Dr. Satish Chandra Mishra, Senior Fellow, at The Habibie Centre (Jakarta), visited the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA) on 15 January 2024 for a Roundtable Discussion on “Indonesia’s Systemic Transformation and its Implications for its Policy-Making”. Ambassador Sujan R. Chinoy, Director General, MP-IDSA, chaired the discussion. The scholars of MP-IDSA were in attendance.

Executive Summary

The session explored Indonesia’s domestic priorities since the end of the authoritarian Suharto regime. The hits and misses of the subsequent Era Reformasi (Reform Era) were identified. This was followed by a discussion on the current political climate and bilateral relation. The upcoming elections were discussed at length.

Detailed Report

The session began with Director General, MP-IDSA, Amb. Sujan R. Chinoy extending a warm welcome to Dr. Mishra. Amb. Chinoy commenced the session with some of his own observations and a few follow-up questions for Dr. Mishra, to render his assessment during the course of the Roundtable Discussion. The Director General asked the Speaker to provide insight into Indonesia’s relations with China. The latter was asked to speak about Indonesia’s relations with other major powers such as India, the United States, and Australia. Amb. Chinoy also touched on the themes of radicalism and Indonesia’s role in the Organisation of Islamic Cooperation vis-à-vis that of its neighbour Malaysia.

Dr. Mishra lamented the dearth of informed knowledge regarding India in Indonesia despite the love for Bollywood, and vice-versa. He began his discussion with a brief overview of the Suharto-era centralization of power. He noted the existence of a parallel military and civil administration akin to the political commissars of the Soviet Union. Despite the lack of organized opposition to Suharto, the Asian financial crisis of 1997 led to unprecedented violence and political unrest. The subsequent fall of the authoritarian New Order paved the way for a complete overhaul of the social, economic, judicial and political systems of Indonesia. Every aspect of Indonesian life was subjected to these systemic reforms. The hitherto highly centralized government was made more democratic by two laws on decentralization, passed in the year 1999. Dr. Mishra cited the Constitutional amendments and judiciary reforms as two major examples of the systemic transformation of Indonesia.

Dr. Mishra noted that these reforms were homegrown and required no foreign assistance. However, some gaps remain. He cited the political system of Indonesia as a case in point. The political system of Indonesia, he argued, is partly French and partly American in its composition. Although the transformation is still an ongoing process, significant progress has been made in a short period of time. According to Dr. Mishra, Indonesia saw economic recovery within five years of the onset of Era Reformasi. Economic growth has been balanced by a social system that is cohesive. Additionally, the systemic transformation efforts have not been impeded by any fears of instability. Dr. Mishra ruled out any possibility of a Suharto-like military coup. Nation building was always a top priority for Indonesia. Outlining Indonesia’s security and domestic priorities, Dr. Mishra identified nation-building as being the paramount concern. Around 20-30 million new entrants are expected to join the Indonesian workforce this year and thus job creation is an area of concern. He opined that there is a need for generating employment to help absorb the large working-class population.

Establishing an integrated domestic market finds itself among the other domestic priorities of Indonesia. Such a project requires massive infrastructure investment and much of the foreign investment comes from countries such as China and India. Addressing external concerns regarding the “capture” by China, Dr. Mishra argued that foreign investments in Indonesia are not restricted to the Chinese. He also added that the investor always has the upper hand at the initial stages of implementing a large infrastructure project.

Dr. Mishra presented an opinion that despite the impression of the rise of Islamic fundamentalism in Indonesia, with observable characteristics such as more women donning the hijab, there is a need to observe the phenomenon more closely. He argued that although the sharia is increasingly being adopted at the level of local governments, family law has largely been the focus. Additionally, Islamic fundamentalism has not come up in a big way in the national politics despite Indonesia being a Muslim majority country. The total share of Islamic parties does not exceed 20 percent.

On the theme of electoral politics, Dr. Mishra sought to distinguish Malay politics from Indonesian politics. Malaysian politics resembles the British style of politics. Indonesian political structure, on the other hand, draws influence from the United States and France. All elections in Indonesia, across various levels of government, are held on the same day. Dr. Mishra noted a sharp decline in political violence since 2000, thus pointing to Indonesian democracy being quite deeply rooted. Dr. Mishra made a brief mention of US-Indonesia relations since the Suharto days. Pointing to USA’s softpower in the country.

Dr. Mishra concluded his discussion with an optimistic economic forecast for both India and Indonesia. He hailed the advent of an “Asian Century”, endorsing the projection of India and Indonesia as the likely candidates among the Top 4 economies in the near future.

Questions and Comments

Ambassador Chinoy made reference to the release of Abu Bakar Bashir of the Jemaah Islamiya, an influential hardliner who had been incarcerated on account of providing training camps for militants in Aceh and has also been linked to the 2002 Bali bombings.

Mr. Arvind Khare asked for a clearer picture on the decentralized structure of governance in Indonesia. In the light of the political ascension of Jokowi’s two sons, Gibran Rakabuming Raka and Kaesang Pangarep, Mrs. Shruti Pandalai made note of the emerging trend of dynastic politics in Indonesia. Gp Capt. Narang asked for the Speaker’s opinion on whether Indonesia views India as a partner in its industrial growth and military modernization. Cmde. Abhay Singh brought up the issue of corruption as an impediment for economic growth in Indonesia. Mr. Om Prakash’s question revolved around the expected electoral outcome. Mr. Niranjan Oak enquired about the role of Muhammadiya Islamic schools in influencing elections. Dr. Temjenmeren Ao brought up the issue of Indonesia’s fiscal control on its public debt.

Dr. Mishra responded to all comments and questions from the Director General and MP-IDSA scholars.

Report prepared by Ms. Aditi Dhaundiyal, Intern, Southeast Asia and Oceania Centre.