Home The Washington Diplomat July 2009 World’s Most Populous Muslim CountryFocuses on Economy in Upcoming Elections

World’s Most Populous Muslim CountryFocuses on Economy in Upcoming Elections


For only the second time in the country’s history, Indonesians will go to the polls July 8 to elect their president directly. Like in the United States, the major issue for voters in the world’s most populous Muslim nation isn’t national security or the threat of terrorism — but the fragile economy and worsening unemployment.

According to the latest numbers, President Susilo Bambang Yudhoyono (known as SBY) is almost certain to be re-elected. Two new polls give the Partai Demokrat leader and his running mate, former Central Bank Governor Boediono, anywhere from 52.5 percent to 62.9 percent of the vote.

SBY’s chief opponents are former President Megawati Sukarnoputri of PDI-P and her running mate, former Lt. Gen. Prabowo Subianto (with an estimated 17 percent to 24.4 percent of the vote), and current Vice President Jusuf Kalla and his running mate, former Gen. Wiranto (11.3 percent to 20.2 percent).

Under Indonesia’s election law, if a single candidate fails to win more than 50 percent of the vote, a runoff must be held between the two leading candidates — an unlikely scenario given SBY’s popularity.

“It seems that the incumbent has a very good chance of being re-elected, but one never knows,” said Sudjadnan Parnohadiningrat, Jakarta’s ambassador in Washington. “In Indonesia, people now directly elect the president, unlike many other democracies where the president is elected through parliament.”

Since 2004, the envoy told The Washington Diplomat, Indonesia has had 490 elections at the municipal, provincial and national levels. “The most important issue is to find jobs for our people,” said Parnohadiningrat, estimating Indonesia’s unemployment rate at 15 percent and per-capita income at around class=”import-text”>2009July.Indonesia’s election.txt,800 a year.

In the first quarter of 2009, Indonesia’s gross domestic product grew by 4.4 percent — a surprisingly strong performance considering the state of the world’s economy. The Economist Intelligence Unit (EIU) recently raised its forecast for Indonesia’s 2009 growth, upping its estimate to 2.4 percent, compared with a contraction of 1.4 percent in its previous forecast.

The ambassador is even more optimistic, predicting growth of 3.5 percent to 4 percent this year. “We are affected [by the global recession], but not as severely as other countries like Singapore, which depend on exports and operations of financial markets on a large scale,” he explained. “The Indonesian financial market operates on a small scale, and our economy does not depend on exports but rather on a domestic, consumer-driven economy. Since 1997, when we were hit by the Asian crisis, our banking system has learned how to operate prudently and efficiently.”

Despite its rosy forecast, the EIU warns of several risks that might threaten Indonesia’s economic recovery. For one thing, the international financial crisis could deepen, affecting capital inflows to Indonesia. Secondly, a collapse of the rupiah on domestic prices would weaken the spending power of most Indonesians, while making it more difficult for local companies to meet their external debt obligations.

“Third, there are also political risks,” it says. “If deteriorating economic conditions spark social unrest, investment could suffer an even deeper and more protracted decline as investors lose confidence in the country.”

As global commerce shrinks, countries are also becoming more protectionist — and the United States is apparently no exception. “We find recently that trade between us needs careful handling and intensified dialogue,” said Parnohadiningrat, referring to U.S. measures that limit Indonesian exports of shrimp and other seafood products. “We have to talk about non-tariff barriers which have become an impediment to the flow of trade.”

Another issue in Indonesia that never seems to go away is corruption. In mid-June, the country’s corruption court sentenced one of President Yudhoyono’s in-laws — former Central Bank official Aulia Pohan — to more than four years in prison for his role in approving illegal payments to members of parliament.

Dozens of other senior officials, who under previous governments would have gotten off scot-free, have been sentenced by the corruption court, including a former governor of Aceh province and a leading prosecutor who took bribes to drop a graft case against a local business tycoon.

“This issue is being dealt with very diligently,” said Parnohadiningrat. “Hundreds of high-ranking officials have been brought to trial within the last five years.”

Yet the corruption court itself is fighting for survival as some lawmakers are threatening to shut it down completely.

Still, the indictment against Yudhoyono’s in-law could help the president’s election campaign because it would show a commitment to fight graft-related crimes, no matter who’s involved. Yudhoyono has said publicly that he’d issue a presidential decree to ensure the court’s continued existence should parliament fail to pass the legislation before October.

With 237 million people, Indonesia ranks as the world’s fourth-largest nation in population, its third-biggest democracy and its largest Muslim-majority country. Some 88 percent of Indonesia’s inhabitants profess faith in Islam, meaning the country has more Muslims than the populations of Saudi Arabia, Turkey, Jordan, Syria, Egypt and Tunisia combined.

In a sign of the times, one issue no longer on the radar screens of Indonesian voters this election season is terrorism. Between 2001 and 2004, the country suffered a spate of devastating attacks linked to al-Qaeda, but the government’s response to those attacks — stiff penalties along with attempts to get at the social and economic roots of the problem — have been largely successful.

“It’s all over,” claimed Parnohadiningrat, who was last interviewed by The Washington Diplomat in April 2006, just after taking office. “We’ve been able to round up over 300 perpetrators, and to mitigate the influence of extremism in Indonesia. It’s no longer a serious problem.”

Parnohadiningrat also downplayed the madrassas, or Islamic religious schools, as a potential breeding ground for terrorists. “In Indonesia, the madrassa is a boarding school, not in Pakistan where very young students study,” the ambassador pointed out. “In Indonesia they teach a national curriculum, not only Islamic studies.”

Like people all over the world, Indonesians are generally enthusiastic about the 44th president. But they have a particular reason to admire him: President Obama lived in a lower-middle-class district of Jakarta from age 6 to 10 and speaks conversational Bahasa Indonesian.

“We are very proud of being part of the formation of the president’s character. He is very sensitive to the suffering of the needy,” said Parnohadiningrat. He noted that Obama visited the island of Bali in 2002 and is expected to return to Indonesia for the first time as president in November, in connection with the upcoming Asia-Pacific Economic Cooperation summit in Singapore.

“Most Indonesians see Mr. Obama as the agent of change in U.S. policy in many areas including the Middle East. They want him to succeed,” Parnohadiningrat said. “As you know, the president spoke in Egypt about democracy, women’s rights and good governance. That’s what Indonesia has accomplished as a country with a large Muslim population, and yet we’re a democracy. We are very keen in advancing the rights of women, so we feel that what Obama said in his speech is exactly what we’ve been doing.”

Indonesians also admire Hillary Clinton, who paid a visit to their country in mid-February, in her first overseas trip as Obama’s secretary of state. “She was very charming,” the ambassador noted.

Parnohadiningrat, 58, began his current job in January 2006. Since joining the Foreign Service in 1981, he’s served multilateral postings in Geneva, Vienna and New York. Most recently, he held the post of secretary-general of Indonesia’s Ministry of Foreign Affairs, concurrently serving as the country’s senior official meeting leader to ASEAN (Association of Southeast Asian Nations).

He was also closely involved in the East Timor issue, heading his country’s delegation to the bilateral Indonesia-East Timor meetings in 2000 and 2001. Following that, he was named Indonesia’s ambassador to Australia.

The career diplomat holds a bachelor’s degree in international relations from Indonesia’s Gadjah Mada University and has also studied at Columbia University in New York.

Parnohadiningrat said he wants to “express our gratitude to the American people” for the assistance the U.S. government offered after a massive earthquake and tsunami struck the Indonesian island of Sumatra in 2004, killing an estimated 167,000 Indonesians and tens of thousands more in India, Sri Lanka, Thailand and elsewhere.

“Only three days after the tsunami struck, the Americans sent the Seventh Fleet into the area. Around 1,000 personnel deployed in the stricken area, bringing food and supplies,” he said. “After the tsunami, we established a five-year plan to rehabilitate and reconstruct the damaged area, and since then, we have completed about 95 percent of our target.”

More than three years ago, when The Diplomat last interviewed Parnohadiningrat, during the height of the Bush administration’s “war on terror,” we invited the ambassador to offer some advice for U.S. policymakers hoping to improve bilateral relations.

Here’s what he said: “Don’t interfere in our affairs and act as if you know better than us how we should overcome our problems, because we are doing it ourselves. Let’s conduct a dialogue, but don’t act as if we are a country that needs to be told what to do.”

These days, Parnohadiningrat’s message is far less defiant.

Asked what Indonesia would most like from President Obama and the American people, he thought for a minute, then responded: “At this point, recognition by this administration of what we’ve been doing in creating a stable and secure environment in Southeast Asia, and in adhering to the principles of living in harmony.”

About the Author

Larry Luxner is news editor of The Washington Diplomat.