Source/Credit: The Age | Australia
By Tom Allard | December 27, 2010
Growth is being marred by religious intolerance and corruption.
In September, Indonesia's leader Susilo Bambang Yudhoyono was moved to put pen to paper, composing a letter to Barack Obama.
He was agitated about the plans of the Florida pastor Terry Jones to burn a pile of Korans on the anniversary of the September 11 attacks. If allowed to proceed, it would ''humiliate'' Muslims around the world and threaten world peace, Dr Yudhoyono wrote.
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The sentiments were a reflection of how many people felt, but in the country with the world's largest Muslim population, the reaction was somewhat unexpected. Dr Yudhoyono came under fierce criticism from the mainstream media and from tens of thousands of Indonesians who took to social media to vent their displeasure.
The reason? For much of the previous six months in Indonesia, there had been an alarming escalation in attacks by hardliners on Christians and followers of Ahmadiyah, the minority Islamic sect with some 200,000 members and a history in Indonesia dating to 1925. While the rants of a fringe preacher on the other side of the world upset him, Dr Yudhoyono had been silent about the surge in sectarian violence in his own country.
In many ways, the incident was emblematic of so much of what was disappointing in Indonesia in 2010. It was a year when the economy motored along, but worrying signs emerged that the very Indonesian values that earned the praise of visiting Barack Obama - democracy, tolerance and ''unity in diversity'' - were under pressure. Indonesia remains an overwhelmingly moderate country but religious violence has risen, directly aided and abetted at times by the police force. President Yudhoyono's response, when it came, was to appoint a new police chief with close ties to militant Muslim gangs linked to attacks on Christians.
Concerns about Indonesia's security services were further inflamed when soldiers were captured on film torturing prisoners in West Papua. Despite swift condemnation and assurances of justice by Dr Yudhoyono, the soldiers remain unpunished.
Meanwhile, Indonesia's leading reformer, former finance minister Sri Mulyani Indrawati, was forced to quit due to pressure from Dr Yudhoyono's coalition partners, including the head of Golkar, Aburizal Bakrie, whose companies were under investigation for unpaid taxes by Dr Indrawati's ministry.
Despite Dr Yudhoyono's thumping election win on the back of an anti-graft platform, the fight against Indonesia's pernicious, ingrained corruption faltered. Virtually no legislation of note was passed.
As Dr Yudhoyono's spokesman, Daniel Sparingga remarked about the year in politics to The Jakarta Post 10 days ago: ''We have achieved almost nothing of substance, to be honest.''
For investors though, navigating corrupt officials is an inconvenient part of doing increasingly lucrative business. Much of the economic growth in Indonesia has been driven by resource extraction aided by rising commodity prices. Gas, oil, coal and palm oil production is booming.
But the country's burgeoning middle class and pool of cheap labour are also attracting foreign investors, anxious to tap into a market of more than 240 million people and a workforce where the minimum wage is less than $200 a month.
Foreign direct investment rose by a third to $14 billion in 2010, while the sharemarket picked up 40 per cent.
Investors like Indonesia's relative stability. And it is remarkable given the chaos of 1998 that heralded Indonesia's adventure in democracy.
Still, while every man and woman has the vote in Indonesia and elections are fair, the institutions that underpin that democracy - the parliament, the judiciary, security forces and bureaucracy - are deeply corrupt and inefficient.
Graft, the selective use of the rule of law and crumbling infrastructure remain a curb on Indonesia's growth. If, or when, the terms of trade shift unfavourably and the hot money retreats, the continued failure to address these scourges is likely to be felt more keenly.
Read original post here: Corruption takes gloss off Indonesia's boom
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