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Year one of the Yudhoyono–Kalla duumvirate
R. William Liddle
To cite this article: R. William Liddle (2005) Year one of the Yudhoyono–Kalla duumvirate, Bulletin of Indonesian Economic Studies, 41:3, 325-340, DOI: 10.1080/00074910500306593 To link to this article: http://dx.doi.org/10.1080/00074910500306593
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ISSN 0007-4918 print/ISSN 1472-7234 online/05/030325-16 © 2005 Indonesia Project ANU DOI: 10.1080/00074910500306593
a* I would like to thank Mohamad Ihsan Alief for able research assistance and Kuskridho
Ambardi, Ed Aspinall, Tobias Basuki, Harold Crouch, Greg Fealy, Nico Harjanto and Salim Said for their valuable comments.
YEAR ONE OF THE YUDHOYONO–KALLA DUUMVIRATE
R. William Liddlea*
Ohio State University, Columbus
In the first year of their government, the joint leadership of President Susilo Bam-bang Yudhoyono and Vice President Jusuf Kalla is reminiscent of Indonesia’s first presidential and vice presidential team, the duumvirate or dwitunggalof President Sukarno and Vice President Mohammad Hatta. Though not without its weak-nesses, the Yudhoyono–Kalla duumvirate is more likely to be successful than its predecessor, whose dissolution led to the overthrow of parliamentary democracy in the late 1950s. The problems that Indonesia faces today are more manageable; today’s leaders are also more compatible in policy goals and understanding of pol-itics. Progress to date is most notable in the organisation of the government’s polit-ical power base, the policy response to the tsunami, the forging of the Aceh peace agreement, and action against corrupt officials, while economic policy making has been less successful.
INTRODUCTION
In the early 1950s many Indonesians placed great hope in the joint leadership of President Sukarno and Vice President Mohammad Hatta, symbolised as the
dwitunggal—two-in-one or duumvirate—two leaders together holding the high-est governmental authority. This hope was dashed in 1956 when Hatta resigned the vice presidency, and since that time little has been heard from vice presidents. In the first year of the current government of President Susilo Bambang Yudho-yono and Vice President Jusuf Kalla, however, something like the dwitunggalhas re-emerged.
To be specific: in many policy areas, President Yudhoyono sets broad goals and provides an umbrella of legitimacy, while Vice President Kalla plans and imple-ments the political and administrative actions necessary to achieve those goals. This division of labour was in part consciously worked out between the two prin-cipals before the government was inaugurated. It is also the accidental result of differences in personality and choices made under the pressure of events. It has achieved some successes, most notably taking control of Partai Golkar in Decem-ber 2004, which gave the government a solid political base, and the Aceh peace settlement in August 2005 which, if it holds, will have ended three decades of brutal civil war in the country’s westernmost region.
The duumvirate has also come under some strains which undermine its effec-tiveness and perhaps its sustainability. These are most noticeable in the crucial
area of economic policy making. Moreover, some major government policies, such as the relatively successful (though it is still early days) anti-corruption cam-paign, seem to be explicable as policies of the president alone, without reference to the vice president (McLeod 2005: 152–6). The president also appears to be engaged in a shadowy struggle for control of the intelligence services that could affect his future ability to govern (Tempo, 14–20/2/2005). Finally, it should be emphasised that the duumvirate is an experimental work-in-progress, a part for-mal, part informal relationship that can be tightened or loosened at will by either player, but particularly by the president.
The Dwitunggalin the 1950s
There were two reasons—located on the demand and supply sides of the politi-cal equation respectively—for the duumvirate idea’s initially wide appeal, despite its apparent implausibility, even essential contradictoriness. The first was broad and deep conflict over three unresolved foundational issues in the new polity, which generated strong demand for decision making and decision makers to resolve them. Should Indonesia be a secular or an Islamic state? To what degree should governmental authority be concentrated in the central government in Jakarta or dispersed to the regions? Should Indonesia adopt the market economic model of the capitalist West or the communist model of Russia and China, with the domestic government and foreign policy implications of each choice?
Between 1950 and 1966, conflict over each of these issues threatened to destroy the polity and break up the nation. Secularism versus Islam immobilised the Con-stituent Assembly in 1959; regional army officers and their civilian allies rebelled against central authority in several provinces between the mid-1950s and the early 1960s; an attempt to decapitate the central armed forces leadership was made, probably by communists and their allies, in 1965.
The second reason for the appeal of the dwitunggalidea was that Sukarno and Hatta together seemed to many to supply a solution both substantively and in terms of their leadership skills. Substantively, their collective views spanned a large swath of the issue spectrum without necessarily contradicting each other. Sukarno, a religious syncretist, formulated a doctrine stipulating that all Indo-nesians believed in one God; Hatta, while more sympathetic to the Muslim camp, was not an Islamist. Sukarno, of mixed Javanese–Balinese ancestry, was the pre-eminent centraliser, while Hatta, a west Sumatran, was also committed to a strong centre, but more open to regional demands for greater autonomy. Sukarno, though not a communist, was more sympathetic to the Indonesian Communist Party’s anti-Westernism and its radical domestic economic policy. Hatta was more open to economic liberalism, while remaining a European-style social democrat.
At least equally important, Sukarno and Hatta were perceived by many Indonesians in the early 1950s to possess distinct but complementary leadership skills as solidarity maker and administrator respectively, in the classic formula-tion of Herbert Feith (1962). Administrators were people with ‘administrative, legal, technical, and foreign language skills, such as are required for the running of a modern state’. Solidarity makers were ‘leaders with what may be called inte-grative skills, skills in cultural mediation, symbol manipulation, and mass organ-ization’ (p. 24).
Feith agreed that the demands of the just-ended revolutionary period had required a supply of both types of leaders. But he stressed the degree to which the combination was incompatible in the specific circumstances of 1950s Indonesia. The pragmatic administrators, of whom Hatta was prototypical, ‘emphasized the need for legality and the maintenance of controls, the need for firm leadership and responsible politics, and the dangers of expecting too much from the new independence’ (p. 33). Planned economic development, using foreign capital and assistance, was the highest policy priority.
The solidarity makers, of whom Sukarno was prototypical, ‘tended to be con-cerned with images of a distant utopia … to which the Revolution was a bridge, the Indonesia of prosperity, justice, harmony, and strength’ (p. 34). They ‘expected the post-revolutionary years to bring rising national welfare, but it was the nation’s prestige and its sense of cultural identity which was the object of their principal concern’ (p. 37). To these men, economic development was of lit-tle interest, while the return of West Irian, still under Dutch control throughout the 1950s, was among the highest policy priorities.
Reconciliation of these different perspectives was complicated by several fac-tors that favoured the ultimate victory of the Sukarno-led solidarity makers. Crit-ically, a fragmented and unrooted party system frustrated policy formulation based on the aggregation of specific interests, while a weak state hampered implementation of administrator-favoured policies. Feith compared Indonesia negatively with India, whose Congress Party was an experienced and skilful aggregator of interests, and Russia, China and Vietnam, whose monolithic com-munist parties could formulate coherent policies and implement them effectively if harshly.
During the revolution, the skills of the Hatta group had been invaluable, espe-cially in winning international recognition and support for the republican cause. After independence was secured, however, foreign-derived political resources were of less value. Moreover, the 1950s were a period of continuing unrest. This was intensified by the gap between exaggeratedly high post-revolutionary mate-rial, status and psychological expectations and weak and unresponsive political and governmental institutions.
Of all the solidarity makers, Sukarno most successfully filled this gap with cre-ative ideological formulations, stirring oratory and mass mobilisation. Hatta, when he broke with Sukarno, publicly rejected the latter’s key concept of
demokrasi terpimpin, guided democracy (Hatta 1960). Without a political organisa-tion of his own, Sukarno then forged a new bond with the army, which had lacked political legitimacy. To this alliance, the army brought substantial admin-istrative and coercive resources, but remained the junior partner until the Guided Democracy regime was overthrown in 1965.
THE DWITUNGGALTODAY
Introduction
In July and September 2004, in a two-stage process, Indonesians democratically and directly elected a president and vice president, Susilo Bambang Yudhoyono and Jusuf Kalla, for the first time in their history as an independent nation. This extraordinary institutional change has the potential to shape the political system
in fundamental ways. Most importantly, it provides the newly elected president or presidential–vice-presidential team with the unprecedented political resource of a national popular mandate. This is especially true of the Yudhoyono–Kalla team, which won decisively by a margin of 61% to 39% in the second round of voting. No other official elected in 2004 (or in any other democratic election in Indonesian history!) can claim a comparable mandate.
How have Yudhoyono and Kalla carried out this mandate? I argue that they have acted as a 21st century duumvirate, similar in style and substance to the Sukarno–Hatta dwitunggal, but also different in important ways related both to the pattern of today’s demands and to the kind of leadership they have chosen to supply. In consequence, they have achieved notable successes, particularly in the reduction of presidential–parliamentary tension and in bringing peace to Aceh. They have had less success in overcoming the major economic challenge con-fronting the government—the fuel subsidy crisis inherited from the Megawati government—although it is possible that a breakthrough was finally achieved at the very end of their first year in office.
Two weaknesses persist from the earlier era as described by Feith. Indonesian democracy in 2004–05 is still politically and governmentally under-institution-alised. The new president and vice president have had to cope with an even more fragmented and unrooted party system than existed in Sukarno and Hatta’s time. Seven parties are significant players in parliament today, compared to four after the 1955 election. Only a few have active branches at the provincial and lower lev-els, in part a legacy from President Soeharto’s authoritarian New Order. More-over, several parties are further weakened by internal leadership conflicts which appear to have grown worse in the past year. Government institutions, particu-larly ministries, agencies and other bodies with economic responsibilities, are somewhat stronger than they were in the 1950s, but still far below international standards for modern states.
The Pattern of Demands
In comparison to the early 1950s, what demands are being placed on the Indo-nesian government today, and at what level of intensity? From 1966 to 1998 Gen-eral, later President, Soeharto’s military-based New Order imposed on the nation an essentially secular state, tightly centralised authority and largely market-oriented economic policies. Imposition is not resolution, however, and all of the three foundational issues that faced the newly independent Indonesia have resur-faced since Soeharto stepped down in May 1998. In their present form, each con-stitutes a significant policy and political challenge to the Yudhoyono–Kalla government, with the most serious threat coming from economy-related demands. Unlike the 1950s, however, none of these challenges appears, so far at least, to threaten the viability of the democratic regime or the Indonesian nation-state.
The Islamic challenge is in the form of a rising religious conservatism that cur-rently threatens the civil and political rights of some individuals and groups but could one day threaten the secular state itself. In July 2005 the quasi-governmental MUI (Indonesian Religious Scholars and Teachers Council) issued 11 fatwas (religious edicts) condemning among other things ‘liberalism, secular-ism and pluralsecular-ism’, the Ahmadiyah sect (which claims a prophet after Muham-mad and has about 200,000 followers in Indonesia), inter-religious marriages and
inter-religious prayers. MUI fatwas, while not considered binding by many Indo-nesian Muslims, nonetheless can have a powerful impact on society. The liberal-ism, secularism and pluralism fatwa was directed primarily at JIL (the Liberal Islamic Network), a tiny Jakarta-based network of intellectuals and activists, which soon found itself under siege from local Islamists. Ahmadis were harassed in several localities, and the FPI (Islamic Defenders Front), notorious for its quick resort to violence, threatened to march on and close down JIL’s headquarters.
In the same month Din Syamsuddin, then general secretary of MUI, was elected to a five-year term as head of Muhammadiyah, Indonesia’s largest mod-ernist Muslim voluntary association. For the last several decades Muham-madiyah and the leading traditionalist Muslim organisation Nahdlatul Ulama or NU (Awakening of Religious Scholars and Teachers), each claiming tens of mil-lions of members, have been the organisational bulwarks of moderate Indonesian Islam. Din is the major theologically conservative figure within Muhammadiyah, which since 1999 has been chaired by the University of Chicago-educated liberal Ahmad Syafii Maarif. Din’s accession to the Muhammadiyah leadership proba-bly signals a shift to the right by that organisation, plus increased political influ-ence for the previously ineffectual MUI, in which Din continues as vice general chair (wakil ketua umum).
A dynamic and fast-growing Islamist party, PKS (Prosperous Justice Party), played a larger role in 2005 in national and local government in both the execu-tive and legislaexecu-tive branches. PKS joined President Yudhoyono and Vice Presi-dent Kalla’s People’s Coalition in parliament, and succeeded in electing the party’s then chair, Hidayat Nur Wahid, to the highly visible if no longer constitu-tionally powerful position of chair of the People’s Consultative Assembly.
PKS is the sixth largest party in parliament, having won 7.3% of the national vote in the 2004 election, compared to 1.4% as PK (Justice Party) in 1999. Urban-based, it is one of the largest parties in the Jakarta provincial legislature and has a substantial presence in many municipal legislatures as well. The party’s current agenda is to promote a ‘clean and caring’ government, in the language of its 2004 campaign, but its long-term goal, to be achieved through peaceful means, is the Islamisation of Indonesian society and state.
In centre–region relations, the devastating Indian Ocean tsunami in December 2004 presented an unprecedented challenge to the national government’s rela-tions with Aceh, where GAM (the Aceh Freedom Movement) has been in rebel-lion since 1976. It also tested the government’s ability to respond to the massive inflow of foreign assistance, including the presence for a time of foreign military personnel. In Papua, open opposition to Indonesian rule continues as well, though with less violence and short-term urgency than in Aceh. Much of the con-troversy in the past year has centred on rejection of a new province of West Irian Jaya, but in August several thousand demonstrators in the regional capital Jaya-pura also condemned the 2001 Special Autonomy Law (Kompas, 13/8/2005).
While important, Aceh and Papua are only tangentially related to the basic problem of centre–region relations in Indonesia, which is how to replace the tightly centralised decision making and implementation structure of Soeharto’s New Order with an arrangement more suitable to the world’s largest archipelagic nation-state. Laws decentralising administrative and fiscal authority, mainly to districts and municipalities, began to be implemented in 2001. Democratic
tions for district heads and mayors, for the first time in Indonesian history, began to be conducted in 2005. One challenge for the Yudhoyono–Kalla government is to make sure that these elections are conducted honestly and peacefully. Another is to use them to strengthen, or at the very least not weaken, its own political base (Bhakti 2005).
Economic developments have twice constituted the biggest challenge to the Yudhoyono–Kalla government, from its inauguration in October 2004 to March 2005 and again in August and September 2005. In this second period, compar-isons began to be made in public with the economic crisis of 1997–98 that drove President Soeharto from office.
In 2004, an unexpected global surge in oil prices, reaching $50 a barrel by Octo-ber of that year, meant that the government’s fuel subsidy to consumers, bud-geted at Rp 14.5 trillion, was expected to rise to Rp 63 trillion (about $5 billion) for the year (Aswicahyono and Hill 2004: 283). This amount, nearly equal to the government’s development budget or 15% of total government expenditures, was widely viewed at the time as unsustainable. According to The Wall Street Journal(Mapes 2004), ‘Mr Yudhoyono may need to take the politically unpopular step of slashing subsidies and increasing domestic fuel prices shortly after he comes into office, or risk seeing the government’s budget deficit rise to levels the market might view as dangerous’.
In 2005 the rupiah continued to weaken, breaking through the psychologically significant barrier of Rp 10,000 to the dollar at the end of August. In the same month, the Jakarta stockmarket’s composite index fell by 12%. Once again, the culprit appeared to be loss of confidence, driven by concerns about the govern-ment’s fiscal policy in the face of rising global oil prices, now in the $60–70 per barrel range. In 2004, fuel subsidies in the end accounted for $7 billion of govern-ment spending; in 2005, they were projected to reach $14 billion, or about one-fourth of all expenditures (The Wall Street Journal Online, 1/9/2005).
The Supply of Leadership
How have Yudhoyono and Kalla dealt with these challenges in their first year in office? In my view, they have constructed a contemporary version of the dwitung-galin which Yudhoyono sets broad guidelines and provides legitimation for the government’s actions in several critical policy areas, while concrete policies are formulated and implemented by Kalla or by officials working at his direction.
Three factors have shaped today’s dwitunggal, with important consequences for its effectiveness and sustainability. They are: conscious agreement on the part of the two principals; differences and similarities in personality and substantive policy between them; and events whose flow has required them individually and jointly to make choices.
The conscious agreement, specifically targeted to economic policy making, was reportedly made before the presidential–vice-presidential election (Sadli 2004a). A prominent political observer and Kalla confidant stated off the record that he had seen a written contract signed by Yudhoyono assigning chief eco-nomic policy making responsibility to Kalla (confidential interview, Kalla adviser, September 2004). The personality differences are dramatic: Yudhoyono is a cautious politician, slow to decide and with a predilection for symbolic solu-tions to problems, while Kalla is more assertive and a pragmatic problem-solver.
The parallels with the Javanese solidarity maker Sukarno, who also loved sym-bolic politics, and the Muslim Sumatran pragmatic problem-solver Hatta, are obvious, but there are important differences as well.
Substantively, Yudhoyono and Kalla agree on the basics on which Sukarno and Hatta disagreed. Both of today’s leaders accept the constitution of 1945 as recently amended: they share commitments to electoral democracy, the secular (or multi-religious Pancasila) state and a government that responds to regional demands for decentralisation but at the same time retains significant power in the centre. The biggest substantive gap between them appears to be in economic pol-icy, where Yudhoyono leans to populism or statism and Kalla to internationalism and the market.
Stylistically, Yudhoyono has none of the flamboyance or impulsiveness of Sukarno, which makes him a more predictable and therefore in some ways more attractive political partner. Yudhoyono is not an original thinker with a highly distinctive vision, as was Sukarno, but is rather the carrier of the core values of secular Indonesian nationalism and populism first articulated by Sukarno. Kalla is not just an administrator like Hatta, but also an astute small-group or insider politician, especially in party, parliamentary, high bureaucratic and even interna-tional elite arenas.
These differences may be rooted in contrasting life experiences among the four leaders. Sukarno, the son of a lesser aristocrat, was educated as an engineer but spent his whole life prior to the declaration of independence in 1945 as a political organiser. Yudhoyono is a Javanese Muslim like Sukarno but was edu-cated in the military academy and rose in the army hierarchy until retirement, at which point he began a second career as a high-level bureaucrat. He is the son of a low-ranking, non-commissioned army officer.
Kalla’s and Hatta’s Islam is more orthodox than Yudhoyono’s or Sukarno’s. The two vice presidents also share similar Outer Island backgrounds, Hatta as a Minangkabau from West Sumatra, Kalla as a Bugis from South Sulawesi. Kalla’s entrepreneurial, ‘can-do’ world view, however, appears to have been most strongly shaped by his long career as a businessman, while the socialist Hatta was an intellectual, journalist and political activist without business experience. Kalla’s father was also a wealthy businessman.
During the course of its first year in office, the duumvirate has shaped and been shaped by four major events: the cabinet formation in October 2004; the Golkar national congress in December 2004; the Aceh peace negotiations that concluded in August 2005; and the pressure to reduce subsidies on petroleum products, which peaked in early 2005 and built again in August–September 2005 before the problem was apparently resolved in early October. I discuss each in turn.
Cabinet Formation: Reaching Out to Parliament
Three aspects of the cabinet selection stand out in sharpest relief: Yudhoyono’s attempt to achieve maximum partisan and societal inclusiveness in his appoint-ments; his slowness to reach closure on many appointappoint-ments; and the prominent role of Kalla in the decision process generally and particularly in the final choice of Aburizal Bakrie as coordinating minister for economics.
Multiple delays preceded the announcement of the cabinet, creating an impression of governmental irresolution. When announced, the cabinet—
officially named the United Indonesia Cabinet—consisted of a large number of party politicians, particularly but not entirely from parties that had supported the Yudhoyono–Kalla candidacy, plus four women (a campaign promise) and several representatives from regions outside Java. Professionals were appointed, but mainly in the economics ministries.
The slowness in reaching decisions undoubtedly reflected Yudhoyono’s cau-tious personal style. Moreover, the inclusiveness of the appointments, and of the search process leading up to them, certainly reflects a personality that avoids making enemies. It is also, of course, a common political response to Indonesian diversity. In truth, Yudhoyono’s cabinet did not look very different from its pred-ecessors under Presidents Megawati Soekarnoputri (2001–04) and Abdurrahman Wahid (1999–2001).
Perhaps the chief explanation for Yudhoyono’s caution and inclusiveness, however, was that he and Kalla had made a careful, and probably sensible, calcu-lation of the limits of their political power. According to a report in the respected newsweekly Tempo, Yudhoyono’s original intention, in line with his campaign platform, had been to appoint a cabinet consisting mostly of professionals. ‘He, who had won in the presidential election, felt at first in a strong position com-pared to parliament’ (Tempo,25–31/10/2004).
The election on 1 October of Partai Golkar’s Agung Laksono as the new chair of parliament, however, was a sharp reminder of Yudhoyono’s relative weakness
vis-à-visthe legislature. In the presidential election he and Kalla had indeed tri-umphed. They had won a plurality in the first round and a large majority in the second round presidential election, with more cross-party support than any other candidates. For example, in the second round, Partai Golkar had officially sup-ported Megawati and her vice presidential candidate, but 80% of Partai Golkar voters voted for Yudhoyono and Kalla (Liddle and Mujani 2005b).
The trick, which Yudhoyono and Kalla could not at that point figure out how to perform, was to turn their popular victory into a parliamentary majority. After the first round presidential election, a National Coalition of parties had been engineered by Partai Golkar’s chair, Akbar Tandjung, to mobilise support for Megawati in the second round. The National Coalition consisted of three of the four largest parliamentary parties—Partai Golkar, Megawati’s PDIP (Indonesian Democracy Party of Struggle) and the Islamist PPP (Development Unity Party)— plus a number of small parties. It held a small majority of parliamentary seats, and a large majority if joined on any particular issue by former President Abdur-rahman Wahid’s PKB (National Awakening Party), the other large party.
Yudhoyono and Kalla’s People’s Coalition, formed in response to the National Coalition, commanded far fewer seats and appeared doomed to impotence until the next elections in 2009. Its main components were Yudhoyono’s own Partai Demokrat, the Islamist PKS, Amien Rais’s PAN (National Mandate Party) and the Islamist PBB (Moon and Star Party), which together hold fewer than a quarter of the seats in parliament. Yudhoyono and Kalla were of course well aware of this disparity and of their constitutional need for parliamentary approval of many government-proposed policies, appointments and decisions, including the annual state budget. The inclusiveness of the United Indonesia Cabinet and the cautiousness with which it was assembled were the products of this awareness.
According to most accounts, Kalla was the second most important actor, after Yudhoyono himself, in the cabinet selection process (Tempo, 25–31/10/2004). His input was particularly important in the economic ministries. He succeeded in obtaining the post of coordinating minister for Aburizal Bakrie, a prominent busi-nessman like himself, against Yudhoyono’s first choice, former finance minister and personal friend Rizal Ramli. Kalla also successfully opposed the appoint-ment of Sri Mulyani Indrawati as finance minister, on the ground that she was too close to the IMF (Sadli 2004b). At the time Kalla and Bakrie were both believed to want the state to play a more interventionist role to speed economic growth than had been the case under Megawati.
Taking Control of Golkar: A Political Breakthrough
In the following days and weeks, it became vividly clear to Yudhoyono and Kalla that the hostility of the National Coalition, in possession of a majority of seats in parliament, seriously threatened their government’s viability and stability. According to a news report in Tempo,‘Not long after Yudhoyono’s victory was officially certified in October, reports were heard that his political opponents in the DPR [parliament] intended to end his government within a year’ (Tempo,
8–14/11/2004).
The National Coalition’s first move was to take advantage of a letter from Pres-ident Megawati Soekarnoputri, in her final days in office, asking parliament to accept the resignation of Armed Forces Commander Endriartono Sutarto and the appointment of then Army Chief of Staff, Ryamizard Ryacudu, as his successor. Shortly after his inauguration, President Yudhoyono sent his own letter to parlia-ment, rescinding Megawati’s request. National Coalition leaders, seeing this as their first opportunity to challenge Yudhoyono, charged him with insulting or ‘harassing’ (melecehkan) parliament. They issued a formal interpellation ‘warning the government to be careful in adopting any policy, because parliament and the President are at the same level (dalam posisi sejajar)’ (Kompas,8/12/2004; Liddle and Mujani 2005a). Meetings were held between the president and parliamentary leaders, but to no effect.
The National Coalition’s second move was to take control of all leadership posi-tions in parliamentary commissions. Again quoting Tempo, ‘In addition to their value as ‘money mines’, parliamentary commissions are significant in determin-ing whether or not the government can actually run’ (Tempo, 8–14/11/2004). The National Coalition, led by Partai Golkar and PDIP, without PPP this time but still with several small parties and with the addition of Abdurrahman’s PKB, had enough votes to freeze Yudhoyono’s People’s Coalition party members out of all commission positions. The minority parties protested, threatening to boycott future parliamentary sessions. Yudhoyono appealed publicly for a more inclusive approach by National Coalition leaders. A temporary ceasefire was achieved when the National Coalition leaders agreed to review the issue in three months time.
Probably by mid-November at the latest, Yudhoyono and Kalla had agreed to attack the problem at the root by challenging Akbar Tandjung’s leadership of Par-tai Golkar at the party congress (Munas, Musyawarah Nasional) scheduled for the next month (confidential interview, Kalla adviser, January 2005). The move reminded many observers of the corporatist and authoritarian New Order, when
Golkar was the state party and President Soeharto, acting as head of Golkar’s Guidance Council, replaced Golkar chairs at will.
Partai Golkar in 2004, though no longer under the control of the president, still retained its basic character as a state party. Most of its leaders at all levels are retired state bureaucrats and military officers or their family members. During the New Order they took for granted their status as members of the ‘ruling party’, even though their power was derived from and dependent on the army and Soe-harto. Their main objective since democratisation has been to restore that status. Akbar Tandjung was elected Golkar chair in 1998 with the support of President B. J. Habibie (1998–99) and armed forces commander General Wiranto, following the New Order pattern. Despite predictions that it would vanish from the politi-cal map, Partai Golkar—renamed to indicate its new role as a competitive party in a democracy—was the second largest party in the 1999 parliamentary election, with 22% of the national vote. More importantly, it maintained considerable strength in Outer Island provinces and districts/municipalities, electing many members to local legislatures. Those legislators in turn controlled local budgets and were able to elect Partai Golkar members to executive positions as mayors, district heads and governors.
After Habibie’s failure to retain the presidency in October 1999, Tandjung con-solidated his control of the party, which was now outside government (Presidents Abdurrahman and Megawati were from PKB and PDIP respectively). In 2004, Tandjung’s expectations were high that Partai Golkar would take power from the faltering PDIP, the largest party in 1999 with 34% of the vote, because of Megawati’s weak leadership (interview, Akbar Tandjung, April 2004). In the event, Partai Golkar’s performance was disappointing. It did become the largest party in parliament, but without increasing its vote percentage. PDIP dropped precipitously, to 18%, but the gap was filled by two new parties, Yudhoyono’s Partai Demokrat with 7.5% and the Islamist PKS with 7.3%.
Tandjung’s magic touch as a politician now deserted him. He called an Amer-ican-style convention designed to nominate him as Partai Golkar’s candidate for the 2004 presidential election. To many people’s surprise, he was defeated by General (ret.) Wiranto, who turned out to be more popular at the party’s grass roots. When Wiranto then lost in the first round of the election, Tandjung organ-ised the National Coalition to support Megawati, almost certainly a lost cause from the outset, against rising star Yudhoyono. His subsequent determination to deny the new president and vice president the fruits of their victory, as reflected in Partai Golkar’s actions in parliament, was perhaps the last straw for Yudho-yono and Kalla.
On 19 December 2004, at the party’s national congress in Nusa Dua, Bali, Jusuf Kalla was elected chair of Partai Golkar for a five-year term. The victory had not come easily. Sensitive to the charge of restoring the New Order, Yudhoyono and Kalla had first promoted parliament chair Agung Laksono and then newspaper magnate Surya Paloh for the job. But neither was thought capable of defeating Tandjung, and a last minute decision was made for long-time Golkar member Kalla himself to advance (confidential interview, Kalla adviser, January 2005).
Many factors contributed to the victory, including Tandjung’s weakened posi-tion, skilful political manoeuvring by Kalla and his aides and, allegedly, the lib-eral disbursement of cash payments to many congress delegates. The most
important factor, however, was that Kalla, like Tandjung in 1998 and all Golkar chairs before him, was the president’s man. After six years in the political wilder-ness, Partai Golkar was restored to its status as ruling party. When asked about the future of the National Coalition in parliament, new Partai Golkar chair Kalla said it had been ‘temporary and situational’ (Tempo, 27/12/2004–2/1/2005).
The Aceh Peace: A Major (Though Tentative) Policy Achievement
Two early accounts of the Aceh peace agreement stress the importance of the con-crete, and imaginative, initiatives taken by Vice President Kalla in the context of firm political support provided by President Yudhoyono (Sanda 2005; Interna-tional Crisis Group 2005).
Kalla had been involved in efforts to resolve the Aceh conflict since serving as coordinating minister for people’s welfare in President Megawati’s cabinet (2001–04). As early as August 2003, just a few months after the breakdown of the previous ceasefire, Coordinating Minister Kalla directed his deputy, Farid Husein, to cultivate personal relationships with GAM leaders in Aceh, Malaysia and Swe-den. Farid also worked through an old Finnish friend, a businessman who was personally acquainted with GAM leaders in Sweden and with former Finnish President Martti Ahtisaari, then chair of Crisis Management Initiative (CMI), an international non-government organisation that facilitates dispute resolution.
Kalla himself developed a relationship with jailed Aceh Governor Abdullah Puteh, awaiting trial in Jakarta on corruption charges. Abdullah recommended that Kalla ask Rusli Bintang, a North Aceh contractor, to directly contact GAM military commander Muzakkir Manaf in Aceh. On 31 October 2004, just days after Yudhoyono and Kalla were inaugurated as president and vice president, a nine-point statement, ‘Points of Agreement between Negotiators of the Govern-ment and GAM’, was issued in Kuala Lumpur, Malaysia.
Among the points were: distribution to GAM members of several thousand hectares of disused plantation land in Aceh; more plantation land to be set aside for 150 pesantren(traditional Muslim boarding schools); payment of Rp 60 billion in compensation to GAM fighters; free electricity for all mosques and pesantren; several aircraft, including two Boeing 737-700s; and the expansion of Blang Bin-tang airport in Banda Aceh to become an international hub. The GAM represen-tatives agreed in turn to disarm and to accept Indonesian sovereignty.
The nine-point statement was controversial and sharply criticised, even dis-avowed, by important elements in GAM, including the movement’s headquar-ters in Sweden, and other prominent Acehnese. Nonetheless, formal negotiations between the Indonesian government and GAM began, under CMI auspices, in Helsinki in January 2005. After five rounds of talks, a Memorandum of Under-standing was concluded in mid-July that took effect on 15 August. Its additional terms include the establishment of an Aceh Monitoring Mission by European Union and ASEAN countries, to monitor implementation of commitments made under the agreement, such as the demobilisation and disarmament of GAM and the relocation of Indonesian army and police troops. The Indonesian government also promised to create, within one year or at the latest 18 months from the sign-ing of the Memorandum, the political and legal conditions for the establishment of local political parties in Aceh in consultation with parliament. Under current Indonesian law, all political parties must have branches in several regions.
1Both the Indonesian government and GAM were under increased pressure at home and
from international agencies to provide greater security for their aid missions.
What accounts for the success—if the agreement holds—of the Aceh peace negotiations? Kalla’s personalised cultivation of GAM leaders, and the patience that it took to win their trust, appears to have had a lot to do with it. So did his innovative idea of providing land and other financial compensation to former GAM fighters. Perhaps equally important, he and President Yudhoyono made two controversial concessions: allowing local political parties and the presence of international monitors. The demand for local parties had been rejected and the role of international monitors restricted by the Megawati government. Members of parliament from her PDIP (plus some from Kalla’s own Partai Golkar) con-tinue to oppose both concessions, as do many army officers (Kompas, 8/9/2005). The report of the International Crisis Group (2005) cites the positive impact of Kalla’s initiative combined with two other major factors: the success of TNI mili-tary operations (since the May 2003 breakdown of the ceasefire) in breaking GAM’s will; and post-tsunami changes in domestic and international political dynamics.1Chief mediator Ahtisaari and his team are also given credit for their
diplomatic skills.
President Yudhoyono’s personal role in achieving peace in Aceh is less elabo-rated than Kalla’s. In his account in Kompas, Sanda (2005) writes only that ‘Presi-dent Yudhoyono gave his full support to the path to peace in Aceh’. According to the International Crisis Group, the president was kept informed by the vice pres-ident at all times, despite the need for highly secret negotiations. ‘The willingness of the SBY [Susilo Bambang Yudhoyono] government’ to agree to international monitors is praised as ‘testament to the political will to make a peace work’ (p. 3), as is the decision to allow local political parties. Credit should also be given, I would add, to the president’s commitment to follow through on his own prom-ise, a cornerstone of his election campaign, to bring peace to both Aceh and Papua during his term of office.
Fuel Subsidies Policy: The Dwitunggal’s Achilles Heel?
As a duumvirate, President Yudhoyono and Vice President Kalla have been much less successful in economic policy making than in taking control of Golkar or combating separatism in Aceh. In particular, they have responded too slowly and (until the very end of their first year in office) too late to the most pressing day-to-day economic challenge confronting their government since its inauguration: how to reduce the rapidly increasing distortions to the economy of state fuel sub-sidies, caused by the rising international price of petroleum products. They have been less successful in this regard than Soeharto, who responded quickly to many similar economic challenges in his long presidential tenure before the economic crisis of 1997–98, by which time he had been slowed by age-related physical infir-mities. On 1 October 2005, after almost a year in office, the Yudhoyono–Kalla gov-ernment appeared finally to act decisively, more than doubling the average price of major fuels. Compensatory cash payments to 15 million poor households and other ameliorative policies were also announced (Pura 2005).
What accounts for the government’s extreme slowness to act on this pressing issue? The proximate cause is President Yudhoyono’s reluctance to adopt the
icy recommendations of his economic team, headed by Coordinating Minister Bakrie and politically supported within the government by Vice President Kalla. The president’s reluctance is in turn probably rooted in some combination of intellectual disagreement on policy substance with the Bakrie–Kalla team and his own political cautiousness. The politics of economic policy making is thus in sharp contrast with the government’s policies toward Golkar and Aceh, where Kalla’s strategies and tactics were fully supported politically by Yudhoyono.
At the beginning of their government, it was widely feared by economists that both leaders were deficient in their understanding of the policies most likely to restore the relatively high Soeharto-era growth rate. Yudhoyono was thought to be too close to protectionist academics at IPB, the Bogor Agricultural Institute, where he had just completed a PhD dissertation on the role of agriculture in cre-ating employment and eradiccre-ating poverty. Kalla and Bakrie, indigenous (pribumi) business people, were said to be formulating policies to restrict Sino-Indonesians, the most dynamic economic actors in Indonesia. The president and vice president reportedly agreed that boosting growth beyond the modest level of the Megawati years required fiscal stimulation. Most economists, on the other hand, believed that a substantial fiscal stimulus was more likely to stimulate inflation, or an unsustainable increase in government debt, than growth.
Once in office, Bakrie and Kalla, whatever their prior inclinations, quickly came to understand the importance of fiscal stability and the threats to the state budget and the economy from the ballooning international oil price (confidential interview, adviser to Coordinating Minister Aburizal Bakrie, January 2005). Assisted by able young economists, including Muhammad Chatib Basri, Mohamad Ikhsan, Anggito Abimanyu, Lin Che Wei and others, they began to lobby inside and outside the government for substantial price increases to reduce the subsidies. President Yudhoyono resisted for several months, finally partially acceding to the pressures in March 2005. In mid-2005 the pattern repeated itself, as the subsidies once again became unmanageable and pressures to raise con-sumer prices built inexorably. In this second round, it was reported that the pres-ident was furious with and considering replacing members of his economic team, including Bakrie (Donna 2005; confidential interview, Bakrie adviser, October 2005).
Why was Yudhoyono so hesitant to modify his policy in this area? One plausi-ble answer suggested by the comparative public policy literature is that the crisis had not become severe enough to provide sufficient political resources to those who wanted reform (Grindle and Thomas 1991). In Indonesia, this hypothesis— formulated as ‘good times make bad policy’ and vice-versa—is often called Sadli’s Law, after the Soeharto-era technocrat and still prominent economic com-mentator Mohammad Sadli.
Though times certainly could get worse (as they did at the beginning and end of the Soeharto era), my view—admittedly speculative—is that the explanation rests more with Yudhoyono’s conscious choices than with the pressures, strong or weak, of the context in which he finds himself. One aspect of this may be his con-viction that, as the holder of a PhD in economics, he is as knowledgeable on the subject as his advisers. London-based economist Anne Booth, one of his oral examiners, found him to be a vigorous and intelligent defender of his dissertation (personal correspondence, October 2004). Australian economist Ross McLeod
also cites the IPB connection, as evidence that Yudhoyono seeks advice from a wider array of economists than did Soeharto (McLeod 2005: 141).
Perhaps more important, however, was Yudhoyono’s calculation of the high political price of economic reform in terms of potentially widespread and fierce opposition in parliament and in the street. This may in fact have been a miscalcu-lation because the political costs of poor economic policy could turn out to be higher in 2009, when Yudhoyono runs for re-election. Nonetheless, the president seems very impressed by the fact that both Sukarno and Soeharto were brought down in part by mass demonstrations fuelled by economic grievances.
Yudhoyono’s own price increases in March produced more, and more vocifer-ous and hostile, public protest than any of his government’s decisions to date (Tempo, 21–27/3/2005). An unnamed member of his economic team is quoted (Tempo, 29/8/2005–4/9/2005) as saying that ‘The president is worried that the issue of increasing the price of fuel oils will be used as a weapon to overthrow him. You have to understand, this October is the first anniversary of his presidency. It’s a critical time.’ In the event, the 1 October 2005 price increases, though unexpect-edly large, did not generate massive protests either in parliament or in the street. To be sure, the duumvirate’s policies toward Partai Golkar and Aceh were also controversial, generating charges of a return to New Order dictatorship and of a sellout to separatists and anti-Indonesian foreigners. But the benefits to the duumvirate were more tangible and more targeted: control of parliament and peace in Aceh, compared to the mere promise of faster economic growth in which all might share. The costs were also lower: containing a restive elite as opposed to confronting a potential rioting mob.
CONCLUSIONS
How successful is the Yudhoyono–Kalla dwitunggalafter one year in office? I have argued that the duo has been sufficiently dynamic to overcome two major chal-lenges, to its political base in parliament and (tentatively) from Acehnese sepa-ratism. Its economic policy making so far, however, particularly with regard to fuel subsidies, has been less successful than that of the Soeharto New Order, which maintained strong growth rates for nearly three decades. I have further argued that the reason (and therefore the responsibility) for the difference is the choices made by President Yudhoyono. In the cases of Partai Golkar and Aceh, he provided strong political support to Vice-President Kalla’s concrete policies, strategies and tactics, while in the case of the fuel subsidies he did not, at least not until very recently.
How stable is this dwitunggallikely to be? Like the Sukarno–Hatta duumvirate, it is almost a contradiction in terms, producing internal tensions that undermine its capacity to meet external demands. On the other hand, those demands, as I have described them comparatively for the two periods, are not as great or as immediately system-shaking today as they were in the 1950s, which is a plus for medium-term stability. Years of stalled economic growth, however, would almost certainly threaten the legitimacy of Indonesia’s fledgling democracy in the future. The main tension in the Yudhoyono–Kalla duumvirate is between a vice pres-ident who is formally less powerful than the prespres-ident but informally the source
of most concrete solutions to the problems facing the country. This is com-pounded by the personality differences between the cautious, inclusive, consensus-building, bureaucratic Yudhoyono and the eager, problem-oriented, solution-seeking, entrepreneurial Kalla. Yudhoyono is known to be proud of his accomplishments, including his election to the presidency, and must chafe at the allegation that he is a mere figurehead president. Kalla is known to believe that he has his own popular constituency, which contributed substantially to their joint electoral victory (confidential interview, Kalla adviser, January 2005).
Kalla’s motives have been questioned by many observers (and some advisers to the two men). Does he want to be the de factopresident, making all the major decisions behind the scenes? Is he preparing for his own run at the presidency in 2009, and will that inevitably lead to a break-up of the duumvirate, probably sooner rather than later? In a press interview, Kalla claimed to be a pragmatist on that issue too. While not denying interest, he indicated that his age (he will be 67 in 2009) and his non-Javanese origins are major disadvantages (Kompas, 7/5/2005).
In evaluating the Yudhoyono–Kalla dwitunggalone year on, it might be well to conclude with the longer term and more structural perspective of Mohammad Sadli (2005). Sadli’s comment also reminds us of the unhappy end of the Sukarno–Hatta dwitunggaland of the repressive side of political leadership in the subsequent half century. ‘What Indonesia needs now is a national leadership that has very great legitimacy but in personal terms is not too strong. This will “guar-antee the continuation of democracy”. What is more important is that political institutions are able to grow in an appropriate and normal way. In the longer term Indonesia will be more secure if it is governed by deeply-rooted institutions, not by individual leaders who are strong.’
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