days later not only did Gus Dur revoke the executive
order but he also replaced Bambang with Agum Gumelar. Agum would later
also state his opposition to declaring a state of emergency, and when Gus Dur
finally declared the emergency on 23 July, he and several other Cabinet ministers
resigned.
Impeachment
The MPR eventually made good on its threat to move the date of its special
session from 1 August to 21 July, in response to Gus Dur's decision to make
Chaeruddin Ismail the acting chief of police the day before. The PKB decided
to boycott the special session. The legality of the session was not threatened,
however, as the party only held around 11 per cent of the MPR seats. As a last
effort to stave off his impeachment vote and despite all the opposition that at
this juncture appeared to come from all corners, except from his own NU and
PKB organizations, Gus Dur decided to declare the state of emergency. In the
early morning hours of 23 July, he issued a decree from the presidential palace
that, inter alia, dissolved the Parliament, dissolved the Golkar Party, and called
for fresh elections within a year. As expected, both the TNI and Polri refused
to deploy their forces to enforce the decree. The MPR hurriedly decided to
hold the voting for his impeachment in its special session that very morning.
The MPR voted 591 to 0 to remove President Abdurrahman Wahid from
office, ending the tumultuous twenty months of his presidency. Vice-President
Megawati Sukarnoputri was immediately sworn in as Indonesia's fifth (and first
female) President.
As Megawati was forming her Cabinet, the defiant Gus Dur remained
holed up in the palace, refusing to acknowledge the legality of his impeachment.
For a couple of days, his supporters gathered in front of the palace in a
peaceful demonstration. But surprisingly, and perhaps to Gus Dur's credit, he
was able to calm his supporters and the much-feared violence did not eventuate.
A negotiated face-saving solution was eventually provided for him, as on 26
July he departed for Baltimore in the United States, for a "medical check-up".
Megawati's Administration
Megawati's Cabinet, announced two weeks after she was sworn in as President,
adopted a similar approach to the first Gus Dur Cabinet. Called Kabinet Gotong
Royong (Mutual Co-operation Cabinet) it was composed of members of various
political parties and retired TNI officers. Many old faces, who had circulated
in and out of Gus Dur's Cabinet, reappeared in the line-up, such as Kwik Kian
Gie and Laksamana Sukardi from the PDI-P, retired generals Susilo Bambang
Yudhoyono and Agum Gumelar, Jusuf Kalla from the Golkar Party, and Yusril
Ihza Mahendra from the PBB (Partai Bulan Bintang, or Crescent Star Party).6
The rationale behind such a composition seemed to be to ensure political

118 Irman G. Lanti
stability after the country was wracked by political division during the previous
administration. The apparent instruction given by Megawati to her PDI-P
members to support Hamzah Haz, the chairman of PPP (Partai Persatuan
Pembangunan, or United Development Party),7 in the vice-presidential election,
instead of the popular Susilo Bambang Yudhoyono, could also be read along
these lines. Even though Megawati may have shared ideological views with
Bambang, and would be more comfortable with him, her choice of a Muslim
based leader was considered necessary in order to secure her tenure until
2004. The choice of Hamzah will appease the modernist Muslim parties,8 who
were particularly active in unseating Gus Dur. Indeed, between succession and
the end of the year only a few minor negative rhetoric exchanges between the
President and Parliament have taken place.
However, many observers noted that Megawati's administration was
characterized by its conservativeness and slowness in making important
decisions. This was apparent from the choice of three Cabinet posts. First, the
Minister for Home Affairs. Instead of choosing a regional autonomy expert
(and supporter) for this important post, Megawati appointed a retired TNI
officer, known for his conservative outlook ? Hari Sabarno. One of the first
policies of the new minister was to review the regional autonomy law. Megawati
and the PDI-P had been known for quite some time to favour the unitary form
of the republic and, many suspect, centralization. The PDI-P have also voiced
concerns that any form of federalism would only serve as an impetus for a
breakup of Indonesia. At the same time, the implementation of Law No. 22/
1999 on Regional Autonomy since early 2001 was widely considered as erratic
and had created great uncertainties in many regions. According to some
proponents of regional autonomy, the confusion was due to the inability of the
central government to provide leadership in this transition period and to
clarify the implementation of the law itself.9 Instead of re-establishing a regional
autonomy portfolio in the Cabinet, which had been incorporated into the
Ministry of Home Affairs by Gus Dur after the resignation of its minister,
Dr Ryaas Rasyid, Megawati opted to maintain the status quo.
The second issue involved the State Secretariat. During the Soeharto era,
this portfolio was regarded as one of the country's most powerful posts. Every
bill or departmental regulation had to pass the approval of the Secretariat. It
also had the real de facto power over the channelling of development funds to
practically all departments and government bodies, and was also responsible
for matters concerning presidential and vice-presidential offices. During the
Habibie era, many of these privileges were removed. Gus Dur continued with
even more radical reform ? for example, he ordered that the executive offices
be organized separately and independently of the State Secretariat. While the
move was considerably successful in cutting off the overarching power of the
Secretariat, co-ordination among the presidential and vice-presidential offices
became abysmal. Megawati was quick to address this problem by appointing
Bambang Kesowo, a seasoned bureaucrat from the State Secretariat who used

to serve her in the Vice-President's office, as the State Secretary. He immediately
restored this office, and his intention appeared to be to restore the past grandeur
of the portfolio.
The third issue involved the Attorney-General's office. This was
overwhelmingly considered to be the weakest link of the Cabinet. It was
apparent that Megawati was subject to pressure over this important legal
portfolio, especially as many political and business leaders have been targeted
for investigation regarding corruption cases since the fall of Soeharto. In a
highly unusual step, the announcement of this Cabinet position was not
made together with the other posts and an appointment was delayed for
almost a week. As the fight against corruption is one of the most important
agendas that Indonesia has to accomplish, the public hoped that the new
Attorney-General might have a quality similar to the late Baharuddin Lopa,
who was famous for his "no-nonsense" approach towards corruption. But the
choice of M. A. Rahman, a relatively obscure career official from a lacklustre
prosecutors' office, seemed to indicate that concerns about maintaining the
fragile balance and stability took precedence over legal pursuits that might
implicate many of the powerful.
The Issue of Constitutional Change
The controversy surrounding Megawati's rise to the presidency and Gus Dur's
defiance were partly due to the weaknesses in the 1945 Constitution. As widely
understood by Indonesians nowadays, the Constitution was drafted in haste
amid the struggle for Independence and was meant as a temporary document
until a new Constitution could be drafted after the revolutionary war. The
effort to forge a new political system under a new Constitution in the 1950s
failed and the then President Sukarno announced a return to the 1945
Constitution. Soeharto continued to uphold the simple 1945 Constitution,
even putting it in a revered position so as to make its amendment impossible.
During the autocratic rule of Sukarno's Guided Democracy and Soeharto's
New Order, a simple Constitution posed no impediment to the function of a
controlled government. It even facilitated authoritarianism. However, in a
situation of open political competition, the 1945 Constitution was proven far
from adequate in laying out the rules of the game.10 As a result, in the stand
off between Gus Dur and the Parliament, both sides claimed that their
conflicting acts were based on safeguarding the Constitution.
Realizing this problem, many in civil society advocated a thorough alteration
of the 1945 Constitution: whether it should be weighted towards a presidential
or a parliamentary system, or a combination between the two; the process of
accountability of state offices, including the President, Parliament, and the
MPR; the creation of a constitutional court to mediate in cases of disputes
among the state bodies or between the central and local government; and
finally the issue of regional representation to the national Parliament. However,
many of these issues were obscured during the run-up to the MPR annual

120 Irman G. Lanti
session held in October 2001, as public attention was directed towards the
unwillingness of the MPR members to establish a constitutional amendment
commission as demanded by activists. The proposed commission was to be
comprised of academics, activists, and societal leaders, and was to be tasked
with preparing a draft for submission to the MPR.
Despite this rejection, the MPR annual session actually deliberated upon
many of the suggested amendments. As a result, the MPR passed a number of
important amendments in 2001 (dubbed the "third amendment").11 The
changes included a creation of a House of Regional Representatives (DPD, or
Dewan Perwakilan Daerah) that will function to channel the aspirations of
local people and local governments. The DPD, together with the DPR (Dewan
Perwakilan Rakyat, or People's Representative Council), will now form the
MPR. Another important change was to establish a direct presidential election,
rather than through a vote in the MPR as the old system mandated. However,
the MPR was still divided on whether a second round of general public elections
would be held if no candidate received an absolute majority vote (50 per cent
plus one), or whether the President would be decided by an MPR vote if such
a situation occurs. A special MPR committee has been formed to look into
these options. The final important change was the creation of a new state
body, the Constitutional Court (Mahkamah Konstitusi), which is tasked with
mediating and ruling over legal disputes among state bodies. It will also carry
out a legal review of any legal products issued by state bodies, either central
or local, to ensure they are not contradictory.
Security and Regional Conflicts
Security conditions in Indonesia's troubled areas remained precarious in 2001.
The potential of secessionism was exaggerated by Gus Dur, although his
impeachment caused a few to demand the creation of an East Java state.12 But
nothing really came of it. All in all, secessionism was a relatively quiet issue in
2001, with the exception of the traditionally restive provinces of Aceh and
Papua, where violence continued to rage. While in some conflict areas, such
as Maluku, the situation was relatively more calm compared with the past few
years, new inter-ethnic, inter-religious conflicts arose, namely in Sampit in
Central Kalimantan, and Poso in Central Sulawesi.
Aceh
A major change for Aceh occurred with the passing of the law of Nanggro?
Aceh Darussalam (NAD) by the Parliament on 19 July giving special autonomy
to the province. The law aimed to appease the Acehnese. The province had
been wracked by a secessionist movement launched by the Gerakan Aceh
Merdeka (GAM, or Free Aceh Movement) and ruthless military counter
action carried out by the TNI during the 1980s and 1990s, known as the
DOM (Daerah Operasi Militer, or Military Operation Zone) era. The new
law would, inter alia, grant the local government 70 per cent of the revenues

from oil and gas exploitation in the province. The law would also allow the
application of Islamic syariah law in the province.
But the granting of such a wide-ranging autonomy law still has not assuaged
the hunger of the militant secessionist group for independence. Fighting
between GAM on one hand, and TNI and Brimob on the other, continued
throughout the year, resulting in around 1,500 deaths, mainly from the civilian
population. By the end of 2001, the TNI had practically taken over security
operations from the police, due to complaints of the ineffectiveness of Brimob
troops, although officially and legally the police remained responsible for the
operation.
A major incident occurred when GAM attacked the Exxon-Mobil natural
gas production facility in April, causing the company to cease operations for
a number of months. While the government and the separatist movement
were engaged in a number of truce negotiations, they failed to check the
rising level of violence. This has threatened to cause the collapse of the peaceful
conflict resolution structure that the government and the separatist movement
had built since the signing of a "humanitarian pause" agreement in Geneva,
Switzer land, in May 2000. There were a number of visits to Aceh by Indonesian
leaders, including Megawati on 9 September.
Papua
The condition in Irian Jaya or Papua was not much better. A similar special
autonomy law to the one granted to Aceh was passed by the Parliament on
22 October, to be effective on 1 January 2002. The framework of the law was
also quite similar, in the return of 70 per cent of oil and gas revenue as well
as 80 per cent of other revenue sources. The law acknowledged that the official
name of the province was Papua, after its unofficial usage for quite some time.
The law also sets up a new institution, the Majelis Rakyat Papua (MRP, or
Papuan People's Council), whose membership derives from various local, tribal,
and religious leaders, as well as the representatives of women's groups. Unlike
other provinces in Indonesia, Papua will be allowed to have its own flag and
other local symbols.
Despite the special autonomy law, the call for independence in Papua
remained strong. The Presidium Dewan Papua (PDP, or Presidium of Papuan
Council), the most prominent of Papuan independence organizations, rejected
the law, citing that the Indonesian Government should first and foremost
revise the official history by acknowledging that Papua had indeed become
independent on 1 December 1961, after the departure of the Dutch, before
it was reintegrated with Indonesia. However, the security condition of the
province was calmer than in Aceh, and PDP has pursued its aim of
independence through legal and political means.
The mysterious death of "Theys" Dortheys Hiyo Eluay, the leader of PDP,
on 10 November, who was said to be returning from attending an invitation
in the headquarters of the local Kopassus (Romando Pasukan Khusus, or Special

122 Irman G Lanti
Forces) unit just outside Jayapura, renewed suspicions and saw allegations of
murder directed at the security forces. By the end of the year the case was still
under police investigation, and members of the Kopassus unit seemed likely
to become suspects for the murder, despite claims of non-responsibility from
Kopassus and Army commanders. They, in turn, have accused some rival Papuan
independence activists of being the perpetrators of the murder.
In any case, the death of Theys was a tremendous set-back for the effort
to placate separatism in the province. It has reignited and reinvigorated the
call for independence. During his funeral in Jayapura a week after his death,
tens of thousands of people showed up amid tight security. The majority of
them wore tee-shirts, carried banners, and displayed other paraphernalia which
promoted an independent West Papua. Theys' death will undoubtedly create
new complications (in the province and abroad) for the Indonesian Government
in dealing with the restive province.
Sampit, Central Kalimantan
By far the worst inter-ethnic conflict in 2001 occurred in Central Kalimantan,
between the indigenous Dayak population and the migrant Madurese. The
conflict erupted initially in the town of Sampit on 18 February, when two
Madurese were attacked by a number of Dayaks (suspected to be under orders
from Dayak local government officials who felt threatened by changes in
personnel). When the Madurese retaliated, the Dayaks went on a rampage.
The conflict then quickly spread out to other areas in Central Kalimantan,
including the province's capital, Palangkaraya. Although relatively short-lived,
the violence claimed the lives of more than 400 people, with ethnic Madurese
primarily the victims. The method of the killings was particularly gruesome ?
many of the victims were beheaded and had their internal organs removed.
The explosive combination of economic disparity between the indigenous
and the migrant groups, rainforest depletion due to excessive logging, and the
suspected provocation by outsiders gave rise to the conflict. While there has
been tension in the relationship between the two ethnic groups in the past,
generally they have lived peacefully side by side, which has given rise to strong
suspicions of political provocateurs from outside the province.
The humanitarian crisis continues to be completely unresolved, as more
than 40,000 ethnic Madurese fled the province, mainly to Madura or East Java.
Many will probably never return.
Poso, Central Sulawesi
The conflict in Poso, Central Sulawesi, adopted a character that echoed the
Maluku conflict. It is inter-religious, between Islamic and Christian groups.
Both sides were armed with conventional weaponry, suggesting the presence
of some outside support, specifically the involvement of the radical Islamic
group, Laskar Ahlus Sunnah Waljamaah (popularly known as "Laskar Jihad").
The conflict has also been sporadic in nature. Although some violence occurred

at the end of 1998, 1999 saw a lull in fighting, only to have hostilities emerge
again by April 2000. Violence occurred not long after the peace accord was
signed by the conflicting parties and witnessed by President Abdurrahman
Wahid in August 2000, and conflict emerged again in October 2001. The
causes for this sporadic violence, which had resulted in more than 300 casualties
in 2001, are usually different, ranging from drunken fights to arguments on
local politics. But some analysts have noted that the "social jealousy" between
the better-off Muslim migrants and the local Christian population is the root
cause of the problem, and the presence of outside interference has worsened
the situation.
However, the year closed on a positive note. A reconciliation effort on the
initiative of Jusuf Kalla, Co-ordinating Minister for Social Affairs, and a native
of South Sulawesi, was successful in bringing together representatives of the
conflicting parties in a two-day meeting on 19-20 December in Malino, a
mountain-top resort town east of Makassar (the capital of South Sulawesi).
The peace conference produced the "Malino Declaration" and the post-Malino
security situation was reportedly significantly better, although it remains to be
seen whether the peace will endure.13
Indonesia after 11 September
The terrorist attack on 11 September in the United States suddenly brought
a new long-term potential for Indonesia's instability to the forefront. Images
that appeared in the media, both Western and regional, after the terrorist
attacks in the United States, and the subsequent U.S. retaliation in Afghanistan,
seemed to be alarming for the whole world. This is especially true of the
images coming out of Indonesia, the region's largest country and the world's
most populous Muslim nation. In the weeks following the 11 September attack,
demonstrations by radical groups in Indonesia occurred questioning the U.S.
allegation that Osama bin Laden was the perpetrator of the terrorist attack,
protesting the U.S. bombing of Afghanistan, and even calling for a holy war
on occasion (simplistically called jihad) in defence of Afghanistan. The nation's
leading religious authority, the Majelis Ulama Indonesia (MUI, or Indonesian
Council of Ulemas) also backed the call for jihad by issuing a fatwa (religious
edict).14 Such images were exacerbated by threats of violence against foreign
nationals, especially Americans and British, in Indonesia, made by hardline
Muslim organizations, such as the Front Pembela Islam (Islamic Defenders
Front).
In terms of domestic politics, the issue of application of sya?ah and the
establishment of an Islamic state in Indonesia remained in public discourse.
Although this has been a long-standing issue since independence,15 it has
received new life since Reformasi (the post-Soeharto democratization) as ideas
and groups long suppressed under the authoritarian rule of the New Order
have resurfaced. For some Islamic groups this has opened a window of
opportunity to reintroduce Islamization of the state, assisted by growing numbers

124 Irman G. Lanti
of sant? Muslims from the 1990s.16 Although many proponents of the Islamic
state idea have been optimistic that their cause would win greater support this
time around than in the 1950s, they were disappointed in the 1999 election.
Islamic political parties that made the Islamic state as their platform received
far less votes than those Islamic parties advocating the existing secular
arrangement, as Islamist groups had the misperception that san?n-nization was
a political phenomenon, while it is apparently a cultural one.17 The general
Indonesian public may be more pious in their religious practices18 and may be
more aware of their Islamic identity, but their political behaviour has hardly
changed. Indonesia's two largest parties ? Megawati's PDI-P and Golkar ? as
well as Islamic-based parties ? Gus Dur's PKB and Amien Rais' PAN ? have
agreed to maintain the secular arrangement, as embodied in the state's official
ideology of Pancasila. While there was sizeable mass support for Islamic parties
that advocated bringing the Jakarta Charter19 back into the Constitution, such
as the PPP, the party of the Vice-President Hamzah Haz, and the PBB, these
parties were far from sufficient to form a parliamentary majority.
Nevertheless the rise of Islam in Indonesian politics has made it difficult
for any political force, including the current government, to exclude Islamic
parties and interests from any political calculation. Fresh from experiencing
the instability of her predecessor's rule, Megawati has been especially concerned
with maintaining the support from the Muslim parties and not disrupting the
fragile balance. This, perhaps at least partially, explained why Megawati seemed
to be swaying from a stance of full support for the United States in its fight
against terrorism, shown during her visit to Washington a week after 11 September,
to a rather openly critical response to the United States and the West's attack
on Afghanistan, as evident from her speech at Istiqlal Mosque in Jakarta during
an official celebration of Isra Mi raj (a Muslim holiday) a month later. By
seemingly flipping her position vis-?-vis the United States, many pundits
predicted that Megawati would lose the momentum of U.S. and Western support
needed to shore up Indonesia's troubled economy. This may cause further
hurt to Indonesia, whose economy is reliant on foreign investment and export.
However, sluggishness over economic reform is also causing concern with
international lenders.
The Troubled Economy
Four years down the road since the economic and financial crisis broke out in
1997, the health of Indonesia's economy has gone from bad to worse. Worsening
political infighting, the dire security condition, continuing corruption, the
lack of a coherent government plan, as well as a less benign external
environment, have all contributed to the difficulties in rebuilding the economy.
The exchange rate of the rupiah to the U.S. dollar, one of the indicators
of the country's economic health, was in a state of fluctuation in 2001. Starting
out just below 10,000 to the dollar, the rupiah plunged to Rpl2,600 per dollar
on 26 April, as Gus Dur's supporters, mainly from East Java, flocked to Jakarta

in a show of support for their embattled President and threatening violence.
The currency reached its strongest level of just under Rp9,000 per U.S. dollar
on 13 August, after the ascension of Megawati to the presidency, marking a
strong positive sentiment for her administration. The 11 September incident
and subsequent flaring up of anti-American sentiment saw the rupiah decline
to the 10,000 mark again. Finally, the failure to sell the government's share in
Semen Gresik in October and the lack of positive sentiment by the year's end
made the rupiah unable to strengthen beyond 10,000, and it was actually
fluctuating around Rpl0,000-11,000 per U.S. dollar.20
Other economic figures were also dismal. The rate of inflation was quite
alarming. After successfully keeping inflation well below 10 per cent during
the previous two years, in 2001, the rate of inflation surpassed the 10 per cent
mark, exceeding the government's prediction of 9 per cent. The increase in
prices has burdened the increasingly poor population. Using international
standards, the amount of people living below the poverty line is probably still
over 50 per cent. In 2001, the unemployment figure has reached 36.2 million
(out of a total population of 220 million). Lower growth rates, the threat of
recession in the United States and Japan, as well as increasing competition
from China, have hit Indonesia's export-dependent economy. Both oil and
non-oil exports have been reduced in 2001. From January-October, the export
volume of US$48.12 billion showed a reduction of 6.84 per cent from the
same period the year before (US$51.69 billion). Oil exports decreased by
6.67 per cent, while non-oil commodities by 6.87 per cent. As a result, the
growth rate failed to make the predicted 5 per cent (as foreseen by the state
budget plan) and came to between 3.5-4 per cent (figures vary slightly).
The state budget was also in deficit. This was partly due to the failure to
sell the assets of either the state-owned corporations (BUMN, or Badan Usaha
Milik Negara) or the banks and companies under the management of IBRA
(Indonesian Banking Restructuring Agency, or BPPN [Badan Penyehatan
Perbankan Nasional]). In the 2001 State Budget Plan, IBRA was given the
target of obtaining Rp37 trillion from assets sales and banking recapitalization
(including Rp27 trillion from assets sales alone). By the end of 2001, however,
IBRA had only been successful in fulfilling around one-third of the target, with
the assets sales totalling only Rp8.6 trillion. But perhaps even more damaging
to Indonesia's economy was the failure of the government to proceed with the
sale of its shares in some BUMNs. The most high profile of these cases involved
Semen Gresik and the Mexican cement company, Cemex. Initially, this was
seen as an encroachment by the Parliament, which appeared resistant towards
the idea of privatizing government assets. But it appeared that when the national
Parliament had given a green light on privatizing some assets, the central
government faced another stumbling block. This time it came from the local
population. The central government was unable to overcome the resistance of
the local government and Parliament over the privatization matters. As a result,
the government decided to postpone the privatization of Semen Gresik, even

126 Irman G. Lanti
as Cemex had already concluded negotiations over the sales of government's
shares in the company.
This failure was considered alarming because it has created further
uncertainty in the already deteriorated climate of foreign investment in
Indonesia. In 2001, Indonesia was only able to attract US$600 million in foreign
investments, a reduction from the previous year's US$2.2 billion figure, and a
far cry from the pre-crisis level (1997) of US$20.1 billion. Indonesia was also
lagging behind other regional economies, such as Thailand, which was able to
garner US$2.2 billion; the Philippines, US$4.2 billion; and Malaysia, US$8.8
billion. If the problem of uncertainty is not redressed soon, with the world
economy probably going into a slump, then Indonesia's economic woes will
most likely get worse in the short-term future.
The Future Agenda
Indonesia and Megawati's government are facing a tremendous challenge ahead.
The consolidation of the country's democracy is the most important task in
the political sphere. The most salient issue that needs to be addressed is the
establishment of clearer "rules of the game". Legal reform is necessary to
ensure that political competition will be regulated as well as to avoid legal
uncertainty that might arise from uncoordinated execution of authority, either
among offices in the central government, between central and local
governments, or among the various local governments.
Related to the issue of legal reform is the necessity for Indonesia to be
more serious about rooting out corrupt practices. Such practices are obstructing
the efforts to improve efficiency in economic activity because corruption creates
a high-cost economy that will turn investors away, as well as perpetuating the
tension between the political machinery and the general public. Political parties,
however, want guarantees that charges of corruption will not be used as a
pretext for political prosecution, or as tools simply to deter one's political
adversaries. For that purpose, a clean, non-partisan, and authoritative anti
corruption commission of some sort, equipped with clear legal provisions, is
what Indonesia badly needs.
The lesson from the political infighting this year suggests that those involved
need to mature under a new political system, and come to see that politics
need not be viewed in zero-sum terms. This means that failure to dominate an
election will not necessarily mean permanent political exclusion. There will
always be another opportunity to improve one's political fortune. Similarly,
losing a chance of governing need not be translated into complete political
oblivion, for there will always be an opportunity to return to government. If
such positive perceptions prevail, politics in Indonesia might be less predatory,
less reliant on use of threats of mass violence, and more constructive as parties
grew accustomed to the nature of pluralism and political compromise.
Another important (and related) lesson from the episode of Gus Dur's
impeachment and Megawati's ascension is that it is difficult for any single

political force to prevail over the others in a system of open competition.
Every political party should recognize the need for, and value of, co-operation,
coalition-building, negotiation, and bargaining in furthering one's political
cause. If the political parties get used to these political processes, eventually,
they may grow more comfortable in more stabilized coalitions, which will
invariably be a hallmark of such a diverse society.
The challenge from militant Islamic groups needs to be handled
proportionally and not overzealously in order not to create a misperception
that they pose a significant threat when it is clear that the groups only
represent a small minority of Muslims. There also needs to be a continued
co-operation between the nationalist forces, such as the PDI-P, TNI, and
Islamic political parties, in order to ensure stability of the government until
the next election in 2004. Meanwhile, mainstream Islamic leaders need to
work against further radicalization of Muslim groups by reasserting the voice
of moderation and by continuing to argue that Indonesia will be better off
keeping its present secular political arrangement while working for a better
moral and social value inspired by Islam. At the same time, further
radicalization might be ameliorated by the inclusion of all groups in the
social and political processes.
Perhaps the greatest challenge for Indonesia in the future lies with the
economy, especially the improvement of the investment climate. Without an
inflow of investment, the economic activities will remain at a standstill, if not
deteriorate further, and this means that the unemployment rate is unlikely to
be reduced. Without meaningful economic activities, conditions of security in
Indonesia will remain in a precarious state as the public will be susceptible to
acts of political adventurism and social jealousies. It is imperative that IBRA
make more serious efforts in asset sales, although co-operation from both the
national and local Parliaments and the public is also important.
Related to the effort to create a conducive investment climate is the issue
of regional autonomy. The current uncertain arrangement and division of
responsibility between the central, provincial, and district-level governments
remains confusing. Any attempts to recentralize will certainly be met with
resistance by locals and, thus, stands as another conflict potential. But the
arrangement needs to be much clearer on the limitation imposed on the
authority of district governments as the primary executor of governance at
the local level. Only through a clear division of labour between district,
province, and centre will regional autonomy be more beneficial to all
concerned.
Notes
1. See Arief Budiman, "Indonesia: The Trials of President Wahid", in Southeast Asian
Affairs 2001 (Singapore: Institute of Southeast Asian Studies, 2001), pp. 145-58.
2. Ibid., pp. 156-57.

128 Irman G. Lanti
3. PKB's constituency is with NU (Nahdlatul Ulama, the traditionalist Muslim
organization). Gus Dur, as one of the most respected kyai (Islamic teachers) in
NU, helped establish this party.
4. PAN, headed by the speaker of the MPR, Dr Amien Rais, was initially one of the
foremost supporters of Gus Dur's presidency.
5. Some parliamentarians even joked that Gus Dur's Cabinet should be called "kabinet
kemisan", which means that on every Thursday, a new Cabinet formation must be
announced.
6. PBB is a modernist Muslim party.
7. PPP is also a modernist Muslim party.
8. Generally regarded to encompass parties in Poros Tengah, such as the PAN, PK
(Partai Keadilan, or Justice Party), PPP, and PBB.
9. See M. Ryaas Rasyid, "The Policy of Decentralization in Indonesia", Paper presented
in a discussion at the Institute of Defence and Strategic Studies (IDSS), Singapore,
15 August 2001. Similar conclusions were also made by Dr Andi Mallarangeng of
the Institute of Public Administration, at the Joint Public Forum on Indonesia
held by the Institute of Southeast Asian Studies (ISEAS), Singapore, 1 November
2001.
10. For a discussion on the deficiencies of current constitutional arrangements, see
"Nestapa Konstitusi Kita" [The Misery of Our Constitution], Tempo, Edisi Khusus
Akhir Tahun (Special Year-End Edition ? Indonesian version), 6 January 2002,
Aksara supplement, pp. 49-63. See also Todung Mulya Lubis, "New Constitution,
Once Again", Paper presented at the Joint Public Forum on Indonesia, Institute
of Southeast Asian Studies (ISEAS), Singapore, 1 November 2001.
11. Since the Reformasi era, the MPR had actually passed a number of amendments
every year, starting in 1999. Last year's was the third such amendment to the 1945
Constitution.
12. This may perhaps be viewed in similar light to when Habibie's supporters threatened
to create a South Sulawesi state when his accountability speech was rejected by
Parliament in 1999.
13. See "Burning Desire for Peace", Tempo, 21 January 2002, pp. 30-31.
14. The fatwa did not receive support from other Muslim organizations, the most
significant of which are the Nahdlatul Ulama and the Muhammadiyah. Under
pressure from other Muslim leaders, later, Din Syamsuddin, one of MUI's
functionaries, issued a clarification saying that the jihad call should be viewed in
general rather than specific terms of sending fighters to Afghanistan.
15. For debates on the issue of state foundation, see Herbert Feith and Lance Castle,
eds., Indonesian Political Thinking, 1945-1965 (Ithaca: Cornell University Press,
1970). The debates continued in the 1950s in the Konstituante (a state legislature
set up with the task of formulating the new Constitution). On the Konstituante,
consult Adnan Buyung Nasution, The Aspiration for Constitutional Government in
Indonesia: A Socio-Legal Study of the Indonesian Konstituante (Jakarta: Pustaka Sinar
Harpan, 1992).
16. Refers to the phenomenon where Indonesians were becoming more pious, more
pure, and less syncretic in their practice of Islam. The word santri has the
connotation of being more orthodox.
17. Ahmad Syafi'i Ma'arif in a seminar organized by the Institute of Defence and
Strategic Studies (IDSS), Singapore, 20 November 2001. See also Azyumardi Azra,
"The Megawati Presidency: Challenge of Political Islam", in Governance in Indonesia:
Issues Facing the Megawati Presidency, edited by Hadi Soesastro, Anthony L. Smith,
and Han Mui Ling (Singapore: Institute of Southeast Asian Studies, forthcoming).
Additionally a good collection of papers on the discourse of application of sya?ah
can be found in Kurniawan Zein and Sarifuddin HA, eds., SyaHat Islam Yes, Syariat
Islam No: Dilema Piagam Jakarta dalam Amandemen UUD 1945 [Syariat Islam Yes,

Syariat Islam No: The Dilemma of the Jakarta Charter and the Amendment of the
1945 Constitution] (Jakarta: Paramadina, 2001).
18. See the result of polling done by a research centre in Jakarta's State Islamic
Institute (IAIN), published in Tempo, 31 December 2001, pp. 44-45.
19. The Jakarta Charter, produced from a meeting between nationalist and Muslim
leaders on 1 June 1945, contained an addition of seven words to the first pillar of
Pancasila (belief in one God). These words basically required Muslims to abide by
the Islamic syariah. After protest from the nationalist leaders and minority groups,
these words were eventually taken out of the final draft of the Constitution adopted
on 18 August 1945.
20. See "The Crisis Isn't Over Yet", Tempo, Special Year-End Edition, Economy and
Business, 7 January 2002, pp. 40-55.

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