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Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Conference Report: Indonesia update 2003
business in the reformasi era: new challenges, old
problems
Hal Hill
To cite this article: Hal Hill (2003) Conference Report: Indonesia update 2003 business in the reformasi era: new challenges, old problems, Bulletin of Indonesian Economic Studies, 39:3, 359-360, DOI: 10.1080/0007491032000142809
To link to this article: http://dx.doi.org/10.1080/0007491032000142809
Published online: 03 Jun 2010.
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The 2003 Indonesia Update conference, held as usual on the last Friday and Saturday of September (26–27) in the Coombs Lecture Theatre at the Aus-tralian National University (ANU), attracted speakers and participants from Indonesia, Japan and the Nether-lands, as well as from all over Aus-tralia. The theme on this occasion was ‘Business in the Reformasi Era: New Challenges, Old Problems’.
Following Andrew MacIntyre’s opening address, there were the cus-tomary political and economic updates, presented this year by Sidney Jones and Chatib Basri. The politics discus-sion focused on a variety of topics, including Megawati’s presidency, preparations for the 2004 elections, and the challenges of terrorism and regional insurrection. There was cau-tious optimism about the economy, thanks in large measure to effective macroeconomic stabilisation, which has resulted in gradually improving investor confidence. But the challenges remain daunting; they include policy uncertainty, legal weaknesses, creeping protectionism and labour problems. Indeed, this theme, that improved macroeconomic management is a nec-essary but not sufficient condition for the return to rapid economic
develop-ment, set the scene for much of the sub-sequent discussion at the conference.
On the main conference theme, there were six sessions, 13 papers and 15 speakers. These presentations, together with lively commentary and questions from the floor, provided a rich and diverse fare. The session titles were: ‘Challenges to Business’, ‘Old Problems in Business’, ‘New Regula-tions Impacting on Business’, ‘Eco-nomic Change and Business’, Private and State-owned Firms’ and ‘Workers, Employees and Firms’.
It is not possible to provide a detailed summary of the proceedings here (the conference volume will appear shortly), but a few snippets may be useful. Much of the discussion was of the ‘whether the glass is half full or half empty’ variety. On almost every issue, it is possible to construct an argument both ways: that progress has been commendable in the wake of the deep economic contraction of 1998 and massive political upheaval; or that reform has been patchy, sporadic and lagging behind reform programs in Indonesia’s major Asian competitors.
On corruption, for example (a fre-quently discussed topic), several speakers argued that there had been little if any progress since the Soeharto
Conference Report
INDONESIA UPDATE 2003
BUSINESS IN THE
REFORMASI
ERA:
NEW CHALLENGES, OLD PROBLEMS
Hal Hill
ANU
Bulletin of Indonesian Economic Studies, Vol. 39, No. 3, 2003: 359–60
ISSN 0007-4918 print/ISSN 1472-7234 online/03/030359-2 © 2003 Indonesia Project ANU DOI: 10.1080/0007491032000142809
Carfax Publishing
Taylor & Francis Group
era. Two memorable phrases summed up the mixed sentiments: Andrew MacIntyre’s assertion that ‘the only thing worse than organised corruption is disorganised corruption’, and Chatib Basri’s quip that ‘at least we have achieved a better distribution of cor-ruption’.
Similarly, the balance sheet on decentralisation and regional auton-omy is mixed. As Bambang Brodjo-negoro pointed out, the major and hastily developed reforms were at least implemented in a fashion, the new rules of the game are gradually being clarified, and some regions are emerg-ing as exemplars of quality in local governance. Conversely, the division of responsibility between the centre and the regions, and within the regions, is still unclear. It is probable that inter-regional inequality will increase, in contrast to the generally good record during the Soeharto era.
The investment climate presents a mixed picture. As James Castle empha-sised, Indonesia is an East Asian out-lier with its continuing negative for-eign investment flows. Yet, as both he and Kelly Bird pointed out, deals are being struck and distressed corpora-tions are being restructured, perhaps more than is commonly realised. There is considerable dynamism among small and medium-sized enterprises, as the case studies presented by Henry Sandee and Peter van Diermen under-score.
The principal problems relate not to the absence of rules and regulations but rather to their sometimes erratic and unpredictable implementation. Thus legal reform is likely to be a drawn-out process, and in the mean-time some short-cut solutions (for example, some sort of arbitration sys-tem) may need to be devised. Where these processes are heavily politicised, as in state enterprise reform (discussed by Tony Prasetiantono), progress will inevitably be very slow.
This was the 21st Indonesia Update conference in an unbroken series dat-ing back to 1983. The Update com-menced under the tutelage of Peter McCawley and Jamie Mackie as a small-scale, experimental and possibly one-off venture. (To commemorate this coming of age, at the outset there was a symbolic cutting of the cake by Profes-sor Mackie!) The proceedings volume, part of the Indonesia Update series published annually by the Institute of Southeast Asian Studies, Singapore, will be number 15.
Our congratulations and thanks go to the conference convenors, Chatib Basri of the University of Indonesia and Pierre van der Eng of the ANU, to the wonderful staff and supporters in the Indonesia Project, and to AusAID for its continuing support. The confer-ence was well attended, with about 400 registrants, and was widely reported in the Australian media.
360 Hal Hill
Indonesia Update Series
LOCAL POWER AND
POLITICS IN INDONESIA
Decentralisation and Democratisation
edited by Ed Aspinall and Greg Fealy
Indonesia is experiencing a historic and dramatic shift in political and economic power from the centre to the local level. The collapse of the highly centralised Soeharto regime allowed long-repressed local aspirations to come to the fore. The new Indonesian govern-ment then began one of the world’s most radical decentralisation programs, under which extensive powers are being devolved to the district level. In every region and province, diverse popular movements and local claimants to state power are challenging the central authorities.
Local Power and Politics in Indonesia is the first comprehensive coverage of decentralisa-tion in Indonesia. It brings together papers from the September 2002 Indonesia Update conference at The Australian National University (ANU), plus additional invited contribu-tions. The authors are leading academics and policy makers from Indonesia, Australia and beyond, among them Professor Ryaas Rasyid, former regional autonomy minister and a chief author of Indonesia’s decentralisation laws; Professor Harold Crouch, political scien-tist, ANU, and former Director of the Indonesia Project of the International Crisis Group, Jakarta; and Hans Antlöv, Program Officer, Ford Foundation, Jakarta.
Chapters include updates of the economy and politics; studies of the military at the local level, of decentralisation and the bureaucracy, of the role of civil society groups in moni-toring local administrations and legislatures, and of the impact of decentralisation on women; and case studies of how regional autonomy and fiscal decentralisation are work-ing at the local level, and how local politicians, bureaucrats, business people and others have responded.
2003 304 pages
ISBN 981-230-202-6 Soft Cover S$39.90/US$25.90
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Bulletin of
Indonesian Economic Studies
Articles you will read in forthcoming issues of BIES include
Ross H. McLeod
Dealing with Bank System Failure: Indonesia, 1997–2002
Stephen Grenville
The IMF and the Indonesian Crisis
J. Soedradjad Djiwandono
Liquidity Support and the Financial Crisis:
The Indonesian Experience
http://rspas.anu.edu.au/economics/bies/ http://www.tandf.co.uk/journals/carfax/00074918.html
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