Pak Sambuaga began with a review of the economy in Indonesia in 2010. He highlighted the growth rate of 5.9%, clinic inflation of 6.5%, and an unemployment level of 7.5%. Relative to the US and European countries, Indonesia is doing well; compared to some neighboring countries, Indonesia is slightly behind. For the coming year, the government is targeting a 6% growth rate; however, Indonesia has the potential grow by up to 7.5 percent. He advocated achieving this growth rate by increasing the national deficit from 1.7 to 2.5 % and investing the additional money, about 5.4 billion US dollars in infrastructure and micro enterprise. Through this growth, Sambuaga believes Indonesia can boost its economic growth further, continue efforts to eradicate corruption, and enhance law enforcement.
Sambuaga discussed the upcoming 2014 Presidential election in general terms, but he mentioned that by constitutional restriction, President Susilo Bambang Yudhoyono can no longer run for 3rd term. This has brought people to start speculating who would be the potential candidate for 2014; among others; Coordinating Minister for Political, Legal and Security Affairs – Retired Air Marshal, Djoko Suyanto, General Chairman of The Democratic Party – Annas Purbaningrum, The 1st Lady, Ani Bambang Yudhoyono from The Democratic Party, General Chairman of Golkar Party – Aburizal Bakrie, Chairman PDIP – Puan Maharani (Indonesia Democratic Party for Struggle), Coordinating Minister for the Economy – Hatta Rajasa, and General Chairman of the Gerindra Party – Retired General Prabowo Subianto (Great Indonesia Movement Party).
He asserted that competition among power seekers will be more intense than previously. He emphasized the importance of local elections and the current political changes in Yogyakarta. He elaborated that the local elections (election of Governor, Regent, Major). Particularly, the Governor elections which are scheduled up to 2013 will build a strong political base or widen the political base of the largest parties, most notably the Democratic party. Sambuaga also discussed the current proposal to remove the sultan of Yogyakarta as the Governor, and instead have the provincial assembly (DPRD Provinsi) elect the governor. He felt this change will be still democratic and better for Indonesia.
Sambuaga discussed the importance of raising the threshold of 2.5 % of the vote for a party to win seats in the Parliament. Golkar calls for a threshold of 7% while the Democrats call for a threshold of 5%; either way, an increased threshold would decrease the number of parties in the Parliament and make the government more stable and productive according to Sambuaga.
Following Sambuaga’s talk, he took questions from the audience.
Q. With the impact of the severe breakdown of the economic situation in the U.S., how has the U.S. federal bailout affected Indonesia? And how would that compare to the 1997/98 crisis? In light of the crisis in Europe as well, what do you think of the relationship between Mr. Bakrie and Jacob Rothschild’s son? Will that impact the election?
Indonesia’s economic performance in the past year was good. We can achieve more than we expect despite the crisis in 2008. For instance, now, as I mentioned before, the economic growth rate is about 5.9 percent, and unemployment is 7.5 percent, inflation 6.5 percent, the reserve is more than 90 billion U.S. dollars. How did we achieve this? Because the economic approach of government is quite good and the interest rate is no more than around 6 percent. This shouldn’t be different because of the current economic crisis.
With last year’s performance, I believe we should be more progressive, have the budget deficit at 2.5 %, not too much higher than what it is now, and we can spend this on infrastructure and micro enterprise. With regards to the question about Bakrie and Rothschild’s business relationship, I don’t see any harm with this relationship, particularly because their economic relationship has existed for quite some time, so how would this negatively impact the national economy now or in the future?
Q. I believe that the record of registration passed by the People’s Representative Council (DPR) was not very good this past year, you suggested that was due to so many parties, is there another reason? And what is the potential for this coming year?
Yes I agree with you that the first year performance is very low. Why? One reason is, in my opinion, that the newcomers in the parliament entered with an attitude to try to defeat the government, so they want to defeat the performance of the old parliament, by investing not in the legislation process, but in the overseeing process. As a result, they’ve fallen behind in the legislation process.
Q. On the political scene, many outsiders don’t understand what the parties stand for. Do you see the parties becoming more policy issue oriented in the future?
Your observation is correct. Political parties presently could do more to commit to certain policies. For example, the economy, education, and technology are hot issues; however, to the political parties these issues do not seem like high politics. In Golkar, we try quite hard to change this. For instance, now we are trying to address substantial and strategy issues like the economy, climate change, and education. We should all get beyond transactional politics.
Q. What do you think Golkar ought to stand for and what would make people vote for its candidate in 2014?
If you are talking about presidential elections, to many voters personality is more of a factor than political affiliation. But I should say at the same time, the role of the political machinery is also very significant, so there is a combination of those two. People will elect a Golkar party member mostly because of the candidate: his/her track record, and his/her popularity.
Q. You mentioned how a vigorous counter-corruption program would be crucial to the future of Indonesia, and we saw that in the last parliamentary elections. Looking forward to 2014, do you see the current tax disputes regarding Mr. Bakrie affecting the election or do you think by 2014 it won’t matter?
In regards to the tax question, let the law work out the tax issues. We also have to take a stand and take firm action to have the tax office reformed. If there is transparency there won’t be a problem.
Q. What’s your read of the Indonesian public? What issues really get them excited at elections? What gets people motivated to vote?
The most interesting issues in the perspective of the voters are economic, health, and education issues. The people want lower rent for housing and more opportunities to work. These are the most important issues from the perspective of the voters, but foreign issues tend to make the news because they are considered more interesting. Personality of the candidate is also important, especially for the Presidential election.
Q. Can you comment on the Islamic parties in Indonesia and their influence on politics?
As our election history shows, since the beginning of our republic, the Islamic parties have never won more than 30 percent of the vote combined. In the last election in 2009, the largest Islamic party only received 7 % of the vote, and the next biggest got 5%. All together five Islamic parties won less than 20% of the vote combined. There are more Islamic voters in the Democratic Party or in Golkar than in all of the Islamic parties combined. In this regard, you can say that the political attitude in Indonesia is focused on pragmatism, and pragmatic coalition even at the local level.
Q. How much does it cost to run to be president of Indonesia? Where do the candidates get the money?
It’s difficult to say exactly what a campaign costs. But we have laws restricting how much individuals or parties can give to a campaign. If I’m not mistaken, at the end of December the DPR passed a proposal that a party can receive donations from private companies for up to 7.5 billion rupiah (about 800 thousand U.S. dollars) per year and from individuals for up to 500 million rupiah (about 60 thousand U.S. dollars) per year. In practice, many candidates find a way to not disclose everything because companies or individuals want to remain anonymous. In local elections, I’ve been told, for governor, at least in Java, candidates spend at least 15 million U.S. dollars. Outside of Java the expense goes down to about 5 million U.S. dollars. Most of the expenses are media and PR expenses.
Comments from Ambassador Dino Djalal: I’d like to comment on some of the points that have been mentioned. I think President SBY will most likely play an important role as a “king maker” in 2014. In the run up to 2014, I believe President Yudhoyono will endorse a candidate who shares his political convictions; a candidate who is open minded a nationalist, an internationalist, and a pluralist. Finding a new leader for a new time is the challenge for most of the parties, so they don’t become seen as the parties of the past.
I also want to mention one point as a citizen. A key challenge is how to keep modernizing Indonesian politics, and I’m a little concerned that some of the new generation of politicians seem to be more conservative or as conservative as those they replaced. They tend to reinforce old politics. I also think the next agenda for modernizing politics would be to rise to the next level of politics and leave behind this notion that the president has to be Javanese. Many people think we’re not ready for a non-Javanese president, but we should be ready. This is an election that should present new faces, new ideas, and electing leaders that depart from the previous ways of doing things.
Q. What is Golkar’s position on foreign affairs issues such as relations with ASEAN and the U.S.? Can we expect to see continuity there?
Among the parties, there is almost no dispute at all on foreign political issues, except for one issue, the Middle East issue. We all strive for Palestinian independence based on their sovereign right, but Golkar is different from other parties in that we can accept their peaceful co-existence with Israel. Other parties, particularly the Islamic parties do not buy into this idea. On another issue, when the U.S. attacked Iraq, all of the parties had the same opinion from very right to moderate; we were all against the attack on Iraq. Golkar reflects the mainstream position on relations with the U.S. on most issues.