Indonesian Elections Highlight, Reforms and Growth

JAKARTA - Indonesians vote on Thursday in the first of two elections that will determine whether Southeast Asia's biggest economy pushes ahead with key reforms to attract much-needed investment, create jobs, and revive growth.

The parliamentary election is the forerunner for the more important presidential vote on July 8, when President Susilo Bambang Yudhoyono, Indonesia's first directly elected leader, is expected to run for, and win, a second five-year term.

That would allow Yudhoyono to push ahead with more reforms, tackling a bloated and inefficient civil service, an unpredictable court system, and endemic graft in institutions ranging from parliament to the police -- flaws that deter investment and hold back Indonesia's growth and development.

"This election is important for consolidating democratisation and providing reformers with a stronger mandate for pursuing institutional reforms, primarily in the civil service and the judiciary," said Kevin O'Rourke, a Jakarta-based political risk analyst and author of Reformasi Weekly Review.

For the world's third-largest democracy (after India and the United States), these elections are a massive exercise and logistical nightmare.

More than 170 million registered voters across an archipelago of 17,000 or so islands will choose from several thousand candidates for the national and local parliaments.

The ballot papers, listing 38 parties, are the size of a newspaper or roughly the width of a polling booth.

"The make-up of the parliament will determine whether Indonesia continues down the reformist path or whether it goes backwards," said Damien Kingsbury, an associate professor at Deakin University, Australia.

None of Yudhoyono's rivals for the presidency has the same commitment to reform, analysts say.

His main opponent, former president Megawati Sukarnoputri, was criticised during her three-year stint for failing to address corruption, while two former generals from the Suharto era, Prabowo Subianto and Wiranto, have poor human rights track records.

Parties that win less than 2.5 percent of the votes will not get any seats in parliament. As the smaller parties drop out, and the undecided voters make their choice, some analysts predict the Democrat Party could win up to a third of the seats.(Reuters)

In order to field a presidential candidate, a political party or alliance needs to win 25 percent of the national votes or a fifth of the seats in parliament on April 9.

Both Yudhoyono and his Democrats lead in most recent opinion polls, with 45-52 percent and about 20 percent respectively, a sign of support for his anti-corruption and economic policies, and the progress Indonesia has made in the past five years.

Former Basket Case

Progress has been slow and much more needs to be done. But to put it in perspective, just over a decade ago at the height of the 1997-98 Asian financial crisis, Indonesia was a basket case on the brink of political, social, and financial collapse.

Former president Suharto, the autocrat who ruled for more than three decades overseeing a system of entrenched corruption and nepotism, was forced to resign in May 1998 amid the chaos.

Indonesia, the world's fourth-most-populous country, was bailed out by the International Monetary Fund (IMF) and embarked on political and economic reform.

Since 1998, Indonesia has had five presidents, with Yudhoyono the first since Suharto to serve a full five-year term.

Today, Indonesia looks politically and economically stronger and more stable than many of its Southeast Asian peers, including Thailand, Malaysia, and the Philippines, amid the global crisis.

"There's no comparison" to the situation in 1998, said Milan Zavadjil, the IMF's senior resident representative in Indonesia.

"They are relatively well-positioned for the crisis and we think the growth will continue. Times will get harder and, without a doubt, the economy will slow, some unemployment increases are probaby unavoidable but they are well positioned to do better than most other places."

Economic growth topped 6 percent last year and is forecast to reach 3-4 percent this year amid the global turmoil. The economic and social indicators show that Indonesia is back on its feet.

Security Improved

Domestic security has greatly improved in the officially secular but predominantly Muslim country, bringing a sense of stability for its Christian and other religious minorities.

A debilitating conflict in Aceh between separatist rebels and the Indonesian armed forces ended in 2005 with a peace agreement.

The threat from Muslim militant group Jemaah Islamiyah, which wrought terrible damage with bomb attacks in Bali and Jakarta, has been largely contained.

Kingsbury said that the election would provide an important test of the peace process in Aceh, and of the security situation in Papua, where separatists have held large demonstrations in recent days to urge a boycott of voting.

Corruption, the scourge of Indonesian business and daily life, is still endemic. But under Yudhoyono a powerful anti-graft agency has investigated scores of high-profile officials from government departments and the central bank, and many have been imprisoned.

Indonesia now ranks as Southeast Asia's biggest democracy. Despite the many logistical problems, campaigning for the April 9 parliamentary elections has been peaceful and analysts predict polling day should go relatively smoothly.

"Indonesia was in the middle of a crisis 10 years ago and now it's coping with the global financial crisis relatively well compared to most other countries," said the IMF's Zavadjil.

"Indonesia has come a long way.