MUHAMMAD AS HIKAM (editor)
T O W A R D
STRENGTHENING INDONESIA
IN A CHANGING WORLD
T O W A R D
STRENGTHENING INDONESIA
IN A CHANGING WORLD
Toward 2014-2019
Strengthening Indonesia in A Changing World
Copy right
Indonesian State Intelligence Agency (BIN)
General Editor : Muhammad AS Hikam
English Editor: Halida Putri Widyastuti
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ISBN: 978-602-70221-0-2
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State Intelligence Agency
FOREWORD
Assalamu’alaikum Wr. Wb.,
With profound gratitude to the Almighty
God, I am proud to welcome the publication
of the book entitled “Toward 2014-2019:
Strengthening Indonesia amidst a Changing
World”. his book is an implementation of Law
of 2011 No.17 regarding State Intelligence
whose purpose is providing a prediction
concerning Indonesian future image within the next 5 years.
he recent global dynamics and development become more complex
and competitive, creating signiicant impacts on the national and
state development. In 2014, the Legislative and Presidential Election
in Indonesia will be followed by a signiicant event of national
leadership succession, indicated by the election of a new president.
herefore, it is necessary for our nation to make various preparations
in order to face the future dynamics and development in all areas
of society, nation, and state which will probably occur post-2014.
Dealing with the dynamics and development of the Unitary State
of the Republic of Indonesia within the next ive years requires
preparedness of the citizens and state oicials of the Republic of
Indonesia, through creative and constructive eforts to extend an
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iii
understanding and to stimulate and encourage greater community
participation in improving the national and state life quality. At
the same time, this book can further develop the international
community’s understanding about Indonesia.
I hope this book will be used as a reference by all levels of society and
other parties in their participation in providing insights and giving
decision about the nation’s future.
Finally, this book is useful in improving our awareness and
strengthening our spirit of nationalism to actualize the Prosperous
Indonesia.
Wassalamu’alaikum Wr. Wb.
Jakarta,
March 2014
Chief of State Intelligence Agency
Lieutenant General (Retired) of Indonesian National Army
Marciano Norman
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EDITOR’S PREFACE
he book in front of you begins with an idea and, at the same
time, an initiative from the Head of the Indonesian State
Intelligence Agency (BIN), Lt. Gen. (Ret.) Marciano Norman,
who considers the need for a forecasting study or a prediction
of the condition of the nation and the Unitary State of the
Republic of Indonesia, related to strategic issues which are
expected to arise within the next ive years (2014-2019), as well
as the anticipatory measures and solutions. Furthermore, the
forecasting study shall be accessible to the public domain so all
national components – together with BIN- can provide insights
and, in turn, contribute various solutions to the current and future
challenges and dynamics which have a strategic impact on the life
of the society, of the nation, and of the state. He also thinks that
the preparation and publication of the publicly accessible strategic
review by BIN should be constantly in line with one of the main
tasks and functions of the institution, namely early detection and
early warning. It also provides strategic inputs within the scope
of national security to take account of in the making of various
national policies.
Now is the right moment to actualize the idea and initiative.
One of the main considerations is the fact that in 2014 Indonesia
will implement a ive-year national agenda of a very important
meaning for the national and state life, namely the Legislative
Election (Pileg) and the Presidential Election (Pilpres). he irst
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v
will lead to the election of people’s representatives (Parliament
and Council/ DPR and DPRD) and regional representatives
(DPD). he latter will result in a succession of national leadership
replacing the reign of President Susilo Bambang Yudhoyono, who
has run his constitutional duties from 2004 to 2014, with the
newly-elected President of the Republic of Indonesia. Particularly
in relation to the Presidential Election, for the irst time since the
Reformation was initiated in 1998, Indonesia will be led by a
President who is not an incumbent and will carry out the task in a
strategic environment with a wide dynamics range diferent from
that in the past. herefore, it is essential for leaders, stakeholders,
and all other components of the nation to have clear and adequate
knowledge and / or understanding of the issues and the challenges
faced by Indonesia within the next ive years, so as to have clear
options to implement strategic choices in ensuring a sustainable
process in implementing the ideals of Indonesia’s national
struggle to become a great , sovereign, digniied, independent,
and developed nation, parallel with other nations in the world
association.
Strategic Analyst Board-the State Intelligence Agency, which is a
non-structural body that serves as a think tank for the leadership
of BIN, is appointed to conduct the study. Of course, all the team
members as well as the analysts from BIN’s Strategic Analyst Board
enthusiastically welcome it and at the same time is challenged to
do their best with the task and the trust from their leaders. he
Enthusiasm, is because this book is the irst publication by BIN
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TOWARD 2014-2019
since the implementation of the 2011 law No. 17 on National
Intelligence, which can be accessed, read, learned, and discussed
openly by the public in Indonesia and even overseas. In addition
to inviting the whole nation to think about the future of their
country, this book is also one embodiment of BIN’s commitments
to the reform mandate of bringing BIN closer to the society. At
the same time, it will increase public sense of belonging (melu
handarbeni) towards BIN. his open publication creates the same
opportunities for all components to work together with BIN
dialogically to contribute the best thoughts and ideas in the nation
progress in the future. At the same time, BIN’s Strategic Analyst
Board is challenged to publish a book that attracts a wide range
of audiences and is easy to read and understand without ignoring
the criteria and rules to be considered as a scientiically justiiable
work. herefore, the principle of BIN’s Strategic Analyst Board
is to maintain a balance between the quality and scientiically
justiiable substance, and the style of scientiic writing of a
readable book, not only to academic readers.
Based on that background, from April 2013 to February 2014,
BIN’s Strategic Analyst Board has been working with experts
to plan and prepare the study, and publish it in form of a book,
which is gratefully accomplished on time. hrough several
considerations, this book covers the following areas: 1) Global
and Regional Strategic Environment; 2) Ideology, Politics and
Government; 3) Social and Culture; 4) Economics; 5) Natural
Resources and the National Energy Policy; 6) Defense and
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vii
Security; and 7) Diplomacy and International Relations. Each
ield consists of several sub-areas considered strategic for the
life of the nation and the State. A long and intensive process
has occurred for almost a year; since the proposal arrangement,
the job descriptions preparation, the writer team formation, the
validation, to the inalization process, including the editing and
publishing of the book. In order to maintain its scientiic quality,
experts from various ields have been involved in the preparation
of this book. hose experts are considered as representatives of
their core competencies. Meanwhile, for the process control
and the quality assurance, not only were internal seminars
held periodically, but also forums of Focus Group Discussions
(FGDs), which involved about 100 people, consisting of experts,
practitioners, and stakeholders as panellists and / or active
responders. he inal stage of the quality assurance process was
conducting national seminars to get inal feedbacks prior to
publication. In this regard, BIN’s Strategic Analyst Board and
the Indonesian Research Association (Himpenindo) have held
two national seminars in Jakarta and Denpasar attended by
about 300 participants, consisting of scientists, practitioners and
professionals, as well as stakeholders in the related ields .
In accordance with the original idea, the most important goal
of this book is not presenting a variety of inal answers and / or
ready-made prescriptions, which would direct or bind the society.
his book is intended more to provide a future overview and
provide solutions to the dynamic and strategic issues within the
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TOWARD 2014-2019
next 5 years in Indonesia, based on the dynamics of the Strategic
Environment (lingstra) both at global and regional level. So, various
recommendations in these book chapters, if any, are still open for
discussion and debate. In other words, various recommendations
provided should be understood heuristically or exploratory, i.e.
various ofers of possible consequences which may occur and /
or be followed, including the desire for making strategic policy
prescriptions. With that kind of spirit and attitude, the society
still has a space to move freely in order to participate in thinking
of nation problems and contribute their thoughts openly and
proportionally.
As a result of an intensive and productive cooperation as well as a
harmonious blend of many parties, BIN’s Strategic Analyst Board
would like to thank those who have exerted their energy and minds
to the success of this book. Especially thanks to BIN Leaders,
the Chief and Deputy Chief of BIN, for the great trust to BIN’s
Strategic Analyst Board, heir attention, encouragement, and
support have made the task implementation possible to complete
on schedule. Similarly, our thanks go to the Principal Secretary
of BIN and his stafs who have provided vital administrative
supports for the smooth implementation of the task for almost
the full year last year. And last but not least, thanks to all those
involved in the preparation of this book.
Finally, there is no man-made work without weaknesses, as the
saying goes: “Nobody’s perfect.” his book certainly has a lot of
weaknesses, both in term of its substance and beyond. However,
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ix
this is all we can actualize to the maximum capacity and efort of
the team. Suggestions and comments from readers and the public
shall be a necessity in order to provide a deeper insight into the
various and alternative thoughts to enrich the treasure of our
collective knowledge and understanding. Moreover, the Strategic
Analyst Board would appreciate and thank everyone who give
criticism, suggestions, and comments containing ideas and deeper
thinking. May God continue to show you the best path and bless
our nation in achieving the noble ideals to become Indonesia
Raya!
Jakarta, March 2014
Dr. Muhammad AS Hikam, MA.
General Editor
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ACKNOWLEDGEMENTS
We would like to express our gratitude and appreciation to the
experts and their team, which together with the analyst team of
Strategic Analyst Board of the State Intelligence Agency and its
members have involved in the planning, preparation, and writing
of this book. hey are Anies Baswedan, Ph.D.; Dr. Alie Humaedi,
S.Ag., M.Hum.; Prof. Dr. Firmanzah; Dr. Kurtubi; Dinna Wisnu,
Ph.D.; and Dr. Eddie Prasetyono; Shofwan Al Banna Choiruzzad,
Ph.D.; Dr. Zaim Uchrowi, MDM; Dr. Jazuni, S.H., M.H.; Dr. Ari
Prihandoko, M.Sc.; Saiful Hakam, M.A.; Dr. Rizal Edi Halim,
S.Sos; Dr. Luky Adrianto; Dr. Ir. Dodik Ridho Nurrochmat, M.Sc.,
F.Trop.; Dr. Mahmud Syaltout; Akbar R Subekti, M.Si.; Muhammad
Arif Anwar, S.Sos.; A. Ag. Dwinta Kuntaladara; Yuli Muthmainnah;
as well as Mohammad Anthoni.
Next, our sincerest thanks and respect go to the coordinator of
book preparation, the Secretary of Strategic Analyst Board of the
State Intelligence Agency, and the analyst team of Strategic Analyst
Board of the State Intelligence Agency and its members, which in
this case also acted as liaison oicers and coordinator assistants. he
Strategic Analyst Board of the State Intelligence Agency would
also like to thank all parties who have participated intensively both
in the FGDs and the National Seminar, providing feedbacks and
help improving the quality of the study and this book. Our special
gratitude to Central Board of the Indonesian Research Association
(Himpenindo) Mr. Prof. Dr. Ir. Bambang Subiyanto, M.Sc. and Dr.
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xi
Laksana Tri Handoko, as well as the Deputy of Indonesian Institute
of Sciences (LIPI) Mr. Dr. Ir. Djusman Sajuti, M.Sc.
hanks to the panellists and active participants of the FGDs and
the National Seminar: Lieutenant General of Indonesian National
Army (Ret.) Agus Wijoyo; Brigadier General of Indonesian National
Army A. Hail Fuddin (Adjudant Oicer of Intelligence Staf );
Col. Dr. Anton Nugroho, MMDS, M.A.; Prof. Dr. Azyumardi
Azra; Prof. Dr. Abdul Munir Mulkan; Dr. Abdul Aziz; Dr. Agung
Wasono; Andi M Tauik; Mayor General of Indonesian National
Army Abdul Chasib; Dr. Alex Chandra; Dr. Bagus FB Utomo; Bey
Khasman; Ir. Budi Basuki, M.M.; Dr. Connie Rahakundini Bakrie;
Prof. Dr. Dorodjatun Kuntjorodjakti; Dr. Dirgo D. Purbo; Prof.
Dr. Djarot Sulistio Wisnubroto; Djipto Situmorang; Marine Col.
(Enlisted) Dohar S.; Ir. A. Edy Hermantoro, M.Sc.; Prof. Dr. Ermaya
Suradinata; Dr. Faisal Mutaqin, M.Si.; Prof. Dr. Farouk Muhammad;
Dr. Fedy Sondita; Dr. Faisal Basri, M.A.; Freddy Panggabean; Prof.
Dr. Hikmahanto Juwana; Dr. Hendri Saparini; Prof. Dr. Hasyim
Djalal; Dr. Harry Prihantono; Kol. H. Simatupang; Dr. Ichsanuddin
Noorsy; Prof. Ir. Ida Ayu Giriantari, M.Eng.Sc, Ph.D.; Dr. I Gede
Arya Sugiartha, M.Hum.; Prof. Dr. Ikrar Nusa Bhakti; Prof. Dr. Indria
Samego, M.A.; Dr. Imam Sugema; Brigadier General of Indonesian
National Army Jamaluddin Mubarok, M.Si. (Defence); J. Victor
Rembeth; Prof. Dr. Ketut Ardhana; Dr. Kusnanto Anggoro; Dr. Lili
Romli; Ir. Marwan Batubara, M.Sc.; Dr. Makarim Wibisono; Melda
Kamil Adrianto, S.H., LLM, Ph.D.; Mangadar Situmorang; Dr.
Makmur Keliat; Dr. Nico Harjanto; Pri Agung Rakhmanto, Ph.D.;
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Dr. Rear Admiral of Indonesian National Army (Oicer) Robert
Mangindaan; Dr. Rely Harun, S.H., M.H., L.L.M; Dr. Robertus
Robert; Dr. Ir. Ridwan Djamaludin, M.Sc.; Prof. Dr. Salim Said;
Sojan Wanandi; Ambassador Soemadi Brotodiningrat; Ambassador
Sabam P. Siagian; Prof. Dr. Syamsudin Haris; Prof. Dr. Singgih
Riphat; Police Brigadier General Drs. Sad Harunantyo; Dr. Santo
Darmosumarto; Dr. Teuku Rezasyah; Major General of Indonesian
National Army Tisna Komara; Wiwiek Setyawati Firman; Yanuar
Rizky, S.E., AK., M.H.; and Dr. Zastrouw Al Ngatawi. We would
also like to thank all participants of the National Seminar, both
in Jakarta and Bali, for all useful feedbacks and comments for the
improvement of study.
In such a book publication that involves many parties and complex
substances, the role of an editor is undeniably important and vital. An
editor is needed not only in language editing and harmonizing, but
also to provide substantive feedbacks that contribute in improving
the quality and the value of the book. herefore, heartfelt thanks
and deep appreciation go to the editor team consisting of Budhiarto
Shambazy, Dr. H. Wawan Purwanto, and Dr. Zaim Uchrowi for the
hard work throughout the long process of editing this book.
Last but not the least, special thanks to all administration stafs of
Strategic Analyst Board of the State Intelligence Agency as the
main promoter of a series of implementation process and the task
continuity. hey have carried out the whole task given devotedly and
tirelessly.
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xiv
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TABLE OF CONTENTS
Foreword from the Chief of State Intelligence Agency
Lieutenant General (Retired) of
Indonesian National Army Marciano Norman
v
Editor’s Preface
Dr. Muhammad AS Hikam, MA.
vii
Acknowledgements
xiii
Executive Summary
xxi
Chapter I
Chapter II
Strategic Environment
In a Changing World
Global Strategic Environment
Regional Strategic Environment
National Strategic Environment
1
6
36
42
Politics
Towards a Consolidated Democracy
53
Indonesian Political Position
Reading the Future
Short-Term Scenario
Impacts on the Future
Democratization and Ideology
Overview and Recommendation
59
67
89
92
93
100
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Chapter III Social
Binding our Indonesian-ness
hreat Dynamics
hreat Map
Impacts on the Future
Eforts and Strategies to Overcome hreats
Overview and Recommendation
103
110
132
137
148
160
Chapter IV Economy
Breaking hrough the Middle Income Trap
Indonesian Economic Foundation
2014-2019 Projection for 2014-2019
2014-2019 Development Challenge
Overview and Recommendation
165
169
189
214
206
Chapter V
Natural Resources
Asset to Become a Great Nation
Need for Energy and
Natural Resources Management
Future Challenges
he System and Management of
Natural Resources
he Solution for Natural Resources
Management
Overview and Recommendation
Chapter VI Defense
Building up a Powerful Indonesia
Defense System and Posture
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213
217
233
244
267
285
289
293
hreat Dynamics
Indonesian Defense Forces
in Confronting hreats
306
344
Overview and Recommendation
Chapter VII International Relationship
Struggling for National Interest
349
Indonesian National and Vital Interest
Weaknesses to Improve
Chances and Challenges
Disruptions and hreats
Overview and Recommendation
351
355
383
398
410
413
Note
419
Bibliography
427
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xviii
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EXECUTIVE
SUMMARY
xx
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photo © dudarev mikhail
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xxi
EXECUTIVE SUMMARY
xxii
Strategic
Environment
In a Changing World
his chapter delves into global, regional,
and national environments that become
part of the strategic environment
for Indonesian development in the
upcoming period of 2014-2019.
Politics
Towards A Consolidated Democracy
his chapter discusses political
development that may take place in the
next ive years, especially regarding the
implementation of democracy.
Social and
Culture
Binding our Indonesian-ness
his chapter analyses threats and
their impacts in social area within the
upcoming development period that
involves multiple aspects.
Economy
Breaking through Middle Income Trap
his chapter explains the optimistic
projection of the Indonesian economy
and the threats to deal with to be able
to take of to the next stage.
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Natural
Resources
Assets to Become a Great Nation
his chapter illustrates the scenarios
needed to manage assets of natural
resources, as well as anticipate an energy
crisis.
Defense
Building Up a Powerful Indonesia
his chapter presents the simulation
results of the various dynamics of future
threats to the Indonesian defense.
International
Relationship
Struggling for National Interest
his chapter shows the need for a
new approach to diplomacy and
international relationship in the face of
the latest global challenges.
Strategic Environment: ‘In a Changing World’
hree aspects constitute the strategic environment that Indonesia
would deal with within the 2014-2019 period, including global,
regional, and national environment. In the global environment there
is economic uncertainty, particularly in relation to the European
Crisis and the recovery of the US economy. he political focus has
shifted to Asia Paciic, although the US, EU, and Russia are still the
big players. At a regional level, China's economic revival has drawn
everyone’s attention following the intensifying dispute in the South
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xxiii
China Sea region. Meanwhile, at the national level, the succession
of national leadership with all its implications is the most important
thing to observe. A series of natural disasters as well as the energy
constraints are other important factors to consider.
Politics: ‘Towards A Consolidated Democracy’
he country’s progress after the 1998 Reform shows that Indonesia
will not be a ‘failed state’ as many have feared. On the contrary,
Indonesia has been relatively strong as a ‘formal democracy’. he
challenge is how to bring Indonesia to become a ‘full democracy’
or even an ‘advanced/consolidated democracy’ considered capable of
achieving welfare stability. For that, irst of all Indonesia needs to
have an income of USD 6,000 per capita. Ten criteria in the ields of
economy, politics and government, and law enforcement can be used
to assess Indonesia’s capability to raise its democracy level. Based
on this assessment, it is believed that Indonesia will only make a
little progress due to obstacles coming from distribution and the
decreasing autonomous political society.
Social and Culture: ‘Binding Our Indonesian-ness’
A population phenomenon often called by the term ‘Demographic
Bonus’ is the main background of the social and cultural development
for 2014-2019. he shadows of violence and social conlicts from
the past years also pose a threat. Education and health need to
emphasize the ‘intangible’ paradigm more to counterbalance its
‘tangible’ approach. he development of science and technology has
to prioritize areas that are biological, geological, and cultural assets to
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Indonesia. he reinforcement of ethics and integrity is necessary in
the ield of law while an approach based on local and national wisdom
is required to strengthen social solidarity. he awareness of diversity
should be built up to compose a beautiful mosaic of Indonesia to
avoid conlicts related to ethnicity, religion, and race.
Economy: “Breaking through the Middle Income Trap”
In the last few years, Indonesia’s economy has successfully achieved
a growth rate of around 6 percent. his airms the country’s position
as one of the G20 countries that control 85 percent of the global
economy. It is not an exaggeratuon, then, if Indonesia makes an
optimistic projection for the 2019 economy with a growth rate of
7 percent, a GDP of USD 6,950 per capita, and a poverty rate of
only 4-5 percent. However, the implementation is not as easy as it
sounds. he power Indonesia has to develop its economy lies on its
natural assets, large domestic market, and consistency of policies
to maintain the macro-economic climate. his relative power has
to overcome a number of critical aspects such as food security,
border threats, energy supply, weak industry sector, and the need
for infrastructure development while the global economy remains
uncertain. Willingness to learn from more successful neighbouring
countries are obviously required.
Natural Resources: “Asset to Become a Great Nation”
To date, Indonesia is recognized as one of the world’s oil and gas
producers. his, along with other natural resources abundance,
is certainly a great asset for Indonesia to become a great nation.
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However, the biggest momentum to achieve it has passed as the
resources have been greatly exploited. With an oil production of one
million barrels per day and the requirement of 1.6 million barrels in
2013, uncreasing to 1.9 million barrels in 2019, Indonesia is borced
to turn into an importing country. Other natural assets including
forests, ishery, and marine resources, meanwhile, have not yet been
managed well and are even damaged now. here needs to be a new
regulation and format on oil management, constructions of new
reineries, and development of other energy resources including
renewable energy resources, geothermal resources, and nuclear plants
such as those powering industrial countries. Energy constraints are
the biggest obstacle for Indonesia to advance. At the same time, the
development of ishery and marine resources must also be a priority.
Defense: “Building Up a Powerful Indonesia”
he power competition between the United States and China is
the most observable aspect in the global defense issue. Although
China keeps enhancing its military force and the US reduces its
defense budget, the US still holds the control over global and Asia
Paciic defense. Regional conlicts regarding territorial borders, the
spread of transnational crimes, terrorism, cybercrimes, separatism,
and situational threats are the challenges for Indonesia’s defense.
he results of the simulations performed show that Indonesia is in
a defensively weak position against the dynamics of threats from
other countries. he alignment of perceptions between governmental
institutions concerning the threats map, the increase of defense
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budget, and the enforcement of territorial sovereignty on land, sea,
and air is needed to build a strong Indonesia.
International Relationship: Struggling for National Interest
Diplomacy and international relationship are not only means for
achieving world peace for all human beings, but also for ighting
for national interest. hus far, Indonesia has not optimally exercised
diplomacy to do that. At least there are four national interests that
Indonesia needs to stand up for in its relations with other countries:
national interest in economy, national interest in politics, national
interest in social and culture, and national interest in defense. To be
able to perform this new task, some improvements are necessary,
including in the design of foreign politics and the development of
the institutional system. Some doctrines embraced in Indonesia’s
foreign policy such as ‘ribuan teman tanpa musuh’ (thousand friends
zero enemy) or ‘keseimbangan dinamis’ (dynamic equilibrium) need
to be reviewed as they have proven to be confusing in the efort to
ight for the national interests.
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xxviii TOWARD 2014-2019
Chapter I
Strategic Environment
In a Changing
World
A Strategic Environment IN A CHANGING WORLD
1
2
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“Many say our world is at a tipping point. If we do not act together,
if we do not act responsibly, if we do not act now, we risk slipping
into a cycle of poverty, degradation and despair.”
~ UN Secretary General Ban Ki Moon ~
photo © Zurijeta
A Strategic Environment IN A CHANGING WORLD
3
A STRATEGIC ENVIRONMENT
In A CHANGING
WORLD
F
ireworks celebrations from the remote areas of Merauke
to New York, where the UN is headquartered, on the New
Year’s Eve, December 31, 2013, represented human beings’
optimism about the future of the world. Various resolutions were
made, both by individuals and by countries, illustrating hopes for
a better condition at least in the ongoing year. As things progress,
the reality of the world is not always as everyone expects. Several
events at global, regional, and national levels during the irst quarter
of 2014 show that there are at all times hopes and challenges for
human beings to deal with.
4
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In Geneva at the end of January 2014, for instance, Indonesia together
with a number of other nations participating in the conference on
Syria was hoping for a way-out of the prolonged crisis that had
claimed a large number of victims. his hope eventually hit the wall
of reality as diferences of opinion between the two parties was so
big that even the world-respected senior diplomat Lakhdar Brahimi
did not manage to bridge it. Not long after the negotiations fell
through, good news came out in the form of the Ukrainian political
crisis coming to an end as President Yanukovych was dismissed by
the parliament. Soon after that, however, a new concern emerged
concerning the Crimea region that involves the superpower Russia.
Ukrainian internal problem has since developed into an international
problem.
Aside from the global dynamics, an important occurrence also
took place at a regional level in the form of a tragedy, namely the
disappearance of a Malaysia Airlines plane on a light from Kuala
Lumpur to Beijing. his was not only an internal afair of Malaysia
but rather a concern for the whole south eastern region. Other than
raising questions on the safety of aviation, such tragedy also tested
the international relations in the South China Sea region that had
so far been plagued by territorial disputes relating to a number
of islands. All countries were involved in the search of the plane,
including China, the highly opposing side in the conlict to seek an
agreement in the disputed area.
Meanwhile, the domestic dynamics of Indonesia were dominated by
two devastating natural disasters: the eruptions of Mount Sinabung
in North Sumatra and Mount Kelud in East Java. Dozens of people
A Strategic Environment IN A CHANGING WORLD
5
were killed in the aftermath of the Sinabung disaster, in addition to
the damage to the most important agricultural center in the island
of Sumatra. As for the Kelud catastrophe, it afected a vast area that
a number of airports in four provinces had to stop their operational
activities. Later, the country was shocked by a sadistic act of a student
couple killing their friend over a trivial matter. his incident raised
a fundamental question: How bad is the Indonesian social portrait
that it brings forth such a dark phenomenon? All of these incidents
occurred when everyone was heading to a moment that could
present hope as well as anxiety, the Presidential Election. A new
leader brings a new hope, but uncertainties during a governmental
transition always pose unsolicited insecurities.
he above incidences are just the beginning of the strategic
environment reality to be faced by the Indonesian people and
government during the incoming 2014-2019 period. All the aspects
in the strategic environment at global, regional, and national levels
can be elaborated as follows:
Global Strategic Environment
he Syrian conlict, portraying one of the problems the
international community is dealing with, is more than a clash
between the government of Al-Assad regime and the opposition
group trying to overthrow it. his conlict represented the interest
of neighboring countries or political groups such as Iran and
Hezbollah in Lebanon on one side, and Saudi Arabia and Israel
on the other. Representing more than a regional dispute in the
Middle East, the Syrian conlict was also a stage where old world
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powers competed for inluence: the United States versus Russia.
As such, the settlement of the Syrian conlict can be seen as a
barometer of the world’s ability to solve real issues.
Political problems, however, are only one of the global strategic
environment’s aspects to which to needs to be paid close attention.
Other signiicant aspects include the areas of social, economy,
natural resources and energy, as well as defense and diplomacy,
which are all related to each other, establishing complex global
dynamics. Complex interdependence among countries has been
put forward by Joseph Keohane and Joseph Nye in the 1970s.
Complex independence manifests in economy as seen from the
development of goods and services production processes that
rely on a global chain, which also requires increasing rates of
mobility and migration from one country to another. Of course
the implications are becoming more complex, as countries could
be increasingly sensitive and susceptible to an external pressure as
well as the euphoria of public participation in policy and political
processes.
he aspects shaping the global strategic environment dynamics
faced by all countries including Indonesia can be explained as
follows:
1. Politics
he global order of politics remains unchanged since the Cold
War ended at the beginning of the 1990s. Despite facing internal
challenges that are by no means easy, the United States remains
the main power of the world with its superiority in multiple
A Strategic Environment IN A CHANGING WORLD
7
areas at once, i.e. politics, defenses, economy, and technology
as well as innovations. he September 11, 2001 tragedy, in
which a terrorist attack ruined the business center in New York,
and partly destroyed the Pentagon, arousing fear among most
people, shows that the United States are no longer as powerful
as it was before. It is even more so after sufering a blow from
the 2008 economic crisis that crushed public trust down to the
bottom level.
In the military ield, the United States is having diiculty ending
its interventions in both Iraq and Afghanistan, leaving uncertainty
in security and ongoing political tensions in both countries. his
underlines the US inefectiveness as the world leader. Meanwhile
in economy, the international community has begun to champion
China to take over the number one position from the United
States. All are viewed as indications of the decline in US inluence,
although in reality the country is still the world’s main power. his
is airmed by Fareed Zakaria in his book he Post American World
(2009) that underlines the fact that the US still exists and in many
facets remains dominant from the point of view of authority.
Aside from the United States, Western Europe is also a big
player in the global political map. True, this region is hampered
by complex economic issues after a number of its member states
faced serious inancial crises, such as Greece. But Western Europe,
driven by Germany with its economic and political stability,
continues to be very inluential in the international arena. he
settlements of global political issues like the Arab Spring in the
Middle East and tensions related to Iran’s nuclear reactor are not
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without Western European involvement.
China came up as a new power that is increasingly respected.
With a large population, the highest economic growth globally in
recent years, and an obvious boost of military power, China began
to be considered as the country most likely able to take over the
US as the world’s leader in the future. his prediction is still far
from becoming a reality. Nevertheless, the country’s inluence on
the international community is undeniably growing stronger from
time to time. In the history of modern civilization, China was never
as powerful as it has been in the last few years and will continue to
be for the next ive.
Russia is another global power that cannot be ignored. Under
the leadership of Vladimir Putin, the country tries to resurrect
as “a challenger to the United States” the way communist Soviet
Union was before it fell apart with the emergence of the glasnost
and perestroika policies during the era of President Gorbachev.
he role of Russia in the Syrian conlict, during which it took
the opportunity to be in opposition to the United States, served
as evidence that its power is not to be underestimated. he
political crisis in Ukraine also showed that Russia’s inluence in
international afairs is quite strong, especially in Eastern Europe
and Central Asia. Once the Ukrainian Parliament brought
down pro-Moscow President Yanukovych after the pressure
from the opposition, an armed group hoisted a Russian lag at
the government building of Crimea, southern Ukraine. Putin
dispatched military force right away to protect “Russian interest”
in the country.
A Strategic Environment IN A CHANGING WORLD
9
Besides the big players there are also a number of important actors
in global politics. In the Middle East, for example, Israel remains a
key party that holds control of the regional dynamic. hat Palestine
has yet to become a fully independent nation is determined by
the Israel factor. Egypt’s political crisis that was marked with the
overthrow of democratically-elected President Morsi was not
independent of Israel’s interest. he same is true of the continuing
tension between the West and Iran with nuclear weaponry as the
main issue, while Israel itself has much more powerful nuclear
reactors.
In East Asia, North Korea preserves its long-held position as a
‘fraction’ that gives a diferent color to a region boasting economic
development. Japan, South Korea, and Taiwan have proven to the
world they could rise to become developed countries as those
in Western Europe and North America. China is on its way,
although it still needs time to settle its internal problems. North
Korea maintains dictatorship of a sole leader from the Kim
dynasty, even though now led by the third-generation leader Kim
Jong-Un who obtained a part of his education in Switzerland.
North Korea keeps positioning itself as a ‘gravel’ hampering the
steps of its surrounding countries.
On the contrary to North Korea, Australia has turned into
the most important actor in the international political map of
the West Paciic region. his is possible because, as the West’s
spearhead in Asia, Australia possesses various aspects of Western
power from politics, economy, and military, to technology.
Australia has also succeeded in developing into one of the most
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prosperous countries in the world, being second in the world’s
Human Development Index (HDI) with only Norway above it.
his more or less helps strengthen Australia’s bargaining position
in global political afairs.
hese players generally remain unchanged from ten years ago.
But the dynamic in international politics is increasingly complex.
Regarding Middle East democratization, for instance, the US
has been contradictory. On the one hand it calls for participation
to secure the democratization, but on the other it lets old allies
like Israel and Saudi Arabia sabotage the existing democracies,
such as in the case of Muslim Brotherhood’s victory in Egypt and
the rise of the Shia political movement in Bahrain.
he relation among the United States, Europe, and Iran has
created a new dynamic that deserves our attention. For three
decades, Iran has been established as ‘a common enemy’ by
the West and Saudi Arabia. However, as the administration of
President Ahmadinejad came to an end, and President Rouhani
from ‘the moderate group’ took oice, the US and the West
loosened their tension with Iran through mediation by the
Kingdom of Oman. he practical interest of Western countries
to strengthen their economy and the tendency of President
Barrack Obama’s ‘humanist politics’ have encouraged the US and
the Western Bloc to take that pragmatic means by overlooking
the interest of their old allies, Israel and Saudi Arabia. Early in
2014, Western economic power began to enter Iran again while
the Iranian government was working actively to build economic
cooperation with Central, Southeast, and East Asia.
A Strategic Environment IN A CHANGING WORLD
11
A big change in the last ive years is China’s aggressiveness in
expanding inluence to Africa. his expansion has been mostly
applied through an economic approach by marketing Chinese
products, and through the development of cooperation in energy
exploration. In addition to the economic tactic, China employed
a cultural approach too. In many countries in Africa, Mandarin
language courses are lourishing. hese various eforts have
strengthened China’s inluence in the continent, competing with
Western countries that have so far had huge power there. China’s
inluence in Africa is predicted to continue to grow in the next
ive years.
Another big change that occurred is the shift of the world’s geostrategic center to Asia-Paciic. In a discussion, Ambassador
Soemadi Brotodiningrat quoted Hillary Clinton’s speech while
acting in her capacity as US Secretary of State, stating that “the
Asia-Paciic has become a key driver of global politics. he future
of politics will be decided in Asia.” Asia-Paciic is the main region
where the world’s economic drivers are. More than 41 percent of
the global population lives here, and they are mostly young and
have continuously increasing purchasing power. No less than 50
percent of global commercial transactions take place in this region.
Here the commercial activities and international connectivity are
very dynamic, so countries wanting to develop their economy will
try to build cooperation with the region’s countries.
It was diferent when the gravity of international relations
was centered in the Trans-Atlantic. At the time, international
relations were colored with relatively homogenous civilizations
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and systems of values compared to those of the current world.
hey were dominated by Western ideologies and systems of
values in economy, community governance, and of course
politics. In the current development, the United States’ liberal
democracy coexists with China’s free-market communism,
despite the remaining tensions regarding several issues. Such
a new reality in today’s global politics must be faced and
accepted by countries in the world, including Indonesia.
2. Social and Culture
A part of the global strategic environment that needs to be
considered in ive years to come is the socio-cultural aspect, which
is closely related to international politics. he relation has been
elucidated in an old analysis by Samuel Huntington in he Clash
of Civilizations (1996). hrough the book Huntington conveys
that the phenomenon of the future world, i.e. the 21st century,
would be marked by global conlicts determined by preferences
based on socio-cultural factors such as religion and ethnicity.
Simply put, it can be described that the world would see tensions
between the Western Bloc vis-à-vis a coalition of China and
Islamic Middle Eastern countries. he prediction is supported
by he Geopolitics of Emotion (2009) by Dominique Moisi that
illustrates the psychological states of a number of countries
including hopefulness, fearfulness, and conidence.
he frontal clash of civilizations did not happen as predicted.
However, the rise of ‘cultures’ that are not exactly similar to
the Western in the center of the world is inevitable. he socio-
A Strategic Environment IN A CHANGING WORLD
13
cultural portrait of the world has become more varied in general.
he dominant discourse of science and policy in fact encourages
every country to show the characteristics of their own model,
including in economic and political management. In scientiic
discourse there is a term called ‘concept indigenization’, which
refers to the development of concepts based on each nation’s
wisdoms and values. his also lourishes in the study of human
rights to push for an efort to seek the unique meanings and
practices at national and regional levels and to not simply follow
international norms.
In regards of economy and labor protection, studies around the
various implementations of the capitalism principles are springing
up. here are social scientiic observations and explorations on
the role of a community’s culture and values in the variation
of market economic system implementations in a number of
countries. he old view that liberal democratic values and freemarket capitalism would be the only norms in the post-Soviet
Union political and economic system is no longer seen as valid.
he world indeed encourages diversity according to the system of
values relevant in each own country.
At a policy level, China and Indonesia are among those that tend
to go in that direction. President Xi Jianping during his visit to
Jakarta in October 2013 said what China wanted to develop
was respect for other countries, regardless of their preferences
in political systems and economic development. A number
of prominent Indonesian igures, such as Susilo Bambang
Yudhoyono and Jusuf Kalla, in diferent forums conveyed that
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the speed of democratization in ASEAN could not be compared
to that in other parts of the world. Indonesia actively share its
experience in democracy, conlict settlements, and cooperation
models with non-government organizations of other countries.
A number of analysts also study Islam in its relation to the culture
of democracy and to development. he underlying assumption is
that Islam is viewed as a social force looking for a place in the
global politics of economy. he question that begs for an answer
is how does Islam as a teaching and a way of thinking inluence
governance? Events happening in Middle Eastern countries have
made observers very careful in bringing the variable of Islam
into international studies. Islam-related issues cannot simply be
concluded in a ‘black and white’ way. As mentioned by Gregory
Gause III (2011), the development of democratization in the
Middle East still needs to be observed, especially with an existing
indication that leadership in the region has been misunderstood.
Democracy is still promoted by Western countries as shown,
among others, through their support so far for the ‘Arab Spring’
movement in the Middle East. he United States’ pressure on
human rights issues in China—including its support for Tibet
Leader Dalai Lama—also proves that the country remains active
in spreading its values. he face of democracy that needs to be
adopted, however, may not be exactly the same. In several years to
come there will be more varied faces of democracy as a result of
adaptation to diferent cultural values of each country.
he diversity of cultural values in the world’s central whirlpool
A Strategic Environment IN A CHANGING WORLD
15
of civilization is becoming more and more widely accepted.
Nevertheless, the globalization of cultural values is also
unavoidable. People from diferent nations and countries use
clothes, vehicles, communication devices, household tools, and
products from the same global brands. Networks of stores,
restaurants, and everyday consumer goods have reached remote
areas. It is as if there are no longer international boundaries for
the global brands.
Such globalization of cultural values is not independent of the
fast information technology development recently. In the next
ive years, i.e. 2014-2019, the world will be more connected by
the technology, which eliminates geographical, and even cultural,
barriers. Not only do the phenomena of the internet, social
media, and Android-based applications facilitate communication
between communities, they also fundamentally change the old
paradigms in politics, economy, science and development, and
culture. Information technology has come to be an important
agent in the democratization of the global community.
At the same time as the fading of barriers between nations
and countries, emerges the phenomenon of global citizenship
that makes nationality no longer important. here is no
statistic igure regarding this matter yet, but the tendency to
work overseas, to migrate, and even to change nationalities
is increasing in many countries, especially among the youth.
he youth’s attention in the next ive years and beyond to
global issues will grow stronger, skipping over their respective
nationalities.
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he demand to seek opportunities
abroad is inescapable due to high
In 2019, the total
world population
population growths in developing
is estimated at 7.5
countries. In 2019, the world
billion people. Such
population is expected to reach 7.5
increase will generally
billion. his will generally put pressure
put pressure on the
on the provisions of food, energy,
provision of food,
and housing, as well as environment
energy, housing,
preservation. Besides, as explained
as well as aspects
before, it will also escalate the rate of
of environmental
conservation. "
people’s migration from developing
countries to the developed ones, such
as the waves of illegal migrants trying
to enter Australia via Indonesia’s southern waters. Many countries
will consequently receive social pressure, including those sitting in
the migratory routes.
3. Economy
As mentioned before, there is a shift of the geo-strategic center
of global civilization from the Trans-Atlantic to Asia-Paciic.
his, of course, involves economy. he tendency in that direction
has been observed by many countries in the last two decades,
as shown by the formation of the Asia-Paciic Economic
Cooperation (APEC) forum. From time to time, international
connections in the region is growing stronger. And it will continue
to be so in several years to come. he United States and Japan,
as its principal partner in the west side of the Paciic, were the
main actors of economic bonds there in the past. Entering the
A Strategic Environment IN A CHANGING WORLD
17
21st century, and after the 1998 monetary crisis, however, South
Korea began to claim their place as an important driver of global
economic development, which is centered in Asia-Paciic.
Regarding the progression of the Asia-Paciic region, one most
noted by economic observers is surely the economic development
of China, a country with the biggest population as well as the
highest economic growth in the world. he communist Chinese
government stunned the world as they successfully applied
market economy in an efective way. Its cities have transformed
into modern urban centers like those in developed countries.
High-standard infrastructure development is reaching all areas.
Its strong domestic market looks attractive to foreign investors
to enter the country that actually calls itself ‘the central nation’ or
Zhōngguó. Meanwhile, Chinese companies, which have already
been strong with its large domestic market, are now expanding
to the global marketplace.
China’s expansion is aggressively propelled by the government,
through its support for both commerce and investment. he
regions of Southeast Asia or ASEAN, Africa, and even South
America become their target areas.he Chinese Deputy Minister
of Commerce once said as quoted by China Daily (11/8/12),
the total Chinese investment in ASEAN has increased by 70
percent. China in fact formed the China-ASEAN Investment
Cooperation Fund, or China ASEAN Fund, that is a private
equity company based in the Netherlands. he company is
owned and controlled by the Chinese government through the
China Investment Corporation and the International Finance
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Corporation. A portion of the institution’s fund has been
invested in companies in Cambodia, Laos, the Philippines, and
hailand. Chinese investment in this region is largely made
into operations of communication, dams, power stations, and
mining explorations.
China has also been working fast in Africa. As quoted by China.
org.cn (12/7/13), the Chinese Ministry of Commerce stated that
their investment in Africa had surpassed that of the US. his
makes China the biggest trading partner to African countries.
Chinese investment growth in the region has multiplied by 30
times since 2005. China is also actively granting loans to oil-rich
countries in Africa, for example, the loan of USD 1.1 billion to
Nigeria. To strengthen its position, China formed the ChinaAfrica Cooperation Forum.
he presence of China in Africa is marked by the increasing
number of its citizens living in the continent. According to
Consultancy Africa Intelligence, there are Chinatowns in
almost every country in Africa, noticeable by the presence of
Chinese food restaurants, Chinese food centers containing
thousands of vendors, and Chinese-owned business centers.
he biggest Chinese communities are currently the ones in
South Africa and Namibia. Even in a country like Libya there
are tens of thousands of Chinese migrants running businesses.
Chinese investment in Africa is generally made into operations
of mining, commerce, banking, manufacturing, information
technology, pharmacy, and agriculture.
A Strategic Environment IN A CHANGING WORLD
19
With the rise of Chinese economy, which is predicted to
overtake that of the United States soon, observers have made
up some special terms, like the acronym BRICS that refers to
Brazil, Russia, India, China, and South Africa coined by an
economist from Goldman Sachs. Brazil is the biggest economic
force in Latin America; likewise, Russia and India are big
economic powers in Asia-Paciic. As for South Africa, it is
the number one in the continent. Other than BRICS, there is
also MIST that refers to Mexico, Indonesia, South Korea, and
Turkey. his one is an insigniicant term that serves merely as
an ameliorative in discussions because of the four, only South
Korea that has managed to become a developed country. he
other three, including Indonesia, still have many basic problems
to solve to follow suit.
Turkey is indeed a small portrait of the global economic
development. Supported by the large inlow of European
industrial expansion, particularly with companies from oldally Germany coming in, the country managed to record the
highest economic growth in the continent in the last ive years.
Unfortunately, the portrait of global economy outside of Turkey
and East and Southeast Asia is generally bleak, especially in
European Mediterranean countries like Greece, Italy, Spain, and
Portugal who have been in lengthy economic crises. he same is
true for the Republic of Ireland, which in the previous decade
had quite an impressive economic growth.
European economic crisis brought forth signiicant impacts
on the rise of youth unemployment, including those with high
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education. According to OECD data, youth unemployment in
Europe has risen by 30 percent since 2007 and the number is
predicted to keep going up. At least nine European countries
have unemployment rates of above 25 percent of their total
labor force. he period of unemployment also lasts longer
than before. One out of ive young individuals aged 15-24 in
European Union is unemployed for over 12 months.
European big countries have come under economic pressure as
well. Only Germany with its very strong economic foundation
that has stayed irm despite the diiculties in recent years.
Nevertheless, even Germany was afected by the European
economic recession as it became the only one expected to ‘help’
its neighbors out of the situation. he current economic states of
Britain and France are not yet strong enough for them to provide
help in this common hardship. Moreover, Europe now also have
to deal with the Ukrainian problem. Ukraine’s pro-Western
group has just won the battle against the pro-Moscow group in
a political conlict that destroyed the country’s economy. Willing
or not, this ‘ill’ Europe must help Ukraine restore everything,
including its economy.
he United States as the big leader of the world, especially the
Western Bloc, has started it by granting a loan worth USD 1
billion to Ukraine’s provisional government. his step was not an
easy decision because the US was not in a comfortable position
economically. It has not recovered from the 2008 crisis caused by
the ‘subprime mortgage’ scandal that went on until early 2014.
Furthermore, the country had to endure a iscal crisis that forced
A Strategic Environment IN A CHANGING WORLD
21
the government to freeze all its own activities for 16 days in
October 2013. It is something impossible to be done by other
countries, including Indonesia.
he economic crisis in Europe and the United States carried
a considerable impact on Asia, particularly Japan and China
who bought a lot of American bonds. India, once predicted
to be a future global economic powerhouse after China, was
severely afected by the crisis in Western countries. he value of
its currency fell, as did the value of Indonesian rupiah due to
more complex causes, when the 2013 iscal crisis hit the US. he
situation also disclosed India’s real economic quality that turned
out to resemble that of Indonesia in the 1980s: praised by many
world economists and proud for its soaring rate of growth yet
actually lacking a strong foundation. Unlike China, India is still
far from being a candidate to be a future developed country as
relected by its low Human Development Index (HDI) rank of
145th in 2012.
Other global institutions like the International Monetary Fund
(IMF) and the World Bank have been working hard to solve
the economic deceleration. In the 67th IMF-World Bank
meeting in Tokyo under the theme of ‘Global Challenges,
Global Solutions’, it was stated that the economic crisis and
deceleration occurring in a number of regions including Europe
and the United States required a comprehensive approach.
he approach should not only seek a recovery in iscal and
inancial sectors, but also policies to mitigate the negative
impacts of the existing development issues. Emphasis should
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be placed on money market stabilization, the strengthening of
the European zone, Asia’s economic role, employment policies,
industrialization, sustainable growth, health investment, and the
Millennium Development Goals.
he IMF acknowledged that this economic calamity rooted in
the debt crisis in the European zone was a complex one. When
the subprime mortgage crisis hit the United States in 2008, the
policymakers agreed on the same option, i.e. a iscal stimulus.
his was done to keep consumption and production at a safe
level to stimulate the economy. However, the current crisis is
much more diicult and multifaceted compared to three or four
years ago.
Head of the IMF Team of Economists Oliever Blanchard stated
the crisis this time overturned the economic understanding and
knowledge that had been believed as valid. It has presented
new issues to be studied in depth by economists, scholars,
and policymakers. Various classic instruments are considered
outdated, which means that the current economics is no longer
adequate to answer today’s challenges. his should have been
seen by economists after they failed to anticipate and prevent the
1998 monetary crisis in Asia.
In a number of other multilateral forums such as the G20 and
APEC, world leaders have also been trying to ind the right
formula to handle the occurring crisis. However, they have yet to
ind the solution due to the complexities. It is likely that the crisis
this time does not need a concept or foundation at a global level,
A Strategic Environment IN A CHANGING WORLD
23
but rather practical solutions at regional and local levels. So the
IMF emphasizes the importance of cooperation and ‘knowledge
sharing’ among the countries and regions to help overcome the
ongoing crisis. Asia, particularly the Eastern and the Southeastern
parts, is the one most expected to revive the world economy to its
healthy state.
4. Natural resources
A strategic environment related to natural resources at a global
level is inseparable from social, economic, and even security
dynamics. World population growth as well as the demand from
economic development has pushed global energy consumption to
increase. However, the rates of population growth and economic
growth are not evenly distributed. Advanced industrial countries,
within the last ive years or even the last two decades, have
generally had relatively stable population and economic growth
at a ‘mature’ and relatively small rate. Some even had negative
growth.
In the long term, with the world’s population numbering
around 10 billion in 2100, energy consumption is expected to
reach at least around 100 billion barrels of oil equivalent per
year, or around 275 million barrels of oil equivalent per day.
he composition of world energy resources that is currently
dominated by fossil fuels will persist although the entire globe
will have been trying hard to develop non-oil alternative energy
resources. Until today, alternative energy resources have not yet
been able to replace fossil fuels signiicantly, either in cost or
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in practicality. At least until the year 2030 the role of fossil
fuels is expected to cover around 75 percent of the total world
energy consumption.
Relatively high economic growth can be found in developing
countries that have the capacity to grow. he determining factors,
among others, are large population as a domestic market, sizeable
territorial area, rich natural resources as the basic capital for
development, relatively stable socio-political and security systems,
and quality human resources. At least in the last two decades,
China has always turned out with a high rate of economic growth.
Along with South Korea, Taiwan and Japan, which have long
been industrial countries, China makes East Asia the center of
world economic growth. his also means they have a very urgent
need of energy.
To maintain economic growth and people’s welfare, the countries
try to secure their supplies of energy and mineral resources.
Naturally they need to import them because their natural resource
reserves of energy and minerals are limited or even nonexistent.
China is actually a producer of oil and gas. However, since its need
far exceeds its domestic production, China is actively looking for
reserves abroad through its oil and gas state enterprise to enhance
its oil and gas energy security.
As a country that geologically has a huge natural resource
potential and is relatively close in distance, Indonesia is viewed
as a supplier of energy and minerals. China, a country with one
of the biggest coal reserves in the world, consciously chose to
A Strategic Environment IN A CHANGING WORLD
25
import as many coals as possible from Indonesia. In addition,
they also import energy from the Middle East, West Africa, and
Australia. A consequence of China’s need for energy resources
has been a territorial dispute with nearby countries on an area
thought to be rich with energy resources.
he natural resources being fought are not only the ones related to
energy, but also agricultural lands obtained by way of acquisition
or long-term rent suspected to be a land grabbing practice or
a new version of colonialism. A study by Borras Jr et.al (2012)
reports that food is only an element of the motive why countries
that are actually economically rich chose to acquire and rent lands
in other countries. here are other reasons for the decision, such
as biofuel investment, part of the strategy to anticipate climate
change, or a way to seek new sources to strengthen the channels
of capital lows in this increasingly globalized world. China is a
big adopter of this practice, reaching Africa, Southeast Asia, and
Latin America. A number of other countries such as Australia
and South Korea have done the same thing. So has Malaysia,
with its palm plantations in Indonesian lands.
5. Defense
he United States remains the biggest economic and military force
on earth, and a science and research power house in the ield of
future technology. he 2008 economic crisis has not relieved the
US from that position. hat said, the country is bearing a burden
it cannot handle alone forever. he US’ involvement in Iraq and
Afghanistan conlicts, for example, has drained its inances and
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claimed many lives. Its relatively low economic growth forced
them to lessen its presence in the Middle East. In fact, its budget
for defense has been reduced by USD 300 billion for the next 10
years. But due to economic and security interests the US will not
decrease its military force in Asia-Paciic, as Obama decided to
adopt the “Rebalancing Asia-Paciic” policy.
he most recent case in which the United States was accused of
espionage on a number of countries, its allies in European Union
are actually not excluded, shows that countries still prioritize
their own economic and security interest. his will continue to
be fought for although it may result in good relationships being
damaged. In an anarchic world, where there is no authority higher
than a state, such an action can be seen as something ‘normal’.
his phenomenon shows there is a change in types of warfare, i.e.
to the war of information.
Another major actor, Europe, must allocate a budget to repair its
economy. With the diference of ideological tendencies among
its member countries, it will be even more diicult for Europe
to sustain an expansive defense policy, whether it is pursued on
its own or together with the United States. In several years to
come, it seems Europe will keep concentrating on resolving its
internal integration problems. his process will take a very long
time and involve complex processes, and yet there is no guarantee
of success. herefore, it can be expected that the participation
of the European Union at an international level will be more
focused on the political dimension, especially on issues related
to human rights and democratization. he minimum coalition
A Strategic Environment IN A CHANGING WORLD
27
between European Union and the United States is very likely
to carry on. However, unlike in the past, joint military actions
between the two sides will be more sensitive after the US
espionage case. Furthermore, military actions will require large
political and inancial costs that may hamper their recovery from
the economic crisis.
On contrary to the United States and European Union, China
will in fact strengthen its defense in a massive fashion. In the
last two decades, China has recorded rapid economic and
military development. Some even predict that China will take
over the United States as the world’s strongest nation in terms of
economy and military in the next twenty years. In line with that,
it is expected that the competition between China and the US
will intensify. On the one hand, China’s emergence as a strong
state in Asia can result in a new world balance with the United
States. On the other, the US will try to defend its position. Until
several years to come, the US will still be the country with the
largest expense for defense.
6. International Relations
In the last few years, international relations have come up with
more complex formats. his can be seen, among others, in
the US relations with old ally Pakistan, which is colored with
tensions especially in handling radical groups under the Taliban–
Afghanistan network. Its relation with Iran, which has so far
been its most important enemy in the Middle East, is similar. he
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TOWARD 2014-2019
US actually tried to loosen the tension between them through a
maneuver by Secretary of State John Kerry as President Rouhani
took oice.
In the meantime, the United States also has a complex relation
with China. Politically it maintains an opposing position to the
Asian country, which it considers to have done many human
rights violations. he US indeed continues to lead the line in
human rights afairs. Besides, it backs Taiwan and Japan in the
possibility of Chinese military attacks. Nonetheless, the US and
China are involved in a complex economic relation: in conlict
with and yet in need of one another. China is the biggest buyer
of American bonds that also means the biggest ‘lender’ to the
superpower. herefore, China obviously has hopes that the US
economy—aside from relying on China—will grow, so that it
can pay back loans. hen again, China also expects American
investors to invest and develop their business in its territory.
Such a complex relation is also apparent in the interaction
between the ‘elite’ countries at a global level, such as among
the ive permanent members of the UN Security Council and
among the eight countries that meet regularly to deine global
economic agenda (the G-8). In the forums each country
tend to insist on defending its own interest while ignoring
global common interest. he fact that multilateral cooperation
mechanisms and schemes, such as the UN and WTO, are
weakening is proven with many issues left unsettled. One may
point out, for example, the conlicts in the Middle East, the
follow-ups on climate change issues, and the deadlocks in
A Strategic Environment IN A CHANGING WORLD
29
trade-related negotiations. he formations of many forums,
like the G-20, APEC, and other economic cooperation
forums, with overlapping objectives in a region show that
international relations are likely to become complex.
At a certain level there is a common awareness to build some
sort of global governance and architecture, to establish a global
norm to keep world peace. hat said, the path to setting up that
peaceful global architecture is not simple. he big hope for a safe,
peaceful, and prosperous world often collides with short-term
needs to ight for their own interests. In such condition, there is a
possibility for conlicts of interest between countries. Looking at
the disputes in the last few years, there are at least ive potential
conlicts in the future global politics of economy that need to be
considered:
a. Conlicts caused by proxy wars among the world’s elite
powers
his kind of non-physical conlicts may occur among the
elite countries whenever their national interest is believed
to be under threat, especially in the context of a struggle for
inluence over other countries. hey will seek opportunities to
attack their political-economic oppositions through a battle in
somebody else’s land. he ive permanent members of the UN
and the global agenda setters at the G-8 will always defend
their inluence. he United States with its position so far
will use its dominance to put pressure on others with various
issues including terrorism, weapons of mass destruction,
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TOWARD 2014-2019
free passes in strategic marine areas, human rights, and so
on. On the other hand, Russia has interest to counter that
by maintaining its inluence in the Middle East, Africa, and
Asia. Russia may avoid direct armed contacts, but will always
look for opportunities to undermine the United States.
b. Conlicts over ‘the rules of play’ in international relations
his is a dispute in determining of ‘the rules of play’ outside
of international organizations such as the UN or WTO. he
organizations are seen as a protective shield for all countries
from the interest of a certain country that forces its wishes on
another. In reality, the roles they play are limited in protecting
weak countries from the pressure of the superpowers. Not
many countries are able to survive such pressure. China is one
of the few countries that is smart enough to ind a hole in the
UN’s or WTO’s rules of play that its national interest remains
fulilled while staying in the proper corridor. Other countries
also manage to ind a way through international regulations.
In the ield of trade, for example, a number of countries are
using non-tarif measures to protect domestic food prices and
supplies by applying a quota, using quarantine, or prolonging
harbor processes. Unfair rules of play render the UN Security
Council and other UN institutions inefective in inding
solutions for many cases, the Syria case being one example.
here is no instrument suicient enough to ind a solution
for peace when there is a member of the UN Security Council
vetoing.
A Strategic Environment IN A CHANGING WORLD
31
c. Conlicts in border areas
International regulations on borders are not without law.
he increasing occurrences of transnational crimes such as
illegal drug trade, human traicking, etc. serve as evidence.
he weakness of regulations on borders also provides room
for neighboring countries to dispute over territories and
to distrust one another. It may endanger relations between
countries, especially when media reports are illed with
threatening and condescending statements to one another.
he South China Sea conlict stands as a proof that the United
Nations Convention on the Law of the Sea (UNCLOS) is
not adequate for protecting the sovereignty of countries with
sea borders. he deinition of ‘island’ in the UNCLOS can
be debated; even a coral reef can be claimed as an outermost
island as long as there are administrative and military
activities by the claiming country. he solution can only be
sought and maintained by the claimers. If one big country
like China does not agree to the agreement put on the table,
the territorial dispute will continue. herefore, rows in border
areas, such as in the South China Sea, are likely to develop
into open conlicts. In fact, until today the United States are
still reluctant to ratify the UNCLOS.
he current applicable mechanism for settling conlicts in
border areas is based on the willingness of the disputing
countries to sit together in a bilateral or regional platform.
his mechanism is proven to be efective for a number of
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TOWARD 2014-2019
cases, such as when Indonesia was settling land borders
with Papua New Guinea, despite the lengthy time it took.
Indonesia’s border issue with Papua New Guinea had been
addressed since 1966 and was only resolved in 2004 after 3
declarations. Border conlicts require diligent handling with
strict monitoring and heavy inancing.
d. Conlicts caused by natural resources
his conlict is not an open one but it creates a convoluted
situation for the local government and the people who are
directly afected. In the last 10 years, it seems the world’s elite
countries have been trying to secure their supplies of food,
energy, and industry materials to provide for domestic needs
and to guarantee job opportunities. Big countries, followed
by new industrial ones like India and Brazil, have been
exploring and acquiring lands and huge projects in the ields
of food, energy, and business in other continents. Africa and
underdeveloped areas in Asia, like those in the eastern part of
Indonesia, are targets to such investment. Because the targeted
areas are inexperienced in dealing with foreign parties, the
agreement entered by the local government is likely to not be
in line with the national interest. he bad consequence will be
felt only in the next decade.
Conlicts related to natural resources are also relected in the
proposed conditions in today’s global trade cooperation, such
as APEC and inter-regional cooperation. One example is
the conditions regarding the environment safety standards
A Strategic Environment IN A CHANGING WORLD
33
applied by the European Union and the United States.
Moreover, non-government organizations in the related
countries also keep resounding this issue.
e. Conlicts caused by cyber wars
here have been indications of possible cyber wars or
information technology wars to weaken a country’s defense
since 2000s. Such action is carried out by a country’s
government to sabotage, hack, or spy on the computer, military,
and defense system, or to retrieve secret data of another. his
kind of action is usually well planned, using, for instance, a
worm or a program that can damage computer devices and
satellites as well as defense systems. In addition, the systems
of electricity, water, fuel, transportation, and communication
management are also prone to such type of attack.
Among the well-known weapons for this kind of war is a
worm created by the US and Israel, called Stuxnet. Since
the administration of President George Bush Jr, the
program has been used to create disorder in Iran’s uranium
enrichment system through an operation code-named
Olympic Games (NYT, 1/6/12). his activity has also been
supported by President Barack Obama since the irst day of
his administration and is more advanced than the US’ similar
attempts to damage Al-Qaeda members’ computer network
or to support NATO’s aerial strike in Libya in 2011.
In the meantime, the United States has detected China’s
attempt to attack its computer and defense networks, as
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TOWARD 2014-2019
reported by Bryan Krekel (2009) and Desmond Ball (2011).
Chinese military is believed to have adopted the “Local War
Under Informationized Conditions” doctrine that is based
on an architecture with complete networks to coordinate
operations on land, air, sea, and space through electromagnetic
spectrums. With this doctrine China also aims at controlling
enemy’s information channels to maintain its dominance in
times of war, by way of ‘comprehensive computer networks
exploitation’to create blind spots in the opponent’s information
system for it to exploit.
he method will be implemented by China as a preemptive action or an anticipatory measure. he report
above also mentions that it was already used by China to
bug information from Taiwan, Japan, and the US. President
Obama and President Xi Jianping have met to ind a solution
for the conlict. he United States claimed that based on a
report by two conidants of President Obama, Director of
National Intelligence Dennis Blair and the US Ambassador
for China Jon Huntsman Jr, the hacking by China had cost
the national economy more than USD 300 billion per year.
he report maintains that China was responsible for around
70 percent of the theft of corporate intellectual property and
trade secrets (NYT 25/5/13).
Cyber wars got in the way of the relation between Brazil and
Canada as well. he president of Brazil accused Canada of
having hacked its system in an attempt to steal the Brazilian
government’s secret information on mining and energy
A Strategic Environment IN A CHANGING WORLD
35
"...the economic sector
is expected to be able to
make a breakthrough
and pass the 'threshold
of democratic stability’
with GNI per capita at
US$6,000, with better level
of equitable distribution
over the years. he problem
is that currently Indonesian
economists and economic
authorities have not yet
possessed adequately
proven capacity to associate
economy and development
of industries as well as
science and technology
as they have focused
exclusively on the macro
aspects. "
(he Globe and Mail 7/10/13).
he phone bugging on European
leaders by the United States, as
disclosed by Edward Snowden, is
another concrete proof of ongoing
wars of information technology. A
similar case is the phone bugging
on Indonesian President Susilo
Bambang Yudhoyono by Australia
that heated the relation between
the countries at the end of 2013.
hese ive conlicts need a special
attention in international relations.
he possible efect for Indonesia
does not only touch on its relations
with other countries, but also on the
unity of its domestic stance. Business
actors or regional government may
become divided, or merely dance to
the rhythm played by other nations. his needs to be considered by
all parties.
Regional Strategic Environment
East Asia is an open region and a hub of interaction of the world’s
major powers. his is due to its highly strategic position as the center
of global economic growth. Unfortunately, this region inherited
some uninished political-security issues from the Cold War. Several
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TOWARD 2014-2019
East Asian countries have achieved
economic advancement, starting
with Japan and followed by Taiwan,
South Korea, and now China, but
traditional issues on security in the
form of territorial disputes are still a
frequent cause for conlicts. As a result
it became an area of tensions and
military rivalries.
"Several East Asian
countries achieve
economic progress such
as Japan, followed by
Taiwan, South Korea
and currently China.
However, on the other
hand, traditional security
issues such as sovereignty
dispute remain becoming
a source of multilateral
tension in the region.
Consequently, the region
becomes laden with
military tension and
rivalry."
he United States has shifted the
focus of its foreign politics from the
Middle East to Asia-Paciic, and the
ensuing policy changes may give rise
to polemics in the regions. he end
of wars in Afghanistan and Iraq, the
US-Iran agreement to temporarily
halt Iran’s uranium enrichment program, and the fact that the Syrian
conlict did not seem like a part of the US strategic interest have
made it easier for the US to move its resources from the Middle
East to Asia-Paciic. his may also intensify the tension with China,
which has an enhanced military force and is assertive regarding many
security cases in Asia-Paciic.
Southeast Asia, driven by ASEAN, has grown as well economically.
his region lies in a strategic position in terms of economy and
military as it connects the Paciic Ocean to the Indian Ocean. In the
last two decades, ASEAN member countries have been enhancing
their military forces with emphases on sea and air capabilities. Like
A Strategic Environment IN A CHANGING WORLD
37
East Asia, Southeast Asia is still dealing with territorial disputes and
conlicts among ASEAN members in areas with either multilateral
nature, such as the South China Sea conlict, or bilateral. In this kind
of situation, ASEAN must work to develop not only a modality of
internal relations, but also a modality to accommodate the presence
of major countries in the region.
Moreover, ASEAN as a regional organization should work on
building a mechanism that will create a comfortable environment for
the regional actors. Otherwise, the development of armaments being
done by each country may trigger conlicts. herefore, it needs to
be underlined that ASEAN was formed not to be a closed regional
organization, but one that acknowledges the existence of major
countries’ interest in its jurisdiction.
Politically, the common regional advancement of this current center
of global economic growth has been hampered by historical tensions
from the World War. China and Korea’s old wounds from Japan’s
invasions have not healed yet. It is shown, among other examples,
by the fact the two countries always protest against every Japanese
leader’s visit to Yasukuni Temple, which serves as a symbol of honor
for the Japanese casualties. he dispute over the Senkaku Islands
between Japan and China is another manifestation of such tensions.
Meanwhile, the Korean Peninsula remains divided into two opposing
political entities. China and Taiwan stays in the ‘status quo’ having
not yet found an agreed format for the long term. And Australia,
which has been trying to identify with Asia, continues to represent
the face of ‘Western politics’ more than that of Asia.
Unlike Western Europe that has a relatively similar standard format,
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TOWARD 2014-2019
the diference in political style in the western Asia-Paciic is deep.
Remaining scars from World War II can be found not only in the
eastern part of Asia but also in the southeast. Indonesia and the
Philippines, that are working to implement ‘full democracy’ ,have
yet to ind a way out of the middle income trap. Singapore has
successfully transformed into a developed country with a guided
democracy political system in place, something followed by Malaysia
that has also progressed much further than many of its neighbors
in Southeast Asia despite the political shakeups it has had to face.
hailand was relatively ready to become an industrial country
but then had to be divided politically. In the meantime, Vietnam
maintains its old communism and Myanmar adopts an approach
resembling that of Indonesia’s ‘New Order’ to preserve the current
government’s authority.
Such political diversity poses a risk for the efort of establishing a
solid unity in the region. It is also correlated to the way each country
handles its socio-cultural aspect. China believes that its treatment to
its non-Han population such as the people of Tibet and Xinjiang is
rightful, whereas other countries, including those from the western
Asia-Paciic, view it as a serious human rights violation. he handling
of Rohingya by Myanmar is a case criticized by other ASEAN
members. At the same time, protection for foreign domestic workers
in Singapore, Malaysia, Hong Kong, and Taiwan is an equally
important matter to be given attention. Illegal drug problems are
worsening in the region with China as the center of distribution.
On another matter, intensive cultural penetration through art and
cuisines similar to what was previously done by the United Sates has
A Strategic Environment IN A CHANGING WORLD
39
also become a phenomenon here. he government of South Korea
aggressively works to spread the K-Pop music to other countries, just
as hailand actively endorses the dispersion of its cuisines.
From an economic point of view, the western Asia-Paciic is
the most dynamic region in the world and will remain so in the
foreseeable future. China carries on recording the highest economic
growth. Mid-level countries like Indonesia and the Philippines
have also been producing an economic growth of more than ive
percent. In the industrial sector, China began to catch up with
Japan, South Korea, and Taiwan, all of which are established
industrial countries. hailand and Malaysia were behind Indonesia
decades ago but are now increasingly strong in the industrial sector.
Together with Singapore, the two countries are among the major
computer manufacturers in the world. heir companies are efective
in expanding overseas as well. hailand exports cars and dominates
the animal feed industry in Indonesia. As for Malaysia, it expands
with palm plantations while holding a strong position in the
Indonesian banking industry.
With its high dynamics, the western Asia-Paciic region has brought
a high level of prosperity to some of its member nations. Countries
in the south and north of Indonesia have achieved a good Human
Development Index (HDI). Australia, for instance, is ranked second
in the world, while Japan, South Korea, and Singapore are 9th, 10th,
and 18th respectively. Malaysia, hailand, and even China, which
bear the burden of a huge population, have also had a signiicant rise
in prosperity level. However, those in the east and west of Indonesia
still record poor levels of prosperity as relected by their low HDI
40
TOWARD 2014-2019
ranks. hese include western Paciic countries such as Papua New
Guinea and South Asian countries such as India, which was once
dubbed a candidate to be an important global economic power.
he most important natural-resource issue to be given attention is
energy. A considerable economic growth and a large size of population
require adequate energy support. Hopes in the region are still relying
on conventional energy resources such as petroleum and gas to support
growth. Other countries view Indonesia as one of the main sources of
the energy here, taking advantage of the country’s need to sell to get
foreign exchange income. Australia is the only developed country that
can fulill its energy needs with its own production.
he dispute between East Timor and Australia over the Timor
Gap is related to the existence of an energy source. he old
territorial dispute in South China Sea involving China and
some Southeast Asian countries is believed to be more than just
about national sovereignty; it also concerns the interest to exploit
natural resources. To not rely entirely on petroleum and gas, Japan
and South Korea are intensively developing nuclear power plants.
Japan reduced its use of nuclear power plants not long ago after
a leak at the Fukushima nuclear plant caused by an earthquake
and a tsunami. Having to bear a burden too heavy to depend on
petroleum and gas, however, Japan decided to re-optimize its
nuclear power plants.
From a defense point of view, the western Asia-Paciic is a region
without a common concept of defense as one territory. Each country
still cares only about its own interest in dealing with a neighbor in
the same region. Chronic military tensions between North Korea
A Strategic Environment IN A CHANGING WORLD
41
and South Korea, North Korea and Japan, China and Japan, China
and Taiwan, and China and ASEAN countries are some highlights
of the regional defense and security issues. At a lower level of tension,
there are also the disputes between Malaysia and the Philippines as
well as Malaysia and Indonesia over territorial claims. he extensive
enhancement of China’s military force in a few years to come may
intensify these regional tensions, moreover with the United States
beginning to move its resources from East Asia to Southeast Asia.
In addition to these concerns on international relations, there will
soon be free trade issues in the western Asia-Paciic region. he
development of free trade cooperation is an important matter
to observe. Among the platforms for such cooperation are the
ASEAN Free Trade Area or AFTA, the ASEAN-India Free
Trade Agreement, the ASEAN-China Free Trade Agreement, the
ASEAN-Korea Free Trade Agreement, the ASEAN-AustraliaNew Zealand Free Trade Agreement, the Trans-Paciic Partnership,
and the Asia-Paciic Economic Cooperation (APEC). Aside from
economic and trade cooperation, some bilateral matters often
heat up the region, such as the illegal migrants case between
Australia and Indonesia, the case of domestic workers protection
between Indonesia and Malaysia, the smog issue among Indonesia,
Singapore, and Malaysia, and the territorial dispute in South China
Sea.
National Strategic Environment
here are many changes to happen to Indonesia in 2014-2019.
he most crucial change will occur in politics, as the 2014 General
42
TOWARD 2014-2019
Election and the Presidential Election take place to determine who
will be in oice for the next ive years. he legislative composition is
not going to change much because around 90 percent of the current
House of Representatives members have decided to run for another
term. Having had more political experience now, they possess the
capability not only to be re-elected but also to play a bigger role until
2019.
he executive branch of government will have a fundamental
change with the election of the new president replacing Susilo
Bambang Yudhoyono. It will be followed with the change of
cabinet, which will alter policies as well as the main actors of the
lower bureaucracies. It is expected that the administration of the
2014-2019 Cabinet be more efective and responsive in dealing
with future challenges and dynamics.
he 2014-2019 Cabinet will generally be faster in making decisions
and taking actions as the leadership style of the new president is
likely to be ‘more courageous’ and not putting too much importance
on carefulness, as the challenges are going to be more pressing, thus
needing swift and concrete solutions.
he biggest politically challenge is related to the system and
implementation of regional autonomy, which has not yet found a truly
established format after all these years. here have been demands for
breaking regions into smaller entities (pemekaran wilayah, literally
‘territorial blooming’) that are generally driven more by a small group’s
interest and pursued through political pressure. Likewise, regional
governing practices are often detrimental to the national interest;
A Strategic Environment IN A CHANGING WORLD
43
the politicization of the ‘local son’ issue is a case of such. Bureaucratic
reform, meanwhile, remains a challenge following criticisms about
the efort bringing only an improvement of ‘remuneration’ for
civil servants so far and not increasing the required integrity and
competence. Another issue for the next ive years is the survival of
the Corruption Eradication Commission (KPK), after indications
of attempts to weaken the institution by some political circle while
the Drafts of the Criminal Laws and the Criminal Procedure Laws
were being reviewed in early 2014. Such political circle may have felt
bothered by the existence of KPK, and it seems the feeling will not
wear out until several years to come.
In addition, the demand for reform in law enforcement will enliven
Indonesia in 2014-2019. It will not be voiced massively, only expressed
in the critical views of scholars. he ‘case trading’ practice involving
law enforcers – there have been some cases in the last ive years – has
not yet shown any signs of going away, despite the ‘remuneration’
program provided for the legal apparatus. his will result in potential
foreign investors having a negative view of the legal assurance about
investing in Indonesia’s real industry sector instead of the capital
market.
Another outcome of this weak legal assurance is the grassroots
being prone to social and religious conlicts. Indonesia in the last
ive years has seen a lot of violence among the people, such as the
Balinuraga case in Lampung and the attack on Shia followers
that claimed lives in Sampang, Madura. his potential social risk,
associated with the weakening of nationalism in Indonesia, will be
easily instigated when public trust in the laws is weak. his matter
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TOWARD 2014-2019
will persist within Indonesia’s social sphere in the upcoming ive
years. he globalization of ideologies, from the Middle East and
the West, as well as active promotions and avocations of liberalism
from the United States will add to the sociocultural vagueness of
the nation, which has always been fragile in terms of character and
identity. In addition, globalization will also stimulate drug trade
and even human traicking.
Information technology is a very important aspect in Indonesia’s
2014-2019 sociocultural context. On the one hand, it serves as a
disseminating medium of foreign ideologies, such as pluralism and
liberalism, without going through an ‘Indonesianization’ irst so
that they bring social risks. On the other, information technology
also provides an opportunity for Indonesia to make a leap in all
aspects of civilization. herefore in the next ive years, there is a
fundamental need to optimize the use of information technology
to bring the country forward in all aspects, including social. A
strategy to optimize the use of technology and to develop science,
technology, and arts, should be a future concern for Indonesia.
To make the development strategy of science, technology, and arts
cohesive with the development of education is another challenge. In
2013 Indonesian students were ranked 64th among students from
66 nations in mathematics, science, and reading skills according to
a PISA study by the Organization for Economic Co-operation and
Development (OECD). In short, Indonesian students’ reasoning
skill was very poor, which of course explains the poor reasoning skill
of school graduates managing various aspects of life in the country.
At the same time, Indonesia is having a youth population boom
A Strategic Environment IN A CHANGING WORLD
45
that is often positively termed as a ‘Demographic Bonus’. hese two
challenges will remain for Indonesia to deal with until the upcoming
few years.
So far, the Indonesian education authority has been trying to
anticipate this problem by building a school management system,
massively enhancing access to formal education up until the level
of university, and developing the 2013 Curriculum. Some observers
believe that the programs are indeed needed by Indonesia, but they
have not solved the problem of quality. Looking at the current
trend, the challenges for Indonesian education will remain the same
in the foreseeable future. However, it does not seem that the most
important aspects of quality improvement, i.e. teacher development
and character building through modelling, are addressed yet. he
same thing is true for comprehensive health development. So far, the
only realized program is health insurance, or more speciically the
most basic ‘treatment insurance’, and does not cover comprehensive
health development.
he population boom is a challenge not only in education and
health, but also in economy, especially regarding employment for
the youth. For this reason, economists and economic policies for the
next ive years should really focus on maintaining economic growth
and controlling macroeconomic stability as it has so far been. he
challenges are the unstable and speculation-prone exchange rate
of the rupiah, the level of subsidy for energy provisions that can
diminish foreign exchange income, the industry sector that is not
yet developed, and the export value growth that tends to be stagnant.
he new government in oice for 2014-2019 must be able to face
46
TOWARD 2014-2019
such reality.
he capability of Indonesia’s economic authority with the support
of the academic sector should be adequate to manage an economic
growth of more than 5 percent several years from now, and to maintain
the macroeconomic stability with a relatively low exchange rate of
the rupiah as recently. Other than that, the economic sector will be
required to increase distribution as agricultural products and imported
goods are looding the domestic market with the implementation of
the free market system and foreign labor enters the Indonesian labor
market. he future of farmers and home industries will be at stake
here.
Its economic position now places Indonesia as a middle-income
country susceptible to the ‘middle income trap’, something that
may hold the likes of Indonesia and the Philippines from becoming
developed countries. For that reason, the economic sector is
required to make a breakthrough to pass the ‘stability threshold
of democracy’ with a GNP of USD 6,000 per capita, and with a
better level of distribution. he problem is that economists and
Indonesia’s economic authority have yet had a tested and adequate
capacity to connect the economy to the development of industry
and science, technology, and arts because they are more focused
on the macroeconomic aspects. Moreover, the existing economic
concepts and views, as expressed above by the world economists in
response to the European Crisis, are seen to be no longer suicient
for managing today’s economy. he economic authorities are
required to be more open minded to learn from the implemented
practices in every country.
A Strategic Environment IN A CHANGING WORLD
47
hus, the pressure to link the economic development to the
development of industry and the management of environment will
be higher in the future, especially with the energy issue being a fragile
point of Indonesia. he problem of energy is one of the obstacles for
the country’s overall progress. here will be a need to formulate an
economic resilience strategy with various resources such as petroleum
and gas, vegetable materials, geothermal energy, solar energy, wind
energy, nuclear energy such as the nuclear power plants developed in
South Korea and other developed countries.
he pressure to manage other natural resources, such as marine forests,
will increase in the next ive years. As a country that serves as the
world’s lungs alongside Brazil, Indonesia’s forest management is poor
in terms of both conservation and industry development. he same
is true for ishery and sea, which have always been exploited more
by various parties other than the government. Poor management of
natural resources is related to the quality of government management
in general, which is related to the quality of education as explained
before. his will be another challenge for the 2014-2019 government
of Indonesia.
Regarding the nation’s internal resilience there are several things
to observe. Among those is horizontal conlict that may occur
because of several factors. First, economic pressure, sociopolitical
pressure, and population density in urban and rural communities.
hese develop at the same time as the country’s ability to
distribute economic, political, and social resources is weakening.
he fact more than half of Indonesia’s population live in Java, is an
obvious example. Second, the emergence of identity politics with
48
TOWARD 2014-2019
ethnic manifestation and the strengthening of religious groups.
his will only happen when economic and political resources are
distributed unfairly based on identities. Usually, this identitycommunal political problem lasts long and is very emotional in
nature. Conlicts arising from identity politics tend to last for a
long time, too.
Vertical conlicts happen between a state and its people in the form
of armed separatism and political movements seen as national
threats. Indonesia has long been facing vertical conlicts in Aceh
and Papua with all their dimensions and characteristic changes
until today. Looking at the roots, the two conlicts are really a mix
of regional dissatisfaction with unfair economic distribution and
responses to physical repression. hese build distrust of and hate
for the central government. Indeed, such sentiments can easily
ignite armed separatist movements. Vertical conlicts get more
complex when politically and emotionally involving cultural,
ethnic, and historical aspects of an identity, especially if the
separatist group seeks and receives international support.
Meanwhile, natural disasters remain an unavoidable threat to
Indonesia. he country sits in the ring of ire, at the meeting point of
the Eurasian and the Australian Plates. his geographical condition
makes indonesia very susceptible to natural disasters. Indeed, there
have been disasters resulting in large casualties and damage. he
Aceh tsunami, the Yogyakarta earthquake, and the Pangandaran
tsunami are some examples. Further back in the past, one may
ind other great natural disasters recorded, including the volcanic
explosions of Tambora, Krakatau, and Agung as well as the deadly
A Strategic Environment IN A CHANGING WORLD
49
wave in Mentawai.
Amidst various threats, Indonesia must also be active in ighting for
its national interest in the international arena. he national interest
is simply deined as a country’s goals and ambitions usually related
to power or inluence in global interactions. In general, Indonesia’s
position as the biggest democracy among Muslim-majority countries
remains globally respected with its involvement in ASEAN, APEC,
and other organizations. Nonetheless, Indonesia has not yet been
efective in defending its national interests, especially in the aspect
of economy.
Adopting the slogans ‘thousands of friends and no enemies’ and
‘dynamic balance’, Indonesia seems to put importance on harmony
in its foreign policy, which is respected by other countries yet fruitless
in pursuing its own interest. he management and capacity of the
diplomacy actors need to be addressed to ensure protection of the
national interest among other countries’ businesses. Meanwhile, the
realm of international relations has shifted to involving more nonstate actors. In 2014-2019, these non-state actors that comprise
transnational business, non-governmental organizations, education
and research organizations, and mass media will play more active
roles in international afairs.
he strategic environment at global, regional, and national levels
in which Indonesia will ind itself in the period of 2014-2019
is full of challenges. his is true in all aspects, including politics,
social and culture, economy, natural resources, defense, and
international relations. It takes determination, non-stop eforts, and
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TOWARD 2014-2019
even integrity and humility to continuously learn to get over the
problems. Awaiting behind the diiculties in dealing with all those
is an excellent opportunity for Indonesia to leap forward fulilling
the hopes of the whole nation.*
A Strategic Environment IN A CHANGING WORLD
51
52
TOWARD 2014-2019
Chapter II
Politics
Towards Consolidated
Democracy
Politics TOWARDS A CONSOLIDATED DEMOCRACY
53
54
TOWARD 2014-2019
“.... since hundreds of years ago, we, Indonesian people,
have been in the same boat, which has developed our
sense nationality and unity, and the unifying personality
entrenched for generations.”
~ HM- Soeharto-he 2nd President of the Republic of
Indonesia ~
photo © wirasatria
Politics TOWARDS A CONSOLIDATED DEMOCRACY
55
Politics
TOWARDS A
CONSOLIDATED
DEMOCRACY
A
s of 2014, the process of political reform or democratization
in Indonesia has been running for sixteen years. Where
has the journey brought us? Has Indonesia become a
democratic country? As summarized by Marcus Mietzner and
Edward Aspinall (2010), observers’ views and emission agreement
on the success of democratization in Indonesia, are not the same.
Some people view the democratization process in Indonesian has run
very well, particularly when compared to other countries sufering
setbacks after initiating democratization process for a while. In this
case, the democratic transition process in Egypt becomes the most
apparent comparator.
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TOWARD 2014-2019
On the other hand,another group believes
Indonesia has made
democratization in Indonesia cannot be
signiicant democratic
considered to be truly successful. For this
progress, despite
group, democratic change in Indonesia
lingering structural
is merely supericial. General elections
problems such as
at central and local levels indeed exist,
corruption and weak
albeit making no signiicant changes
law enforcement,
in the Indonesian political economy
resulting in imperfect
structure. he power at various levels
consolidated
remains dominated by a handful of
democracy.
people. Indonesian people merely take
part in the routinely-held General
Elections which are heavily inluenced
by money politics and manipulation. Between these two groups, a group
of observers considers Indonesia to have made democratic progress,
despite still having structural problems such as corruption and weak law
enforcement, which hinders the democracy to be perfectly consolidated.
he diference in this view is closely related to parameters used to
measure the success of democratization. Freedom House and those
viewing democratization in Indonesia as an example of success tend
to use minimalist deinition of democracy, such as Schumpeter’s
emphasis stating that general elections exist to determine political
leadership and Robert Dahl’s deinition of “polyarchy”, with its views
on institutional aspects.
Meanwhile, those viewing from the negative side are likely to
see that institution aspects are supericial and false. hus, the
determination of deinition applied will afect our evaluation of
Politics TOWARDS A CONSOLIDATED DEMOCRACY
57
success of democratization in Indonesia. So, what are the deinition
and parameter applied in this paper?
Indonesia’s political future can be projected by drawing a “scenario line”
consisting of six phases. To reach the ladder of democracy, the irst
prerequisite is the position of the ‘state’ which at least its into the scenario
of ‘authoritarian state’. If the state is equipped with electoral institution
under the state’s control, the state level steps forward to ‘pseudodemocracy’ stage. When general election is performed independently,
the state has now belonged to ‘formal democracy’ category.
Scenario Line of Future Indonesian Politics
Authoritarian
Failed State
Pseudodemocracy
Facade
Democracy
Electoral/
Formal
Democracy
Full
Democracy
Advanced
Democracy
Source: Andreas Schedler, 2001 & Jef Haynes, 2001
At this phase, there are no strong guarantees for civil and political
rights. Once the guarantees for civil and political rights have
been strongly fulilled, the state enters into the typology of ‘full
democracy’. he last ladder is optimal participation of citizens,
which brings the country to the ideal typology called ‘advanced
democracy’. To ind out Indonesia’s starting point in the “line
scenario” it needs to be determined which ladders Indonesian
political system has been through.
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TOWARD 2014-2019
Indonesian Political Position
he irst ladder, the existence of a state or stateness, has been passed.
Except for small-scale anomalies in Papua, the state remains sovereign
throughout its regions. Monopoly of the use of violence (arms) remains
under state’s control, although the use of violence has also emerged from
certain groups. However, it should be noted, this country is not something
given and static. Failed States Index 2013 recorded Indonesia’s rank shift
in the index measuring the vulnerability towards “state’s failure.”
In general, all agree that Indonesia has surpassed ‘authoritarian state’
ladder by regularly holding general elections. Following the 1998
Reform, Indonesia has held the General Election in 1999, 2004, and
2009. Since 2004, presidential elections have been conducted directly.
It is understandable considering political system restructuring becomes
one of the top priorities, as seen in the laws and regulatory products at
the beginning of the reform summarized in the following table.
Table 1. Major Laws and Regulatory Products
In Early Reform Period
Law
Issues
Constitutional Amendment Reorganization of political power
structure of the People’s Consultative
Assembly (MPR), House of
Representatives (DPR), and the President
Law No. 33/1999
General Election and political parties
Law No. 22/1999
Decentralization of governmental
functions
Law No. 25/1999
Decentralization of inance/iscal transfer
Source: Anies Baswedan, 2013
Politics TOWARDS A CONSOLIDATED DEMOCRACY
59
Under the laws born following the Reform, Indonesia has started
to implement a multi-party system to replace the limited (three)
political parties system that has been in place for thirty-two years
by the New Order. he current law on political parties and general
elections is very progressive compared New Order’s thirty-two years
of practices. At two lowest ‘ladder’, democratization has no dissenting
opinions. Debate rises on the third ladder, questioning whether
general elections have been truly fair, competitive, and inclusive.
Political reviewer of the University of Indonesia, Chusnul
Mariyah for example, agrees that the 2009 general election was
independent. However, she repeatedly stated, it was marred with
fraud, or in her terms, a ‘liberal Machiavellian election’ – a liberalbut illed with gimmicks-election.1
By not denying the allegations of fraud in the execution, Indonesian
general elections have been relatively fair, competitive and inclusive.
his is seen from the dynamically changing results of Indonesian
general election. In 1999, the Indonesian Democratic Party of
Struggle (PDI-P) won with 33.7 percent of total votes. In 2004, he
Party of the Functional Groups (Golkar) won with 21.6 percent of
total votes. In 2009, the Democratic Party won with 20.8 percent of
total votes. Table 6 below records three largest votes in 1999, 2004,
and 2009 general elections.
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TOWARD 2014-2019
Table 2. he Big hree of 1999, 2004, and 2009
Legislative General Election
1999
2004
2009
Party
%
Party
%
Party
%
PDI-P
33.74
Golkar
21.62
Democratic
20.81
Golkar
22.44
PDI-P
18.31
Golkar
14.45
PPP
10.71
PKB
10.61
PDI-P
14.01
Source: General Election Commission (KPU), 2009
hus, Indonesia has entered the “formal democracy” ladder. In the
next phase, the debate turns more complicated: Has Indonesia
strongly guaranteed civil and political rights? Freedom House gives
3 points (1 as the best and 7 as the worst) on civil rights and 2 points
on political rights in Indonesia (1 as the best and 7 as the worst);
hence by average, Indonesia is at 2.5 (rating of freedom) points
which remain under the “free” category.2
Such positive index may be understood had the measure been
comparing with other countries in the world. However, various
violence by state oicials (by commission) or neglect by the state
(by omission) occurring in this country towards minority groups are
making it diicult to say that the state has strongly protected civil and
political rights of its citizens. According to Setara Institute report,
264 violations against religious freedom occurred in 28 provinces in
Indonesia in 2012 alone.
By comparing the two institutions’ report, Indonesia’s position can
be placed between ‘formal democracy’ with the existence of fair and
Politics TOWARDS A CONSOLIDATED DEMOCRACY
61
competitive general elections and ‘full democracy’ where democracy
is built by fair and competitive general elections and strong protection
to civil and political rights. ‘Full democracy’ has not been reached
perfectly as the state has not been able to fully guarantee citizens’ civil
and political rights. Since “guarantee of strong protection to civil and
political rights” ladder has not met, the next “optimal participation of
citizens” ladder has not been reached.
Formally, all citizens are entitled to engage in politics. But in reality,
not all citizens have access to the formulation of public policies that
afect their lives due to elitist domination in Indonesian political
society. Most public policies are formulated not for the public interest,
but for personal and group interests. herefore, to avoid interference
by society, most public policy-making processes are conducted with
no transparency. With this logic, we can see whether a country
has reached the phase of ‘advanced democracy’. hat is, a stage of
democracy in which every citizen can optimally participate in public
policy by viewing at the level of transparency and corruption in the
questioned country.
In this context, we must admit, Indonesia has not yet been included
in the category of “advanced democracy”. Perceptions toward the
high rate of corruption and also the reality of rooted corruption in
Indonesia cannot be denied. he igures show the facts. For example,
Indonesia’s ranking in the Corruption Perception Index released
by Transparency International has not experienced signiicant
improvement from year to year. Compared with 178 countries, we
are still ranked in the top 100.
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TOWARD 2014-2019
Chart 1. Indonesian Corruption Perception Index
Rank
160
140
120
122
133
137
130
143
126
111
110
111
2009
2010
2011
100
80
60
40
20
0
2003
2004
2005
2006
2007
2008
Source: Transparency International, 2011
Indonesia’s rank slightly improved in 2009 and subsequent years in relation
to the Corruption Eradication Commission (KPK) performance which
is considered relatively successful in solving various corruption cases
involving state oicials at various levels and sectors of government, from
members of Parliament and the Council, regional heads, to ambassadors.
From 2004 to 2013, 72 members of the House of Representatives and
Regional House of Representatives, 8 judges, 9 ministers and heads of
agencies, 9 governors, 34 mayors/regents/deputies, as well as 114 oicials
of echelons I, II, and III were arrested by KPK.3
In addition to reporting good news that state oicials can now be
convicted of corruption, the data also shows that bureaucracy is one of
the loci where corruption is most prevalent. Not only is the amount of
the stolen goods important, but also the bureaucracy dealing directly with
the public. herefore, democratization rolled out in Indonesia is to create
sound public policy and oriented to services aimed to public interests.
Politics TOWARDS A CONSOLIDATED DEMOCRACY
63
Indonesia’s journey in the democratization process follows the
transition of double-track lines as experienced by other new
democratic countries. Double transitions involve the irst track, which
is the action to develop a competitive political system to amend the
uncompetitive political system run by prior authoritarian regime. On
the second track, naturally, the new democratic countries apply power
decentralization, which was concentrated on a handful of people in
central government to local governments. Both tracks are inseparable,
with one afecting the other. Decentralization is expected to be
able to strengthen democracy. Because, decentralization provides
opportunity for local government to create favorable scope for
democracy through a variety of ways, including improving quality of
life through local development programs, developing accountability,
improving responsiveness to the interests of local communities, and
improving the degree of representativeness to shorten distances
between ruler and the ruled.4
he development of democracy related to decentralization can be
reviewed, among others, by viewing the Indonesian Democracy Index
(IDI) in 2009 which was deined by a team and fully supported by the
National Development Planning Agency (Bappenas). he 2009 IDI is
relevant to be stated here given the measurements were carried out in
a way that could capture the variations in each provinces in Indonesia.
here are at least three important aspects of democracy, i.e. civil
liberties, political rights, and the presence of institutions of democracy
as summarized in the data. he review can be further explored, but at
least this may help to see variations in the level of implementation of
democracy throughout provinces. he chart shows diference in the
64
TOWARD 2014-2019
quality of democracy from one region to another. Central Kalimantan
has the best democracy index, instead of one of the Javanese provinces
which during the New Order generally experienced better progress
compared to other provinces outside Java.
he same chart also shows, “big” provinces which have often been
used as references, such as East Java, South Sulawesi, West Sumatra
and North Sumatra, apparently have lower indexes of democracy,
compared to other provinces. his means that decentralization allows
us to see that communities scattered in diferent provinces have
diferent qualities in running the democracy. Our Jakarta-centric,
and to a certain extent “Java-centric” view in assessing everything,
including the assessment of democratic “ability” of Indonesian
society, should actually be changed.
Chart 2. Indonesia Democracy Index
(5 Top and Bottom Provinces)5
90
80
70
60
50
40
30
20
10
0
g
en
lt
Ka
au
Ri
KI
D
pr
Ke
alo
i
G
t
on
or
im
Jat
el
ls
Su
S
r
ba
um
ut
m
u
S
TB
N
Politics TOWARDS A CONSOLIDATED DEMOCRACY
65
So, what is the importance in acknowledging that one region is more
democratic than the others? One reason is to see the link between
democracy and people’s welfare, as the political reform we achieved
during the Reform, the democratization, aimed to create more
just and prosper society. One way of measuring the level of social
welfare is to use Human Development Index (HDI). It is interesting,
therefore, to look at the HDI of ten provinces above, at least in 2009.
he following chart shows an important pattern to note. Five
provinces with highest Democracy indexes (except for Gorontalo)
in fact, have higher Human Development Index than the other ive
provinces with lowest Democracy Indexes. At least, this gives us an
early indication about an associative relationship between democracy
and community’s welfare, with the Human Development Index in
the ten provinces.
Chart 3. 2009 Human Development Index (HDM) in 10
Provinces with Lowest/Highest IDI
80
75
74.36
70
64.66
65
60
55
g
en
lt
Ka
au
Ri
KI
D
pr
Ke
alo
i
G
t
on
or
im
Jat
l
lse
Su
Source: Central Bureau of Statistics
66
TOWARD 2014-2019
r
ba
m
Su
ut
m
Su
TB
N
Findings in regional level conirm the formulation on ten key
indicators (particularly indicators of “welfare level”) used to predict
the trend of democratic consolidation development in Indonesia in
this research. Decentralization itself will be discussed further as one
of the “driving forces” in determining the political future of Indonesia.
Reading the Future
Indonesia’s political reality as of 2013 becomes the foundation
to see the future of Indonesia’s politics, at least for the period of
2014-2019. To be able to conduct these matters, further studies
need to be implemented to a number of important indicators that
afect the future of political developments. hese indicators include
the level of welfare and economic growth; equal distributions;
institutionalization of economic society; freedom of civil society;
community political autonomy; bureaucracy; democratic political
culture; and law enforcement and its enforcers.
Indicators 1 & 2: Level of Welfare and Economic Growth
Various parties inside and outside the country are likely to see
aspects of welfare and economic growth in Indonesia in optimistic
way. Chairul Tanjung, Chairman of the National Economic
Committee (KEN) repeatedly stated Indonesia’s bright projection.
In 2050, Indonesia is projected to be the world’s fourth-largest
economy following India, China, and the United States (USA)
with economy size amounted to US$13.9 trillion, above Brazil
(US$11.6 trillion) and under the United States (US$39.1 trillion).
In 2030, Indonesia is predicted to have become the ifth largest
economy in the world and in 2020 will have been in ninth position.6
Politics TOWARDS A CONSOLIDATED DEMOCRACY
67
Chart 4. Indonesia’s Growth and GDP Per Capita
Projections by 2030 Vision Team7
Indonesia Visi 2030 GDP per capita Projection
45,000
1992
2015
Lover Middle
Income Country
40,000
2023
Lover Middle
Income Country
High
Income Country
38,609
35,000
SUSTAINABILITY
30,000
Actual:GDP
26,237
per capita has
reached US ACCELERATION
$3,000 in
19,195
2010
25,000
20,000
15,000
PREPARATION
4,745
10,000
5.000
0
1,660
1990
1995
2000
2006
3,000
4,308
2,359
3,923
2010
2015
9,543
7,867
14,367
15% CAGR
12.8% CAGR
10.7% CAGR
12,449
7,231
2020
2025
2030
With rapid economic growth, the level of welfare will also rapidly
increase. Projections formulated by the 2030 Vision shows,
Indonesia’s GDP per capita will reach over 7,000 by 2020. he
same optimism is expressed by observers from outside Indonesia,
although economic growth rate prediction is not as great as those
by KEN. In Imagining Asia 2020, Indonesia is predicted to be
able to reach the level of United States’ GDP per capita in 41
years (assuming economic growth of 6 percent).
Study indings by Adam Przeworski, Michael E. Alvarez, Jose
Antonio Cheibub, and Fernando Limongi suggest relation
between per capita incomes with how long a democracy can
survive. A study towards 135 countries from 1950 to 1990 shows
the higher per capita income; the more solid the democracy is
built.
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TOWARD 2014-2019
Table 3: Per Capita Income and Average
Length of Democracy
Per Capita Income
(US Dollar)
Average Durability of
Democracy
< 1.000
8.5 years
1,000 – 2,000
16 years
2,000 – 4,000
33 years
4,000 – 6,000
100 years
>6,000
Unwavering
Source: Adam Przeworski, et al.
Referring to the research, it is natural if there is optimism that
Indonesia will experience democracy development. Assuming
that US$6,000 is a critical point which will lock the democratic
path to avoid ‘democratic reversal’, democracy in Indonesia will
be able to survive sustainably if Indonesia has managed to achieve
such igure in the period of 2015-2020.
However, these optimistic predictions must be addressed with
caution as it is based on the development assumption which is ixed,
linear and positive. For example, KEN’s optimistic predictions are
based on four key factors: good political environment, integration
with regional and global networks, demographic (low dependency
ratio and growing productive population), and strong inancial
system. If one of these four factors (except for demographics which
cannot be changed relatively quickly) experiences shock, such
positive trend for democracy consolidation can change rapidly.
Politics TOWARDS A CONSOLIDATED DEMOCRACY
69
he critical point that can be identiied in both indicators is
“economic crisis.” If there is a huge economic crisis and Indonesia’s
inancial system is not able to deal with such shocks, positive trend
of economic growth and increased welfare will be afected. As
the result, the consolidation of democracy will be hampered. In
addition to strengthening consolidation of democracy, economic
growth and welfare development also depend on the consolidation
of democracy that will sustain both. hen, viewing other indicators
afecting the development of democracy is signiicant.
Indicator 3: Equal Distribution
Indonesia’s economic growth rate is apparently not compensated
by speedy equal distributions of development outcomes. In general,
Indonesia has experienced an increasing trend of social inequality,
as indicated by Gini coeicient increase. Social inequality in the
measurement of Gini coeicient increased by 5 points from 0.33
to 0.38 in 2010 (1 is the highest value of the inequality). In 2012,
Indonesia’s Gini coeicient has increased to 0.41.8
Chart 5. Indonesia’s Gini Coeicient in 1999-20109
Gini Coefficient
Urban
Rural
Total
0.40
Gini Coefficient
0.35
0.33
0.30
0.25
0.20
0.24
0.33
0.29
0.32
0.24
0.35
0.34
0.31
0.28
0.26
0.25
0.37
0.37
0.37
0.30
0.30
0.29
0.38
0.32
0.15
0.10
0.05
0.00
1999
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TOWARD 2014-2019
2002
2003
2004
2005
2006
Year
2007
2008
2009
2010
he increased inequality is also complicated by inter-regional
gap due to uneven development. Riyana Miranti, et al. research
(2013) showed no signiicant changes in the percentage of poor
people in 2001-2010. he map formulated according to the
percentage of poor people in 2001-2010 describes inter-regional
gap clearly: Eastern and Middle Indonesia generally marked
with red, indicating high level of poverty in 2001 and 2010.
Chart 6: Indonesia Poverty Map (2001-2010)10
DKI
Legend
Persiapan in Poverty Rate - 2001 and 2010
Low-Low (2)
Medium-Low (1)
Medium-Medium (22)
Medium-High (0)
High-High (5)
In a study on the consolidation of democracy, it is believed that
the increase in equal distributions will give positive efect for
the consolidation of democracy. Meanwhile, the increase in the
gap will challenge the consolidation of democracy. In this equal
distributions indicator, if we accept this view, the consolidation of
democracy will face serious obstacle.
Politics TOWARDS A CONSOLIDATED DEMOCRACY
71
he critical point that may reverse this trend is decentralization.
If decentralization runs well and efectively, the gap can
be suppressed. In contrast, if decentralization becomes
“decentralization of corruption,” the gap will be maintained and
become serious obstacle to the consolidation of democracy. hus,
the third indicator will be associated with the fourth indicator.
Indicator 4: Economic Society Institutionalization
Linz and Stepan in Toward Consolidated Democracies stated, a
consolidated democracy is in need of norms, institutions and
regulations to mediate between the state and the market (as they call
“economic society”) with fair and independent.here is no democracy
with centralized economy except perhaps during wartime; on the
other hand, there is no democracy where the state has no role at all.
In Indonesia, eforts to achieve institutionalization have been
conducted through a variety of laws, one of which, Law of the
Republic of Indonesia Number 5 of 1999 on Prohibition of
Monopolistic Practices and Unfair Business Competition. In
addition, eforts of economic society institutionalization are also
strongly related to the ight against corruption; as corruption
(especially those involving state oicials and entrepreneurs) is the
most obvious sign that the economic society institutions mediating
between the state and the market are not properly functioning.
For example, by providing gratiication, entrepreneurs receive
project share from government. Other example is state resources
that are used for the interest of economic groups that control
access to these resources. In corruption, boundaries between the
state and the market blur.
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TOWARD 2014-2019
In this context, implementation
he elites, born and
of the eforts to institutionalize
raised by the New
economic society becomes serious
challenge. One of the main factors
Order but escaped
is because those who control access
the efect of the fall of
to economic resources attempt
Suharto, rush to gather
to collect even more access to
economic resources
economic
resources
through
with their involvement
political process. For some skeptics
in politics.
on democratization in Indonesia,
Indonesian democracy has been
hijacked by New Order elites but did not fall with Suharto. hese
elites later compete to collect economic resources by engaging
in political activities.11 In addition, new players in Indonesian
politics have similar attitude, as we see in corruptions involving
political parties as always shown in national television. But we also
see some positive developments such as KPK’s success in solving
various cases of corruption that undermine the institutionalization
of “economic society” or bureaucracy reformation, led by various
regional heads in Indonesia.
In this fourth indicator, we can see eforts being conducted to
institutionalize “economic society,” which is the arena for mediation
between the state and the market. here are many more challenges
in these eforts, especially due to rampant corruption. However, we
also see many developments that should be appreciated.
he critical point in this indicator is the “success of the ight
against corruption”. If the anti-corruption eforts gain widespread
Politics TOWARDS A CONSOLIDATED DEMOCRACY
73
support from the community and the leadership of the country,
boundaries between state and market can be established and
each can function optimally. he driving factors that may afect
this matter, among others, are the increasing number of middle
class, which can be more powerful suppressor against corruption
practices, and information technology development that enables
more robust control on utilization of the state budget.
Indicator 5: Alive and Free Civil Society
In this indicator, Indonesia’s tendency is also various. Freedom
House, an international organization monitoring civil and
political freedom throughout the world, notes that in general,
Indonesia’s civil society is quite alive and free. he organization
states that various sectors of civil society are relatively free albeit
monitored by the government. Media freedom and freedom of
expression are guaranteed, albeit common censorship to normviolating contents. his organization also notes that Indonesia
has a strong and active civil society, in spite of the existence of
several human rights groups monitored by the government. In
general, academic freedom is also acknowledged.
Even so, civil society activists were pressured in many events.
he State is also reported to conduct frequent violence and
human rights violations against civil society. he Commission
for Disappeared and Victims of Violence (KontraS) report
entitled “Penyiksaan: Tindakan Keji yang Tidak Dianggap Serius”
(“Torture: A Despicable Act Not Taken Seriously”) records a
total of 49 people were victims of torture over the time span of
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2010-June 2011. Freedom House also notes no cases of serious
human rights violations have been successfully prosecuted even
after democratic transition.
he data relates to the aspect of “freedom.” hen, how “alive”
is Indonesian civil society? NGO Review written by STATT,
consultancy agency requested by AusAID to conduct research on
non-governmental organizations (NGOs) in Indonesia, estimates
approximately 2,293 NGOs are active throughout Indonesia.
Field research carried out for the review writing found among
civil society organizations registered in the Ministry of Internal
Afairs (11,468 organizations), around 20 percent are active.12
he NGO populations are concentrated in Java. 22 percent of
total NGOs registered in Indonesian government are located in
Jakarta. he study also found a correlation between local income
and the presence of NGOs: the higher regional income, the more
NGOs established in the questioned region. Another interesting
STATT’s research inding is that about 37 percent of the NGOs
were established throughout 1997-2001.
2011
2009
2007
2003
2005
2001
1999
1997
1995
1993
1991
1989
1987
1983
1985
1981
1979
1977
1973
1975
1971
1969
1967
1963
1959
1955
1946
1943
200
180
160
140
120
100
80
60
40
20
0
1936
Chart 7. NGOs’ Years of Establishment13
Politics TOWARDS A CONSOLIDATED DEMOCRACY
75
hus, we see democratization opens wider space for nongovernmental organizations. As to why fewer non-governmental
organizations established after 2005 is related to the development
of these institutions that are relatively well-established currently.
Another positive trend is the growing middle-class people with access
to information technology known as social media. Albeit still limited to
urban population, the use of social media has been able to afect public
discourse as many oicials, political igures, activists and journalists
exist in the social space. A few examples show the potential power of
civil society when managed by social media, such as a feud between
the Police and KPK (Cicak vs. Buaya—lit “Gecko vs. Crocodile”—
Confrontation) and “Coins for Prita” case. Urban youth communities
also organize networks through a variety of youth organizations to
optimize social media. Indonesia, especially Jakarta, is among the
highest ranks among the world’s major cities with highest number of
Facebook users according to www.socialbakers.com.
Table 4. Cities with Largest Facebook Users Worldwide14
#
City
County
1.
Bangkok
Thailand
8 682 940
2.
Jakarta
Indonesia
7 434 580
3.
Istanbul
Turkey
7 066 700
4.
London
United Kingdom
6 139 180
5.
Bogota
Colombia
6 112 120
6.
Sao Paulo
Brazil
5 718 220
7.
Santiago
Mexico
4 294 820
8.
Mexico City
Chile
4 129 700
9.
Mumbai
India
3 700 460
Buenos Aires
Argentina
3 533 840
10.
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Users
Although the general trend is positive, some negative trends
also exist with the emergence of the Civil Society Organizations
Act (CSOs Act) which is considered to limit the space for civil
society. Another important note is the unequal distribution of
NGOs that may worsen with the growing role of social media,
due to concentrated access of social media in urban areas. In
Indonesia, internet penetration remains small at 34.1%. However,
the penetration grows rapidly; especially with mobile phone
technology with access to internet at low prices.
Matter that may change the situation rapidly is a political decision
which pushes the limit and controls the activities of civil society,
such as stricter civil society organizations laws or laws governing
the use of social media.
Indicator 6: Relatively autonomous political society
here are two important trends to be observed in the aspect
of “political society”: political party and decentralization. In
political parties, almost all political reviewers believe that healthy
democracy requires healthy political parties.
In connection with this, there is a tendency of stagnation or even
decline in the management of political parties. Political parties
are increasingly concentrated in the hands of inluential elite,
hence the electoral achievements are related to the inluence of
such individuals.
For example, the Democratic Party received only 7.5 percent of
votes in 2004, which increased to 20.9 percent during President
Politics TOWARDS A CONSOLIDATED DEMOCRACY
77
Susilo Bambang Yudhoyono tenure. Meanwhile, PDI-P, winning
33.7 percent in 1999 election thanks to Megawati’s popularity,
received only 18.5 percent of votes in 2004, as her popularity
declined.
Rampant corruptions conducted by party elites, either at central
or regional levels also afect the presumption that the parties are
no longer representing the interests of the society. Golkar and
PDI-P rank irst in the number of regional heads from the parties
involving in corruptions. 52 regional heads from Golkar and 33
regional heads from PDI-P were involved in corruptions.15
Table 5. Corruption Cases of Regional Heads by on Party
No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Partai
Functional Groups (Golkar)
Indonesian Democratic Party - Struggle (PDI-P)
United Development (PPP)
Democratic
National Mandate (PAN)
Prosperous Justice (PKS)
National Awakening (PKB)
Coalition
Independent
Unidentified
Total
Permitted
Not yet
Permitted
Handled
26
10
16
20
4
5
5
0
6
15
1
1
83
12
1
4
0
1
0
9
0
1
38
1
0
2
0
0
0
7
0
0
26
Source: ICW 2012 Corruption Trends Documentation
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Number
Investigated
53
33
5
11
5
1
6
31
1
2
147
Chart 8. Number of Party Elites in Central Level
Involved in Corruptions16
Unidentified
PPP
Gerindra
PKS
PKB
PAN
PDIP
Democratic
Golkar
0
3
6
9
12
15
Source: ICW 2012 Documentation
Such political parties’ “achievements” afect people to lose strong
political parties identiication. CSIS national survey found only
4.7 percent of respondents have political party membership card
and only 2.5 percent have donated funds to political parties.17
he second important trend is the so-called “decentralization.”
Countries recently experiencing democracy transitions often
conduct the double track transition, which include: (1)
development of a competitive political system to replace the
uncompetitive political system run by previous authoritarian
regime and (2) decentralization of power, from the previous
concentration in small central government to local governments.
In this context, decentralization is an important trend that will
greatly afect realization of a relatively autonomous political
society. Decentralization can be viewed as a political process
in which distribution of power is territorially carried out.
Decentralization includes transfer of obligations, resources, and
authority of governmental units at a higher to the lower level.
Politics TOWARDS A CONSOLIDATED DEMOCRACY
79
Various academic studies found associations between total area
of governance and democracy. Two-thirds of countries with
population of less than one million people are categorized as ‘free’,
while only one-third of countries with more than a million people
are categorized similarly. In a large country such as Indonesia,
decentralization can shorten the gap between government and
society, which is expected to create a more sustainable democracy.
In general, decentralization gives positive trend for the
consolidation of democracy in Indonesia. Studies on the efects
of decentralization in new democracy show the impact of
decentralization on voter’s behavior. Remmer and Gelineau in
their study on Argentine politics found voters living in diferent
areas to a certain degree also consider and compare diferences in
inter-regional economic situation with the economic situation of
the area where they live.18 hese indings are similar with those
found by political researchers on democracy transition in Eastern
and Central Europe.
Direct local elections provide opportunity for people to evaluate
ruling leaders and parties by comparing with local leaders in
other areas. Gradually, local leaders will be encouraged to become
more accountable. his trend has been proven, for example, by
the emergence of outstanding local leaders who later become
alternative leader candidate in national political stage.
Based on the above discussion, in this indicator we ind positive
and negative trends. Negative trends appear in the management of
political parties, while there are positive trends in decentralization.
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hus, there is also a critical point in the two aspects. After 2014
when powerful igures such as SBY and Megawati begin to
lose their inluence; will the parties be able to reorganize the
management to function properly? Will decentralization be
sustainable or is there a push to recentralize power to central
government?
Indicator 7: Well-Functioning State Bureaucracy
Reformation of the bureaucracy has become an important agenda
in the political reformation and governance in Indonesia. To carry
out the bureaucracy reformation, many eforts have been carried
out, either related to institutional or human resource quality. his
paper is not going to discuss complex bureaucratic reformation
comprehensively as not included in the purpose of this study.
However we would like to see how the trend development will be.
In connection with the objectives, an indicator may help us see
the progress. Since 2007, KPK has been publishing public service
integrity report to receive real picture on the performance of
public services as well as potential abuse of power in the forms of
collusion and corruption. Based on the experience of corruption
indicators and potential corruption in public services, indicators
to assess the integrity of various public services are formulated,
entitled the National Integrity Index. Based on reports from
2007 to 2012, we ind the luctuation of National Integrity Index,
which shows that bureaucratic reformation progress measured
through the quality of public services, has not shown signiicant
progress.
Politics TOWARDS A CONSOLIDATED DEMOCRACY
81
Chart 9. 2007-2012 National Integrity Index19
Integrity Experience
8
Integrity Potential
Integrity Index
7.21
6.84
6.00
6
5.96
6.89
6.71
6.5
5.87
5.53
5.34
6.48
6.31
6.37
5.97
5.7
5.42
5.34
4.86
4
2007
2008
2009
2010
2011
2012
In addition to indicate stagnation, the above chart also indicates
the quality of public services in Indonesia (in this context, whether
or not the bureaucracy is functioning properly). Other countries
such as South Korea, stated by the KPK, has the Integrity Index
of 9. In 2012, 20.6 percent of respondents still claimed to pay
additional fee outside the oicial fee to obtain public services.
In general, we can see that the achievement of bureaucratic
reformation in Indonesia has not shown signiicant results.
However, as the bureaucracy relates to politics and culture,
rapid changes cannot be expected. As a result, there are some
positive trends that should be appreciated, such as utilization of
information technology to facilitate public services, for example,
with the launching of http://satulayanan.net/. Along with
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increasing internet penetration, we expect that public service will
utilize information technology to improve bureaucratic functions.
Other positive trend is the growth of the middle class in Indonesia.
he Economist predicts, in 2014 Indonesia will have about 150
million people in the middle class. he growing number of middle
class can exert inluence on the bureaucracy as they tend to be more
empowered to provide criticism on public services they receive.
Chart 10. Southeast Asian Middle Class Growth20
Middle-class spread
Size of middle class*, m
0
50
100
150
Indonesia
Philippines
Thailand
Vietnam
2004
2009
2014
Malaysia
*$3,000 annual household
disposable income *Forecast
Source: Nomura; World Bank; CEIC
Indicator 8: Democratic Political Culture
he next important indicator is the existence of a democratic
political culture. At the community level, this can be seen from how
wide a community supports the implementation of democracy as
a political system in Indonesia. Unfortunately, current research
that measures the level of support for democracy is extremely
Politics TOWARDS A CONSOLIDATED DEMOCRACY
83
limited. One survey conducting the research was performed
by the Indonesian Survey Institute in 2003-2006. Added with
several previous surveys, these reports provide a portrait of the
development of support for democracy from 1999 to 2006.
Chart 11. Percentage of Community Supporting Democracy
as the Best System to Apply in Indonesia21
75
80
70
60
68
70
70
72
74
69
50
40
30
20
1999
2001
2002
2003
2004
2005
2006
he chart shows a steady trend, ranging between 70 percent.
he igure remains below established democratic states such as
Germany at 93 percent, or the United States and Japan at 88
percent. he percentage is almost similar to the percentage of
support for democracy in Mexico and the Philippines where
democracies are still unsteady. his range of igure is also found
in more recent study in 2010, IFES Indonesia survey found 72
percent of respondents having the knowledge about democracy
state their fondness of the democratic system.
Viewing the development from 1999 to 2010 from various
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surveys, we can see that support
for democracy is relatively stable
Stickers containing
at around 70 percent. However, we
message of the pre1998 reform nostalgia
also see a declining tendency that
are spread, reading
needs to be monitored. While,
“Piye Kabare? Enak
research that conirms a setback
Jamanku tho Le?”
view to democracy is nonexistent,
(“How are you? hings
but the symptoms found in
were much better back
society must alert us. For example,
in my time, weren’t
stickers containing message of
they?”).
the nostalgia in pre-1998 reform
are spread. he stickers read “Piye
Kabare? Enak Jamanku tho Le?” (“How are you? Easier in my
time, wasn’t it, Son?”).
Another trend that must be addressed properly is the development
of technology that facilitates easier exposure to various ideologies
that contrast to democracy. In various segments of society, there
are groups rejecting democracy. Indeed, the attitude towards these
groups should be done wisely, to allow them to be “absorbed” into
the democratic system. Further on this subject will be discussed
in democracy and ideology.
Indicators 9 & 10: Just Law Enforcement and Reliable Law
Enforcers
his section actually discusses two indicators, i.e. law enforcement
and law enforcer. However, both indicators can be seen as a whole.
Why, then, were they not written separately in the methodology?
Politics TOWARDS A CONSOLIDATED DEMOCRACY
85
It is to allow us to see two separate things simultaneously: law
enforcement process and law-enforcing institutions.
In 2013, Indonesian Legal Roundtable published a report on
the views of people about law enforcement in Indonesia. he
report shows law enforcement in Indonesia still needs a lot of
improvements. here are ive rules of law elements to be included
into the perception index indicator of the state of law, which include:
(1) law-based governance; (2) the independence of judicial power;
(3) respect, recognition and protection of human rights; (4) access
to justice; and (5) open and clear regulations. In this study, the
fourth and ifth elements can be included to see the ninth indicator
(just law enforcement) while the irst and second elements can be
used to see the tenth indicator (reliable law enforcers).
he index shows the issue often discussed by the public: that our
law enforcement is weak. In terms of access to justice as well as
open and clear regulations, each of these elements consecutively
receives the scores of 4.27 and 3.13 (with 10 as maximum score).
In terms of law-based governance and independence of judicial
power, the index scores consecutively at 4.77 and 4.72.
If we browse through deeper, we will ind that public’s view on
law enforcement is currently very low. ILR Research shows 60
percent strongly disagrees and disagrees with the statement that
judges in Indonesia are free from bribery.
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Chart 12. View on Judges and Bribery
2%
17%
21%
11%
49%
Strongly agree
Agree
Disagree
Strongly disagree
No opinion/no answer
Source: Indonesian Legal, Roundtable. 2013
Based on the above discussion, we see law enforcement and lawenforcing institutions in Indonesia are perceived poorly by the
public. Of course, albeit not 100 percent describing the condition,
such perception shows both are in need of improvements.
Although the size of the two indicators shows poor achievement,
there are some positive trends that may strengthen.
he irst positive trend is the presence of KPK and its success
in restoring public trust in law enforcement, at least in relation
in eradicating corruption. However, we still see conlict between
KPK and other state institutions in the efort to eradicate
corruption. Another positive trend is similar positive tendency
that afects previous indicators, such as growing middle class
and the increasing use of Internet, which may strengthen the
monitoring of law enforcement and law-enforcing institutions.
Of the various indicators mentioned, the possibility of progress
or setbacks of Indonesian democracy’s future can be indicated.
Politics TOWARDS A CONSOLIDATED DEMOCRACY
87
To facilitate further analysis, the development trends of the ten
indicators are summarized in the following table:
Table 6. Measuring Scenario Possibility
Elements
Key Indicators
Welfare Level
Economic growth
Economics
Politics and
Governance
Law
Enforcement
Increase
Decrease
Increased
with note
Level of equitable
distribution
Critical Point
Economic crisis
Decreased
Decentralization
Economic Crisis
Economic society
institutionalization
Stagnant
Corruption Eradication
Alive and free
Civil society
Increased
with note
Middle Class
Information
Technology
Autonomous
political society
Mixed
(Positive:
Decentralization)
Mixed
(Negative:
weakened
parties)
Well-functioning
state bureaucracy
Stagnant
Democratic
political culture
Stable/Stagnant, with the
possibility of setback
Just law
enforcement
Reliable Legal
institutions
(law enforcer)
Stagnant
Decentralization,
Party strengthening
(especially after 2014)
War against
Corruption Middle
Class Information
Technology
Non-Democratic
Ideology Trust on
State
War against
Corruption Middle
Class Information
Technology
From the table, three indicators show rising trend, i.e. the level
of welfare, economic growth, and alive and free civil society.
One indicator, the level of equal distribution, tends to decrease.
Another indicator has a tendency to mix, i.e. autonomous political
community. he remaining ive indicators, i.e. economic society
institutionalization; well-functioning bureaucracy; democratic
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political culture; just law enforcement; and reliable law-enforcing
institutions are stagnant.
Although this study was not conducted by the quantiication of
these indicators, at least we can guess that the development of
consolidation in Indonesia will tend to be stagnant, albeit several
progresses and setbacks in some aspects. hus, the most likely
scenario to happen in 2020 is that Indonesia will not shift much
from the current position in the scenario line, which is in between
the “formal democracy,” and “full democracy.”
In general, the possibility of Indonesia experiencing democratic
reversal and turning into an authoritarian or a failed state is rather
small, unless triggered by the occurrence of a major events such
as severe economic crisis or a large degree of loss of conidence
in the state resulted in the failure of the war against corruption
and institutionalization of political parties. On the other hand,
Indonesia also seems to have diiculties to progress into a ‘full
democracy’ or ‘advanced democracy’ state, unless Indonesia can
take advantage of all critical points toward a positive direction,
such as eradicating corruption, well decentralization, the
strengthening of middle class, and utilization of information
technology to oversee democratization.
Short-Term Scenario
As viewed in the long term scenario discussed earlier, political reform
project in Indonesia will tend to be stagnant, unless signiicant
events in the identiied ‘critical points’ occur. In this context, the
inertia will be faced with an important momentum that will provide
Politics TOWARDS A CONSOLIDATED DEMOCRACY
89
opportunities for the various possible ‘critical points’, to allow sharp
turn in the direction of Indonesian political development; either
from stagnant position to democratic progress or from stagnant
position to democracy setbacks. he 2014 General Election is the
‘critical point’.
Political constellation formed post-2014 election will have great
opportunity to afect the 10 indicators that relect development
of democracy consolidation progress in Indonesia. For example, if
the new government is strong and committed to the eradication
of corruption, Indonesia’s democracy will move forward as some
indicators, such as institutionalization of economic society and law
enforcement, will be shifted to a positive direction. On the other
hand, if what formed brings political constellation that incapacitates
policy-making activities, our chances of being hit by economic crisis
will create opportunities for democratic setbacks. his is related to its
impacts in indicators 1, 2, and 3.
Political constellation following the 2014 General election could not
be separated from the dynamics of the previous years. Figures who
were originally nominated as president will be quickly surpassed by
newcomers in national political scene. Although various surveys were
conducted, it is diicult to predict the number of votes received by
each party until election result has been announced legally. Despite
the highly dynamic development, at least the general trend is
relatively unchanged; this may provide clues about political features
following the 2014 election, with several tendencies: (1) he absence
of dominant party; (2) he strength of a igure; (3) he inluence of
party elites; and (4) he number of non-party groups.
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Since the multi-party system has been applied, we can see there is
no dominant party. Post-Reformation, no parties receive above 50
percent of total votes. he highest number achieved post-reform
was 33 percent by PDI-P in the 1999 general election. Afterwards,
highest votes continue to decline. Signiicant decline in the number
of parties in 2014 in fact was incapable of raising highest votes
signiicantly such as during pre-Reform. his means no political
party appears to be a dominant force.
As in 2004 and 2009, which conirmed the persona of SBY, the
tendency of the public will remain directed to igure’s persona. his
can be signiicantly seen in diferent levels of votes obtained by
elected president in 2014 with votes obtained by parties supporting
elected president. his means, the society prefers the igure rather
than political parties, even political parties supporting the igure.
In addition, political dynamics is also determined by the role of
party elites. Prior to general elections, party elites may inluence the
formulation of laws and electoral preparations. Following legislative
elections, even insigniicant votes of each party, including winner
of the general election will strengthen the lobbies among the party
elites. Lobbies among party elites will play important role in the
future of Indonesian politics post-2014 election.
No less important tendency is the size of group without ailiation to
any political parties. CSIS National Survey found only 4.7 percent
of respondents own party membership cards while mere 2.5 percent
have contributed funds to the party. Table 13 also shows 42.5 percent
of respondents have not yet made choice of political parties.
Politics TOWARDS A CONSOLIDATED DEMOCRACY
91
Impacts on the Future
If outstanding events do not happen in the national political map, the
future of Indonesia following the 2014 election can be well predicted.
Indonesia’s political map will be colored with rainbow coalitions led
by president and party elites. Political constellation will be more or
less similar to the previous ones. here will be no dominant party;
therefore all parties shall form coalitions. Within the coalition, party
elites will play important role. In addition to party elites, important
role will be played by elected president as the central igure who
receives direct mandate from the people.
In the perspective of long-term scenario, presumably what are the
impacts of such “Rainbow Coalition”? he irst impact relates to
policy-making impact. With a coalition containing various parties,
could policy-making be conducted efectively and eiciently? If
policy-making is often inefective and ineicient due to becoming
a scene of negotiations between political elites, will the government
be able to make the most appropriate policy in the event of a major
crisis that must be addressed with solid policy? As discussed in the
previous section, ‘economic crisis’ is the possibility of ‘critical point’
that could create democratic setbacks if not managed properly.
Other impacts are directly related to indicators of democratic
consolidation development, either aspects of economic, political, or
rule of law. If what formed is a rainbow coalition, will the “war against
corruption” that brings positive impact to the institutionalization of
economic society and strengthening political community win? Will
decentralization be able to perform efectively as a means of wealth
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TOWARD 2014-2019
distribution and strengthen free autonomous political society and
civil society?
here are no certain answers to these questions. herefore, the answers
would be related to several determining factors. he irst factor is
the leader igure (president). How strong is the elected president,
including when he/she is opposed by his/her supporting coalition?
How strong is his/her commitment to the eradication of corruption
and bureaucratic reform? he second factor is political party. Will
political parties strengthen themselves with good regeneration? Will
the elites act on constituents’ interests or just for personal interest?
Democratization and Ideology
Ideology is one of the important aspects related to the consolidation
of democracy. As mentioned at the beginning of this paper, the
consolidation of democracy is characterized by the spread of political
actors receiving the implementation of democracy and having loyalty
to democracy as the rule of the game. hose who ideologically reject
democracy experience moderation and accept democracy as the rule
of the game. Initially, this commitment is instrumental, in the sense
that a democratic political system is viewed as a means to achieve
their ideological objectives. Along with strengthened consolidation
of democracy, instrumental commitment turns into a fundamental
commitment to democratic framework.
hus, in general, we may say the development of democratic
consolidation in Indonesia can be viewed from the level of acceptance
of various political actors in the democratic system as the only rule
Politics TOWARDS A CONSOLIDATED DEMOCRACY
93
in the game of politics. If democratization grows more consolidated,
groups with diverse ideologies that initially reject democracy will,
little by little, accept democracy as the “rule in the game” of politics.
Does this happen in Indonesia? his section attempts to answer the
question by viewing the phenomenon of ideological depolarization
in Indonesia.
Ideological Depolarization Symptoms
he indings of various research institutions conirm trends
found in post-Reform election results. Votes to parties formally
supporting Islam experienced a declining trend. hey view this as
a phenomenon where the inluence of Islam in politics declines.
However, when studied deeper, parties at opposite poles of Islamic
parties (Anies Baswedan uses the term “Secular-exclusive”22) are
now more open to religious symbols. Many PDI-P candidates
currently wear the hijab. hus, declining votes to Islamic parties
is not a single phenomenon. It can be understood as part of a
larger phenomenon: ideological depolarization. Parties shift
to the center, which is relected in the typical Indonesian term
‘religious-nationalist.’
Compared to the phenomenon in some other countries, ideological
depolarization in Indonesia can be viewed in a positive light. In
Egypt, for example, ideological polarization after Mubarak’s
fall in 2011 seemed very real. Polarization between religious
and secular groups incapacitated political leadership of Egypt
in running the government. Polarization remains to be seen in
Turkey as the remains of secularization movement conducted
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TOWARD 2014-2019
by Mustafa Kamal Attaturk at the
beginning of 20th Century.
If democratization
grows more
consolidated, groups
with diverse ideologies
that initially reject
democracy will, little by
little, accept democracy
as the “rule in the
game” of politics.
In Indonesia, there are competition
and conlict between Islamism and
secularism; however, the history
of Indonesian revolution shows
the depolarization seed has been
around since before independence.
In the struggle for Indonesian
independence, Islam, liberalism,
socialism and nationalism mixed.
hey exchanged and inluenced
each other in mobilizing resistance to colonialism.23 During
Japanese occupation, Japanese authorities viewed Islamic groups
as an important force in society and tried to control them by
establishing the Council of Indonesian Muslims Associations
(Masyumi).24 As the Republic of Indonesia was established,
paramilitary religious school students, such as Hezbollah and
Sabilillah were signed in to the army of the Republic.
Ideological polarization seemed strong in the early days of
independence. At the time, a strong debate on the basis of the
state and the position of Islam in the newly established country
occurred.25 his polarization has resulted in a deadlock in the
Constituent Assembly and opened an opportunity for Sukarno
to issue the Presidential Decree of July 5, 1959.
In the reign of Soeharto, the country performed de-ideologization
systematically as part of an attempt to consolidate power and
Politics TOWARDS A CONSOLIDATED DEMOCRACY
95
maintain political stability. One of the strategies was to press
Political Islamic groups, thus in 1980, Islamic political activists
rethought orientation and engagement strategy of Islam in
politics. his, according to Bachtiar Efendy, then spawned the
“New Islamic intellectualism” which tried to mediate between
Islam and the state.26 Unlike the Ikhwanul Muslimin (lit. Muslim
Brotherhood) in Egypt which continues to struggle underground,
Islamic groups in Indonesia began to enter bureaucracy and even
penetrated Golkar as ruling party. his trend gained a momentum
with political developments in the late 1980s which forced
Soeharto to approach Islamic groups.
Along with the increase of religious community since the 1980s,
the involvement of Islamic groups in bureaucracy and ruling
party has been paving the way for depolarization. Islamic groups
realize that Islamic parties are not the only way to stand up for
the interests of Muslims (hence distributing it to various types
of parties), while secular groups ind out that becoming religious
does not necessarily mean betraying national commitment.
Gift or Curse?
What is the impact of ideological depolarization tendency
towards Indonesia’s political system? In this case, IslamistSecularism is not the only ideological spectrum map. However,
other spectrum maps (democratic-liberal, for example) have
similar depolarization. Albeit being grateful for not experiencing
the curse of extreme polarization such as in Egypt, we cannot
necessarily be satisied.
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Ideological depolarization or de-ideologization is the estuary
of two philosophical traditions: pragmatism and rationalism.
he more rational a person, the easier he/she releases from
ideological postulates in viewing a problem, therefore he/she may
easily discuss and compromise with groups with diferent views.
Similarly, the more pragmatic a person, the easier he/she transcends
ideological boundaries, as long as such a move is proitable. If this
depolarization is largely inluenced by rationalism, we may rejoice
as debates on public policy can be more vivid and measurable, no
longer overshadowed by gap of ideological identity. However, if
ideological depolarization is driven largely by pragmatism, the
opposite will occur. Debates about public policy will rarely occur;
if any, without proper quality as beneits and advantages of each
actor are used as the measurement.
Which philosophical traditions will distinguish ideological
depolarization in Indonesia? Presumably, pragmatism is more
dominant. his can be seen, for example, from the legislation
process which is often undirected in the House of Representatives.
Stephen Sherlock of the Center for Democratic Institutions, for
instance, concludes in his study on the procedures of the House
of Representatives where many of the decision-making process
in the House are conducted in non-systematic ways. here are no
clear policy designs from parties regarding important issues.
Another impact of the de-ideologization driven by pragmatism is
the weakening bond between political parties and public because
all parties are considered “the same”. his has serious implications
on the quality of political recruitment in the national political
Politics TOWARDS A CONSOLIDATED DEMOCRACY
97
system. Because the ideology and platforms are no longer
attractive, the parties are busy recruiting leaders as vote-getters
without taking much account of their capacity.
Observing the trend of ideological depolarization, along with
the tendency of the absence of party wining dominant votes,
the awakening of a ‘rainbow coalition’ becomes inevitable. As
experienced so far, governments in the political environment
of ‘rainbow coalition’ tends to be inefective. Policies are mostly
determined by negotiation than by agreement about the interests
of a particular policy platform.
Once again, ideological depolarization and the lack of party
institutionalization -- as seen from the lack of public engagement
with political parties-- paint the political life post-2014 election.
In such circumstances, personal factors from national leaders
and political elites will be very important in determining the
efectiveness.
Impact on Democratization
In the long-term perspective, what is the relation ship
between the phenomena of ideological depolarization and
democratization? Simply put, we can see the relation by
understanding depolarization as ideology moderation process,
either due to rationalization and pragmatization. As the political
actors experience ideological moderation, there is a perspective
shift on various aspects of politics, including in their attitudes
towards democracy. hus, “ideological depolarization” in general
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brings positive trend for the consolidation of democracy as
political actors experience moderation in their attitude towards
democracy. It means that the groups rejecting democracy, with
the occurrence of ideological depolarization, may change their
perspective and attitudes towards democracy.
Ideological Depolarization is assumed to increase the actors who
accept democracy as the only rule in the game of politics as it
turns those who ideologically reject democracy to be moderate.
Due to their rather moderate views, they may have a new view
of democracy. If drawn into the circles describing the acceptance
level of democracy, ideological depolarization can encourage the
spread of the circle of actors who accept “democracy as a tool” and
“democracy as a commitment.” Actors who “reject democracy”
can be included into the circle of those who accept democracy as
an instrumental commitment.
Currently, depolarization makes Islamist parties closer to circle
of actors who accept democracy as a commitment, or at least
accept democracy as an acceptable instrument to ight for their
ideology. Nevertheless, we also see, there are groups in the outer
circle, i.e. those who reject democracy. his outer circle consisted
of radical Islamists who reject democracy which is considered
as a system not originating from Islam. In addition, there are
also groups in this paper referred to as “ultranationalists”, i.e.
those who view that democracy has weakened the position of the
state. To materialize the consolidation of democracy, both group
typologies should be included into the circle of actors who accept
democracy, at least as instrumental commitment.
Politics TOWARDS A CONSOLIDATED DEMOCRACY
99
Chart 2. Circle of Actors’ Attitudes toward Democracy
Democracy as
“Commitment”
Ultranationalists
Inclusive Muslims
Democracy as
“Instrument”
Rejecting
Democracy
Islamic Parties
Radical Muslims
In this context, depolarization also raises a challenge to encourage
groups which reject democracy to revise their attitude and
perspective. Depolarization which is characterized by pragmatism
and marred by cases of corruption committed by parties of
diverse ideological spectrum may erode conidence in democracy.
If the depolarization is not equipped by good governance and
plagued by corruption, the circle of actors accepting democracy
will become smaller. Naturally, this means that consolidation
of democracy will be hampered and Indonesia will experience
‘democratic reversal’.
Overview and Recommendation
As a nation, we deserve to be grateful that Indonesia has been
climbing the political reform process since 1998 with relatively more
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success compared to other countries. However, our elaboration on
Indonesian politics today and development scenario of democratic
consolidation in Indonesia shows that after reaching a certain point
(in between “formal democracy” and “full democracy”), we do not
make any progress. his is due to the severity of rooted problems
such as corruption and weak law enforcement.
From a positive standpoint, the “going nowhere” scenario can
be interpreted that Indonesia has low probability to become an
authoritarian state. However, it is not impossible. his study found
a “critical point” that could lead to democracy setbacks, such as
severe economic crisis and the failure of the war against terrorism.
On the other hand, the study also found several “critical points” that
could be utilized to save Indonesia from democratic consolidation
stagnation, which has occurred and predicted to happen in the
future. Based on the identiication on trends and critical points, this
study formulates some recommendations to be conducted by the
government and other stakeholders to encourage the consolidation
of democracy in Indonesia. In general, the recommendations are
intended to achieve three things: a functioning political governance,
a functioning economy, and the rule of law.
Among the recommendations is to constantly improve bureaucratic
reformation in various governmental sectors based on good
governance principle. Similarly, improving reformation eforts
in various law enforcement agencies is suggested. Furthermore,
sustainability of decentralization programs should be maintained
to ensure it is well-functioning for the distribution of welfare and
strengthening society’s political awareness. All national components
Politics TOWARDS A CONSOLIDATED DEMOCRACY
101
need to support the eforts ight to win the “war against corruption”.
he 2014-2019 National Leaders need to be conditioned to maintain
strong commitment to eradicate corruption and uphold the law.
Governance of political parties, such as more transparent regulation
of party funding, should also be the concern of all parties. It can
be supported by strengthening the community in the policymaking process and supervision of policy, and the arrangement of
public oicials’ recruitment process to prevent corruption, sale and
purchase of position, and other abuses of power. One of the ways
that can be used, for example, is by periodically conducting inverted
authentication on public oicial candidate’s personal wealth.
Reformulation of various Laws governing politics is also necessary
to embody a more efective government and healthy political parties.
Later, socialization of Pancasila and democratic culture through
various methods which are suitable to the development of society
and utilization of information technology is also crucial. Groups
opposing Pancasila and democracy need to be identiied and handled
well without violence. he use of proper socialization measures will
bring them to enter and be included into the democratic political
system.*
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Chapter III
Social
Binding our
Indonesian-ness
Social BINDING OuR INDONESIAN-NESS
103
“Let us build our nation and leave behind
recurrent conlicts in history. It is our historical
duty that should never be forgotten. he essential
question is, can we, as a nation, develop the
attitudes, emphasize common interest…and set
aside personal interests of our nation’s leaders.”
~ KH Abdurrahman Wahid-he 4th President
of the Republic of Indonesia ~
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photo © Sergey Uryadnikov
Social BINDING OuR INDONESIAN-NESS
105
Social
BINDING OUR
INDONESIAN-NESS
A
t least twice a week in early 2014, million sets of eyes eagerly
await these youths in front of the television. Together as the
PSSI U-19 football squad, the youths who are Batak, Timor,
Ternate, and Mamuju, natives commanded by Surabayan Evan Dimas,
were new Indonesian icons. he team, under the management of Indra
Syafri, toured several Indonesian cities—taking part in trial matches prior
to their participation in the Asian Cup. Aside from watching matches aired
on television, tens of thousands of spectators cheered upon their arrival
and packed every stadium they visit. Diferences are no longer debated.
hey are all the ‘sons of Indonesia’ whose actions on the football ield are
highly anticipated.
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Being Indonesian by putting aside racial and ethnic diferences
becomes an Indonesian mainstream phenomenon nowadays. A
phenomenon Prof. Azyumardi Azra of the State Islamic University
Jakarta relentlessly brought up in every discussion forum he attends.
“he process of being Indonesian keeps on going and cannot be
halted,” he asserted. he process that puts aside all diferences has
since long ago been practiced by the community, such as in Balinese
traditional villages by putting together Pedanda and native Balinese
Islamic igures to be involved in each religious celebration. his
also happens in a number of indigenous villages in Maluku where
Christians help build mosques and Muslims lend their hands to
construct churches. In most Papuan tribes, Muslim and Christian
families work hand in hand during communal events.
It is a shame that such a beautiful portrait of socio-community
lives is often marred by humanitarian tragedies in countless places,
which later is broadcasted to the rest of Indonesia. he early reform
era tainted by chaos and pillaging in Jakarta was soon followed by
gruesome conlicts inlicting a lot of casualties in Ambon, North
Halmahera, Poso, Sambas, and Sampit. hreats come from armed
parties, e.g. the Free Papua Movement (OPM), which under the
pretext of independence, are struggling for their separation from
Indonesia. Terror attacks in many regions as ailiates of terrorism
networks at neighboring countries such as Malaysia and the
Philippines add to local and trans-national problems.
Mass violence – Bali Nuraga incident in Lampung, Sampang riot
in Madura, inter-village wars in East and West Nusa Tenggara and
other regions in Sulawesi, Maluku, and Papua – should no longer
Social BINDING OuR INDONESIAN-NESS
107
exist in the 21st Century, so should abuses to general customs and
rules arbitrarily occur in public in the forms of traic violations,
demonstrations of workers demanding increases in wage by blocking
the highways, celebrity disputes aired by infotainments, pornographic
acts and sex tapes by middle school students, and student brawls
triggered by trile matters. Such reality invites a mind-boggling
question. Has the society been surfeited by the intricate social lives?
Or doesn’t Indonesia, as a nation, have the maturity and strength to
face complex global changes, to avoid being stuck in the expanding
social intricacy?
he world has been changing. Amidst such change, Indonesia is
demanded to strengthen its position globally while its people are
struggling with internal polemics and conlicts. Indonesia, as a nation
and country, is expected to be robust despite the unpreparedness of
its people both culturally and socially. here is also a tendency in
the decline of diversity values within the social lives of the nation.
In such situation, will it be possible to bind the Indonesian-ness
by diminishing geohistorical connectivity, such as nation’s pride or
collective memory to build a great nation?
For period of 2014-2019, the maturity of the people in social and
cultural aspects is highly indispensable. his chapter turns into
milestone for the Republic of Indonesia, not only because Indonesia
will soon celebrate its 75th anniversary and change its national leader,
but also start an initial phase of ‘Demographic Bonus’. In 2014 the
total population of Indonesia has reached 249 million lives with 169
million of people in their productive age. he igure is predicted to
grow into 270 million in 2019.
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At this point, the number of Indonesian people within the productive
age will be 70% of the total population. his will allow low dependency
ratio where productive age group supports smaller number of people
within the non-productive age group. In 2014, every 100 people of
productive group support 45 people from non-productive group;
therefore the society will have better opportunity to work. his can be
optimized by nationally and globally-competitive human resources
quality in addition to vast employment opportunities.
he Demographic Bonus will be useless to the welfare of society or
the greatness of a nation when human resources are low in quality
such as in 2013 where Indonesia ranked at 121 of the Human
Development Index (HDI) with low domestic job opportunities
while Indonesians working abroad are majorly employed as domestic
workers. When both main aspects – high human resources quality
and job opportunities – are met, Demographic Bonus is predicted
to be able to create Economic Bonus for middle-upper group due
to economic development, with lower group naturally involved in
the process. Consequently, Demographic Bonus may be a great
opportunity for Indonesia – as stated by the President of the Republic
of Indonesia Susilo Bambang Yudhoyono (SBY) in ASEAN-EU
Business Summit 2011 – while at the same time may be a disaster
when improperly managed.
he period 2014-2019 becomes a starting point for the improvement
of the nation’s welfare. Economic improvements supported by
favorable dynamics of national and international politics, for
instance, will strongly afect socio-economic improvements,
particularly in education, health, development of science, technology,
Social BINDING OuR INDONESIAN-NESS
109
and arts, national ties, and vice versa. he possibility towards such
tendency is wide open, depending on the public’s capacity and its
strategic circumference. Such opportunity will be futile if issues
such as low human resources quality, limited science and technology
improvements, weak law enforcement, fragile social solidarity, and
risks of discriminative conlicts are not properly addressed.
Many bystanders believe Indonesia will not turn into a ‘failed
country’ as predicted by a handful of parties. Still, failure to manage
Demographic Bonus will complicate the way out of the middleincome country circle. Demographic Bonus means “productive age
is burdened less by non-productive age, hence having more potential
to improve welfare”. Such opportunity, if lost, will require long time
to recover. Internally, citizens will possibly lose trust in their country,
triggering prevailing socio-cultural and political conlicts.
Failure to take advantage of the Demographic Bonus and optimize
natural resources for the welfare of universal society also decrease
Indonesia’s image globally; a failure which shows the Country’s low
level of self management. Low level of trust from global society will
afect the esteem of Indonesian people. For that reason, fundamentally,
social development in the period 2014-2019 is necessary particularly
related to Demographic Bonus as a golden opportunity.
Threat Dynamics
Socio-cultural aspects that may threaten Indonesia’s future need to be
addressed. here are at least ive crucial issues for Indonesia presently
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which will continue to the foreseeable
future: limited access and quality of
educational and health services; weak
law enforcement; weak and false
paradigm of science and technology
development; declining national and
social solidarity; and racial conlicts
and reduction of citizenship rights to
minorities.
1. Limited access and quality of
educational and health services
“With reliable human
resources, Indonesia
may really have a
chance to break the
barrier and emerge as
a developed country;
without it, Indonesia
will remain a mediocre
country. he main key
to improving human
resource quality lies
in the development of
education and health.”
Demographic Bonus, as previously
stated, apart from being a great
opportunity may also be a disaster for Indonesia. he surplus
of population at productive age will be worth nothing for the
Indonesian progress if not balanced with excellent productivity
which meets global standards and demands as a whole. In fact,
due to lack of productivity populations at productive age might
burden the country as well as the non-productive group. Such
concern is based on realistic grounds. In general, compared to
other countries, the level of productivity of Indonesian employee
is considered low with open and disguised unemployment hiding
behind inefective formal institutions.
With reliable human resources, Indonesia may have the chance
to break the barrier and emerge as a developed country; without
it, Indonesia will remain a developing country. he main key
Social BINDING OuR INDONESIAN-NESS
111
to improve human resource quality lies in the development of
education and health, which has been pursued by the Government.
Nonetheless, the welfare of the people – measured by educational
and health aspects – remains insuicient to drive the country to
emerge equally as other countries. Generally, educational and
health development has not been able to bring Indonesia into
becoming a smart and healthy nation. A number of realities mark
the achievements of our education and health development. High
corruption practices and declining plurality and multiculturalism
sentiments show development in education has not yet succeeded
in building human resource integrity and moral in general.
Weak industrial structure indicates education has been insuicient
in creating the nation’s professionalism. Low education quality is
also shown by frequent student brawls and demonstrations. Both
examples indicate education cannot reach out to students, who
choose to channel their energies toward destructive actions. When
learning goes well, students will focus on developing themselves,
increasing knowledge and skills, and preparing for things that
matter for their future. In addition, student demonstrations may
be initiated by concerns towards particular matters. his is a
phenomenon indicating that the local authority empowerment by
the Ministry of National Education has not yet run efectively.
he afordability of health services to disadvantaged communities
in addition to increasing number of middle-upper communities
seeking medical treatments abroad have become a real portrait in
medical sector which is relected in the Country’s HDI. Based
on data released by the UNDP on May 2013, Indonesia’s HDI
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was at 0.629 or ranked at 121 out of 186 countries globally in the
previous year. his was an improvement from the previous index
of 0.624 or climbed three levels from the previous rank of 124.
On one hand, such improvement marks managerial success of
Indonesian development, among others, in education and health.
On the other hand, the achievement is considered insuicient
for Indonesia when linked to compositions of natural resources,
total area, and populations. While the quality of educational and
health facilities and services are rather low in areas nearby the
capital such as Banten, Bogor, and Bekasi, access to educational
and health services in border areas such as Sebatik, Singkawang,
and East Nusa Tenggara are very low if nonexistent.
When the HDI is described partially, it will show that educational
index was relatively low at 0.577. his demonstrates how the
Indonesian educational development has not yet succeeded,
albeit a number of real progresses whose results may only be
enjoyed in the future. he HDI in health sector correlates to
life expectancy or average age at the end of each person’s life.
Indonesia’s life expectancy reached 69.8 years old with health
index of 0.785. Compared to other countries reaching above
70 years old, Indonesia’s life expectancy is relatively low, despite
having signiicantly increased from initial development period in
1980 with 57.6 years old.
Aside from life expectancy, the United Nations uses maternal
mortality rate to measure health development progress of each
country for the Millennium Development Goals (MDGs).
Indonesian maternal mortality rate in 2013 was at 220 lives in
Social BINDING OuR INDONESIAN-NESS
113
100,000 cases; making it one of the highest in Southeast Asia.
Internal bleeding during home birth becomes the most common
cause of mother’s death. Other indicators include: (a) infant
mortality rate; (b) prevalence of sanitation-related diseases such
as malaria, dengue, and tuberculosis; (c) death from cardiac arrest
and strokes resulting from unhealthy lifestyle; (d) drug addiction
and mental disorders.
hese cases indicate that in terms of educational and health
development, Indonesia remains at the middle-lower level,
which is far from what should be expected from a large country
with abundant natural resources and strategic placement in
international arena. Educational and health development progress
contributes to people’s welfare as a whole, which is relatively low
as relected by Indonesian HDI rank among 10 of the lowest East
Asian countries together with Papua New Guinea and Kiribati.
If such condition persists, Indonesia will fail to take advantage of
the upcoming Demographic Bonus.
Other educational and health development threats in period
2014-2019 include: (a) large population burden; (b) domination
of modern paradigm which demands linear, mechanistic, and
quantitatively-measureable educational and health development;
(c) inefectiveness of bureaucratic structure, system, and culture
to improve people’s welfare; (d) orientation to money politics
by political practices and national political parties’ system which
triggers massive corruption hence becoming a bad role model
to build a characterized, healthy, and smart society demanded
by educational and health sector; (e) deicient local authority
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empowerment; (f ) globalization pressure creating consumptive
and hedonistic culture, while at the same time improving people’s
aspiration through mass media; and (g) expanding primordial
educational institution enclave that may erode inclusiveness and
multiculturalism traditionally. Success in handling these threats
will initiate real development in educational and health sector in
Indonesia.
2. Weak law enforcement
On the last three months of 2013, at least four police oicers
were killed on the street. hree were shot in Jakarta’s outskirts
and another found dead on the street of the capital. hese law
enforcers seemed to face horrible death in front of law ofenders.
Later the Police found the shootings were related to ‘terrorist’
acts, while there were Police oicers also killed in pure crime.
Whichever the cause such events indicate the weakening of the
Police force’s dignity as law enforcers.
Meanwhile, a Police General was alleged for massive corruption
with a revealed wealth worth hundreds of billions Rupiah. Tried
by the Anti-Corruption Court, the defender insisted part of his
wealth came from the sale of his keris collection. An interesting
phenomenon to observe: a person who was supposed to rationally
regard material facts of the law has brought supernatural aspect
as part of his defense in trial. he same Police General was also
involved in a dispute indicating Police arrogance against the
Corruption Eradication Commission (KPK) through the ‘Cicak
vs. Buaya’ (lit. Gecko vs. Crocodile) confrontation. A First Police
Social BINDING OuR INDONESIAN-NESS
115
Adjunct Inspector was also suspected to perform illegal banking
transactions worth more than Rp 1 trillion through fuel and
forest products sale and purchase and shipping services.
In addition to police oicials, prosecutors and judicial oicers
also face similar problem. he KPK has alleged prosecutors
and judges in Bandung and Semarang of receiving gratiication
inluencing court verdicts. his was a case extension of Cyrus
Sinaga prosecutor and several judges in Semarang and Jakarta.
Often, law enforcers compromise to reduce or even free ofenders
from their punishments. While cases in lower courts have yet
come to resolutions, cases have also hit the Supreme Court
and Constitutional Court; both are law-enforcing institutions
supposed to be guarded by people with dignity and integrity. Yet,
these oicials easily put aside and violate their law-enforcement
dignity. For example, the Chairman of the Constitutional Court
was caught red-handed by the KPK with allegation of bribery
and money-laundering. his became an issue raised by the
international media also.
Law enforcement in Indonesia is apparently far from what is
expected. Ironically, law enforcement became the irst element
of Reform Agenda during the Reform era. his agenda includes:
(1) Law supremacy enforcement; (2) Eradication of corruption,
collusion, and nepotism; (3) Trial against former President
Soeharto and his cronies; (4) Amendment to 1945 Constitution;
(5) Abolition of ABRI’s dual-functionality; and (6) widest possible
regional authority. hese agendas are legal issues, hence there is no
exaggeration in saying law improvements are the main agenda of the
Reform.
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Until these days, law supremacy
enforcement does not run
efectively. It is often sarcastically
stated that “law enforcement
is sharp downwards and blunt
upwards”. Common people with
small cases receive more severe
punishment than important people
with larger cases. Many police
oicials, prosecutors, judges, and
clerks are involved with judicial
maia. his cannot be separated
from the role of lawyers mediating
between law enforcement and
ofenders. Some legislative oicials
also take part in the weakening of
law enforcement through alteration
to the Anti-Tobacco Law Draft.
“Many of police
oicials, prosecutors,
judges, and clerks are
involved with judicial
maia. his cannot
be separated from
the role of lawyers
mediating between
law enforcement
and ofenders. Some
legislators also take
part in weakening law
enforcement through
some alterations to
the Anti-Tobacco Law
Draft.”
Law enforcement is substantially inseparable from the sturdiness
of three law building pillars as suggested by Lawrence M.
Friedman (1984: 4), which include: law substance, structure,
and culture. hese three aspects need to be strongly developed.
Nonetheless, there is a more basic issue regarding the integrity
of law enforcers who are eager to ‘be bought’ or ‘sell themselves’
to law ofenders.
Socio-cultural impacts in law supremacy are crucial matter
needs to be considered. Our nation may easily suggest the idea
Social BINDING OuR INDONESIAN-NESS
117
of law supremacy, while in reality ‘socio-economic supremacy’
becomes top priority. his is shown in the settlement of
traic accidents which prioritize ‘peace ofering’ practices,
in addition to more legal cases settled without upholding
integrity enforcing law. Socio-cultural impacts complicating
law enforcement among others are the values of tolerance and
paternalistic traditions in our society (Muhammad 2013).
his issue will also threaten law enforcement in the period 20142019, in spite of more signiicant diference and progress in new
legal issues such as cybercrime, money laundering, political
ofense, etc. Several threats to law enforcement predicted to
occur, in relation to Demographic Bonus and Indonesian
political contestations are:
First, threats related to legal substance. A number of issues need to
be addressed, which cover: (a) the drafting of laws and regulations
marred by power (e.g. regional autonomy/expansion, identity
politics) and economic (e.g. Anti-Tobacco Law Draft) interests;
(b) collision between new and old regulations complicating the
implementation; (c) new issues not regulated or not maximally
regulated by law, e.g. money laundering and cybercrime are not
clearly regulated in the Penal Code.
Second, threats related to legal structure. his threat can be
viewed from two sides: (a) whether the legal structure existing
prior to the reform has defects, hence in need of improvements
or supports from new “legal structure”; (b) whether the legal
structure established following the reform is indeed necessary to
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settle issues, and whether the existence of such legal structure is
efective in settling issues.
he existence of new institutions resulted from amendments to
the 1945 Constitution may create overlap to the roles and duties
of legal institutions. For corruption eradication, for instance, KPK
as a new institution has clear mandate in handling corruption
cases, while old institutions such as the prosecutors also have the
authority in handling such cases. he need for new institutions
is apparent as not all of old legal institutions are completely
reformed.
For instance, the Police remains vulnerable to become the ‘center
of corruption’ considering its position as the initial place for
law ofenders to compromise. his is also indicated in the level
of welfare and the lifestyle of police oicials seemingly above
people from other professions. Prosecutors and the court also has
corruptive tendencies through its ‘authority’ to reduce or increase
punishment. he Supreme Court is also highlighted as ‘protector
of the corrupt’.
hird, legal culture remains overshadowed by ‘judicial maia’ due
to non-transparency of law-enforcing institutions under public
watch. Corruption is the utmost legal issue in Indonesia nowadays.
he old law-enforcing institutions are generally reluctant to be
under the watch of new institutions established to support the
Reform.
Fourth, threats outside law-enforcing institutions’ system and
structure with many outsiders making advantages of the weak
Social BINDING OuR INDONESIAN-NESS
119
law enforcement through extortions. Fifth, excessive mass media
broadcast in legal case coverage that may afect neutrality and
the “presumption of innocence” principle in law enforcement
in Indonesia. Sixth, regional autonomy/expansion of areas
previously established as special autonomic regions, such as
Papua and Aceh, also impedes law enforcement. Such selective
law settlement based on political interest becomes the indication
or bad precedent for law enforcement in Indonesia for the period
2014-2019.
3. False paradigm of science and technology development
False paradigm of science and technology development is another
issue in socio-cultural sector. he fallacy, among others, happens
in the translation of green policy. Indonesia is well-known for
its abundant wealth in natural resources, in addition to very rich
non-biological resources such as mining products (petroleum,
mineral), natural gas, geothermal, etc. Such wealth is supposed
to be the most important capital in science and technology
development. In the past, both resources were optimally utilized.
Today, both need to be developed more in order to strengthen the
Country’s future position through the development of science
and technology.
From time to time, science and technology development in
Indonesia has been constantly linked to global progress. In early
historical era, for instance, science and technology development
was connected to development of Indian, Arab, and later Chinese
civilizations. During colonialism, the development was halted
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due to exploitation by the occupying authority. Nusantara became
the object of exploitation by Europeans through their occupation.
Colonialism was intended not only to occupy trade and source of
commodities, but also to directly produce such commodities and
export them worldwide, including bioresources, as the main route
of European shipping (Schiebinger 2004).
Colonials were fundamentally encouraged by bioprospecting,
the exploitation of their colonies of natural resources. Colonial
bioprospecting at the same time became the driving force for
Dutch science and technology development in its colonies.
Colonial bioprospecting were commonly practiced by Europeans
in their golden colonial era from 1500 to 1700 (Cook 2007;
Parthesius 2010), also by the Japanese in the 19th and 20th centuries
which continued until the colonies declare their independence
(Schiebinger 2004). Until today, such practices still continue
despite the more subtle manner.
Biopiracy as a more subtle form of bioprospecting is among
others performed through research cooperation between foreign
and governmental institutions, such as cooperation between
the JICA ( Japanese International Cooperation Agency) and
the Indonesian Institute of Sciences (LIPI) and the Ministry
of Agriculture. his happens because the Government does not
speciically prioritize research on the abundant natural resources,
hence forcing local researchers to cooperate with foreign parties
to receive funding.
Biopiracy is practiced not only by countries, but also large
companies in cooperation with indigenous peoples with their
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bioresources and local knowledge. Multinational pharmaceutical
and food companies are non-governmental groups that
often conduct biopiracy. herefore it may as well be said that
biopiracy is a form of “modern colonialization”. In parallel with
bioprospecting and biopiracy are geoprospecting and geopiracy.
Both are practiced by the domination of a country over another
country or by a multinational company over resources from
indigenous regions in developing country. It needs to be noted
that colonial geoprospecting was not as extensive as colonial
bioprospecting until late 19th century and throughout the 20th
century (Hutchinson 1996; van Bemmelen 1970; Hutchinson &
Taylor 1978).
Indonesian natural and non-biological wealth has tremendous
potentials to increase people’s welfare. he question is: will
Indonesia be capable of managing both powers as the basic
for science and technology development and bringing impacts
towards welfare? On the other hand it needs to be considered
that the utilization of both powers also triggers negative impact
to national stability and weakens Indonesia’s bargaining power.
his is a side efect to the involvement of entities, in political and
economical, national and international scene towards biopiracy
and geopiracy-based science and technology development.
Foreign parties surely do not expect Indonesia to be capable of
managing our own local knowledge and wisdom.
here were indeed attempts to overcome these issues. he
National Development Planning Agency has drafted a science and
technology development blueprint in 2003, despite not bringing
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fundamental progress to science and technology development.
Yet Several issues contained covered: (a) the focus on biodiversity
and its conservation strategies; (b) biodiversity utilization has
not yet brought real economic intent (bioprospecting) to the
improvement of welfare; (c) no futuristic brieing on which
science and technology segments need to be expanded in relation
to biodiversity utilization; (d) lack of clarity in deining real threats
to biopiracy and geopiracy in globalization era (colonial biogeopiracies sensu lato) which involve not only foreign countries
but also international or domestic multinational companies with
large economic power.
In other words, the blueprint has not touched the root cause of
science and technology failure in Indonesia, i.e. lack of mastery
of basic science supporting bio-geoprospecting. his lack of
proiciency open the widest possible opportunities for the
practices of biopiracy and geopiracy by other parties to undermine
natural resources that are supposed to be researched and managed
by our own actors. In partnership with other country or private
sector, Indonesian scientists need to be more active in the policymaking, monitoring, and taking maximum beneit for the nation.
Yet, for bioterrorism may arise at any time during this era of
globalization.
Several governmental institutions, e.g. LIPI, Ministry of Research
and Technology, the Agency for the Assessment and Application
of Technology (BPPT), and the National Institute Aeronautics
and Space (Lapan) as Indonesian research authorities, for
Social BINDING OuR INDONESIAN-NESS
123
the past ive years, were starting to gradually redirect natural
resources-based science and technology development. his step
was initiated by data re-collection and status update of the
resources (Widjaja 2011). his is seen as an excellent start to reestablish bioprospecting as our nation’s science and technology
paradigm. he paradigm, however, does not apply the colonial
bioprospecting pattern, but rather directed to realize the
intentions of the Unitary Republic of Indonesia establishment,
i.e. to promote general welfare. Once again, the initial step and
its continuation, such as the development of supporting basic
science, were not supported by suicient funding.
4. Declining social solidarity
National identity is one of the most signiicant characteristics of
Indonesia that needs to be built maintaining ‘Indonesian-ness
identity’, by not basing it on the identity and tradition of a certain
ethnicity. Javanese, as the ethnic group comprising the largest
portion of population, does not assert and force its tradition
and culture, particularly language, into national identity. his
becomes a crucial capital in building the multi-ethnic awareness
and ties of Indonesian nationality. Social solidarity on behalf of
‘Indonesian-ness’ is built above a reality and strong challenge
of diversity and diferences between ethnicities, languages, and
customs.
his multicultural model of nationality constantly strives and
succeeds in overcoming ethnic diferences and merges into a
Unitary Republic of Indonesia. he society becomes aware of
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acknowledging diversity, and later processing it into “becoming
Indonesia” which is one or Bhinneka Tunggal Ika. Other national
pillars such as Pancasila and the 1945 Constitution acknowledging
diversity are also maintained and preserved within a mutual
understanding in building Indonesia, as stated in the Youth
Pledge of the Second Youth Congress of 1928.
Such awareness was built on strong geo-historic foundation
where this country and nation is tied both by geographic and
historical ties. Within the awareness, seas separate, while at the
same time, unify Indonesia. herefore, large Indonesian islands
are no longer regional units geographically, but rather a unitary
country’s regions. here are at least ive geographic classiications
of regions based on historical perspective from old family ties
that emerged into the idea of a nation’s path.
First, geo-historic regions at both sides of the Malaka Strait,
covering the east coast of Sumatra and the west coast of
Peninsula. Second, geo-historic regions at both sides of Sunda
Strait covering Lampung at the southern part of Sumatra
and Banten at the western part of Java. Third, geo-historic
regions at both sides of Java Sea. Fourth, geo-historic regions
at Makassar Strait. Fifth, geo-historic regions at Molluca
Sea bordered with the Philippines near Mindanao and Sulu,
covering the spice islands: Papua, Banda, Ambon, Seram,
Buru, Ternate, Tidore, and Manado.
Along with growing nationalism, such extensive geo-historic
regions attract threats to national ties. In the past, power struggle
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125
for occupation between kingdoms often happened. Meanwhile
during colonialism, provocation and discrimination for the
occupation of area and production sources became major threats.
Post-declaration of independence, various internal and external
threats from ex-colonials continued to exist. Internally, disputes
triggered by diferences in ideology between parties, schools,
and ethnic-based organizations occurred without considering
social and national solidarity. Many political parties insisted on
prioritizing their short-term practical interests and seldom bring
forward long-term national interests.
Disputes between these schools of thoughts resulted in various
tragedies, such as Madiun incident in 1948, Revolutionary
Government of the Republic of Indonesia (PRRI) Rebellion in
West Sumatra, Permesta Rebellion in North Sulawesi, and 30th
September Movement. hreats to social and national solidarity
post-independence declaration throughout the Old Order were
focused on diferences in political interests, particularly in sharing
development allocation.
Political trauma during the early years of independence throughout
the Old Order forced the New Order to act repressively. Often,
the country acted severely to ofenders or political schools of
thoughts trying to criticize or question the basis of country
and nation. Discussions and questions about ethnicity, religion,
and race were banned and became a taboo to maintain political
stability, order, and security. he country created a singular
interpretation of Pancasila and nationality. he reality of a plural
and multicultural nation was reduced to be diferences uniied
within one Indonesia.
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As though never learning from history, during the Reform
society was trapped in euphoria which once again threatens
the sense of nationality. Self and group identities in sectarians
were brought forward. Governmental policies strongly orient to
market economy and decentralization, particularly those related
to investment in mining and plantation, brought social conlicts
in society in the forms of agrarian disputes between business
groups, local government, and indigenous peoples. A new model
of colonialism, as stated previously in the science and technology
development segment arise as non-armed threats against national
solidarity. he condition was worsened by regional autonomy
issues where the majority of regions were not ready to run their
own government.
herefore, in period 2014-2019, apart from “classic” threats
mentioned earlier, Indonesia’s largest threats lie in the issue
of national solidarity, covering at least four issues. First, the
strengthening of sectarians interests within identity politics
package on behalf of group, ethnicity, and religion. Diferences
between natives and foreigners, self and others are strengthened
through the accommodation of identity-based politics brought
in regional autonomy policies and practices. Signs are starting
to show for the past ive years in Banten (Serang, Lebak, and
Pandeglang), West Java, South Sulawesi, Central Kalimantan,
South Sumatra, East Nusa Tenggara, etc.
Second, exploitation of poverty and social gap issues in political
practices, particularly if Indonesia fails to grab Demographic
Bonus opportunity in 2014-2019. his tough challenge
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127
theoretically covers critical attitude
from the public that nationality,
“Within two decades
of post-Reform, the
in addition to Youth Pledge and
society has not fully
Pancasila,
encounter
stagnated
matured in deining
interpretation. National understanding
and practicing
becomes a mere ritual in the forms of
democracy as
ceremony and commemoration, even
Reformists aspired to
considered as utopian dream which is
achieve. his is evident
too ideal and hard to achieve. National
from the quality of
and social solidarity lost its meaning
public approval to
and function if not philosophically
religious and ethnic
interpreted and developed according to
minorities.”
the development of time, particularly
when people cannot aford to achieve
welfare as mandated in the nation’s mutual goals. It is not
impossible that people will ind it futile to live as a nation while
remaining on the poverty line and witnessing a very wide social
gap between established and poor communities.
hird, the expansion of popular culture such as social media
and other popular culture practices in public space to appreciate
personal freedom, particularly those exhibiting their rejections
against the established national life. he Existence of social media
sites denying or degrading the nation’s integrity and the emergence
of punk and indie subculture in addition to outlaw motorcycle
gangs are not issues to be triled with. Failure to pay attention to
such issues will create diferent interpretation to togetherness and
social and national solidarity which put forward respect between
one and another.
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Fourth, rapid low of information including press and media
freedom introducing concepts contrary to the nation’s ideology.
Currently the Government practices the full market economy
for the media, --probably due to demands from Western
democracy--; highly sensitive issues on politics and religions are
even handed over to the public. Such reality provides space for
mass media and religious fanatics to step forward and turn into
important policy-afecting actors. In the end, it is no longer a
surprise that morality, diferences in religious sects, and religious
tolerance triggering disputes are shown publically, creating social
conlicts and weakening public morality.
5. Racial conlicts and reduction of citizenship rights to
minorities
As previously mentioned in other sections, development and
strategic environment of the inter-religion and inter-ethnicity
relationship in Indonesia also encounter serious issues. he
phenomena arising lately among others are the reduction of
citizenship rights to religious and ethnic minorities, in addition to
communal racial conlicts. Within two decades of post-Reform,
the society has not fully matured in deining and practicing
democracy as Reformists aspired to achieve. his is clearly shown
in the quality of public approval to religious and ethnic minorities.
Post-Reform, there were at least three recorded large communal
racial conlicts, i.e. inter-religion conlict (Christians-Muslims)
in Ambon, Maluku in 2000, inter-religion conlict (Christians-
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129
Muslims) in Poso in 2002, and inter-ethnicity conlict between
Dayak and Madurese people in Kalimantan (Sampit, Sambas,
Ketapang) in 2004 which led to thousands of casualties. Two
of three conlicts were triggered by failure in inter-religion
relationship. he Dayak-Madurese conlict, the seemingly
ethnicity-based conlict, may also be viewed as inter-religion
conlict since the majority of Dayaks are Christians, while most
of Madurese are Muslims, despite no problems between the
Dayak and other Muslim communities.
More racial conlicts have occurred during these past ive
years, including (a) Sunni-Shia conlict in Sampang, Madura
throughout 2011-2012 followed by Jember incident in
September 2013; (b) attacks on Ahmadiyya community in
Cikeusik, Banten in 2012; (c) Ahmadiyya incident in Bogor in
2011; (d) Balinuraga-Lampung conlict in October 2012; and
(e) other inter-village and indigenous group wars in various
regions with various patterns and causes. Lurking hatred and
stigma against other groups are also strongly held by a few
communities in Indonesia, which may turn into a latent sign of
the outbreak of racial conlicts in the future.
When a minority group is positioned at the lowest point, in most
cases, their citizenship rights will automatically be suppressed and
reduced. Access to public service and their freedom to perform
religious practices are limited in places where the suppression
applies. Tangible evidences are seen in Shia community in
Sampang Madura, Ahmadiyya community in Cikeusik and
Kuningan, Yasmin Christian Church in Bogor, etc. not to
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mention treatments to adherents to Mystical Beliefs in various
regions. Citizenship rights guaranteed to these communities
were reduced based on the concept of ‘others’ against one’s ‘self ’,
judging that “they are diferent from us”.
he citizenship and nationality concepts were indeed not built
based on the understanding that “they are diferent from us”, but
rather on their membership ties as “citizens” within one Unitary
Republic of Indonesia. If the concept of ‘others’ remains attached
to every individuals, this unitary state will cease to exist. his
means, the state will lose or be subdued by parties suppressing
and reducing or limiting citizenship rights which was supposed
to be guaranteed and provided by the State.
he concept of ‘others’ started to strengthen post-Reform,
where identity politics of regional ethnic groups strengthened
and found its channel on behalf of freedom and human rights,
along with global strategic issues in politics and socio-economy.
Unfortunately, apart from being used as authoritarian expression
of the “natives” to occupy political position and government
oicials, identity politics is also misunderstood as denial of interethnicity, language, religion, socio-economic strata relations.
Enclave community regions resulted from traditional family ties,
common religion, and results of colonial programs during Dutch
occupancy and transmigration by RI government are later seen as
factors diferentiating between one occupant and another. Such
condition strengthens the factors triggering communal conlicts
on behalf of ethnicity, religion, and race in Indonesia.
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131
Several “religious” conlicts, for instance, are not always considered
as communal conlict on behalf of ethnicity or religion, but also
triggered by other aspects, including identity politics. Unsettled
historical issues in the past, such as tight competition between
Christian and Islamic missionaries in addition to ethnic
competitions between indigenous peoples in Ternate or Bugis,
Bone, and Makassar tribes who are mostly Islam adherents and
Ambon, Papua, and other non-Austronesia tribes as Christian
majority.
Threat Map
Based on the chronology and observation to ethnicity, religious, race,
and group conlicts phenomena in Indonesia, there are at least seven
threats to be encountered by Indonesia in the period 2014-2019:
he strengthening of ethnic identity and majority religion politics,
or false implementation of identity politics by minorities due to
accessibility or guarantee from international (human rights). he
concept between self (al-ana) and others (al-akhar) assertively
practiced in communal lives which later break into communal
racial conlicts, particularly when identity politics are exploited
by the motive of power as seen in Regional elections. It is
inevitable that the intensity of communal conlict threats on
behalf of religion and ethnicity in Indonesia will heighten and
expand. Some of the regions vulnerable to such threats include
North Sumatra, Lampung, West Java, East Java, Kalimantan,
Central Sulawesi, Kalimantan, and East Nusa Tenggara.
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Economic gap between local communities and outsiders, both due
to transmigration or natural migration from various communities.
Regions vulnerable to such issue include Lampung, North
Sumatra, Kalimantan, and Papua. In this concept, transmigration
is associated with colonialism, which was fully supported by the
government earlier. So, what is wrong here? here are certain
aspects in need of close attention: (a) land ownership aspect of
transmigration; (b) formation of regional space for community
settlement. Expropriation of communal rights both by ethnic
groups domiciled in the region since the beginning—that can
be understood and for the opening of new plantations prepared
for the arrival of transmigrants. Such cases are apparent in land
ownership issue by the Kubu people in Jambi, Dayak community in
Kalimantan in transmigration program of one million mangrove
lands (Walhi 2002; AMAN 2001; and YMP 2007), Tau Taa Vana
indigenous community in the inland of Tojo Una-una District,
Central Sulawesi (Humaedi 2012). If remains unadressed, the se
agrarian-based racial conlicts will continue to occur.
Special Autonomy policy given to Papua and Aceh. In one hand,
this is considered as resolution ofered by the government to
appease recurring tensions. On the other hand, Special Autonomy
opens the opportunity a for and strengthens racial primordial ties
in regions with high-intensity conlicts tendencies. As a result,
racial conlict threats are more apparent, particularly aimed to
members of society not considered as the main targets of the
Special Autonomy policy. For instance, Special Autonomy given
to Papua Province is understood as the fruit of Papuan indigenous
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133
peoples’ success in maintaining the “independence of Papua land”
with other model, by staying under the governance of the Unitary
Republic of Indonesia, while their hearts and feelings are busy
with inding self identity. Such struggle is identical to Papuan
ethnicity, making other ethnicities to be denied their rights to
utilize the Special Autonomy funding. In the end, control towards
the Special Autonomy policy programs is fully held by Papuan
ethnicity.
Enclaves of various communities, as a result of colonialism
(Yeoh 2011), transmigration, or natural establishment with
the natives’ traditional region based on ethnicity and religion.
Enclaves in transmigration program, for instance, will threaten
the relationship between various communities in the future.
Conlicts may arise not only between transmigrants, but also with
the previous indigenous occupants. In many cases, transmigration
settlements were established based on the origins of each
transmigrant groups. Balinese transmigrants were grouped and
placed in particular settlement; similar treatment was also given
to transmigrants from Lombok, East Nusa Tenggara, Javanese,
and Sundanese who were given the settlement based on their
respective origins. In the development, such pattern has created
primordial solidarity which threatens inter-ethnicity relations.
Failed interaction or acculturation process between two or more
cultural characteristics of each ethnicity and religious adherent
within one communal life (Humaedi 2013). he failure in the
interaction is caused by primordial feeling or rigid assessment of
socio-economic partitions of each community. he lowest social
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elements feel insecure being “left alone”, while the middle-upper
elements are busy thinking about themselves. If related to ethnocultural context, ethnocentrism becomes the reason as to why a
group separates itself and abandons other community groups. If
related to religious context, abandonment without communication
will create presumption that may trigger conlicts.
Intervention by other parties on behalf of power and religious
beliefs. Such intervention is based on primordiality and fanaticism
of political and religious understanding, both locally and transnationally. A practice seen is the establishment of terrorism cells
or network and other radical groups based on their trans-national
network. Terrorism overshadows inter-religious relations and
afects the socio-politic al stability and state’s security built on
such intervention. A consortium as the source of the funding
behind the piracy of ships in Somalia also actively involved in the
funding of terrorism network globally. Several other consortiums
have also actively given full support to domestic religious groups
which trigger conlicts and violations against the minority groups
of Shia and Ahmadiyya for these past few years.
he roots of the conlict are essential in nature and attached
to community groups in certain regions. Such essentialism
approach was deliberately proposed following the observation
of conlict tendencies in Indonesia for the previous periods.
Closely observed, the Indonesian National Board for Disaster
Management (BNPB) 2011 disaster-prone map revealed that
disaster-prone regions are more likely also vulnerable to conlicts.
he “Ring of Fire in Topographic lines of Sulawesi” map, for
Social BINDING OuR INDONESIAN-NESS
135
example, is also vulnerable to social conlicts as occurred in
Poso, Tentena, Morowali, and Sigi Birimaru. he similar also
applies to “Barisan mountain range and Sumatran fault”, which
was indicated as regions with large social threats as strong as its
natural disaster threats, such as in Warsidi incident in 1980s and
Aceh conlict (Humaedi 2013). In Java Island, Menoreh Hills
region which is prone to landslide, drought, and ire also becomes
the most important site for inter-village conlict as illustrated
in the story “Api di Bukit Menoreh” (lit. Fire on Menoreh Hills)
depicting never-ending battles between rulers of Pajang and
Mataram kingdoms; or riots in upper Pekalongan (Humaedi
2008) and Kiai Ahmad Rifai in Kendal ( Jamil 2002). In culture
materialism perspective as stated by Marvin Harris (1976), there
is apparently a linear perspective that ecological vulnerability
of a region has strong efect on the region’s vulnerability in
psychological, anthropological, and sociological aspects. In other
words, environmental aspects have created certain conditions
and community characters which are potential for triggering
conlicts. It should be admitted that such a way of thinking
may not be accepted by many as it is oftentimes considered as
artiicial, as there were no comparison between disaster-prone
map and conlict threat map in all regions of Indonesia. However,
this at least may be used as the signs of vigilance that threats of
essentialism-based ethnicity, racial conlicts always overshadow
anywhere and anytime.
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Impacts on the Future
he Preamble of the 1945 Constitution has asserted that Indonesia
in the future shall be independent, sovereign, just, and prosperous.
socially, this means dynamic and prosperous community life with
freedoms of self-actualization without creating loss to others bound
by the awareness and mutual love as a nation. At the individual level
in the community the independent, sovereign, just, and prosperous
Indonesia is relected in the attitude of all people with the
characteristics of well-mannered and peace-loving, strong characters
and ethics, innovative and advanced, ethical and law-abiding, loving
the nation and respecting local wisdom, and respecting others
regardless of ethnicity, religion, and class.
he noble picture of social life as the ideals of independence of all
Indonesian people has to face real threat in various sectors. Low
quality of education and health services relected in Indonesia HDI
and rank as well as other measurement; disoriented science and
technology development creating no added values; law enforcement
loaded with money politics; broken social solidarity; even radicalism
and violence victimizing vulnerable and minority groups will all
signiicantly inhibit Indonesia in developing into a large nation, not
only in political, but also in economic and cultural aspects.
Social threat dynamics from various aspects and their possible impacts for
the future are illustrated as follows:
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Table 1. Social hreat Dynamics and heir Impacts
FIELD
THREATS
IMPACTS
Education and
Health
Not centered on quality aspect
Science and
Technology
Without clear development
No innovation locomotive to drive
strategy, theft of national wealth national progress
Law
Money interest-laden
enforcement
A nation of poor ethics and law
certainty
Social Solidarity
Fractured Solidarity
Failure to build strong social
synergy
Diversity
Violence against vulnerable
groups and minorities
he weakening of nation and
country’s dignity
A nation of weak reasoning,
health, and character
1. Education and health
he quality of educational and health development so far has
been considered low as relected in Indonesian HDI which
ranked at 121 or in middle-lower position globally. In educational
sector, this among others is relected in the level of education
where on average, Indonesians receive six years of mandatory/
requisite education or elementary school graduates. In addition
to low average length of education is the low quality of education
which is illustrated in the Program for International Student
Assessment (PISA) result from the Organization for Economic
Co-operation and Development (OECD) in 2013 which ranked
Indonesian students at 64 out of 66 countries assessed.
his bitter reality fails to reach the society in general since its
existence is overshadowed by the success of Indonesian students
obtaining medals, gold included, in the International Science
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Olympiads. he PISA covers mathematics, science, and reading
skills which resulted that on average, Indonesian students have
a lower order thinking system or weakness in logical, analytical,
and synthetic reasoning. Weakness in reasoning is not only
sufered by primary and secondary school students, but also
school graduates in general who later ill crucial positions in
government or public posts. his explains the age-old question
as to, why today’s public oicials have lower quality compared to
those during the beginning of independence.
As the second largest fund absorber following education,
weaknesses in health development still exist. Indonesia still
struggles with basic health issues from infant and maternal
mortality rate to ‘poor people disease’ such as tuberculosis,
which generally are one of the highest in Southeast Asia.
Health development in Indonesia is at a lower level compared to
hailand and Malaysia. Major breakthrough in the form of health
insurance through BPJS in 2013 is an initial step to providing
health treatments at the basic level which was supposed to be
run since 25 years ago, and has not been an ideal development of
health quality.
Issues concerning school building infrastructure, pro and contra
regarding the National Exam, teacher’s certiication and quality,
textbook quality, pornographic acts among students, student
brawls, to campus politics are still among the primary concerns
in the educational sector. Meanwhile, the health sector is more
focused on pursuing fundamental matters as established in the
Millennium Development Goals (MDGs) and handing over
Social BINDING OuR INDONESIAN-NESS
139
medical service programs for middle-upper society to market
mechanisms which later developed into huge commercialization
of health treatments at hospitals.
Educational authorities have been trying to make breakthrough
by issuing the 2013 Curriculum which include character building
as part of the teaching. However this character building efort
remains constrained by two issues, i.e. teacher preparedness and
quality as the most important aspect in education sector, and the
focus on quantitative or tangible aspects of ‘system paradigm’
instead of the qualitative or intangible aspects of ‘educational
paradigm’. Character building is better connected to ‘education
paradigm’ than to ‘system paradigm’. his is a similar issue with
health sector where tangible ‘medical paradigm’ is given more
focus than the intangible ‘health paradigm’.
Such paradigm will seem to continue dominating education
and health development in period 2014-2019, as it has been
familiar and customary for the government all these times. he
Central Authority’s habits of developing and controlling its own
program instead of empowering Regional Authority—which is
supposed to spearhead the educational and health development,
will continue since central bureaucrats do not wish to ‘lose their
program’. Hence, for the upcoming ive years, people’s quality will
experience improvements resulting from health and educational
development, albeit not signiicantly. In the next ive years, people
may not be suicient in reasoning, health, and other characteristics
crucial for Indonesia’s development such as economic, technology,
and cultural aspects.
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2. Science and technology
Developed countries are nations with innovation locomotive
which pulls their nation’s progress carriage in the forms of
technology developments. Such countries are Japan and South
Korea with the automotive and electronic industries, the United
States with military and information technology industries,
and Taiwan with computer industry. Focused development of
science and technology encouraged these countries to control
all derivatives, bringing large economical advantages while
alleviating nation’s dignity at the same time. he largest potential
for science and technology development in Indonesia lies in bio
and geo aspects in addition to culture which unfortunately lack
improvements to be used as development’s top priority.
So far, bio and geo science and technology resources are the
most vulnerable research materials. In several cases, theft of
materials often takes place be it directly or indirectly. Direct
theft, for instance, is when materials are directly stolen from
research location by foreign researchers disguised as tourists or
non-governmental organization activists. Often, these tourists
take samples of stones, plants, and marine life to be brought into
their home countries, which later will be developed as research
materials beneicial for their country’s science and technology.
Other modus operandi of the theft is by disguising as art curator
while involving Indonesian citizens, for instance in heirlooms
theft in the National Museum of Indonesia in early September
2013. he theft, while cannot be deined as a syndicate in
Social BINDING OuR INDONESIAN-NESS
141
need of money from the archeological materials’ value, can be
considered as liaison between pure economic interest and science
and technology developers in need of research materials. Such
incident, in fact, occurs often with disappearance of national
archives, particularly old manuscripts (books, documents) from
National Archives and National Library.
Indirect theft commonly happens through research development
cooperation between local research institutions, universities, and
non-governmental organization and foreign parties on behalf of
a country, company, or non-governmental organization (donor
institutions) taking the science and technology development
material as biopiracy and geopiracy, in addition to local cultural
wealth, which later is claimed as their own indings. In Megalara
garuda case, for instance, Rosichon Ubaidillah, researcher from
LIPI is not acknowledged as one of the species’ discoverers. He
was written of by the other two researchers from the paper
proposal to international journals. Another case happens to
language research by Indonesian citizen in North Halmahera.
Apart from conducting language research, this observer was also
assigned to perform research on natural resource wealth with
assistance from other expert. Later, a well-known foreign gold
mining company explored North Maluku following the language
research. his is similar to cooperation conducted by Norway
and Germany with several non-governmental organizations in
Central Sulawesi. Apart from performing humanitarian missions,
these volunteers also brought home crucial materials from Poso,
Morowali, and Tojo Una-una to be analyzed for science and
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technology development in their countries. he occurrence of
these cases, once again, is possible due to lack of assertiveness,
integrity, and wholeness in law enforcement to protect bio and
geo resources in addition to socio-cultural wealth.
Impact from science and technology development threat map,
particularly in the colonial bio and geopiracies sensu lato, including
cultural production in globalization era cannot be taken lightly.
his directly relates to state sovereignty, national independence,
and national integrity. Meanwhile, our nation faces diiculty
to rapidly advance and keep pace with developed countries as
science and technology do not run synchronously. he most
tangible instance is the lack of priority in the development of
geo science and technology, in this case, related to coals. Holders
of coal concession as well as local government tend to sell raw
material with lower price instead of performing manufacture
to give added value. Indonesia enjoys little from the sale, while
industries in China, India, even Vietnam enjoy the material’s
added value. In palm oil industry, Indonesia must also become
follower and leader of Malaysia. In fact, there are no countries as
follower with orientation to interests that can easily and rapidly
grow into a great nation.
3. Law
Law is one of the most crucial image of a country as it directly
diferentiates between groups of primitive creatures regulated by
their capabilities of competing through power and a country with
good governance in all aspects. Law has a role in the loss and
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143
“Law has been
working in favor of
the rich and elites,
victimizing the poor.
Figuratively, the law
enforcements is sharp
downwards and blunt
upwards.”
damage of Indonesia’s potential wealth
in the forms of bio and geo wealth as
mentioned above, in addition to its
contribution to social and development
rifts in political, economic, and cultural
aspects.
As mentioned in the threat map, law
enforcement is the most apparent
aspect prone to threats in the crucial
period of 2014-2019. hese threats are
attached to three law enforcement main pillars, i.e. legal substance,
structure, and culture. Other threats to law enforcement include
power and capital owner inluence to law politics during law
drafting process. Such prediction is not impossible to exist. In this
crucial period, many parties, be it individuals, groups, indigenous
people, or other parties acting on behalf of citizens, will try to
afect government’s decision or legislative decree. he Bloomberg
case in 2012-2013 on Anti-Tobacco Law Draft may reoccur in
the next period.
Powerful money politics in law enforcement is an issue for the
state which fails to guarantee the fulillment of citizenship rights
to stand equally before the law. Law is biased towards the rich
citizens and elite groups while against poor citizens. Figuratively,
law enforcement is sharp downwards and blunt upwards. If
such a phenomenon continues to exist in the period 2014-2019,
accompanied by wider gap between the rich and the poor, while
the media constantly publicizes chaos in sectarian and identity
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politics, people may lose their trust towards the state, which will
bring further conlict in the forms of anarchism, terrorism, even
subversive acts.
Money politics involve a lot of law enforcers (e.g. police oicers,
prosecutors, judges) in case negotiation, but also create collusion
with politicians and entrepreneurs. Along with power transition,
such rights will trigger beef trade practice that give birth to
high-level corruption cases such as Century, Hambalang, Health
Instruments, and other unsettled cases. his will also strengthen
clashes between law-enforcing institutions such as KPK with
the Police, KPK with Prosecutors, KPK with Anti-Corruption
Court, KPK with Prosecutors, Prosecutors with Judges, KPK
with Supreme Court, and between advocacy institutions.
he weakening of law will extensively take place and grow larger
due to media, particularly television, mixing law with opinions.
he weakening is also determined by the quality of education that
produce graduates with low reasoning skill and character, which
in turn lowers the nation’s ethics and integrity as foundation for
the law enforcement.
4. Social Solidarity
As emphasized by social scientist Francis Fukuyama, the
development of a nation is determined by the country’s social
capital in the form of trust between one and another. Trust
between all national elements shows social solidarity crucially
needed by Indonesia, which in the last few years stands at a
low point. Identity politics and sectarianism that weaken social
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145
solidarity have resulted in the halt of being Indonesia in various
national elements, in addition to the weakening of synergy power
that is supposed to strengthen our nation.
Once again, law enforcement becomes an important aspect in
maintaining our nationality. Law enforcement acts on behalf
of the state to fulill citizenship rights while at the same time
demands accountability from the citizens of their duties.herefore,
solidarity binds and uniies all diversiied community elements
from the ive geo-historic ranges. In its history, Indonesia was
initially not built based on the “law statute” of de jure and de
facto that can be accounted for before the law. Our nation was
built based on a concept of mutual “life awareness” within one
nation. Awareness, which is an abstract concept and having no
value before the law, may become a remarkable power that uniies
mutual lives within one place, Indonesia as a nation.
he awareness was later deined as the “state of Indonesia”
which is legal before the law under the foundation of the 1945
Constitution, Pancasila, and other legal instruments. hese
instruments are supported by social and national solidarity to
create the feeling of togetherness for mutual purpose of struggle.
his mutual awareness becomes an anomaly of state sovereignty
when the country fails to guarantee the rights of each citizen
as loyal supporters of the ties, or merely treated as “wasted,
complementary, marginalized group” presented to meet only a
few people’s needs. Such anomaly becomes serious threats in the
period 2014-2019 due to its systemic impact to state sovereignty.
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5. Violence against minorities
Radicalism and violence against weak and minority groups clearly
bring impacts on the weakening and harassment of our nation’s
dignity. Every developed and prosper ous country always respect
and uphold its nation’s dignity. In these past few years, radicalism
and violence are clearly practiced and remains a threat for the
next ive years. State ‘presence’ is gravely needed to overcome
such threat, as seen from previous cases, where violence against
minorities took place due to the ‘absence’ of the State.
In Cikeusik case, for instance, where a group of people attacked
and burned down houses of Ahmadiyya adherents. Signs of the
attack were seen earlier from a mass coordination using “janur
kuning” (lit. yellow coconut leaves) as their symbol. About this,
had the State given early responses, the apparent loss of lives
and materials might be prevented. Our state received highlight
globally as the party that failed to protect the human rights of a
religious minority group.
For years, cross-generation, the society has been equipped with
internal mechanism to settle conlicts. However, new matters
brought by external parties from global and regional strategic
environment trigger the society to easily act anarchically. he
United States’ attack on Taliban in Afghanistan triggered violence
in Indonesia domestically, in the forms of terrorist movement
and attacks under Al-Qaida network. Sunni-Shia conlict in the
Middle East has also brought large impact on internal relation
between Islamic groups in Indonesia. In reality, both sects have
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entered the Nusantara at the same time during the arrival of
Islam which was brought by traders from their respective route
of Silk Road.
People’s quality of education and weak law enforcement are the
main factors that determine the outbreak of violence against
minorities. Media also participates in information globalization
by spreading trans-national ideology throughout regions of
Indonesia without previously understanding the socio-cultural
context that is needed for the application. Such matters easily
trigger religion-related violence against minorities. In ethnicitybased conlict such as Bali Nuraga in Lampung, socio-economic
gap became a key factor. In the pre-launching seminar of
this ‘Welcoming 2014-2019’ book in Denpasar, Bali, it was
emphasized that minorities need to contribute to prevent violence
against them by not acting ‘exclusively’. Exclusivity strengthens
the allegation against them as others which became the basic of
the unjustiiable chaos against Chinese descents in Jakarta and
Solo during May 1998.
Efforts and Strategies to Overcome
Threats
Based on the national geo-historic connectivity frame, a number
of threats that may bring negative impacts for socio-cultural
development for the next ive years can be overcome by two
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mechanisms, i.e. (a) natural mechanism consisting of national
society's capacity through cross-generation experience process;
and (b) artiicial mechanism by individuals or the state through
authority, leadership, and power.
Natural or internal mechanism covers cultural aspects truly born
from the community, albeit not denying inluences from external
factors. Such mechanism, referred by the United Nations as
resilience (Kerangka Aksi Hyogo 2007), is a set of capability of a
social system of a community vulnerable to hazard, to evade, avoid,
face, and prevent all existing threats and risks in their surroundings.
People’s capacity in such deinition refers to traditional institutions
and socio-economic system familiar to the people. he traditional
institutions cover social mechanism, local traditional leadership, and
cultural organization which also means local wisdom. According to
John Haba (2007), local wisdom has the following characteristics and
functions: (a) identity marker of a community; (b) as social cohesion
bonding element; (c) cultural element growing from the bottom,
existing, and developing in the society, not a cultural element forced
from above; and (d) functioning to provide unity in a community.
Additionally, local wisdom also: (a) may change the mindset and
interrelationship between individuals and groups by putting it above
the common ground; and (f ) capable of encouraging the creation
of unity, appreciation, and mutual mechanism to defend themselves
from possible disruption or damage to group solidarity as a whole and
integrated community. Local wisdom seems to be a creative answer
to local geographic-geopolitics, historical, and situational condition
(Saini in Abdullah 2008).
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he internal mechanism, in facing socio-economic threats, at least
presents ive strategies, i.e. (a) community value system preservation
strategy (Haba 2007; Abdullah 2008); (b) regeneration strategy,
which in Anthropology is referred to as weaning and nurturing
pattern (Sheldon 1997); (c) cultural learning strategy, may be
through direct involvement or memorization (Fromkin 1997); (d)
power preservation strategy, to realize people’s expectation, as stated
in Anderson (1997) and Hefner (1990); and (e) the strategy to utilize
traditional institution in the realms of life (Kleden Probonegoro &
Humaedi 2012).
he second type, artiicial mechanism, is made based on authority and
leadership through policy and program. Here, national motivation
and commitment of state oicials such as civil servants, Indonesia
National Armed Forces, and the Police becomes a quite potent power
map. Law enforcement against criminal ofense that might trigger
racial conlicts can only be done by the state. Law enforcement
by the people will bring dangerous impact, such as the practice of
vigilante in closed space or on the streets. Such practice may also
replace law supremacy with socio-cultural supremacy whereas the
latter not necessarily succeed in overcoming the issues triggering the
criminal ofense.
Of course, not all threat maps can be overcome by the state, considering
that full dependency on the government in the threat-overcoming
processes and strategies may develop the threats into other formats
and expand to other places. Such concern may truly occur due to
diferent and contrasting perspective between government and the
society. Government’s perspective in overcoming threats is commonly
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directed to security and stability principle, which oftentimes ends up
as criminalization and stigma which eliminate citizenship rights of
the parties considered as threatening.
A number of eforts and strategies to overcome socio-economic
threats can be elaborated as follows.
1. Educational and health aspects
he strengthening of national values in the implementation of
education and health to overcome threats in these sectors is done
through the extraction of values of Pancasila and local wisdoms.
Post-New Order, Pancasila seemed to be left behind, albeit its
values that may represent national wisdom in ethics, normative
values, and social lexibility. However, a large part of the society
seems to show aversion to Pancasila. Young generations who
were born between 1990 and 2000 face unstable condition; they
do not appreciate the depth of this nation’s life philosophy. As a
result, these newest generations become the target of threats and
the most potential stability threats. his can be understood since
they lack the understanding, forced to accept the disoriented idea
of “freedom to reform”, in addition to unextracted local wisdom
values and products.
Strengthening regional autonomy policy becomes another crucial
strategy in welcoming 2014-2019. Here, policies related to the
strengthening of education and health with regional autonomy
scheme need to be encouraged as regional government is the
party having the most knowledge of their own region. he
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strengthening in education and health will succeed by calculating
preparedness and empowerment eforts of each local authority.
Taking advantage of Information Technology development:
As of 2013, Indonesia became one of the countries with rapid
growth of information technology utilization. Unfortunately, this
is not accompanied by increasing productivity of the users. he
changes not only inluence communication pattern in the society,
but also information pattern and basic learning. Information
technology development needs to be utilized in learning process
of educational sector and discovery of medical technology.
2. Science and technology development
Strengthening the resource-based science and technology
development paradigm is a crucial strategy for Indonesia. All
Indonesian science and technology building, from policy to
research priorities, shall be grounded by most efective and eicient
utilization of natural and cultural resources for the interests of
the nation. he paradigm has been written in the Preamble of the
1945 Constitution. Bioprospecting, geoprospecting, and cultural
geo-historical may become the mainstream of Indonesian science
and technology in 2014-2019.
he system of science and technology development in Indonesia
must be fully grounded on the synergy between universities,
research institution, and industry. hese three aspects have been
individually operating for long time without clear communication
to avoid duplicated and redundant researches that are often
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found. Foreign parties take advantages of potential research
indings that do not receive support to be developed locally.
Increasing nation’s competitiveness since early to advanced age
is necessary, to encourage productive group in providing the
best for the state.
3. Law enforcement aspect
Law as commander of the nation is not a mere rhetoric and law
enforcers are not mere ‘toothless tigers’. Law enforcement must
be implemented in national practice without discrimination.
Previous explanations have stated that law becomes powerless,
as the three pillars of law enforcement are marred by political
interests and legal maia causing corruption practices. he
strategies in overcoming law enforcement threats in period
2014-2019 need to be related to three legal pillars and threat
characteristics of each pillar.
Remapping job description of each functional oicer in lawenforcing institutions, as functional oicers are needed to
encourage the success of institution’s Task, Principal, and
Function. Assessors and people in charge, including leaders
encourage employees’ eiciency by prioritizing performance and
productivity principles. Success indicator in law enforcement
becomes the point in the career ladder. his needs to be supported
by the strengthening of judiciary institution’s functions. Lawenforcing institutions need to discuss together of the division of
tasks and authority to avoid future clashes among institutions.
Strengthening internal monitoring and encouraging external
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153
monitoring is another efort that needs to be conducted. Internal
monitoring is considered less efective due to partiality to own
corps. However, such monitoring may run efectively when
the promotion of post with inspectorate task force and ethic
enforcement are sourced externally, while external monitoring
is performed by NGO and mass media. Both are considered
quite efective in monitoring performance and cooperation
between law-enforcing institutions. Meanwhile, rearrangement
of institutional synergy between House of Representatives’ Legal
Afairs Commission and the Cabinet . To strengthen institutional
synergy, employees need to do “internship” at institutions with
similar expertise.
hese eforts may be performed with artiicial mechanism strategy,
to avoid paternalistic socio-culture system supremacy. he
strategy shall be internalized into each employee or institution
involved, in the forms of empowerment and coaching of law
enforcers, in addition to job promotion based on performance
and productivity.
4. Social and national solidarity
he two remaining aspects have strong relations, social and
national solidarity with racial conlicts and inter-religious
relationship. Both aspects give stimuli to each other. Weak social
solidarity within community will trigger conlict and interreligious gap. On the contrary, good relationship within the
community will bring forth social solidarity. Despite this, for a
study to be comprehensive, the mapping of both challenges and
impacts need to be separated. here are at least four challenges
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in social and national solidarity, i.e.
“Weak social solidarity
(a) the strengthening of sectarianism
within community will
in the forms of identity politics
trigger conlict and
on behalf of class, ethnicity, and
inter-religious gap.
religion. (b) national politics
On the contrary, good
contextualization related to poverty
relationship within the
and social gap. (c) the strengthening
community will realize
of popular culture in appreciation
social solidarity.”
and expression of individual freedom
in public spaces which show rejection
against national life’s establishment.
(d) rapid low of information and
knowledge including press and media freedom.
he question is what are the eforts and strategies in facing
the challenges? In relation to this aspect, community’s internal
mechanism is larger compared to government’s artiicial
mechanism, given that national social solidarity is the basic
capital or capacity possessed by the society and becomes a power
map of a nation. Still, the intensity, quantity, and quality have
diferences and face changes (increase or decrease) depending
on the size of the emerging threats. It needs to be noted that
from the perspective of Indonesian-ness, there is an interesting
yet exceptional phenomenon. When conlicts of inter-society
and inter-political group occur, there is a taboo or sin to state
the presumptions of ethnicity. his shows that nationality and
Indonesian-ness is highly upheld by Indonesian people. Also
in Indonesian-ness and nationality, diversity of ethnicity and
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traditions remains acknowledged, taught, and presented not as
separator and diferentiator in political lives, but as a form of
traditional power.
Citizen’s identity politics is not linked to ethnicity identity, as
well. his is proven in the identity card recording, where ethnicity
is not included as one of the categories and information. his
is a simple form of the manifestation of Indonesian-ness and
nationality model. his means that Indonesia essentially has good
natural mechanism potential in social and national solidarity.
Hence, the eforts and strategies to overcome the threats are
emphasized more on the improvement of national internalization
and the feeling of social solidarity itself.
here are several eforts that can be done, i.e. First, political public,
especially youths, are encouraged to know and learn various
ethnic traditions as a part of understanding the Indonesianness. Outlook on life, local wisdom, material culture, and other
culture in the forms of dances, traditional music, and traditional
crafts need to be encouraged to be taught in schools as part of
art education and realization of social and national solidarity in
addition to foster pride towards own country.
Second, nationality education needs to be re-interpreted or
contextualized with situations at hand. Stories of national heroes,
for instance, need to be re-narrated into popular patriotic stories
in the eforts of maintaining sovereignty and unifying tribes
across the nation. It needs to be remembered that classic stories
or epics are the foundation for us to recount mutual experience
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as one large nation struggling against colonialism. hese heroes
ofer the values of perseverance, patience, and hard work. Heroes
are crucial actors in national education. he saga shall be related
to challenges against national ideas in current situation.
hird, the country needs to appreciate and respect new heroes in
various sectors, such as environmental activists, scientists, creative
entrepreneurs, and creative farmers. he deinition of hero for our
nation and state needs to be expanded along with the diversifying
professions and employment.
Fourth, nationality needs to be contextualized with current
political and social challenges to be efective and functional.
his means that nationality value needs to be disseminate
and interpreted in various sectors. It is necessary to maintain
the context of nationality value and to have unlimited social
deinition in political activities.
Fifth, the state needs to support the creativity that gives birth
to national music and songs, and encourages the awareness to
respect diferences and uphold the unity. We are a large country
with diverse communities. herefore a binding web is necessary,
particularly through music, to elicit similar feeling of nationality
in addition to emphasize the importance of unity amidst
diferences.
5. Diversity and racial conlicts
A number of eforts and strategies to overcome diversity issues,
particularly racial and inter-religious conlicts may be conducted
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157
as follows. First, grounding and socializing local wisdom
contained in the outlook on life, heritage, and cultural practices
which aim at harmonious lives of community groups with
diferent ethnicity and religion. his will also encourage pluralism
and multiculturalism spirit and way of life in responding sociocultural diferences among the citizens.
“Ani himor laling gabenai, iwiu mai gereja oho do pi rumai pifeteng.
Fou mar himor e natei mesjid oho do pi rumai pifeteng.” “In heavy
rainfall, landslides, and lash lood, the church will be the
barrier fortress. If storms and waves coming from the sea, the
mosque will be the barrier fortress.” he saying is well-known
in the heterogeneous society in Kafoa, North Probur, East Nusa
Tenggara (Humaedi 2013). It is an exceptional cultural wealth
and wisdom that should be preserved and introduced to all people
of Indonesia.
Second, prioritizing cultural approach rather than religious
consideration in the settlement of conlict-triggering issues.
Cultural views and practices are in fact stronger and applicable to
all community groups. Meanwhile religion, while strongly based
on transcendence principle—where the happiness of heaven after
the departure of a human becomes God’s promise to be sought
after, has little chance in adjusting with groups with diferent view.
People of the East Nusa Tenggara have a saying that “religions
(Islam and Christianity) were brought by seawater; while
tradition and culture were born from the earth we stand on.” An
allusion that cultural aspect is truthfully stronger than religion, as
culture was born in a region, through generations, while religion
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is a pre-formed creation attained by people in certain region.
Such allusion is similar to the saying where culture was born
from the “bowels of the earth”, while religion was brought by “sea
currents”, as known by people in Eastern Indonesia.
hird, prioritizing contextual religious interpretation and beneit
of the people in general. he acknowledgment of truth is not
valid when faced with parties outside the religion, which of course
have their own acknowledgment of truth. Racial conlicts on
behalf of religion often occur when each adherents force truth
acknowledgement to other parties, particularly when followed by
economic interest and ethnic identity politics behind. When this
happens, religions that bring the message of peace and goodness
– such as Islam and Christianity or other religions – seem to be
considered as religions bringing and teaching the practices of
violence. In fact, violence is a contra of humanitarian instinct, while
at the same time a contra of a religion’s teachings and dogma.
Fifth, encouraging the actualization of peaceful religion concept
as main competitor of hard-line religious movements that may
be disastrous to social order. his is important, particularly when
peaceful religion concept is faced with diferent religion, where
such religion may become the creator of harmony. However,
peaceful religion principles and practices should be balanced
with the intent, principles, and practices from diferent religions;
which naturally will create excellent and beautiful peace for the
social life within the country. Here the state holds a role to keep
diversifying concepts and practices stand above respects to people
of other faiths.
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Sixth, re-strengthening and encouraging mutual practices by
prioritizing and basing on general civility. his is performed to
create mutual order and just and civilized welfare for all citizens.
Seventh, cross-organizational dialog with interfaith logic as the
foundation, is an artiicial mechanism that might probably work.
Even so, the dialog should not be a mere lip service or crossreligion project. In community level, involvement from religious
igures, public igures, worship leaders or administrators, and
other interested parties is required.
Eighth, the prioritization of interfaith logic principles in all
social life aspects. Interfaith logic or in-depth frame of mind
about inter-religious relationship becomes the foundation of the
understanding. Meanwhile, a mythology about “Indonesian-ness”
or Nusantara needs to be built together as a binding instrument
of various ethnic groups spread throughout Indonesia.
Overview and Recommendation
Indonesia in the period of 2014-2019 is challenging all aspects
of life including socio-cultural aspect which directly face two
tremendous issues: population explosion which is expected to
be a ‘Demographic Bonus’ and global cultural invasion that may
put aside our own culture. he challenge is how to accelerate the
process of ‘being Indonesian’ of various community elements as
part of the eforts in binding Indonesian-ness and building nation’s
dignity. he reality in the aspects of education and health, science
and technology development, law enforcement, social solidarity,
and diversity and national diversity which for the last few years
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are far from ideal has the potential to turn into threats for the
eforts in binding Indonesian-ness and building our dignity in
the future.
Impacts of the threats are quite tangible, in the forms of improvements
of the quality of reasoning and health and national characteristics,
which so far were low and lack of signiicance to bring Indonesia to
take of. Disoriented science and technology development prioritizing
the nation’s wealth in the forms of bio and geo resources and culture
not only will fail in creating innovations to meet people’s welfare,
but also are vulnerable to thefts from foreign parties. Meanwhile,
law sector, which is weak in integrity and ethics, has not shown
signiicant efort to emancipate from money politics—the largest
potential that hampers Indonesia to be progressive.
Other impacts from the tangible threats in social sector for period
of 2014-2019 is social clash resulted from the ‘me vs. you’ instead
of ‘us’ perspective. he perspective states that people with diferent
identities are others that can be avoided and, if necessary, faced with
violence; especially if what faced is a minority group. Social clashes
strengthened by negative practices of the Regional Autonomy
which trigger the issue of ‘the native son’ by sacriicing the quality
and interest of the realization of Indonesian-ness. Whereas, a
nation’s most important capital lies in trust as a social capital that
binds nation’s synergy as a whole.
In relation to social solidarity, racial conlicts and radical religious
movements spreading anxiety followed by gruesome conlicts these
past few years remain as threats. he level of people’s maturity is
indeed one of the determining factors in addition to the absence of
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the state and indecisiveness of law as the more crucial factors. Amidst
information globalization tendency that may set of foreign incidents
triggering violence in our Country, as well as unrealized media role
that may turn anarchists and radicals into ‘heroes’ with the story of
their ‘bravery’. Such reality is indeed degrading and insulting to our
nation’s dignity.
With exposed threats and impacts, certain eforts are needed under
the values of local wisdoms and national identity, such as:
First, educational and health authorities need to change tangible
development paradigm into an intangible one. his is performed
to prioritize ‘education paradigm’ as character builder to balance
quantitative ‘system paradigm’ which has been used by educational
authorities. he quality of the teachers, particularly their characters
as the weak point in education is more efective to overcome using
‘educational paradigm’ compared to ‘system paradigm’. On the other
hand, for health authorities, it is time to prioritize ‘health paradigm’
rather than ‘medical paradigm’ for the next ive years.
he paradigm shift is not only needed in the level of policy
makers, but also at bureaucratic lines, even supporting educational
institutions e.g. Teacher’s Training Institutions (LPTK) and medical
colleges and faculties. he importance of ‘health paradigm’ needs
to be emphasized in medical education which speciically aimed
at exploring the medical ield. It is also time for educational and
health authorities to reduce the establishment of central programs
and pay more focus on the empowerment and guidance to regional
authorities as the spearhead of community’s educational and health
services.
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Second, science and technology development needs to prioritize
bio, geo, and cultural sectors as Indonesia’s original strength.
herefore these sectors may drive national innovation directly and
competitively in front of other countries globally. Protection to bio,
geo resources, and culture is also needed to prevent direct and indirect
theft of national wealth such as mining products including minerals,
germplasm by various foreign parties, and theft of ownership status
of art and cultural products as conducted by Malaysia.
hird, law enforcement reform needs to be conducted for the
improvements of integrity, characters, and competency of law
enforcers to perform their roles as appropriated. he cultivation of
national consciousness is important to be held along with deepening
sense to free law enforcers from low culture of money politics through
case negotiation and collusion. Tight selection, good training and
self development system, provision of proper salary and facilities, and
promotion of simple lifestyle will help in realizing the reform. In
advanced countries, law apparatus are people with highest integrity.
It is about time to create a similar situation in Indonesia.
Fourth, weakening social ties in these past few years shall be
strengthened in the period of 2014-2019 through promotion and
conditioning of national awareness. Geo-historic values need to
be excavated, resurrected, and re-socialized through various media.
Developed nations are nations with global characters and cultures
with strong root to own cultural values. Nationality values in the
forms of diversity awareness and the characters of Pancasila, in
addition to our local wisdom are highly valuable social capitals that
may bring Indonesia into a irm global nation with particular cultural
characters such as shown by China and India.
Social BINDING OuR INDONESIAN-NESS
163
Fifth, diversity in all aspects, from ethnicity to diversity of religion
shall be made as the main capital in building a beautiful mosaic of
Indonesia. Only primitive and uncultured backwards people dispute
identity diferences and settle them through violence. Indonesian
people in general is currently at a higher intellectual and emotional
level, therefore racial conlicts are not supposed to happen although
in reality they remain to potentially occur in the next ive years.
he ‘presence’ of the state, legal certainty, broad-mindedness of the
majorities, the modesty of minorities to avoid exclusiveness, and
rearrangement of regional autonomy with excess to identity politics
will help in realizing to build the mosaic.
With these eforts, Indonesian social order in the future will be built
strongly, even though its realization for the period of 2014-2019
has not been supported by proper foundation. Nevertheless, with
cooperation from all sides and serious eforts, our Indonesian-ness
will be bound to realize an Indonesia with dignity, which not only
illustrated by the Garuda Jaya team on football ield, but also in all
ields of life.*
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Chapter IV
Economy
Breaking Through
The Middle Income
Trap
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
165
“For once, may the interest of minor wealthy men is
not against the interests of the many poor. he form
of justice that we want is common justice based on
prosperity and happiness”.
~ Sutan Sjahrir- Republic Indonesia’s First Prime Minister ~
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photo © Worldpics
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
167
Economy
Breaking Through
The Middle Income
Trap
I
n the last two or three years, Indonesia’s economy continued
to show satisfying growth even when the world economy was
haunted by prolonged European crisis, Middle East was still
shaken by the political dynamic, and US was still in iscal deicit.
At such times, Indonesia was able to record over six percent growth
in 2011 and 2012 although slightly down in 2013. On such level,
Indonesia had recorded as one of G20 country members with the
highest growth rate, at 6.5 percent in 2011.
Indonesia signed up at G20 as a country that prevailed over about
85 percent of world economic in 2009. Indonesian development
proile in these few years brought attention of some countries and
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international organizations such as World Bank that projected
Indonesia along with Brazil, China, India, South Korea and Russia
would contribute 50 percent global growth in 2025. With income or
Gross Domestic Product amounting to 825 billion US dollar in 2011,
Indonesia is recorded as the sixteenth country with largest economic
level in the world. In the last year towards 2014-2015 there were some
attenuation in Indonesian economic indicator, such as in economic
growth, Rupiah exchange rate, up to the level of foreign exchange
reserves. Nevertheless, in general, the economy remains good and
steady as foundation for the next period economic development.
Level of strength, and weakness, of Indonesia’s economic foundation,
as a whole can be described as follows:
Indonesian Economic Foundation
Indonesian economic stability and performance in the last ive years
shows relatively good level. he good Performance was indicated in
2010, which provided optimism for the following years; Indonesia’s
economic growth was able to survive, even increase. hat was
proven when in 2011 Indonesia recorded a 6.5 percent growth.
hat performance brings optimism in achieving prosperity through
acceleration of growth distribution to all areas in Indonesia. he
growth was not only higher than the 2011 global economic growth
at 3.9 percent, but also the third highest in Asia Paciic after China
and India, and the highest in South East Asia region.
Many parties mentioned 6.5 percent growth was ‘outstanding’ when
the world was in crisis since 2008. hat was a valuable capital for
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
169
Indonesia in managing the economy in the future. In the following
two years, in 2012 and 2013, the economic growth was slightly down.
However, in general, the economy was at a relatively steady level
amidst many uncertainty in global economy in recent years. A more
complete picture on Indonesian economic performance in the last
decade can be viewed in the following chart:
Chart 1: Indonesian Economic Growth 2001-2012
5.7
6.3
6.5
6.1
6
4.7
6.3
3.8
4.6
2001
2003
2005
2007
2008
2009
2010
2011
2012
Source: Economy Indicator, BPS (processed)
Indonesian economic performance was also relected in the increase
of people per capita income, from US $3000 in 2010 to US $ 3542
at the end of 2011. he increase in per capita income also caused
Indonesian middle class growth that was predicted reaching 7
million people per year. he number of Indonesian middle class, in
this case the middle-low spectrum, in the same year reached 130
million people or 53 percent of total population. his number rose
sharply in the last 10 years when during 1998 post-crisis the number
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was only around 25 percent of the population. he increase of per
capita income of Indonesian people can be shown in the following
chart:
Chart 2: Per Capita Income 2004-2012 (Rp. Millions)
33.3
2012
30.4
2011
26.8
2010
23.6
2009
21
2008
17.2
2007
2006
14.7
2005
12.4
2004
10.4
0
5
10
15
20
25
30
35
Source: Economy Indicator, BPS (processed)
he increase of Indonesian middle class in the last decade also
becomes the backbone for national economic structure, where
domestic consumption contributes up to 55-56 percent. he Asian
Development Bank (ADB) report entitled he Rise of Asia’s Middle
Class also shows the wiggle of Indonesian middle class that is
growing fast. Even, the World Bank report, ‘Global Development
Horizon 2011 – Multipolarity: he New Global Economy’, placed
Indonesia along with China, India, South Korea and Brazil, as global
growth epicenter with estimation that part of the global growth is
contributed by those six countries in 2025. he growth of Indonesian
middle class is predicted to continue until the end of Demography
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
171
Bonus period in 2040, when Indonesian Demography structure is
dominated by the productive age group, whereas dependency ratio or
percentage of elderly and children population decreases.
Indonesian economic performance can also be seen from debt ratio to
income or Gross Domestic Product (GDP) that in the last decade can be
reduced to relatively stable level. In 2011 debt ratio to GDP is 83 percent,
which continues to decrease until 24 percent in 2012. his ratio is a very
stable debt ratio amidst debt ratio of European countries, Japan and the US
that is nearing 100 percent. he impact of prolonged European zone debt
crisis to Indonesia is relatively minimal given the relatively strong domestic
economy structure supported by domestic consumption. On the other
hand, eforts to diversiication of export destination are also encouraged
targeting nontraditional markets as major export destination markets.
Chart 3: Debt Ratio to GDP 2004-2012
Progress in Debt to GDP Ratio in 2004-2012
[in Rp trillion]
9,000
120%
8,000
100%
7,000
6,000
5,000
4,000
56.6%
80%
47.3%
3,000
39.0%
60%
35.1%
2,000
1,000
0
2004
2005
2006
Outstanding Debt
Loans
SSN/Securities
Total
33.0%
32012
Grafik
28.3%
2008
2009
2007
GDP
2004
637
662
1,300
2005
620
693
1,303
26.0%
24.4%
24.1%
2010
2011
2012*
2006
559
743
1,302
2007
586
803
1,389
2008
730
906
1,637
2009
611
979
1,591
Source: Finance Ministry and BPS
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20%
0%
Debt to GDP Ratio
Source: Ministry of Finance and Central Bureau of Statistics, processed
172
40%
2010
612
1.064
1,677
2011
621
1.188
1,809
2012*
638
1.338
1,976
Economic growth that was positively maintained in the last few
years decreased in 2013 due to global downturn and economic
downturn pressure of China and India. However, Indonesian
economic growth was relatively high compared to global growth at
only around 4-4.5 percent in 2010-2012 period. his achievement
placed Indonesia in G20 group as country with high growth along
with China that recorded the number of 8.1 percent and India
at 5.3 percent. Meanwhile, Indonesian GDP value, which was
counted based on constant 2000, reached Rp.2.618 trillion in 2012.
he value increased by Rp.153 trillion compared to 2011 value at
Rp.2.465 trillion.
Based on its use, the highest growth rate in 2012 occurred on
Gross Fixed Capital Formation (GFCF) or physical investment
at 9.8 percent. GFCF has wide multiplier efect for not only
encouraging production side, but also stimulating consumption
side. GFCF would encourage employment opening and expansion,
improve people’s income, which in turn would stimulate people’s
consumption. Recorded Household Consumption that grew more
than ive percent also supported economic growth. Meanwhile,
Government Consumption sector that was expected to provide
optimum contribution to national economic growth only grew by
1.25 percent.
Household consumption slowdown occurred in the second quarter of
2013. he downturn was caused by, in part, inlation pressure of post
subsidized fuel price increase and food price increase. Government
consumption growth was also relatively slowing down compared
to previous period, i.e. from 7.7 percent in irst semester of 2012 to
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
173
1.4 percent in irst semester of 2013. his downturn was caused by a
decrease in growth of budget expenditure for goods in relation to budget
eiciency policy and low budget expenditure for social assistances and
other budgets due to delay in the disbursement in several ministries and
agencies.
Meanwhile, until the irst semester of 2013 GFCF also experienced
signiicant downturn in comparison to the same period in the
previous year. he decline was from 11.2 percent to 5.2 percent.
Signiicant downturn occurred on overseas machinery and
equipment investment, overseas transportation, and others where
those three sectors experienced contraction. On the expenditure
side, Household Consumption gave the biggest contribution,
i.e. 55 percent, while Government consumption contributed 7
percent. Whereas GFCF 31.8 percent, export 24.8 percent and
import 24.8 percent of total GDP.
A number of Indonesian economic aspects in the last few years and
the future projection can be described further as follows:
1. Investment
Investment plays an important role in Indonesian economic
growth that in several years the realization is beyond target. In
2012, realization of the investment reached Rp.313 trillion, which
is expected to increase up to Rp. 500 trillion in 2014. Competition
to attract foreign investment directly is not easy. Competition
between countries, especially in Asia and Latin America to get
foreign investment low directly becomes tighter. Global investors
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would evaluate a number of criteria from social-political stability,
law assurance, availability of raw material, productivity of human
resource, technology up to the size of domestic market. Even
more considerations would be evaluated for investor that would
invest his capital in real sector, which is a long-term investment.
herefore, all of the mentioned factors would be net-presentvalue-d to measure the level of risk and investment feasibility.
Achieved realization for the time being shows that Indonesia
remains on relatively good position in investment aspect.
Chart 4: Development of Investment Realization 2006-2012
Investment Realization (Rp trillion)
313.2
2012
251
2011
208
2010
135
2009
154.9
2008
135
2007
2006
162.7
0
50
100
150
200
250
300
350
Investment Realization (Rp trillion)
Source: BKPM
At present, Indonesia has momentum to attract and increase
both Foreign and Domestic Investment. After going through
post 1998 economic crisis recovery process, Indonesian economic
structure and foundation is considered stronger. Indonesia has
the potential to become one of the world’s 10 biggest economic
strengths in 2020 with GDP of 3.200 billion US dollars.
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
175
McKinesey published a report entitled ‘he Archipelago Economy:
Unleashing Indonesia’s Potential’. In the document, it is predicted
that in 2030 Indonesia will become the world’s 7th economic
strength.
At present, Indonesia will get more or less 90 million middle class
additions with high purchasing power. At that time, Indonesian
domestic market will be considered large enough for urban
consumption growth is predicted to increase by 7.7 percent on
average and creates market potential by 1.1 trillion US dollars.
Indonesian domestic market potential in the future becomes one
of the pull factors to invest in Indonesia. Currently, Indonesia is
the 15th economic strength based on the Purchasing Power Parity
(PPP). With an average growth rate at above six percent, it can be
ensured that the opportunity to invest in Indonesia will grow. his
is not only caused by an increasingly growing middle class and
consumer purchasing power, but also natural resources potential
–both renewable and not—which is big enough to be processed.
Industrialization and down-streaming programs become the entry
for natural resources processing investment in Indonesia.
World Economic Forum (WEF) also placed Indonesia as the most
competitive economy in Asia after China and Malaysia. Besides
that, the lastest survey by UNCTAD placed Indonesia as the 4th
best destination country for multinational company investment.
Support from democratization process that has matured also adds
value and eligibility substance to Indonesia as world investment
destination.
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2. National Competitiveness
A number of agenda to constantly increase national competitiveness
needs to be improved. he decline in national competitiveness
rank from 46 (2011-2012) to 50 (2012-2013) has posed a
pressure for constant improvements speciically to maintain the
national competitiveness environment. In the period of 20132014, WEF promoted Indonesia’s competitiveness to 38th place
or up by 12 ranks from the former place. Previously, Indonesia
had three consecutive years of declining competitiveness. he rise
placed Indonesia as one of the countries with the highest rank
promotion for its competitiveness. Indonesia outperforms four
out of ive BRICS countries, i.e. Brazil, Russia, India and South
Africa. WEF identiied 10 of 12 competitiveness assessment that
indicates Indonesia has achieved improved and better result.
WEF considered infrastructure construction in Indonesia as
continuing to improve as can be seen in better road quality, clean
water provision, port, electricity generator, and other facilities.
Apart from that, WEF also assessed Indonesian macroeconomic
condition as well maintained with a positive and stable
growth. WEF also appreciated the development of science and
technology in Indonesia as well as success in governance. his
signiicant rise of competitiveness rank is an accomplishment in
the last few years.
While national competitiveness rose, some eforts still need
to be done, such as simpliication of bureaucracy, permit, and
improvement for a conducive business environment. Good
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
177
coordination between the central and
"Despite improvement
regional governments as well as crossin national
ministry coordination needs to be
competition, several
optimized to provide assurance for
eforts need to be done
business, so that Indonesia will still
in the simpliication of
be able to optimize all investment
bureaucracy, licensing,
potentials, both foreign and domestic.
and improvement of
One of stimulants for investors in
favorable business
increasing their investment eligibility
climate. Coordination,
is the availability and quality of
either the centralinfrastructure. Consequently, availability
regional or crossministry, need to be
and quality of infrastructures like road,
optimized in order to
port, electricity and airport become a
provide certainty for
priority for improvement. In order to
businesses."
improve national competitiveness, the
government has also launched a program
to accelerate infrastructure development
as outlined in the Master-Plan for Acceleration and Expansion
of Indonesian Economic Development (Masterplan Percepatan
dan Perluasan Pembangunan Ekonomi Indonesia - MP3EI). It is
intended to bring connectivity so that production process in the
national level will become more eicient.
3. Foreign Exchange
Foreign exchange reserves grew rapidly in period of 2010-2012, but
slightly declined in 2013 due to deicits in trade balance and payment.
In 2012, foreign exchange reserves reached 112.8 billion US dollars
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or rise by 2.8 billion US dollars over the previous year. Compared
to 2009 foreign exchange reserves at 66 billion US dollars. Rapid
growth of foreign exchange reserves in the period of 2010-2012 that
was supported by indication of strong domestic economic structure
with various assessment instruments encouraged by world ratings
agency (Fitch, S&P, and Moody’s) increase Indonesian investment
level to investment feasible zone (investment grade zone).
Until September 2013, Indonesian foreign exchange reserves
reached 95.7 billion US dollars. he decreasing foreign exchange
reserves compared to 2012 was due to market intervention
throughout irst semester of 2013. At that time, global inancial
market turmoil had depressed the economy of some developing
countries including Indonesia. Capital outlow following he Fed
rumor would accelerate the termination of QE3. Rupiah currency
exchange rate weakened during period of January-August 2013.
Chart 5: 2004-2012 Foreign Exchange Reserves
Investment Realization (Rp trillion)
120
100
96.2
80
60
40
36.3
34.7
2004
2005
42.6
56.9
51.6
110.1 112.8
66.1
20
0
2006
2007
2008
2009
2010
2011
2012
Source: Finance Ministry
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179
4. Export-Import
he pressure of the global economic downturn in the last few years
has caused national export to slow down due to reduced demand
from export destinations. In 2012, Indonesian export recorded a
2 percent growth. Meanwhile, import grew much higher, at 6.65
percent. he increase in import is due to increasing non-oil and
gas as well as oil and gas imports. In addition, import increase
was also afected by increasing raw materials and capital goods
imports. In 2012, raw materials imports recorded a 7 percent
growth in comparison with the previous year. Whereas capital
goods import in the same year grew by 15.24 percent compared
to the previous year. Higher import growth rate in comparison
with export component has made Indonesia experienced a deicit
in balance of trade.
At the beginning of 2013, export growth experience another decrease
to 4.2 percent from 5.3 percent compared to the same period in
the previous year. Meanwhile, import growth experienced a larger
decline, to 0.3 percent from 10.2 percent. Pressure of exchange value,
decline in need for import input of export and domestic commodity
production, as well as concern for inlation pressure caused downturn
on the import growth. Deicit in Indonesian balance of trade in the
irst semester of 2013 reached 3.31 billion US dollars, mainly due
to deicit in oil and gas balance and lack of improvement in non oil
and gas sector due to global economic downturn and tendency to
decline in main export commodity price. Cumulatively, Indonesian
export value in irst half of 2013 reached 91 billion US dollars or
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decreasing by 6.1 percent compared to the same period in 2012.
74.77 billion US dollars of which were non oil and gas export. he
import cumulative value during the same period was 94.36 billion
US dollars or decreasing by 2.16 percent compared to the previous
year.
5. Income Structure
In the last decade, tax revenue contributed 70 percent on average
of total state revenue and grants. Taxation consists of domestic
taxes such as income tax, VAT, excise, property tax, Customs
Acquisition of Land and Building, and other taxes, as well as
international trade taxes in the form of import duties and export
duties. On average, domestic taxes dominated 96 percent of total
tax revenues in the period of 2006-2012, whereas international
trade taxes contribute an average of 4 percent.
Posture of Indonesian State Budget until 2012 has shown a
signiicant increase in budget capacity. In 2001, State Budget
and Grants was only about Rp. 301 billion, but since then has
increased into Rp 1.358.2 trillion in 2012 APBN-P (Revised State
Budget) or increased by 351 percent in a decade. Meanwhile, the
state budget in 2001 that was only Rp. 341.6 trillion has increased
into Rp. 1.548.3 trillion in 2013 APBN-P (Revised State Budget)
2013 or multiplied by 353 percent in a decade.
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
181
Picture 1: 2001 & 2012 State Revenues and Grants, 2013
APBN-P (Revised State Budget)
Rp1,358.2T
3 Desember 2013
APBN-P
Rp301.1T
2012
2013
Rp1,548.2
2001
trillion
Source: Finance Ministry
Tax revenues as the biggest contributor to state budget posture
has increased signiicantly, both when it was calculated since
2001 and in 2005. Tax revenues increase at Rp. 980 trillion at
the end of 2012 or increased by 371 percent from 2001 at Rp.
185.5 trillion. In accordance with APBN-P (Revised State
Budget), the 2013 tax revenue target reached Rp. 1.148 trillion
or almost by ive times from 2001 tax revenues. his performance
surely increases optimism in achieving various government
development programs, both in medium and long term, and in
other development programs.
Increasing tax revenues in State Budget posture in the last ten
years afected the debt portion decline as source of funding
in State Budget. Debt ratio to GDP dropped to less than 24
percent in 2013 compared to 2001 at 77 percent. Budget deicit
within the decade was also well maintained at an average of 1.4
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percent of GDP. In 2001, the state budget deicit was recorded
at 1.1 percent or was reduced to 54 percent from 2001 when
it reached 2.4 percent. he 2012 state budget deicit at 1.86
percent is slightly elevated in comparison with the 2011 deicit
due to deicit pressure in balance of payment and trade, but this
deicit was quite low, both in the region and global.
At present, Indonesia is at the point of economic acceleration.
his situation is expected to bring Indonesia as the world's new
economic power. On the iscal side since last period of the 2000s,
Indonesia always maintained iscal balance with a constantly
declining debt ratio into below 24 percent by the irst semester
of 2013. On the macro-economic fundamental side, Indonesia is
recorded as a country with relatively low inlation rate in South
East Asia, even in comparison to several emerging markets. For
example, India whose growth is relatively high but accompanied
by an inlation rate of 10 percent and China with a 6 percent
inlation rate. he demography bonus that would be enjoyed
from 2010-2040 is a great opportunity for Indonesia to optimize
its potential, either in terms of domestic economy and in global
economy.
6. Poverty and Employment
Stable economic growth, even though slightly declining in last
year, resulted in the decrease of poverty indicator. he number of
poor people was 13.33 percent or about 31.02 million people in
2010 decreased to 11.37 percent or 28.7 million people in 2013.
Many new employment opportunities created in the last ive
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
183
years also aid in decreasing the number of unemployment i.e.
8.59 million people in 2010 into only 7.17 million people in the
irst semester of 2013.
Global economic downturn and crisis in the European zone would
not lessen the government’s efort and commitment to continuously
conduct development strategies oriented in the pro-growth, projob, pro-poor and pro-environment direction. he completion
of several development agenda such as infrastructures, roads,
seaports, airports, telecommunications, and energy becomes
an incentive for higher investment appeal. A relatively
maintained iscal balance, besides increasing the use of iscal
as growth stimulus, also increase budget absorbance.
Beside infrastructure, purchasing power of grassroots community
is also maintained. he strategies are for instance, providing
accessibility to micro and business groups to enable them to
increase their capability and production capacity. Mechanism of
People Business Credit (PBC) cumulatively, since its conception
in 2007 until March 2013, has a total absorption of Rp. 108.4
trillion with business recipients reaching 8.3 million debtors.
Aside from being equalization mechanism, PBC’s function and
role are also to increase the capacity of small and micro businesses.
herefore, this will create employment and enable small and
micro businesses to increase their income. An increasing income
will surely expand opportunity for national consumption and
savings.
Increase in employment expansion is one of the strategies to break
the cycle of poverty in Indonesia. Up to August 2012, level of open
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unemployment could be suppressed down to 6.14 percent. his
achievement even received a mention in the 2012 IMF mid-term
report when developed countries were facing high unemployment as
an impact of global crisis. In addition to the “keep buying” strategy,
various development acceleration programs also contributed to
employment expansion, which then induced an increase in formal
sector workforce up to 40 percent.
Poverty reduction acceleration program through four clusters
not only suppresses the poverty number but also elevates people’s
purchasing power. In addition, ongoing development program
and investment inlow has expanded employment as one of the
catalysts in reducing poverty in Indonesia. Cluster I to Cluster IV
accelerate poverty reduction in order to ease target achievement
by the end of 2013. With various programs designed within the
big frame of development acceleration, Indonesian poverty level is
expected to be around 8-9 percent by the end of 2014.
he four poverty reduction program clusters are as the following:
First, in the form of direct assistance of rice to poor family
(raskin), School Operational Support (SOS), and Ideal Family
Program (HFP); Second, National Program for Community
Empowerment (NPCE) development. hird, small, micro and
medium based business programs through People’s Business
Credit (PBC) and Corporate Social Responsibility (CSR). Fourth,
low-cost house, low-cost public transport, more equitably clean
water and electricity, and improvement in the life of ishermen
and the urban poor programs.
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
185
In 2013, government encouraged integration program of Cluster
I until Cluster IV to accelerate poverty reduction to ease target
achievement by the end of 2013. hrough many programs in the
big frame of development acceleration, poverty in Indonesia was
expected to be suppressed to 9.5-10.5 percent by the end of 2013.
Budget allocation in 2013 proposed national state budget for poverty
reduction reached Rp. 115.5 trillion. In 2013 national state budget,
the budget was allocated for the implementation of:
First Cluster including HFP in the amount of Rp. 2.8 trillion
to reach 2.4 million of targeted very poor households. Rice for
15.5 million poor families using Rp. 17.2 trillion, and health
insurance program for 76.4 million people.
Second Cluster, NPCE program with an allocated amount
of Rp. 13.4 trillion included program for rural areas at Rp.
9.6 trillion targeting 5.100 sub-districts, programs for urban
areas at Rp. 2 trillion for 10.922 urban villages and rural
infrastructures development program at Rp. 0.8 trillion for
2.600 villages.
hird Cluster, government targeted improvement in PBC
program for micro, small and medium businesses.
Fourth Cluster was targeted for self-reliant house construction
for 60.000 units.
In addition, with education budget reaching Rp. 336 trillion,
Government resumed SOS program to ease the burden of education
cost to complete the 9-year compulsory education. Around 45
million students of primary school, madrasah ibtidaiyah, and salaiyah
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ula students as well as students of junior high school, madrasah
tsanawiyah, and salaiyah wustha became the program beneiciaries.
Apart from that, government provided scholarship for about 9.4
million of schools and college students, as well as fund for teacher’s
profession allowance in the amount of Rp. 43.1 trillion.
Chart 8: Poverty Reduction Budget
45
36.15
35
39.30
35.10
37. 17
120.0
120.0
34 .96
32 .53
115.5
3 1.0 2
30.0 2
30
93.8
25
8 0.1
20
99.2
100.0
28 .59
80.0
81.4
60.0
60. 6
15
46.6
53.1
40.0
10
5
0
23.4
2004
28.0
2005
20.0
2006
2007
2008
2009
2010
2011
2012
Poor people
2013
Number of Poor Population (million lives)
Poverty Alleviation Budget (Rp trillion)
40
140.0
140.0
00
Budget
Source: Finance Ministry, BPS
7. Area Development
Area development to enforce economic dispersion is also
conducted from Sumatera to the Papua regions, as described
below:
Sumatera Region
Gini coeicient value of Sumatera region tends to increase.
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
187
In 2012, Gini coeicient value of Sumatera reached 0.35 or
increased in comparison to the 2009 Gini coeicient value
of 0.31. he increase is often indicated as a sign of a wider
gap between households’ income. However, as a note, the
increase of Gini ratio also indicated industry expansion that
provides space for skilled workers and afected increasingly
wider income gap against non-skilled workers. herefore, the
increasing Gini ratio in certain conditions can be understood
as development expansion transition phase. Whereas as part
of GDP National formation role, Sumatera region ranks
second place with national GDP formation portion of 23.77
percent.
Java Region
Gini coeicient value in Java region has a tendency to increase.
In 2012, Gini coeicient value of Java region reached 0.39 or
increase in comparison with the 2009 Gini coeicient value
of 0.35. Java region still ranks irst with portion of national
GDP formation of 57.63 percent.
Kalimantan Region
Gini coeicient value of Kalimantan region has an increasing
trend. In 2012 Kalimantan region’s Gini coeicient value
reached 0.36 or increased in comparison the with 2009
Gini coeicient value of 0.33. Kalimantan region ranks with
portion of national GDP formation of 9.3 percent.
Bali-East Nusa Tenggara Region
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Gini coeicient value of Bali-ENT has an increasing trend. In
2012, Gini coeicient value of Bali-ENT region reached 0.38
or increasing in comparison with the 2009 Gini coeicient
value of 0.34. Bali-ENT region ranks second smallest with
national GDP formation at 2.51 percent.
Sulawesi Region
Gini coeicient value of Sulawesi region has an increasing
trend. In 2012, Gini coeicient value of Sumatera region
reached 0.4 or increasing in comparison with the 2009 Gini
coeicient value of 0.34. Sulawesi region ranks fourth with
portion of national GDP formation at 4.73 percent.
Papua Region
Gini coeicient value of Papua region has increasing trend.
In 2012, Gini coeicient value of Papua region reached 0.4 or
increasing in comparison with the 2009 Gini coeicient value
of 0.34. Papua region ranks the last with portion of national
GDP formation at 2.06 percent.
2014-2019 Projection
Closing the 21st century, Indonesia emerged as a middle-income
country, economically strong, politically steady, and more conident.
Over the last decade, Indonesian iscal and political system has
experienced transformation. Although rarely mentioned, Indonesia is
also experiencing basic demography and geography shifts. Currently,
Indonesia is an urban country since more than 50 percent of the
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189
population lives in urban areas. In the next ive years, Indonesia’s
population would reach 270 million people, 60 percent of whom lives
in urban areas. At the same time, there would be a decrease in fertility
level and a sharp increase in elderly population number, that would
make Indonesia keeps beneiting from the ‘Demography Bonus’ in
the coming decade because working age population increases relative
to other population groups.
In 2020, it is predicted that young population at age 15-24 years
would reach 50-60 percent. his would be an advantage if the young
population has skills and are employed. Otherwise, unemployment
would certainly be a disaster. In order to make young population
growth our cutting edge, it is necessary to think about jobs provision
strategy. Population condition in developed countries provides an
excellent opportunity for Indonesia as jobs provision alternative.
According to ILO, in the coming decade the population growth of
developed countries especially Europe, North America, East Asia
and Australia would experience stagnation, where elderly population
increases to 50-60 percent. hey would lack young workers. his is
an opportunity for our young population.
So far, some industrialized countries like Germany has started taking
steps to deal with the impact of such condition, for example by
sending delegation to Indonesia for possibility of national workers
deployment there. Similar condition has been experienced by Japan
and South Korea Since the last few years the two Asian countries have
opened opportunitles for Indonesia to send young workers, either to
work in industry or nursing. In the last ive years, other developed
countries are predicted to do the similar thing. In general, Indonesia
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can make the most of job opportunity by
providing skilled workers to ill the job
market in industry and health sectors.
herefore, development of workforce
service industry ‘road map’ by creating
conducive
business
environment,
development of migrant workers quality
improvement system, and migrant
workers market share improvement are
necessary.
"In 2020, the
estimated number of
youths ranging 1524 years will reach
50-60 percent. his
will be a blessing if
they are equipped
with skills and jobs.
Nevertheless, this will
be a disaster if they
were unemployed. "
If Indonesia is able to continue
macroeconomic foundation and political
stability development that have been
established as well as accelerate growth while ensuring equitable and
sustainable growth, Indonesia has the potential to become a dynamic,
competitive and inclusive middle-income country in the next decade.
However, to achieve Indonesian development vision and mission,
many things need to be done. Growth needs to be maintained to
stay positive and strong. Conducive infrastructure development and
investment environment become high economic growth pendulum.
With the background of strong iscal position, Indonesia’s opportunity
in the next ive years is very extensive to overcome a number of
challenges in the coming years. Democratization and decentralization
fundamentally have changed the structure of government
accountability and decision-making. he changes highlight systemic
weakness in process and capacity for policy formulation and
implementation as well as reformation implementation process
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becomes challenging and time consuming. Government efectiveness
is limited by inadequate capacity and accountability of civil servants
and coordination problem in the government. hus, capacity building
and improvement of state apparatus especially in areas become
serious concern to make national development in the next ive years
conducive.
Table 1: 2014-2019 Indonesia Projection*
INDICATORS
UNIT
2014
2015
2016
2017
2018
2019
Number of
Populations
Million lives
253
257
260
263
266
270
GDP
Billion USD
1,150
1,220
1,332
1,451
1,538
1,631
GDP Growth
%
5.8-6.1 6.2-6.5 6.2-6.5 6.5-7.0 6.8-7.2 6.8-7.2
GDP per capita
USD
4,270
4,750
5,200
5,850
6,380
6,950
Gini Coeicient
%
0.4
0.39
0.39
0.36
0.35
0.35
Inlation
%
5.5-6
4.5-5.5
4- 5
4- 5
4- 5
4- 5
103
115
125
145
175
210
Foreign Exchange Billion USD
Reserves
Poverty
%
Open
Unemployment
%
4.5
3.9
3.3
2.7
2.1
1.5-1.8
Electriication
Ratio
%
80
83
85
90
93
95
9.5-10.5 8.0- 8.5 7.0-7.5 6.0-6.5 5.0-5.5 4.0-4.5
*) Assumption: global downturn due to US economic stimulus cut, European Zone Stagnation (in recovery process),
China economic expansion, remained high volatility of energy and food commodities, remained high domestic
consumption, transaction deicit run on relatively maintained level, middle-economic class grow according to
projection, and infrastructure development in line with MP3EI plan.
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Certainly, 2014-2019 Indonesian development period would not be
separated from global economic integration or linkage. Economic
linkage among countries and among regions becomes inevitable
reality and demand for each country to prepare their economic
development policy and strategy amidst the linkage conditions.
Global economic integration gets more crucial when countries in
regions of Asia, Europe, Africa and US continue to encourage region
uniication establishment in overcoming macroeconomic stability in
encouraging quality global growth.
he period of 2014-2019 is the third period of national mediumterm development phase until 2015. hus, the elected president in
2014 general election needs to pay attention to sustainability and
improvement principles while formulating the vision, mission and
program of national economic development that will be pursued later.
Path-dependency should be put forward, since the next process would
be mostly determined by the former process. Positive achievements
to date needs to be continued and even improved in the next period.
he 2014-2019 Indonesian economic vision is closely related to the
national long-term development plan with phased development
construction, i.e. ive-yearly development or medium-term until 2025
that is expected can be Indonesian launch basis toward big country.
In the long-term design, there are eight development directions that
can be described further, as follows:
a. he establishment of noble, moral, ethical, cultured and civilized
Indonesian society, characterized by: First, realization of strong,
competitive, noble and moral national characters based upon
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the Pancasila philosophy. his philosophy is characterized by
human nature and behavior as well as Indonesian society that is
religious, virtuous, tolerant, patriotic spirit, dynamic developing,
and science & technology oriented. Second, more consolidated
nation culture relected in the increase of Indonesian people
civilization, propriety and dignity, as well as stronger nation’s
identity and personality.
b. he establishment of nation with competitive power for more
thriving and prosperous community, as indicated by the following:
First, quality and sustainable economic growth so that the per
capita income by 2025 reached equivalent to middle-income
countries, with open unemployment level is not more than 5
percent and number of poor people is not more than 5 percent.
Second, an increase in human resource quality, including the role of
women in development. In general, Indonesian human resource
quality increase is indicated by increase in human development
index (HDI) and gender development index (GDI), as well as
population grows in balance achievement. hird, developed
economic structure that is strongly based on the competitive
advantages in various areas of Indonesia. In the broad sense,
agricultural sector and mining become the basis of economic
activity that is managed eiciently thus produced quality
commodity, manufacture industry with global competitive power,
economic motor force, and services whose role is increasing with
more qualiied and competitive quality of services.
Fourth, compiled reliable and integrated linkage of infrastructure
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network with one another. Fulilled reliable and eicient electricity
supply according to need, including almost entirely household
and rural electriications can be met. he operation of eicient and
modern postal and telematics to create Indonesian information
society. he realization of water resources conservation that is
able to maintain the sustainability of water resources function,
Fifth, increase in professionalism of central and regional state
apparatus to create good governance, clean, authoritative and
accountable, as well as professionals who are able to support
national development.
c. he establishment of democratic Indonesia, based on law and
justice, indicated by the followings: First, the creation of law
supremacy and human rights enforcement based on Pancasila
and the 1945 Constitution of Republic Indonesia as well as
national law system that relects truth, justice, accommodating,
and aspiring. he realization of law enforcement regardless
of position, ranks, and societal class of a person for the sake
of law supremacy and realization of respect for human rights.
Second, creating constitutional base to strengthen democratic
institution.
hird, strong civil society and political party role in politics.
Fourth, consolidated democracy values institutionalization that
emphasizes on tolerance, non-discrimination and partnership
values. Fifth, fulillment of democracy consolidation in various
aspects of politics that can be measured by the presence of law
based government, neutral and professional bureaucracy, self
reliant civil society, political society and economic society, as well
as national self suiciency.
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d. he fulillment of a sense of security and peace for all people
and perpetuation of Unitary Republic of Indonesia territorial
integrity and national sovereignty from threats either domestic
and foreign, is indicated by the followings: First, realization of
national security that guarantees human dignity, citizens safety,
and territorial integrity from threats and disturbance to defense
and security, either foreign and domestic.
Second, professional Indonesian military, strong reserve
components and defense support especially community’s
state defense supported by reliable defense industry. hird,
professional Indonesian police, strong community participation
in efective security, intelligence and counter-intelligence, as
well as consolidated coordination between defense and security
institutions.
e. he establishment of equal and equitable is indicated by the
followings: First, more equitable development level to all areas
is fulilled by increasing in life quality and community wellbeing, including reduced inter-regions disparity in terms of
Unitary Republic of Indonesia. Second, self-reliance in food can
be maintained at a secure level and in adequate nutrition quality
as well as availability of food security instrument for household
level.
hird, fulillment of residential need that is completed with
infrastructure and support facilities for all communities that
is supported by long-term housing inance system that is
sustainable, eicient, and accountable for realization of urban and
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rural environments according to good, sustainable life that is able
to provide added value for the community.
f. he establishment of lush and sustainable Indonesia, is indicated
by the followings: First, better management and utilization of
natural resources and preservation of environmental function
that are relected by maintained function, support system and
recovery capacity in supporting social and economic life quality
in harmony, balanced and sustainable. Second, preservation of
species diversity and natural resources distinctiveness to meet
added value, national competitiveness, as well as national
development capital. hird, increase in community awareness,
mental attitude, and behavior in managing natural resources
and preserving environmental function to maintain life comfort
and quality.
g. he establishment of Indonesia as an archipelago country that is
self-reliant, advanced, strong and based upon national interests
that is indicated by the followings: First, the establishment of
infrastructures and facilities network as the glue for all islands
in Indonesian archipelago. Second, increased and strengthened
human resources in the marine that is supported by science and
technology development. hird, the perseverance of the Unitary
Republic of Indonesia regions, assets, and others related to state
defense frame. Fourth, the establishment of integrated marine
economic by optimizing marine resources in sustainable manner.
Fifth, less coastal and marine pollution disaster impacts.
h. he establishment of increasing role of Indonesia in international
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197
community, is indicated by the followings: First, strengthen
and promote national identity as democratic country in the
international community Second,restore strategic roles of Indonesia
as big democratic country that is indicated by diplomatic success
in international environments in an efort to maintain national
security, territorial integrity, and safeguarding national natural
resources. hird, increase leadership and Indonesian contribution
to various international cooperation in order to meet a more
equitable and peace world’s order. Fourth, realize national selfreliance in global constellation. Fifth, increase in investments of
Indonesian companies abroad.
2014-2019 Development Challenge
Indonesian economy in the next ive year period would be characterized
by free trade with other countries along with the establishment of
Asean Economic Community (AEC) by 2015. AEC would provide
positive and negative inluences for economic of South East Asia
countries. he positive impact is related to luent outlow of resources
between countries in this region. Besides, decrease in trade restriction
would also create improved trade volume and relatively lower prices
for goods. he negative impact for the region is systemic risk: crisis
that happens in a country would provide signiicant contagion efect
for other countries in the region.
Relecting from what has happened in European Union, inter-states
economic disparity in a certain joint economic region also has negative
potential. Although the purpose is to bring joint interests, in the end
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each state has their own interests. hus, MEA does not necessarily
eliminate the inter-state friction. An economic region usually would
bring big impact to state with big economic domination in the region,
such as European Union that relatively provides more beneits for
Germany and France.
Indonesia is not quite ready as a key player in MEA despite having
big resources, both natural and human resources. Lagging in
productivity and infrastructure, made Indonesia only as a market for
other countries. Indonesian non oil and gas trade balance with other
countries in this region also remained deicit. In 2012, to hailand,
Singapore and Malaysia, Indonesia was respectively experiencing
deicit of 721 million US dollars, 707 million US dollars and 511
million US dollars. Indonesia recorded trade deicit to Vietnam of
157 million US dollars. Even Brunei Darussalam forced Indonesia to
be in deicit of 281 million US dollars. In such position, Indonesia’s
title as biggest economic power in South East Asia region became
meaningless.
Free trade system along with the formation of ASEAN Economic
Community and working forums in economic cooperation with
other countries in Asia Paciic region, becomes an opportunity as
well as a threat for Indonesian economy in 2014-2019. Indonesian
preparedness to face the new economic era becomes the key on how
big the phenomenon can be optimized into opportunity. Indonesia
has a number of economic strengths that enable relatively good
achievement among developing countries so far, even though falling
even more behind neighboring countries, such as hailand, Malaysia
and let alone Singapore.
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One of Indonesian important economic
capitals is an abundance of natural
resources, either in the form of oil and
gas, mining products and minerals,
forestry resources, marine resources,
and vegetable matter. Many countries
optimized their natural resources to
transform from ‘developing country’ to
developed country. his is shown for
instance by Norway that used to be the
poorest country in the Scandinavian
region, thatturnied into the most
prosperous country in the world with
Human Development Index at the irst rank. heir money from oil
was not entirely spent on state budget revenues, but fully invested in
future generations’ beneit. he biggest opportunity for Indonesia is
to take similar steps as Norway has gone, since our natural resources
supply are relatively still in plenty in comparison to other countries.
here are at least four
critical points that need
to be addressed in the
Indonesian economy from
2014 to 2019. hose four
critical points are food
security, energy security,
industrial development,
and infrastructure
development.
he large domestic market is also one of Indonesian economic
strengths. With large domestic market, Indonesian economic
was not really afected by the ongoing European region crisis that
happened until 2014. Such a condition to which some communities
criticized as similar to economic of subsistent traditional community,
unafected by its surrounding economic market. Nonetheless, this
domestic market power can be used to invite investment that would
deliver employment and bigger economic turnover. he problem
is, the presence of investment also needs a number of prerequisites
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TOWARD 2014-2019
like infrastructure, legal assurance, as well as support from clean and
eicient bureaucracy, has not been completely met by Indonesia.
herefore, foreign capital low entered Indonesia more as market
capital than as investment in real sector.
Other strength in Indonesian economy is consistency of the
inancial authority in maintaining a conducive macro environment.
he consistency has relatively been tested for 15 years post 1998
Monetary Crisis. Since then, Indonesian economic continues to
increase signiicantly from various above-mentioned aspects, such as
growth, foreign exchange increase, iscal management, up to poverty
reduction and wider provision of social insurance. he downturn
of Rupiah exchange value in 2013 becomes one of the touchstones
of Indonesian economic policy durability towards susceptibility in
various aspects that would always grow.
In addition to dealing with future opportunity and threat, three major
economic powers –i.e. abundant natural resources, large domestic
market and consistency of economic policy authorities— are also
managing critical points that become Indonesian economic weakness.
here are at least four critical points that need to be addressed in
2014-2019 Indonesian economic. he four critical points are food
security, energy security, industrial development and infrastructure
development.
1. Food Security
Food security is a latent problem in Indonesian economy. In the
beginning of 1980s period, Indonesia had won an award from Food
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
201
and Agriculture Organization (FAO) for a success in achieving
‘self-suiciency in rice’ as staple food for people. However, the ‘selfsuiciency’ also delivered long implication in the form of staple
food standardization that originally was diverse like corn, cassava,
and sago became rice only. Moreover, food is no longer limited as
the fulillment of staple food but also includes the need for meat
and fruits that dependent mainly on imports.
Soybean crisis and meat import in 2012 and 2013 not only
have implication in economy, but also in social and political
spheres. here is a shift also in regards to staple food by increase
in consumption of wheat product. Economic policy cannot be
blind to the food aspect by simply passing to market mechanism.
hailand is able to manage the food aspect into one of their
economic powers along with tourism, as well as automotive and
computer industries. hailand even masters the poultry industry
and cattle related experts in Indonesia. Advance food industry, as
a whole would determine the welfare of farmers that until now is
still largest workforce in Indonesia.
2. Energy Security
he biggest obstacle to Indonesian economic progress in catching
up the deterioration from developed countries is limited energy
supply. Although seen as abundant in oil and gas, Indonesia
currently has become a fuel oil importer country for domestic
needs at 1.5 million barrel per day, which would continue to
increase to 1.9 million barrel per day by 2019. he need of the
community for electricity also remains unmet due to the lack of
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newly built power plants. Development of wind power based,
ocean currents based, and solar power based energies have yet to
be done massively due to economic considerations of the high
cost. Geothermal energy and vegetable oil fuels have not really
developed, let alone Nuclear Power Plant (NPP) that becomes
the pedestal for energy supply of all industrial countries. he
lowest in South East Asia with electricity consumption level, it is
diicult for Indonesia to achieve economic progress signiicantly
in the future. (see next chapter: “Building a Strong Indonesia”)
3. Industrial Development
he weakness of national industry is realized by Indonesian
economic authorities. he weakness positioned Indonesia more
as a market rather than an actor in global economic system. In
order to address the weakness, government has launched program
of Master Plan for Acceleration and Expansion of Indonesian
Economic Development (MPAEIED) by establishing six
economic corridors. hrough the program, domestic industrial
development or ‘down-streaming’with infrastructure development
support is expected to be achieved.
Report on the implementation of MPAEIED program so far
mentioned good performance. It is indicated for example by
total investment at Rp. 647 trillion on 240 projects, both in
real sector and in infrastructure development for two years
since the program was launched on 27 May 2011. he growth
indeed strengthened optimism toward Indonesian economic
performance improvement in general. However, it needs to be
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
203
further examined, whether or not the program is able to build
foundation for Indonesian industrialization as other countries
that have proved success in managing their industrial foundation
such as South Korea.
4. Infrastructure Development
he Government in 2009-2014 also has realized the need for
a good infrastructure development. hat has been included in
the MPAEIED that is considered as the country’s mainstay
program for Indonesian economic progress in 2014-2019 and
the following period. he development of railroad network, road,
airport, port, electricity network, telecommunication network,
and up to industrial regions are necessities. Fiber optical network
development plan that supports Information Technology based
economy development would even reach geographically diicult
areas like Papua.
In general, the infrastructure development plan can be relied to
be achieved given its invisibility. However, it is still necessary to
examine together the development as a whole according to the
needs of Indonesia in the future. he existence of double railroad
tracks for train along the highways of Java and Sumatera, as well as
in some areas in Kalimantan and Sulawesi are necessities. Similarly,
infrastructures related to national energy supply fulillment such
as electricity, urban gas pipelines, gas and oil reineries in adequate
numbers as well as nuclear power plant to support industrial growth.
Infrastructures development in relation to urban development has
also been in urgent situation. All need careful political economy
consideration.
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Challenges in 2014-2019 Indonesian economic development are not
easy. he challenges are not only to achieve the established targets
but also to break through obstacle that is called as ‘middle income
trap’ or middle-income country trap. World economists believed that
the steps middle-income country to become developed country are
not easy because of the abstract trap. Very little countries were able
to break through the trap, one of whom was South Korea in 1980s
era. Indonesia must be able to break through the trap and ‘take of ’
before 2025 in order to not lose momentum. he success in dealing
with above-mentioned four critical aspects is one of the keys.
Apart from that, there are other aspects that need to be examined so
the projection by the end of the next ive years period is able to be
achieved, among which political stability in relation to democracy
implementation. Success of 2014 Legislative General Election
and Presidential Election would become the initial determinant
of how politic is able to contribute toward economic progress. he
achievement of clean, efective and eicient bureaucracy as product
of Bureaucracy Reformation would also play important role in
achieving established economic targets. Similarly, certainty and
enforcement of law directly afect investment rate.
Linkage that is not less important than economic development
is quality of education that is urgent quality of workforce, whom
supports the progress of economy. Failure in education would change
‘Bonus Demography’ into ‘Disaster Demography’ that would burden
economy. Critical time for educational quality improvement is 20142019 as initial phase of ‘Bonus Demography’ time. Population and
environmental developments also become critical point whether or
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
205
not Indonesian economy is able to move forward to be a developed
country. Are population and environmental aspects able to boost
Indonesian economic growth or would become burden instead?
Overview and Recommendation
2019 Indonesian economic projection in relation to long-term
development plan can be seen as very optimistic or ambitious
projection. As mentioned above, level of income per capita
that wants to be achieved by Indonesia is 6.950 US dollars with
equalization rate as indicated by Gini coeicient at 0.35. By then,
the expected poverty rate is around 4-5 percents of total population,
with electriication rate or connectivity to electricity at 85 percents.
All achievements are expected to be achieved when Indonesia bears
270 million populations.
Such optimism is needed because challenges in Indonesian economy
are not simple. Indonesia has lost its biggest momentum for taking
of due to failure in utilizing ‘oil booms’ at the end of 1970s until
early 1980s. 1998 Reformation momentum also was not utilized
enough as basis for building new economy rapidly as consumed
by the existing political euphoria. Indonesia’s last chance to break
through the ‘middle income trap’ is the period of the next 10-15
years, by optimizing the remaining natural resources and recapitulate
cultural resources.
Bad experiences in the past becomes precious lessons learned by
Indonesia. In the New Era regime, Indonesian economy had become
the biggest economic power in Asia especially during initial of 1980
to early 1990. Economic growth reached the highest at that time,
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TOWARD 2014-2019
with the highest economic growth was recorded at 8.9 percents in
1991. Grassroots community experienced relatively good prosperity
for its extent. However, all tended to be lulled by success and praises
by world’s economic observers. Developments of agriculture and
industry that started to ind their formats were not maintained to
grow until inally got standstill when 1997-1998 Monetary Crisis.
After having slumped to minus 13 percent growth, inlation reaching
70 percents, poverty number reaching 24 percents, Indonesian
economy slowly rose and recorded average growth at above 5 percents,
and was again praised by a number of international observers.
Meanwhile, world economy was still at uncertainty because US was
still in recovery process after sub-prime mortgage crisis in 2008 and
much less 2013 iscal crisis. Whereas Europe has yet to ind proper
medication for their ‘fever’ in the last two years. In the midst of
such circumstances, there are at least three urgent things to do for
economic development in the period of 2014-2019.
First, post-reformation Indonesian economic progress has pulled
world investors both in inancial-capital market and real sector.
Challenges in 2014-2019 in relation to this are: (a) continue to
increase local business world to compete and take bigger role to
utilize domestic market. Entrepreneurship movement and stimulus
toward local businessman that are being done needs to be intensiied.
(b) he swift low of foreign investment in inancial market and
capital market make Indonesia more integrated and sensitive to
global economic issue. his is lately relected by the impact of policy
in the US afects composite stock price index and Rupiah exchange
rate. Speed in policymaking, careful iscal policy, iscal-monetary
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
207
authorities coordination as well as maintain and improve economy
fundamental are basic principle that need to be done constantly.
Moreover, world economy-politic-technology in the next ive years
would be more diicult to predict and the afect to Indonesian
economy requires precautions and speed to answer collectively.
Second, domestic challenge in economic development is to keep
realizing more prosperous, advance, equitable and fair Indonesian
community. herefore, sustainable development balance between aim
and ecological-social-motives also needs to be formulated. On iscal
side, keep increasing state income source from taxes and non-tax is
also important to reduce iscal deicit. A number of critical aspects
for Indonesian economy in the future such as food security needs
to become a priority, either agricultural and ishery development.
Sustainable potential in marine ishery resources at 6.6 million tons
per year until now has yet to be optimally explored, even often be
stolen by isherman from neighboring countries until they become
the biggest ish exporters.
Energy security needs to be a priority of 2014-2019 Economic
Development given energy is key factor for Indonesia whether or
not progress into developed country. Development of oil reinery, gas
pipelines, and new power plant for electricity are urgent along with
development of vegetable oil fuels. At the same time, electricity based
on geothermal, ocean currents, and nuclear power plant as used by all
industrial countries are important to be developed along with solar
power plant that currently is not economical.
Industrial development as has been started through MPAEIED
framework that would open 9.6 million employments in 32 major
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TOWARD 2014-2019
activities in six corridors needs to be continued. he industrial
development is not only to open employment, but also to enable
Indonesia as actor instead of merely as a market, at least for domestic
market. All big and strong countries are industrial and high-tech
countries. he industrial development needs to be supported by
connectivity construction in the form of port, airport, road, railroad,
telecommunication and other infrastructures.
hird, in the next ive years there is important agenda for regional
and the world, such as ASEAN Economic Community by
December 2015 efective date and implementation of Post-MDGs
World Development Agenda that need attention to be put into
program and policy in this period. Human resources development
(HRD) is necessary because massive economic development surely
needs capable and reliable HRD supports. One percent economic
development requires 500-600 thousands HRD. Educational
sector needs to be strengthened including increasing the number
of doctorate graduates. In Indonesia, in every one million of people
there are 98 doctorates, whereas in Malaysia of one million people
there are 300 doctorates.
Productivity of workforce to meet the need for skilled workers also
needs to be improved. It is about the time for educational direction
and orientation to provide development space for Vocational and
University. Curriculum design is expected to enable more workforces
whom are ready to support the direction of national industry.
Besides, industrialization also needs research and study supports not
only from universities but also national research agencies. Strategic
partnership patterns between University–Research Agency and
Industry need to be improved mutually.
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209
Environmental sustainability also needs to become joint concern.
Investment low to Indonesia is expected to be accompanied
by preservation of environmental balance and social stability.
Investment and industrialization would sustain when keep paying
attention to ecological and social environment aspects. Surely that
would not only become the responsibility of government but also
all stakeholders, including business, private, NGO and community
to continue balancing the economic and environmental beneits as
well as preservation of social-civic stability.
2014-2019 Indonesian economic challenge is breaking through
6.000 US dollars per capita income level. he value is considered
as political stability bottom line through democracy, whereas the
stability is also necessary to guarantee economic progress into the next
stage. Mix of strategy that is run simultaneously and integrated with
each other is indeed necessary. Furthermore, world’s economists also
reminded that European crisis assures that current theory, concept
and economic comprehension are outdated (obsolete) to answer real
problems. he World no longer needs big economic theories or single
approach because it is proved inefective.
he world needs more learning from real experiences of other countries
that are more successful in running their economic development. For
Indonesia, among which are learning from hailand that is able to
turn agriculture and ishery as one of their economic cutting edges;
learning from South Korea that grows from poor country into strong
industrial country; also learning from China that remains humble
although in the coming years surely becomes number one economic
power replacing US. Chinese economists and oicials in unison
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always mentioned that China has long way to go to improve the life of
all their citizens. Chinese are still far from prosperous in comparison
with citizens of many other countries. In the end, the real measure
of economic development result is how far the prosperity of all
population as shown by their Human Development Index, and not
other measures. Sincerity and humility from economic development
actors become the key including for this 2014-2019 period.*
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Chapter v
Natural Resources
Asset to Becoming
a Great Nation
Economy BREAKING THROuGH THE MIDDLE INCOME TRAP
213
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“I leave for you the natural wealth of Indonesia, so that all big
countries in the world are jealous of Indonesia, and I leave it so
that Indonesia can cultivate it by itself.”
~ Soekarno-First President of the Republic of Indonesia ~
photo © Ethan Daniels
Natural Resources ASSET TO BECOMING A GREAT NATION
215
Natural Resources
ASSET TO BECOME
A GREAT NATION
I
ndonesia is a country that geologically contains relatively
huge potential of natural resources wealth. he problem is
whether such natural resources have optimally utilized for the
prosperity of the people, or whether they are used more for the
beneits of foreign parties. Many countries beneit from the natural
resources of Indonesia in developing their economies. Moreover,
China which is also the owner of the largest coal supply in the
world consciously chooses to import coals and gas fuel as much as
possible from Indonesia rather than dredging its own supply.
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With a relatively abundant natural resources wealth, Indonesia’s economic
growth is expected to be higher, even reaching a ‘double-digit’ growth.
Recently, Indonesia’s per capita income is approximately USD 3,500, with
a relatively high economic growth, namely 5.5%. However, this economic
growth is far lower than China and India whose population burdens are
higher and whose wealth of natural resources are lower than Indonesia.
Need for Energy and Natural
Resources Management
Before projecting the aspect of Indonesia’s natural resources for 20142019, at least we need to know irst the condition of those natural
resources and how they are managed all this time. here are at least
three ields related to natural resources, namely energy, forestry, and
ishery and marine afairs. he three ields can be elaborated as follows:
1. Energy
From the aspect of the fulillment of electric energy needs,
we should be concerned for the recent condition Indonesia is
experiencing. In addition to the lack of reliability, such as the
frequent blackouts, the Electriication Ration nationally at recent
times is also relatively low, which is about 75-80%. Because
the electric power supply is still far below the actual needs, the
consumption of electric power per capita in Indonesia is also still
relatively low, which is only about 1/6 of that of Malaysia and
about 1/14 of that of Singapore. Whereas, some of the electricity
in Malaysia and Singapore are generated by the gas fuel coming
from Natuna and South Sumatra.
Natural Resources ASSET TO BECOMING A GREAT NATION
217
Even more, for areas which produce coal and gas energy sources,
such as East Kalimantan, the Electriication Ratio is in fact
very low. his anomaly in electric power provision, such as what
happens in East Kalimantan, can be seen from the numerous
power generators using petrol despite being the largest producer
of coal and gas in Indonesia.
Table 1. he Comparison of Electric Power Consumptions
in Several Countries
COMPARISON OF ELECTRICITY CONSUMPTIONS
IN SEVERAL COUNTRIES
No.
Country
1
United States
3
Japan
2
4
5
6
7
8
9
10
11
Generator
GDP/
Population
(Million Lives) (BillionkWh) Capita
307,2
4.167,0
46.300
13.654
127,1
1.195,0
33.400
8.071
33,5
612,6
38.700
17.061
China
1.340,0
Russia
140,0
Canada
3.256,0
1.016,0
4.900
14.000
Malaysia
25,7
102,9
14.200
Thailand
65,9
148,4
7.900
Singapore
South Korea
Indonesia
The Philippines
Electricty per Capita
(kWh/Capita)
4,6
48,5
240,3
97,9
41,1
48.500
2.455
6.435
3.490
8.185
2.079
440,0
25.800
8.853
56,5
3.100
588
142,4
3.500
591
Source: he National Board of Energy (DEN)
Since the elasticity of the price of electric power towards its
consumption, its absolute value, is smaller than one and it is in fact
not elastic towards the price, the impact of the price hike towards
the decrease of consumption is relatively minor. his means, since
electricity is included in the primary needs, whatever the price is,
it will still be needed or bought by the society.
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Meanwhile, in terms of petrol,
In the next ive years,
long queues of consumers trying
changes in policy are
to purchase petrol still occur
necessary to reduce
frequently, mainly because of
fuel consumption and
the supply is limited by terms
subsidies in rational,
of quota. his is related to the
comprehensive
policy of petrol price which is
manner without
very much inluenced by political
negative impacts on
inlation and economic
considerations. he drop of crude
growth.
oil production along with the
stagnancy of the capacity of the
national petrol reineries amid the
increase of petrol consumption
have led this nation to become one of the largest oil-and-gas
importer countries in Asia. In the last ive years, the Government
through the Downstream Regulatory Agency Committee on
Oil and Gas (BPH Migas) has repeatedly poured the ideas on
bringing down the petrol consumption and subsidy, starting from
the idea to limit the consumption based on the manufacturing
year of the vehicles up to the volume size of the engine of the
vehicles. he latest idea recently applied is by installing the Radio
Frequency Identiication (RFID) device in every vehicle to
monitor and ration petrol consumption of every vehicle.
In the next ive years, a policy change needs to be done so that the
reducing of petrol consumption and subsidy can be implemented
rationally, comprehensively, and will not result in negative impacts on
inlation and economic growth. Another change to do is the method
Natural Resources ASSET TO BECOMING A GREAT NATION
219
of calculating the quantity of the petrol subsidy, which all this time
refers to the market price. his needs to be changed by referring
to the concept of “Petrol Main Cost” so that it will not violate the
constitutions and be in line with the conventional practices in the
business world.
Because the domestic crude oil production keeps on decreasing
and the capacity of the petrol reineries is stagnant amid the
increasing consumption of petrol due to economic growth and
the rising amount of population, crude oil and petrol imports
keeps on increasing. Indonesia is signiicantly dependent on
imported energies (crude oil and petrol). Indonesia’s energy
security recently has been in a very much worrisome condition
because of its dependence on imported energies.
Diferent from oil, Indonesia’s gas production is still relatively
massive. However, within the country, shortages of gas supply
until now are still experienced by those working in industries,
fertilizer factories, power plants, and the transportation sector.
his wrong gas management is shown by the fact that at the time
the domestic consumers are experiencing lack of gas supply, gas
export is in fact done in a massive way because Indonesia has
been bound by a long-term selling contract.
In addition, some of the exported gas, namely from Papua to China,
follows a selling price formula that is really disadvantageous for
Indonesia, since it uses the low crude oil price standard, USD
25/bbls, which is then altered into USD 38/bbls for long-term
contract (25 years). he selling price of gas for China is far below
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the gas price paid by fertilizer factories. he loss potential from
the gas selling from Tangguh Papua to China is about IDR 30
trillions/year.
Meanwhile, the need for energy in terms of household use, which
was previously fulilled by kerosene, has now been successfully
transferred to LPG and this has been successful in economizing
kerosene subsidy signiicantly. However, since the domestic
production of LPG cannot balance the increase of demand, as its
result more than 50% of the national LPG need has to be imported.
In the next ive years, the establishment of the gas pipeline system
infrastructure will have to be started already, mainly in big cities, to
reduce the dependency on imported LPG.
One of the causes for the lack of gas supply for domestic
consumers, whereas the national gas production is relatively
signiicant, is the lack of gas infrastructure. he State’s Gas
Company (PGN), which is responsible for fulilling the domestic
gas consumption, has been privatized. he pipeline infrastructure,
including the gas pipeline for cities, has less attention from PGN
due to the small proit margin. Another cause is the domestic
gas trade system is designed by placing the very dominant role
of brokers/traders. Traders ‘purchase’ gas from the producer to be
‘sold’ to gas consumers.
Even more, PGN, which is supposed to play its role as a provider
for infrastructure and pipeline by charging a toll-fee, is now
playing another role as trader, which is very much proitable for
PGN share holders (most of whom are foreign investors) due
Natural Resources ASSET TO BECOMING A GREAT NATION
221
to the large proit ‘margin’. However, such system results in the
expensive gas price that the domestic gas consumers must pay.
he open-access policy for pipelines that is now proposed as a
discourse has to open the opportunity for domestic gas consumers
to be able to purchase gas directly from the producers without
having to pass by the traders so that the domestic gas market can
be eicient and the domestic gas price can be pressed, and this
will be able to accelerate the national economic growth.
he communities of the world have for so long realized that huge
dependency on fossil energy sources, such as oil, gas, and coal, has
to be pushed down since fossil fuel sources are non-renewable
and less environmentally friendly.
Advanced industrious countries, such as the USA has committed
in funding researches on using renewable energies, including
solar, wind, and biofuel energies. So far, renewable energies have
been made use mostly for electric power source, such as solar,
wind, and geothermal energies.
In the transportation sector, this type of energy has been used in
terms of ethanol mixed into petrol and biodiesel mixed into gas
oil. However, its role in the energy mix of the world is relatively
very small, namely only about 1.3% per 2012. Renewable energies
have not replaced fossil energies, especially petrol, because their
production costs are higher than those of petrol. After the
production of the world’s oil reaches its culminating point, which
is predicted to happen in 2050s, then the role of renewable energies
has a chance to start to dominate the world’s energy mix.
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Diferent from the renewable energies, new energy, especially
nuclear energy, has already been used as a raw material for
electricity. he data show that the role of nuclear energy in the
world’s energy mix is relatively stable, about 5-6% in the last three
decades. hough there have been several nuclear plant accidents,
such as those happening in hree Mile Island, Pennsylvania, USA
(1979), Chernobyl Russia (1986), and Fukushima Japan (2011),
electric power supply coming from nuclear plants is relatively
stable and quite dominant.
According to the data from Electricity Information and
International Energy Agency (IEA), the role of Nuclear
Plant for the world’s electricity production is about 13.4%
(as for electricity from coal, gas, water, petrol, and Renewable
Energies, the percentages are respectively as follows: 40.8%;
21.3%; 16.2%; 5.5%; and 2.8%). Countries which are recently
using nuclear plants are, among others: France, the United
States of America, Japan, South Korea, Russia, Germany,
Canada, Sweden, Belgium, Swiss, Czech Republic, Slovakia,
Hungary, England, Spain, Finland, Dutch, Argentina, Brazil,
Pakistan, and China.
By considering the public attention towards the aspect of safety,
recently there are about 50 new nuclear plants being built all
over the world and start to operate between 2013-2017. hese
under-construction nuclear plants, among others, are in: India,
China, Korea, Russia, Argentina, Slovakia, Taiwan, USA, France,
Japan, Romania, Pakistan, and Iran. Since the time of President
Soekarno, Indonesia has had thought about using nuclear as an
Natural Resources ASSET TO BECOMING A GREAT NATION
223
alternative for energy production. his is indicated by the forming
of the National Nuclear Energy Agency (BATAN). However,
until now there has been no serious efort to make use of such a
scientiic advancement as nuclear energy.
2. Forestry
Indonesia owns more than 130 million hectares of forest, which
is the third largest tropical forest after Brazil and the Democratic
Republic of Congo. It is too naive to let this abundance of forest
resources potential in this country be without management
that can give as much beneit as possible for the prosperity of
the people. Forestry sector has a very important and strategic
position in the national development because it plays vital
and irreplaceable roles, namely: as a bufer of life system and a
determining factor of climate change, as a motor that drives the
economy, as an opener of areal isolation, and as a means to create
employment.
Forest ecosystem has a crucial role as the bufer of life system.
Deforestation and forest degradation will cause damage to
the life system bufer, which will result in the occurrence of
various disasters, such as lood, landslide, erosion, and drought.
Deforestation can happen because of, irst of all, natural factors,
for instances: dry weather and extreme heat, thunder, pest attack
and disease. Secondly, human factor, such as illegal logging,
encroachment, and uncontrolled burning in land opening for farms
and plantations. Forest ire can be a very serious problem because
the impact is not only national-scale, but also transnational-
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scaled. Forest ire issue becomes
international concern because it is
related to carbon emission, which
is allegedly the factor causing the
global climate change.
he forestry sector
has a strategic role in
the implementation
of the Triple Track
Strategy of the
national economic
development, with
pro-growth, pro-poor
and pro-employment
orientation, but still
taking account of
environmental aspects
(pro-environment).
In the last decade, the problem
of climate change becomes a
strategic issue that penetrates state
boundaries. he increase of green
house emission is believed to be the
cause of the increase of the earth’s
temperature. he end of the Kyoto
Protocol has shifted the issue of
the cause of global warming from
the advanced industrious countries which produce much of the
emission from the chimneys of their industries to forest owner
developing countries. Forest degradation and deforestation are
increasingly accused as the source of emission, while industrial
emission becomes more and more silent. he direction of the
constellation of the global economy politics has determined that
forest is the ighting arena for climate change issue. Inevitably,
the demand on preserved forest management becomes louder.
Timber use from the sustainable forest management is one of the
most environment-friendly activities that should be supported.
Timber use for daily needs is obviously far more environment
friendly compared to the use of plastics or metals. More than
Natural Resources ASSET TO BECOMING A GREAT NATION
225
that, the trend of timber use will give a positive signal to business
actors to conduct forest management in a more sustainable
manner. hus, the policy of logging moratorium that is unfocused
is not only conceptually wrong, but also socially, economically,
and environmentally dangerous.
One of the important functions of the forest in the climate system
is its central role as the regulator of carbon cycle. In the carbon
cycle, forest plays a role in the process of carbon sequestration
and carbon stocking. Diferent from the public perception
which sees negatively the management of production forest, if
observed cautiously the management of production forest in fact
has the potential to become one of the efective mechanisms in
the eforts of reducing carbon emission. herefore, the scheme
of the sustainable forest management (SFM) in production
forest through the mechanism of Indonesian Selective Cutting
and Planting System (TPTI), Intensive Indonesian Selective
Cutting and Planting System (TPTI Intensif ), Clear Cutting
with Artiicial Regeneration (THPB), Silviculture Multi System
(MSS) and various other supporting systems, such as the RIL
(Reduced Impact Logging), have to be driven to become an
inseparable part of the reduction scheme of emission from
deforestation and forest degradation. he Indonesian government
has the commitment to reduce its emission up to 26% in 2020
by its own ability and up to 41% with international supports. In
this context, forestry sector bears the responsibility for pressing
down the emission more than 87% or the total national target of
emission decreasing (Stranas REDD+ 2012; Ridwan 2012).
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Forestry sector has a strategic role in the implementation of
the Triple Track Strategy of the development of the national
economy, which is oriented to pro-growth, pro-poor, and proemployment by having consideration on the environmental
aspect (being pro-environment). he strategic role of the forestry
sector as a driving engine of the economy is not seen in terms of
its contribution towards PDB, but in terms of the strong linkages
of forestry sector to other economic sectors and its multiplier
efects on the output, income, and workforce. Nurrochmat et al.
(2007) and Nurrochmat and Hasan (2012) emphasize that the
forestry sector has a central role in driving the national economy
because it has the second largest forwards linkage value of the 21
economic sectors, after agriculture and plantation.
he development of the forestry sector has a real contribution in
opening an area’s isolation through the activity of Forest Opening
conducted by the holders of Forest Concession and Industrial
Forest Plantation permits. he contribution of the forestry sector
in opening the isolation of a certain area has been felt since the
starting of forest concession in a certain area. After the forest
concession operational permit is granted, several areas can be
connected with a land transportation system coming from the
unpaved timber transportation roads. Recently, forest roads in
various areas have been paved with asphalt and they have a good
quality and many of them have become land lanes connecting
areas, both between provinces and between areas.
With the increase of forest concession activity intensifying in
the period of 1980 until the mid of 1990, the number of forest
Natural Resources ASSET TO BECOMING A GREAT NATION
227
road lanes being established has been increasing too. As its result,
the level of area opening (connectivity) between one area with
another area around the location of the forest concession is also
increasing. hus, the number of isolated areas around the forest
concession location decreases. It is estimated that the total length
of forest roads having been built in the area of forest concession
in Indonesia until 2008 is 351,960 km, longer than the public
roads built by the government, which is 249,094 km until 2006
(Budiaman in Nurrochmat & Hasan, 2012). herefore, it is
clear that, despite all its shortcomings, the existence of Forest
Concession and Industrial Forest Plantation companies is
important to open up isolated areas in various corners of the
archipelago through infrastructure construction.
Workforce absorption in the forestry sector is quite signiicant
and is on the seventh place of all economic sectors. Largest
workforce-absorbing sectors, according to the Sakernas data:
(1) crops 31.7% of the total workforce in Indonesia, (2) trade
17.8%; (3) service 12.5%; (4) plantation 5.6%; (5) transportation
5.1%; (6) construction 4.6%; and (7) forestry and forest industry
4.0% (Statistics Indonesia, 2008). Not far diferent from the
data from Sakernas, Hadianto (2010) stated that of the total
new employment created in all economic sectors, the forestry
sector contributes 4.7%, or is on the sixth place of all sectors.
Meanwhile, the forest industry sector, such as sawn timber
industry, contributes 2.9% of the total workforce absorption, pulp
industry contributes 1.5% and furniture industry 1.1%.
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3. Marine Afairs and Fishery
In the context of ishery development, the total Gross Domestic
Product of ishery in 2009 reached IDR 176,620 billions, which
then increased to IDR 255,332.3 millions in 2012 (Statistics
Indonesia, 2013). Fishery’s GDP contribution is relatively
dominant compared to other economic sectors in the agriculture
ield, such as crops, plantation, forestry, and animal breeding.
Graphics 1. he Development of Fishery’s GDP
Relative to Agriculture’s GDP
1,400,000.0
1,200,000.0
1,000,000.0
800,000.0
600,000.0
400,000.0
PDP Agriculture
200,000.0
PDP Fishery
2009
2010
2011
2012
Source: Statistics Indonesia 2013
In general, the intensity of global ishing shows an increase. he
picture presented here points out such phenomenon, where in
1960s ishing was still relatively insigniicant, marked by the
relatively small ishing ground. In the beginning of 2000s, ishing
intensity started to increase and threaten the sustainability of
ish resources. his needs to be a considered for Indonesia in
determining the direction forward regarding ishery development
Natural Resources ASSET TO BECOMING A GREAT NATION
229
since, geographically and economically, Indonesia is inseparable
from the isher policy of the world.
Fishing Fields
The opening of new fishing fields half a century agohas resulted in the surgeof world’s catchment, along
with the deployment of fishing fleets with improved capacities throughout the high seas. Its consequences
have been pictured clearly in all seas.
LOW
HIGH
Fishing Intensity: catchment by half degree cell (2,410 square kilometers), stated in primary
production measurement (phytoplankton metric ton) during the period of five years.
Early 1960s
Early 2000s
FISHING PATTERNS
A: Southeast Asia
Popularity of sushi has
brought very bad
impact on tuna supply
B: Exclusive Economic
Zone
Inhibiting fishing
within 370 km sea
distance from the shore
of a country.
C: Southern
Hemisphere
After fish boats entering
Antarctic’s water,
Chilean snapper supply
drastically drained.
D: North Atlantics
The 1,000-year
ongoing fishing has
resulted in the
scarcity of codfish.
E: East Atlantics
European fleets
targeting on Africa,
resulting in local food
crisis.
Source: he Global Fishery Trend (National Geographic, 2012)
In the context of global isher, Indonesia is an important player, as
one of the largest ishery producer countries of the world together
with China, Peru, and the United States of America (FAO,
2012). Other countries being the world’s ishery producers are
India, Russia, Japan, and Norway. he contribution of the ishery
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sector of Indonesia reaches 6.1% of
the world’s total production, and
it is still below China (16%) and
Peru (8.8%) (FAO, 2013). Since
1970 until 2011, the growth of
Indonesia’s ishery production has
been reaching 5.05% each year.
Indonesia is a country
with one of the most
extensive seas in
Asia. Optimistically
speaking, with an
average growth of 7
percent per year, in
2030 the contribution
of isheries and marine
sector will be expected
to reach US$40 billion
(MGI, 2012).
In the contexts of Asia and South
East Asia, Indonesia is considered
as a country which has the largest
marine territory. he optimistic
assumption is that, with the average
of 7% growth per year, in 2030,
the contribution of the ishery
and marine afairs sector is expected to be as much as USD 40
billions (MGI, 2012). ASEAN Economic Community (AEC)
also becomes one of the momentums the government can beneit
from to immediately improve the quality of ishery development
starting from today. his is the ‘head-to-head’ context of the
ishery diversity between Indonesia and other countries in
ASEAN.
he level of productivity per ships in Indonesia is only 6.7 tons
per year; while hailand is 137.86 tons per year, Vietnam 19.48
tons per year, and Malaysia more than 30 tons per year. In terms
of the contribution to the country’s GDP, Vietnam reaches 21%,
Malaysia 10%, and hailand 10%; while Indonesia is only 3%.
he number of poor people in Indonesia reaches the number
Natural Resources ASSET TO BECOMING A GREAT NATION
231
33,768,000 individuals (13%), Vietnam 12,440,000 individuals
(5%), China 11,750,700 individuals (5%), the Philippines
11,247,000 (4%), and Myanmar 6,209,340 individuals (2%).
Most of them live in the coastal areas.
With the third largest production in the world, ishery in
Indonesia should be able to give bigger economic beneits to
the society and ishermen, and deliver a signiicant amount of
GDP to the country. Meanwhile, in terms of the production of
breeding ishery, Indonesia is also far behind China, India, and
Vietnam. he width of all public water lands in Indonesia is
approximately 13.85 million hectares, consisting of 0.05 million
hectares man-made lake, 1.8 million hectares natural lake, and
12.0 million hectares lood plain. he potential of the total width
of public waters, ponds, and rice ields utilized for breeding ishery
is 139,336 hectares, 541,100 hectares, and 1,538,379 hectares
respectively (DKP, 2007).
In addition, the potential coastal lands for shrimp ponds are
as wide as 1.22 million hectares. And only 400,000 hectares of
them are worked on, with the average productivity rate 0.6 ton/
hectare/year. About 24 million hectares of shallow sea waters are
appropriated for the mariculture of various commodities, such as
grouper ish, rabbit ish, cobia ish, pearl shellish, sea cucumber,
abalone, and seaweed, which have high economic value, with
the production potential at about 47 million tons/year. he
production of breeding ishery also shows a very high increase
compared to catch ishery. he growth of the ishery sector of
Indonesia reaches 15% per year since 1970 until 2011.
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In breeding ishery, China contributes up to 61% of the total
breeding ishery production of the world, while India 7%,
Vietnam 4.5%, Indonesia 4.3%, and hailand 1.6%. Other
countries’ production is below one percent of the total breeding
ishery production of the world (FAO, 2013). A number of
ASEAN countries, such as Vietnam, hailand, and Malaysia,
become competitors in shrimp, patin, and catish commodities
coming into Indonesian market.
Future Challenges
Incompetent management of the national oil and gas, mineral and
coal resources at this time is a major problem faced by the national
energy industry, especially at least during the last three years. his
has a direct impact on the weakening of the energy security of
this nation. hough geologically this country is so rich in primary
energy resources, in a hydrocarbon form (oil, gas, and coal), recently
about 50% of the national oil-and-gas needs have to be imported,
about 75% of the coal production and 55% of the gas production
are exported for a ridiculously cheap price, while domestically the
country lacks of gas and electricity supplies.
he challenge against the incompetent management system is shown
by such facts as, among others, the extremely low (and continuously
decreasing) production of crude oil in the middle of the increase
of needs due to economic growth and the increase of population
number factors. Whereas, geologically, the potential taking its form as
oil and gas resources is extremely immense in the earth of Indonesia.
he extremely high price of the world’s oil during this more-than-
Natural Resources ASSET TO BECOMING A GREAT NATION
233
a-decade period should be able to motivate investment for exploring
new reserves, so that Indonesia can maintain the production at 1.5
million bbls/day, or even higher, remembering the development of
the upstream sector technology is very much signiicant. Yet, the fact
is oil production is very low.
hough the consumption of petrol keeps on increasing signiicantly
every year, apparently in more than these ten years, the capacity
of petrol reineries is relatively stuck at the level of about 1.05
million bbls/day, because the government/Indonesian Oil Company
(Pertamina) refuses to build new reineries due to the thin proit
‘margin’. Whereas, the capacity of petrol reineries needed, so that
in 2013 we are no longer dependant on petrol import, is about
1.6 million bbls/day. his is a profound challenge that needs an
immediate solution, to avoid the collapse of the nation’s economy
whenever disruptions over the low of petrol importing from outside
the country happen. his is because more than 40% of the recent
petrol need is depending on foreign parties, especially Singapore.
he low production of crude oil and the stagnant capacity of petrol
reineries are heavy challenges, because these will worsen Indonesia’s
dependency on imported oil and gas. And this will keep on
exacerbating the deicit of the national oil and gas trading balance.
Meanwhile, the constant shipping of the LNG from Tangguh to
China, despite the extremely low price, is a challenge that needs to
be solved, so that this country would not sufer too deep a loss. In
addition, the fulillment of domestic need of gas, which can drive
economic growth, create employment, reduce primary costs and
electricity subsidy, and reduce petrol import and subsidy through the
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acceleration of petrol-to-gas conversion should be ensured.
he elusive domestic gas infrastructures, along with the signiicantly
ineicient structure of the gas market, due to the dominant role of
the brokers, are challenges that must be resolved. herefore, domestic
gas consumers can acquire suicient gas and will not be mere
‘objects’ of the brokers. he stagnancy of petrol-to-gas conversion
is also caused, among others, by the insuicient gas infrastructures,
so that dependency on petrol is getting tighter, which results in the
exacerbation of petrol subsidy. he ever-increasing dependency on
imported LPG is a challenge in the next ive years. here must be a
solution to press down the dependency on imports, among others, by
preparing the use of through-pipe natural gas which can be fulilled
by the domestic production.
he challenge for the national electric power policy recently is that
the policy regarding primary energy (gas, coal) resources is not
harmonious with the national electricity policy. he abundance of
gas and coal resources Indonesia has, which are relatively cheap raw
materials to produce electricity, in fact are pushed away and exploited
completely for exported goods. he government is then ‘forced’ to
use the extremely high-priced and large quantity petrol to produce
electric power. With the reason of motivating new and renewable
energies, the State Electricity Company (PLN) is forced to buy
private electricity (IPP) which is made of geothermal energy, which
is also very expensive, far above the selling price used for the society.
he challenge towards the status of the ownership of oil and gas and
mining materials reserves is at the same time also a chance to have
Natural Resources ASSET TO BECOMING A GREAT NATION
235
a source of funding the development massively in the future. Since
the recent management system is not strict enough to regulate the
issue on ownership over the reserves beneath the earth, there is a
strong indication that foreign oil-and-gas and mining contractors
have been using the reserves to borrow money from the banks to
fund the expansion of their oil-and-gas/mining ields. Such practice
of law and constitution violation is done openly, remembering that
until now there is no party, both from the government and the oiland-gas and mining State-Owned Companies, which has accounted
their oil-and-gas reserves asset in their Financial Report.
he challenge from the demand side is how to make the energy
consumption of this nation not highly dependent on oil/petrol.
Energy diversiication set since 1986, especially the petrol-to-gas
conversion, is in fact left behind. By paying attention to the aspect
of environment and production cost, the development of new and
renewable energies must be considered carefully so that the “dig a
hole to hide the other one” impression does not appear. he petrolreplacing energy which is more expensive than the petrol itself will
only perpetuate energy subsidies which have to be borne by the
State’s Budget. he geothermal technology has to be driven more so
that the electric power it produces will not be too expensive, such as
what happens now. Costly electricity infrastructure and fee will also
be a hindrance for the ‘electric car’ program.
he recent management system which is opposed to the constitution
is apparently still maintained by the Government. he Upstream Oil
and Gas Activity Agency (BP Migas), which was sentenced as violating
the Constitution and had been discharged by the Constitutional
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Court of Indonesia based on the MK No.36/PUU-X/2012 decision,
is in fact maintained by putting a new cloth to the old body, that is
the Special Task Force of the Upstream Oil and Gas Activity (SKK
Migas), which is then proven to disadvantage the state. It is because
the institutional substance of SKK Migas is the same as BP Migas,
namely, both are governmental non-business institutions, so to sell
state’s share of oil-and-gas it has to appoint a trader. In addition,
it cannot also continue the production operation of Oil-and-Gas
Blocks whose contracts will expire, including the Mahakam Block,
whose contract will end in 2017, and following after, other large
Blocks, such as Rokan Block, whose crude oil production is the
largest in Indonesia (Minas and Duri).
he challenge in the next ive years is how to change the ‘B to G’patterned system into ‘B to B’-patterned. However, in the Draft of
Oil and Gas Law No.22/2001 that is recently being discussed in
the House of Representatives, what actually happens is that the ‘B
to G’ pattern will be maintained by strengthening the legality of
what formerly is known as BP Migas/SKK Migas, though with a
diferent name.
he challenge for new and renewable energies in the future is how
to improve the role of new and renewable energies in the national
energy mix. In the National Energy Policy, the Government has
stipulated the energy mix target to achieve in 2025. he reduction
of the role of oil is being developed, while the role of new and
renewable energies will keep on increasing. he role of oil will
decrease from 49.7% in 2010 to about 23.7% in 2025. Meanwhile,
new and renewable energies increase only for 5.7% in 2011 to 25.9%
Natural Resources ASSET TO BECOMING A GREAT NATION
237
in 2015. he target of new and renewable energies use in 2025,
which is quite signiicant (25.9%), is a challenge in developing new
and renewable energies since the production cost is still unable to
compete with fossil energy industry. Only large-scaled Nuclear
Plants with USD 0.6 per kwh production cost that can compete
with the fossil energy industry.
Graphics 2. he National Energy Mix 2010-2050
NATIONAL ENERGY MIX to 2050
2010
(%)
2025
5%
24%
22%
30%
49%
23%
22%
25%
2030
2050
25%
30%
25%
23%
31%
24%
20%
22%
Petroleum
Natural Gas
Coal
EBT
Source: he National Board of Energy (DEN)
he challenge of developing Renewable Energy, especially Bio-Fuel,
in addition to the issue on production cost and the long-termed
supply guarantee, is also on the fact that the raw materials are
also used as food, such as bio gas oil made of palm kernels. BioFuel from non-food materials until today is less developed due to
unclarity and the lack of coordination between the activities in the
upstream (management/production of the raw material plants, such
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as jatropha) and the activities in the downstream, which process the
raw materials and the distribution.
Meanwhile, the challenge for Nuclear Plant construction is related
to the security problem of the plant. he events in hree Mile Island,
Chernobyl, and Fukushima have given a widespread impact towards
the public perception regarding Nuclear Plant security, though actually
the number of victims is not as what the news tells and the security
quality of the plant keeps on being improved. As an anticipation to
ensure that the accident in Fukushima will not reoccur, the location
of a Nuclear Plant should be as far as possible, to avoid the risks
of earthquake and tsunami. As for Indonesia, the need for nuclear
energy source, including for providing electric power, has actually
been apparent since the administration of President Soekarno, with
the presence of BATAN. However, the program of Nuclear Plant
construction which has been planned, is repeatedly pended, mainly
due to the psychology of the public, which is appraised as being ‘not
ready’ yet.
Nuclear Plants are really needed by Indonesia to support the
economic growth and the increasing number of the population,
which cause the need for electricity keeps on soaring up. Recently,
there are about 20% of the population which have not been able to
access electricity. Meanwhile, those electriied areas still frequently
experience blackouts. Many investments are hindered due to the
shortage of electric capacity, including the lack of transmission and
distribution networks which often is caused by issues on capping.
So, the fulillment of such ever-increasing electric need cannot be
concentrated or depending on one type of energies. It is natural that
Natural Resources ASSET TO BECOMING A GREAT NATION
239
Indonesia should start to reprogram Nuclear Plants as God-given
cheap energy to bring prosperity to the people, as what has been
enjoyed by advanced countries.
Meanwhile, in the ield of forestry, there are several challenges which
must be overcome to ensure that the forestry development can run
well and guarantee the sustainability of the strategic role of the
forestry sector at this time and in the future, namely: to improve
the competing force and interest in terms of forestry investment, to
increase the readiness facing the ASEAN-China free trade, to trim
down and simplify forestry fees, and to ix the forestry tenure system.
he huge potential of forest resources is a comparative superiority
owned by Indonesia. However, such comparative superiority can
never produce optimal beneits if the forestry sector cannot overcome
such fundamental issues, among others, as the low competing
force due to uncertain round timber raw material supply and the
ineiciency of production due to old machinery.
In addition, the appearance of several new players in the international
market also makes the challenge of developing the national forestry
industry become bigger. Another challenge that needs to be concerned
by forestry development is the low interest in investing in the forestry
and forestry industry sectors. Investments in the forestry-based
sectors during this decade tends to see a decrease (BKPM, 2009).
his low interest in investing in the forestry sector is believed to be
caused by several factors, (Nurrochmat and Hasan, 2012): Firstly,
the relatively long return of capital because the investment in the
forestry sector needs a quite longer time compared to the investment
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in other sectors. Secondly, high risk investment. he business in the
forestry sector, in general, is considered high-risk business because,
in addition to the fact that it needs a long time, there are many tenure
conlicts related to the right for land use, especially with the local
communities. hirdly, high risk economy. In general, there are a lot
of types of fees for the investors conducting their business in the
forestry sector.
In the road-map of the revitalization of the forestry industry, it is
mentioned that the needs for round timber to fulill the raw material
supply for the domestic processed timber recently reaches the amount
of 50-60 million m3 per year, while the actual round timber supply is
only about 25-30 million m3. his means that there is a gap between
demand and the supply of round timber for about 25-30 million
m3 per year, or about 50% of the total round timber need. his gap
is suspected to become one of the factors triggering the growing
number of illegal loggings in the timber black market (Nurrochmat
and Hasan 2012).
he numerous forestry fees are damaging for the investment. In
the spirit of creating a conducive investment climate in the forestry
sector, at least there are two important ways that can be taken: irstly,
giving iscal incentive by disciplining illegal fees and trimming
down/simplifying legal fees, and secondly, giving a guarantee for
business certainty, especially relating to the regulation for tenure
issues (Nurrochmat and Hasan 2012).
he business costs in the forestry sector is felt so high and the
implementation is quite complicated. In addition to the practice of
Natural Resources ASSET TO BECOMING A GREAT NATION
241
illegal fees, there are also other types of legal fee that are related to the
forestry business. Several types of fees at the forestry sector regulated
in the Forestry Law No. 41 of 1999, among others, are the Business
Permit Contribution, Performance Guarantee Fund, Reclamation
and Rehabilitation Guarantee Fund, Forest Preservation Investment
Fund, Research and Development, Training, and Counseling
Investment Fund, and the Compensation for Community’s Loss
Fund (Nurrochmat et al. 2010). In addition to being charged with one
or more types of PNBP fees, forestry business actors are also charged
with various other fees, both in terms of taxes and of retribution,
whose amounts are quite high.
here are two understanding that fundamentally changed after
the decision of the Constitutional Court on the material test of
the Forestry Law. Firstly, forest zone needs a stipulation, and not
only designation. Secondly, the status of customary forest is not a
part of the state-owned forest. herefore, after the decision of the
Constitutional Court, there is a shift regarding the interpretation on
forest, which in terms of the status is diferentiated into two, namely
the state-owned forest and the private forest.
Private forest is distinguished into customary forest (indigenous
right) and individual/legal entity forest. hose three forest statuses,
at the highest level, are all controlled by the state. Yet, it needs to be
underlined that the deinition of forest zone is not identical with
state-owned forest. he forest zone ownership status or “permanent
forest” can be granted to anybody as long as it follows the norms of
forest management pursuant to its function.
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he issue on overlapping licensing or forest zone encroachment cannot
be simpliied to become just a legal issue which can be overcome only
by legalistic-formal approach, such as the stipulation of boundary.
In the context of tenure, the claim of truth in general only clings on
or is attached to the aspect of legality and not legitimacy. he low
legitimacy over land control in several cases has no relation at all to
the presence of “de jure” boundary regime; instead, to how far the
boundary is pursuant to the understanding and practice of “de facto”
land control applied and acknowledged by a community in a certain
area.
In the ield of ishery and marine afairs, there are several strategic
issues which can be challenges in the future. Among others are its
linkage with food security, where the demand of ishery products
keeps on increasing along with the increase of the number of middle
class people in Indonesia. he domestic need for ishery products, it
is estimated, will reach 4 million tons per year.
Meanwhile, as for the sustainability of export towards the main
market, such as Japan, USA, and Europe, Indonesia is required to
fulill such strict requirement which often cannot be managed at the
ield level. he calculation between demand and supply is also often
not harmonious, so that this brings about the so-called ‘pseudodemand’ which is then answered pragmatically, namely: by opening
the import faucet. he management of the ishery ield is also still
far from perfect to be able to realize a really good ishery resources
preservation.
Natural Resources ASSET TO BECOMING A GREAT NATION
243
In the aspect of marine afairs, the problem of coastal and marine
ecosystem damages still becomes a particular challenge. As a medium
for marine-based activities, the health quality of the ecosystem is
important to be improved. As for sea boundaries, there are still
several international border agreements that need to be resolved to
guarantee the national sea management. he fact that the format of
the management of small islands is not yet perfect, especially those
related to the optimization of the use of resources and the welfare of
the communities in foremost islands and border areas, also becomes an
issue that needs to be paid attention to. In addition, the development
of science and technology which support the development of marine
afairs and ishery is also not yet maximum.
The System and Management of
Natural Resources
Far before the independence of Indonesia, geologists from foreign
countries had believed that the earth of Indonesia contains an immense
amount of natural resources such as oil, gas, mineral materials, and coals.
his is because Indonesia’s geological position is on the meeting point
of the Eurasian, Australian, and Paciic plates and the geographical
land and sea territorial widths are almost the same as those of the US
and the European Continent. he oil-and-gas and mining potentials
can be located onshore and ofshore. his is what becomes one of the
reasons why Indonesia, far before its independence, was one of the
regions in the world that was most coveted, or, at least, whose natural
resources can be controlled and exploited.
Geologically, the estimation of the national oil-and-gas resources
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recently is about 56 billion barrels
With strategic
for crude oil and about 334 tcf for
geological position,
gas, trapped in approximately 120
Indonesia, long before
sediment basins. Meanwhile, those
the declaration of
which are ready-to-produce reserves
independence, has
recently are relatively of small amount,
become one of the
namely 3.7 billion barrels, and those
world’s targets of
which are potential reserves are about
colonization or, at
4 billion barrels. If new reserves are
least, the target for
natural resources
not discovered, whereas the existing
exploitation and
ones are continuously produced at the
control.
recent level of production, Indonesia
will become one of the oldest oil
producer countries in the world whose
oil reserves is only about 0.20% of the world’s oil reserves.
For the last 12 years, the signiicant new reserve discovered is almost
second to zero. hus, it can almost be made sure that the national
oil production, which was 820,000 bbls/day as per October 2013,
will be diicult, and even impossible, to improve to the self-reliance
level to fulill the national oil needs recently, which is about 1.6
million bbls/day. hough Indonesia has a relatively huge potential
for oil resources, namely 56 billion barrels, if there is no eforts
for improving the management system, it is most certainly that
Indonesia will keep on being a net-oil importer country forever.
herefore, the need of crude oil import will become a permanent
need.
Natural Resources ASSET TO BECOMING A GREAT NATION
245
Graphics 3. he Decrease of Indonesia’s Oil Reserve
DECLINE INOIL RESERVES
4,5
Miliar Barrel
4,0
3,5
30
2,5
2,0
1,5
1,0
0,5
Assuming:
− Total reserves
amounting 4 billion
barrels without
newly-found
reserves.
− Total production
equals to 2011 of 0.3
barrels.
− Hence the oil
reserves will drain in
12 years.
0,0
2011 2012 2013 2014 2014 2016 2017 2018 2019 2020 2021 2022 2023
Source: BP Statistical Review 2012
Source: he National Board of Energy (DEN)
Graphics 4. he Decrease of Crude Oil Production
INDONESIAN OIL PRODUCTION CONTINUES TO DECLINE
With LawNo.8/1971,oil production fluctuates. It declines for a while, then increase.
The decline in oil production may be caused by old fields, etc. On the other hand, the
production may increase due to the finding of new fields,EOR,etc.
Peak
1977
700
Million barrels/Year
600
Peak
1995
Sharp
Declining
Since 2000
Cepu Block
500
400
300
200
0
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
100
Source: EMRDepartment
Ever since the Oil and Gas Law,no significant oil reserves were found. Cepu
Block became the last finding prior to the Oil and Gas Law. Following the Law,
Pertamina has lost its KP whereas its status was equaled to foreign companies.
Cepu Block was no longer under the control of Pertamina. The 2011 production
was averagely 940,000b/h; March 2012:890,000b/h.
Source: he National Board of Energy (DEN)
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he hope to increase the oil production recently is only available through
two options. hose two options are extra production from the discovery
of new reserves and extra production resulting from the optimization
of old ields, for instance, by applying the enhanced oil recovery (EOR)
technique. he only new block reserve that can be reliable to improve
the national oil production is the Cepu Block, which is able to add the
production for about 160,000 bbls/day. he Cepu Block was discovered
before the management system was regulated with the Oil and Gas
Law No.22/2001. his means that in the next ive years, the maximum
national oil production can only achieve about 1.0 million bbls/day.
Whereas, in 2019 the national oil demand will be about 1.9 million
bbls/day.
To convert the resources into a ready-to-produce reserve, the investment
for the purpose of exploration is needed. he problem is that in about the
last 13 years, exploration activities have been terribly low. he reduction
in terms of exploration drilling actually happens since 1999, due to,
in addition to the monetary crisis, the efect of the waiting attitude
of the oil and gas investors because of law uncertainty incurring from
the Management System of Oil and Gas of Indonesia which is going
to be amended with the Oil and Gas Bill proposed to the House of
Representatives.
In 1998, exploration drilling was still conducted in about 145 wells, and
then it reduces to 99 wells in 1999. At the time the law certainty has
already existed since the Oil and Gas bill had been legalized to become
the Oil and Gas Law No. 22/2001, the number of exploration drilling
keeps on experiencing a decrease, down to 62 wells only. Even more, in
2003, exploration drilling was done just in 23 wells. In 2007, the drilling
Natural Resources ASSET TO BECOMING A GREAT NATION
247
activities was still terribly low, namely in about 39 wells. Such exploration
drilling activities are carried out in production blocks, and not in new
blocks. his relects that oil and gas investors are reluctant in investing
their money in new blocks which has high risks. If the exploration
fails, and there is no discovery, 100% of the loss will be the investors’.
However, if the failure happens in terms of exploration drilling in the
existing blocks, the cost expensed will be the burden of the state, with
the ‘cost recovery’ mechanism.
he low quantity of exploration drilling happens because of the
Management System which is based on the Oil and Gas Law
No.22/2001, which is really unfriendly towards the investors. his is
relected on at least two things. Firstly, the article 31 of Oil and Gas Law,
which obliges the investors to pay various types of tax and fee, though in
the exploration year they have not yet discovered or produce oil and gas.
he provision in this article 31 has removed the ‘lex specialis’ principle
in the national oil and gas sector, which had been applied under Law
No.8/1971.
Secondly, the bureaucratic and serpentine management system because
the managing body is a new institution (the BP Migas), a non-business
agency which never existed previously in the system of the national
petroleum. On the other side, this new agency has no adequate force
to guard oil and gas investments since though it signs a contract with a
foreign/private party, it is not the Mining Control Holder.his is diferent
from the Law No.8/1971, where Pertamina is the party which signs
the Contract and it is at the same time the Mining Control Holder, so
that its position is ‘profound’, for example in its relation to the obstacles
experienced in seeking for new reserves in regions of Indonesia.
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his National Oil and Gas Management System, which is based on the
Oil and Gas Law No.2/2001, has made Indonesia to become one of
the countries whose oil and gas management is the worst in the world.
Even more, as for the Asia-Oceania region, the oil and gas management
system of Indonesia becomes the worst compared to all our neighboring
countries. It is worse than Australia, New Zealand, Brunei, the
Philippines, Malaysia, and even East Timor. his is the conclusion of
the Result of the Survey of Fraser Institute Canada for two consecutive
years, as reported in ‘World Petroleum 2011’ and ‘World Petroleum
Survey 2012’ books.
he discovery of new reserves can only be obtained if exploration
drilling activities are conducted. he main factor driving the exploration
investment is the presence of hydrocarbon resource potential, which is
seen from the preliminary map of geological potentials and the economic
factor, which is seen from the level of the world’s oil price.he preliminary
map of hydrocarbon resource potentials should be updated based on the
most recent data. Good geological data will attract the investor’s interest.
In addition to that, the oil price, which tends to increase, especially since
the rickety monopoly control by ‘the seven sisters’ cartel, will also become
a motivation for the investors to look for new reserves.
he low national oil production as the result of the reduction of
exploration activities is highly inluential towards the national economy
and energy security. In addition to having to be dismissed from OPEC,
Indonesia also becomes highly dependent to imported oil, which
depletes the national exchange. In 2012, the amount of Indonesian
imported oil had reached USD 45 billion, which directly alicted the
Rupiah currency exchange rate because the value of trading deicit went
Natural Resources ASSET TO BECOMING A GREAT NATION
249
beyond USD 5 billion, which is the highest oil and gas deicit in the
history of the national petroleum.
he Government’s Economy Rescue Policy Package announced in
23 August 2013, among others, is to repair the deicit of the on-going
balance deicit and the Rupiah exchange rate. he action plan to take is
by reducing the gas oil import, by attempting to increase the biodiesel
consumption by adding the content of biodiesel in gas oil, from 7.5%
to 10%. However, the package does not make the acceleration of petrol
to gas fuel conversion as a part of it. Whereas, in fact the amount of
petrol import is bigger than that of gas oil. his means that, the efort of
reducing oil and gas deicit will be far more efective if the consumption
of premium petrol can be reduced signiicantly by converting the use of
petrol to gas fuel.
he relatively huge oil and gas trade balance deicit at this time has been
proven to have negative impacts on the macro economy indicator, such as the
weakening of rupiah exchange rate towards the US dollar and the increase of
the interest rate. his is a ‘new’ phenomenon in the national oil and gas industry,
which is over 100 years of age. Before, the oil and gas sector had always been
the biggest national exchange contributor. For more than two decades before
the Oil and Gas Law No.22/2001, about 80% of the total receipts of national
exchange reached came from oil and gas exports.
he history of the world’s petroleum industry records that the oil and
gas industry in Indonesia (d/h the Dutch Indies) is one of the oldest
oil and gas industries in the world. he birth of oil and gas industry in
Indonesia is only several years after the world oil industry was born in
Titusville, Pennsylvania, USA, in 27 August 1859, marked by the success
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of Colonel Drake to drill the irst oil well. In Indonesia, the irst oil well
drill was executed in 1871, or about 12 years since the world’s oil and gas
industry was born. However, the irst oil drill carried out by Jen Reerink
in the surrounding of Ciremai Mountain, West Java, did not succeed in
discovering the oil.
he birth of the oil industry of Indonesia was marked by the ‘discovery’
of oil seepages in the Langkat Region of North Sumatra by A.J. Zijlker
in 1880. he irst oil well drilling was done in Said Lake, Langkat, in
1884 and succeeded in discovering the oil though in an uneconomical
amount. he drilling was then moved to the east direction in Tunggal
Lake and in 15 June 1885, with 121 meters depth, torrents of gas, oil,
and water occurred. It is this Tunggal Lake well that is then named the
irst commercial oil well in the Dutch Indies.
he regulation for Mining Management was issued by the Dutch Colonial
Government, in the form of Mining Regulation 1850 (Koninklijke
Besluit 1850). It was then reined with the Mining Law 1899 (Indische
Mijnwet 1899). he Colonial Government issued a Mining Permit to a
mining company for a certain area or block. hus, the concession system
adopted the ‘Business to Government’ (B to G) relation pattern with a
vertical structure, where the Colonial Government gave the concession
and the company acquired such concession for a 90-year period of time.
If after that a dispute occurred, the Colonial Government could be sued
in the International Arbitration.
In addition to paying taxes as it is supposed to be if a company makes
proits, Concession Holders were obliged also to pay a 1% royalty. he
management was completely on the hand of the Concession Holders,
Natural Resources ASSET TO BECOMING A GREAT NATION
251
starting from the determining of capital, production, marketing,
workforce, to the mining technology and infrastructures. Oil, gas,
and mining materials produced from the earth of the concession
areas were entirely the possession of the Concession Holders. Taxes
and the royalty paid by the Concession Holder could be the mining
produce (in kind) or in the form of cash paid to the State’s Treasury.
he Colonial Government only monitored the mining activities.
hough the Colonial Government, via the Royal Dutch Shell (the
oil company of the Dutch Colonial Government established by A.J.
Zijlker, which was then incorporated into the Shell Transport from
England) had a dominant position, the Dutch Government felt it
important to protect its company in the competition with other
oil companies. For that, IMW 1899 was corrected by conducting
concession granting restriction. Even more, in 1904, the granting
of new concessions was frozen. A very signiicant change on IMW
1899 was done in 1918, by adding ‘Article 5A’, which obliged any
companies having the interest to hold oil mining activities in the
Dutch Indies to run a contract with the Dutch Colonial Government.
It was recorded that, in the beginning of the 20th Century, there
were 18 oil companies operating in the Dutch Indies based on the
IMW 1899.
After the independence of Indonesia, the Concession System on the
basis of this Indische Mijnwet 1899 kept on being efective before
the new Law came up to replace it, though the IMW 1899 was not
in line with the State Constitution of the Republic of Indonesia. It
was on the basis of IMW 1899 that the wealth of Indonesia’s natural
resources, such as oil, gas, and mining materials were completely
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controlled by foreign oil companies operating in Indonesia, such
as Shell, Stanvac, and Caltex which obtained a concession right as
long as 90 years. So, though Indonesia had been an independent
country, all oil and gas management, starting from the upstream to
the downstream, were on the hands of foreign companies.
During the Independence War, the strugglers and oil workers took
over oil ields and reineries in various areas from the foreign hands
and formed the National Oil Company at the local level, which then
became the embryo of three state-owned oil companies, namely
Pertamina, Pertamin, and Permigan. On the suggestion of Mr.
Mohamad Hasan – a member of the House and former Governor of
Sumatra – the efort to replace IMW 1899 was realized by forming
the State Committee for Mining Afairs, whose task was to arrange
the Bill of Mining Law as the substitute for IMW 1899.
he wave of nationalizing the Dutch companies happened in 1950s.
he spirit of nationalism of the people, infused by the measure the
government took to announce the Juanda Declaration 1957, which
stated that the territorial waters around the islands are an integral
inseparable part of the territory of the Republic of Indonesia. Before
that, the territorial waters among islands were international waters.
Juanda Declaration was acknowledged by the international world
through UNCLOS in 1986. In 1960, the government issued Law
No.44/Prp/1960 on Oil and Gas and Law No.37/1960 on Mining.
he status of the foreign oil companies operating in Indonesia
changed from Concession Holder to State-Owned Company’s
Contractor.
Natural Resources ASSET TO BECOMING A GREAT NATION
253
Foreign companies could still conduct mining activities by having
a contract with State-Owned Company, in the form of a Working
Contract. It was recorded that Caltex Oil Company had a contract
with Permina, Stanvac Oil Company had a contract with Pertamin,
and Shell Oil Company had a contract with Permigan. he Working
Contract system in Law No.44/Prp/1960 adopted the ‘B to B’ relation
pattern, where the party having the contract from the Indonesian side
is a State-Owned Company. his pattern is diferent to the general
mining which refers to Law No.11/1967, with the ‘B to G’ pattern.
Freeport Mining Company, for example, started to make its way
into Irian Jaya (Papua) in 1967 by having a direct contract with the
Government of the Republic of Indonesia in a form of a Working
Contract or ‘B to G’.
In the history of the national petroleum, it is recorded that after the
independence day in 17 August 1945, in Indonesia there had been
several State-Owned Companies in the petroleum ield in various
regions. hose companies were born from the taking-over of oil
Dutch reineries by the combatants in the ield of petroleum. hose
companies are: he Oil Mining Company of the Republic of Indonesia
(PTMNRI) in North Sumatra, State-Owned Oil Mining Company
of the Republic of Indonesia (Permiri) in Jambi and South Sumatra,
and the National Oil Mining Company (PTMN) in Cepu, East Java.
In 1950, PTMNRI North Sumatra was changed into PTMRI
North Sumatra. In 1954, PTMNRI was changed into the North
Sumatra Oil Mine (TMSU) and in 1957 it was again changed into
PT ETMSU. In 10 December 1957, PT ETMSU was changed into
PT Permina under the leadership of Colonel Dr. Ibnu Sutowo and
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in 1961 it was changed into State-Owned National Oil Mining
Company), which in 1966 signed of the irst Production Sharing
Contract with foreign companies.
Meanwhile, Permiri in Jambi and South Sumatra dismissed itself
in 1948. he NV NIAM’s ((NV Nederlands Indische Aardolie
Maatschappij/Stanvac) assets in South Sumatra and Jambi were
bought by the Government under Indonesian Oil Mining Ltd. (PT
Permindo). In 1961, PT Permindo was changed into State-Owned
Company of Oil Mining of Indonesia (PN Pertamin), most of whose
activities were on the sides of Reineries and Domestic Marketing.
In East Java, PTMN Cepu was changed into Cepu Oil Mining
Company of the Republic of Indonesia (PTMRI Cepu) in 1950, and
in 1961 it was changed into State-Owned National Oil Mining and
Geothermal Energy Company (PN Permigan). To conclude, in 1961,
Indonesia had 3 State-Owned Oil Companies: PN Permina, PN
Pertamin and PN Permigan. In 1968, PN Permina and PN Pertamin
were merged into PN Pertamina. Meanwhile, PN Permigan Cepu
was liquidated and changed into the Cepu Center for Petroleum
Education and Training, under the Department of Mining.
With the Law No.8/1971, PN Pertamina was changed into
Indonesian Oil Company (Pertamina) which is an integrated
national oil company, moving from the upstream to downstream
sectors. If the company lacks of funds and technology, Pertamina as
the Holder of Mining Control was given an authority to conduct
a cooperation with Foreign Investor, in a form of Production
Sharing Contract. Here, it is clear that the relation pattern with
the Foreign Investor party follows the ‘B to B’ pattern. If a dispute
Natural Resources ASSET TO BECOMING A GREAT NATION
255
occurs between Pertamina and the foreign party, the one to be sued
is Pertamina, whose assets are separated from the government’s. In
addition, the government can also apply a policy that is diferent
from the contract contents, if apparently the contract contents are
detrimental for the state.
Under the Law No.8/1971, Pertamina succeeded to build a national
oil and gas industry acknowledged by the international world. he
production of crude oil soared drastically, the Nationa Budget’s
revenues from oil and gas sector and the receipt of National
Exchange from the oil and gas exports jumped up signiicantly.
he model of management based on Law No.8/1971, with the
Production Sharing Contract method, were imitated by many
other countries. Malaysia, with its Petroleum Development Act
1975 (PDA 1975) which is almost completely the same as Law
No.8/1971, gives the authority to Petronas to manage Malaysia’s
oil and gas wealth, and all foreign oil companies in Malaysia have a
contract with Petronas, and not with the Malaysian Government.
he monetary crisis in 1998 was a turning point of the national
petroleum management system. Since Indonesia obtained loans
from the International Monetary Fund (IMF), then pursuant to the
Letter of Intent (LOI), Indonesia had to amend the Law No.8/1971
into a new one. he new Bill was proposed by President Habiebie’s
administration, yet the House of Representatives rejected to legalize
it since it was judged as being opposed to the Constitution. he new
Oil and Gas Law, namley the Law No.22/2001 was legalized at the
time of President Megawati’s administration. With this law, the
Mining Control has to be revoked from Pertamina, taken over by the
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Government to be re-submitted to the business actors, consisting
of foreign and private companies. Pertamina was then changed into
PT Persero and was broken down on the basis of Upstream and
Downstream Business Activities, which are separated companies.
hen, the Government would form BP Migas, which signs the
contract with Foreign/Private Parties, sells the State’s Share of oil and
gas, controlling the cost recovery paid by the state to the Contractors.
At the Downstream Sector, anybody can open a petrol retail business
with a permit from the Government. Petrol subsidy will be discarded
and the petrol price will depend entirely on the Competition Market
Mechanism. hen, BPH Migas is formed, whose function is as the
regulator at the downstream sector. Later, the Court of Constitution
approved a Judicial Review over the law, by taking out four important
articles, including the one relating to the presence of BP Migas.
Meanwhile, in the management of renewable energies, especially
biofuels, the government allocates subsidies to the producers, which
are private companies. he same happens with Geothermal Power
Plant. he state has given a subsidy to the independent power
producer (IPP) of Geothermal Electric Power, which are private
companies. he granting of such subsidy happens because those
private companies produce biofuels and electricity whose prices are
far above the petrol selling price and the electricity basic rate. As for
the biofuel, the production costs become relatively expensive since
the raw material of biofuel is from food material (palms). However, if
the biofuel material is from used cooking oils, the production cost is
supposed to be very cheap. In the future, we need to restore and make
eicient the management by promoting transparency in accounting
Natural Resources ASSET TO BECOMING A GREAT NATION
257
for the production cost and the determining of the quantity of subsidy
towards biofuel and Geothermal Electricity.
As for the geothermal electricity management, remembering that
based on the Constitution the geothermal vapor within the earth is
owned by the state, then we need to reevaluate whether the granting
of the right to manage geothermal energy to private companies is
already been harmonious with the constitution. IPP of Geothermal
Energy is supposed to be able to produce electricity more eiciently,
so that it is able to produce cheaper electricity production cost than
what is being done by the state (State-Owned Companies). However,
the actual fact is the other way around. he State Electricity Company
(PLN) is ‘forced’ to buy the electric power from Private Geothermal
Energy IPP with a price far beyond the price of geothermal electricity
managed by the State-Owned Company.
For instance: the selling price of geothermal electricity of Kamojang
Garut, managed by Pertamina to PLN is about USD 0.4 per kwh,
before raised by the government to USD 0.6 per kwh. Meanwhile, the
private IPP geothermal electricity sold to PLN is priced about USD
0.8-1.5 per kwh. Private Geothermal Power Plant from Supreme
Energi, for instance, sells electric power to PLN with the price as
much as USD 0.94 per kwh, whereas the basic rate for electricity
has now been relatively expensive, namely USD 0.8 per kwh. To
prevent the ‘three-party collusion’, namely the private, executive, and
legislative parties, which disadvantages the people in the stipulation
of the selling price of geothermal power to PLN, a transparency and
the involvement of an independent party are needed.
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he argument that geothermal electric power has to be ‘expensive’ so
that it can be developed is hard to accept. Generally, the geothermal
well drilled is relatively more shallow than the oil and gas well,
though it is located in mountain areas. Geothermal Power Plant is
built at the mouth of the mine, so that it does not need a cost for raw
material transportation, something that is diferent from Coal Power
Plant, whose raw materials must be transported from the producers
in Kalimantan and Sumatra to the plant sites in Java Island and other
islands. In fact, the electric power selling price of Coal IPP to PLN,
about USD 0.6 per kwh, is far cheaper than the selling price charged
by Private Geothermal Power Plants.
he management condition that needs to be concerned with is the
one if the ield of forestry. In the law terminology in Indonesia, the
term ‘forest zone’ is diferent from ‘forest’. he term ‘forest zone’ refers
to the areas stipulated by the government as a ixed forest, while
‘forest’ refers to bio-physical condition of an area, which is grown by
trees shaping an ecosystem. his means that not all forest zones are
physically forests.
Based on the National-Level Forestry Plan (RKTN) 2011, of 130 million
hectares of forest zone, apparently only 92 million hectares of them are still
forests. his happens due to the intensive illegal logging, encroachment,
land function transfer, and forest ire. However, the portrait of Indonesian
forest management is not all bad. he pleasing news is that Indonesian
government’s eforts in reducing the pace of deforestation have started to
show results. FAO (2010) appraised that, though there are still threats on
deforestation, generally countries in Asia, including Indonesia, are quite
successful in pressing down the number of deforestations.
Natural Resources ASSET TO BECOMING A GREAT NATION
259
In the reformation era in the end of 1990s, law enforcement regarding
forest issues was at its lowest level and the average of deforestation
speed had gone beyond 3.5 million hectares per year. However,
the latest data released by the Ministry of Forestry show that the
average speed of deforestation in Indonesia in the 2006-2009 period
had decreased under 1 million hectares per year and in the 20092011 period it went down even lower, to 0.5 million hectare per year
(Santosa, 2012).
here is no other way that the forestry sector can maintain its
existence and rise to give contributions to the national economy
except by conducting the rehabilitation of natural forests and by
developing forest plantations. he contribution of forest plantation
as a source of round timber tends to keep on increasing from year
to year. In 2003, the timber contribution from the Industrial
Forest Plantation (HTI) was only about 5 million m3, or less than
50%. Meanwhile in 2011, of the total round timber production,
which was 47 million m3, only about 11% came from natural
forests. his means that almost 90% of Indonesian round timbers
recently are dominated by those coming from forest plantation, be
it from Industrial Forest Plantation (HTI) – including from Perum
Perhutani, Community Forest Plantation (HTR), and Community
Forest (the Ministry of Forestry, 2012). hough the proportion of
round timbers coming from forest plantation recently has gone far
beyond those coming from natural forests, actually the development
of forest plantations, except for community forests, is moving very
slow. Many HTI companies cannot continue their business due to
land conlicts with the community and because the domestic price
for round timbers is very low. In 2011, the number of operating
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HTI companies in fact decreased, compared to the number in 2010,
though the cumulative plantation width increased.
he development of Community Forest Plantation (HTR) is also
still far from the expectation because the community’s reluctance
to participate in the HTR program due to the inappropriateness of
the type of plants and the unclarity of the regulations on the ield.
Diferent from the HTI and HTR programs, whose development
speed is terrible, the community forests planted in the private lands
(private forests) recently experiences a quite rapid development. his
gesture of development of the community forests can be felt in various
regions, especially in Java Island. In order to obtain optimal results,
the movement of developing plantation forests is continuously done
with a good silviculture technique and by considering the ecological
compatibility, for instance by prioritizing the planting of local type
trees, which is not expansive and dangerous for the biodiversity.
With the assumption that HTI planting needs an IDR 8.7 million
per hectare, and that the harvest can be done in 12 years, Nurrochmat
et al. (2007) predicted that, if the planting was done in 2005 with the
width, for example, of 100,000 hectares per year, the GDP of the
forestry sector in 2017 (the twelfth year, the assumption that the
HTI can be harvested for the irst time), will add to the amount
as much as IDR 7.7 billion. By doing the projection based on the
constant price, then the National GDP will reach consecutively
IDR 3,299 trillion in 2017, IDR 3,299 trillion in 2018, IDR 3,464
trillion in 2019, and IDR 3,637 trillion in 2020. In this simulation,
the GDP growth of the forestry sector will depend on the width of
the planting.
Natural Resources ASSET TO BECOMING A GREAT NATION
261
HTI development does not necessarily pump up drastically the
contribution of the forestry sector towards the GDP. If the HTI
investment was done since 2005 with the width of 100,000 hectares
per year, the forestry GDP in 2017 will become IDR 31,204 billion,
or about 0.99% of the national GDP. However, if the HTI planting
can be increased up to 1 million hectares per year, the forestry GDP
at that time will climb up to IDR 37,580 billion, or 1.2% of the
national GDP (Nurrochmat et al. 2007).
he value of Indonesian forestry products, especially processed
timbers, is relatively stagnant and its market segment is getting
smaller compared to the competitor countries. he decline of the
market segment of Indonesian timber product export is caused by the
decrease of Indonesian timber’s competitive power in the international
market and the increase of the growth of the domestic timber
market. here are several causes for the decrease of the competitive
power of Indonesian timber products in the international market:
irstly, Indonesian timber industry has been for quite a long time
protected by the provision of cheap round timber raw materials since
the application of the restriction policy on round timber export in
1985. Our domestic timber industry is late in getting well-organized
and many of the companies operate with low-level eiciency. As the
result, the competitive power of Indonesian forestry products slides
even lower when having to compete with the timber products of
competitor countries.
Secondly, the marketing of timber products is getting tougher after
the economic crisis in the late 1990s. Indonesia, as a patient to
the IMF, had to take the prescription of dismissing the Collective
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Marketing Agency (BPB) for timber products. As the result, the
national timber industry loses its control in the international market
and the market position of Indonesian timber products gets weaker,
whacked by internal competitions in ighting over export markets.
In addition to the decrease of the competitive power, the decline of
the segment of Indonesian timber products in the export markets is
also caused by the growth of the domestic market. he large number
of population and the quite high intensity of growth of Indonesia
population need a shelter to live in, furniture for various needs, and
to use papers to communicate and do their works. he increasingly
intensive domestic demands and the low competitive power of
Indonesian timber products in the international market have caused
its export value to become stagnant, and even tend to decrease.
Indonesia was once a market leader of the world’s plywood market in
1990s. However, Indonesia’s plywood export value kept on decreasing
and in 2004, it was under Malaysia and China. As for timber
secondary products, since 2009, Vietnam and Malaysia have also been
outclassing Indonesia. his condition forces Indonesia to immediately
strengthen the competitive power and repositioning strategy of
its timber products in the international market. heoretically, the
improvement of export value can be achieved through two methods:
(1) increasing the export volume and (2) selling high-priced products.
It is diicult to improve the export volume of timber products since
the national round timber production is relatively stagnant and the
demand on timber from the domestic market keeps on increasing.
Recently, the forestry sector is facing a very complex situation and
Natural Resources ASSET TO BECOMING A GREAT NATION
263
all forest zones are under an extraordinary pressure, be it due to
economic development, social, or environmental reasons. During
these last several years, requests of permits for releasing forest
zones for the uses of plantation, settlement, and area proliferation,
and requests of borrow-to-use permits for mining purposes have
increased signiicantly. A policy that takes side with forestry is not
identical with the action of terminating all forest conversion permits.
Economic development must be concerned too, yet the granting of
forest conversion permits should be done in a more cautious way, and
are prioritized to forest lands that have been degraded. he balance of
the ecosystem must be pertained too by doing eforts of rehabilitating
critical lands and developing forest plantations seriously.
As what happens in the ield of forestry, the condition of ishery
management is also quite worrying. In general, Indonesian ishery
production in 2011 reached 13.6 million tons, 5.7 million tons of
which were from capture ishery and 7.9 million tons of which were
from breeding ishery. In the period of 2007-2011, the increase of
the total ishery production reached 13.5%, where at the same period
of time, the increase of capture ishery production reached 3.2% and
the increase of breeding ishery was 25.6%. In the earlier context of
time, namely in 1971-2011 period, the signiicant increase of capture
ishery started to occur in 2000, and then was relatively stagnant in
2009. Meanwhile, the production of breeding ishery increased more
signiicantly in 2000 and kept on climbing up until 2011. Figures
1-2 present the trend of Indonesian ishery production in 1970-2011
period.
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Graphics 5. he Trend of Indonesian Fishery
Productionin 2007-2011
6000
Farming(x1000ton)
Fishing(x1000ton)
Production
5000
4000
3000
2000
1000
0
1970
1980
1990
2000
Year
2009
2010
2011
Source: he Report of the Relection of Marine Afairs and Fishery 2012
In the report of the Relection of Marine Afairs and Fishery 2012,
the total ishery production is temporarily at the number of 15.3
million tons, where the capture ishery production reached 5.8 million
tons and the production of breeding ishery was 9.5 million tons.
Indonesia’s capture ishery production is highly luctuating, yet the
trend is increasing each year. Several important things that can be
synthesized from the dynamics of Indonesia’s capture ishery are as
follow: (a) the production of capture ishery in 2012 was 5.8 million
tons, with the speed of the increase of production 3.83% per year;
(b) the level of productivity per RTP was between 6-9 tons per RTP
year with the average of 8 tons per year; (c) the ishers productivity
level achieved 2 million tons per year; (d) the number of catching
instruments operating is approximately 0.9 million units; (e) the
Natural Resources ASSET TO BECOMING A GREAT NATION
265
average of the productivity level of those instruments achieved 4 tons
per year; and (f ) household ishery productivity level achieved 7.6 tons
per year, the instrument productivity achieved 4.4 tons per year, and
the vessel’s productivity achieved 1.8 ton per year.
Meanwhile, the production of breeding ishery increased more
signiicantly. Several important things related to the dynamics of
breeding ishery production that can be presented are as follow: (a)
the contribution of the breeding ishery production towards the
total production of the national ishery from 1970 until 2011 was
9-47%; (b) the increase of breed ishery production was very much
signiicant since the 2009-2011 period, namely 33-47% (or 41%
at average); (c) the average of the contribution of breeding ishery
production since 1970 until 2011 was 26.3% per year; (d) from 2003
until 2011, the biggest contribution of the cultivation productions
were: seaweed cultivation (5302%), shrimp breeding (9.9%), milk
ish breeding (8.7%), gold ish breeding (7.5%), tilapia ish breeding
(7%), and patin ish breeding (3.3%); (e) the value of breeding ishery
production from 2003-2011 increased from IDR 1.6 trillion to IDR
6.3 trillion, with the average of IDR 31 trillion; (f ) the regions with
the largest contribution for breeding ishery production in 2010
were: South Sulawesi (21.6%), Central Sulawesi (11.8%), East Java
(10.1%), West Java (9.9%), and South East Sulawesi (6.4%). he
rest of the regions contributed lower than 5%; and (g) in 2010, the
government stipulated 10 superior commodities of breeding ishery,
namely: shrimp, grouper, tilapia, gold ish, milk ish, snapper, patin,
catish, gourami, and seaweed.
In terms of ishery product export, in the period of 2003-2011,
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Indonesia displayed an increasing trend and still dominated the
national ishery product trade. However, ishery product imports
also show an increasing phenomenon, such as what can be observed
in the following graphics:
Graphics 6. he Trend of Indonesian Fishery Export and Import
1400000
Eksport
1200000
Volume (ton)
Import
1000000
800000
600000
200000
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: he Report of the Relection of Marine Afairs and Fishery 2012
The Solution for
Natural Resources Management
A number of challenges will be faced in the management of natural
resources in 2014-2019. Energy consumption will keep on increasing,
mainly because of such factors as the increase of population and the
growth of economy. he demands on all oil-and-gas, mineral and
coal goods will keep on increasing. his makes the competition to
gain the guarantee of oil-and-gas, mineral, and coal supplies become
even tighter, both through diplomatic line competition among
governments and the competition between companies. Because the
Natural Resources ASSET TO BECOMING A GREAT NATION
267
location and the number of oil-and-gas, mineral, and coal reserves
are limited, then the zones which contain the potential of reserves
will still be the source of conlicts, such as the zones in East Asia Sea,
South China Sea, and the Indian Ocean.
In line with the tendency of the world, the consumption of
oil-and-gas, mineral, coal, and electric power in Indonesia will
keep on increasing. In the next 5 years, it is almost impossible to
improve the oil production signiicantly, unless the oil production
from the Cepu Block can be accelerated to achieve the ultimate
production as much as 165 thousand bbls/day. he capacity of
Petrol and LPG Reineries will still be stagnant, which means
that Indonesia must be ready for the increasing import of oil and
gas, in forms of crude oil, Petrol, and LPG.
Petrol consumption can be signiicantly reduced by accelerating the
conversion from petrol to gas fuel, not by the way of applying quotas
though accompanied with the Radio Frequency Identiication
device, increasing the use of biofuels, and increasing the quantity and
quality of public transportation. In addition to that, there are also
chances to create changes and restorations in terms of oil and gas,
mineral, and coal management through amending the Law, if the
elect House of Representatives and the Government after the 2014
General Election understand well the real conditions experienced
by the natural resources ield and are able to provide ine solutions
which are completely based on the national interest.
With such challenges as mentioned above, several solutions are
needed:
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1. Oil and Gas
he number of countries in this world which geologically
possess an abundant amount of natural resources wealth, such
as hydrocarbon and minerals, is not many. According to the
oicial data from the Government, the estimation of the amount
of reserves for those three types of hydrocarbon energies is as
follows: oil (7.73 billion bbls), gas (152.9 tcf ), and gas (about
28.17 billion tons). he estimation for their values is as the
following:
Table 2. he Estimation of the Value of Oil-and-Gas
and Coal Reserve Assets
Asset Value Estimates of Oil, Gas, and Coal Reserves
Type
of Asset
Value in
US$
Value in
Rupiah
$110/bbls
$850billion
Rp8,075T
TrillionCF
$15/cf
$2,293billion
Rp21,783T
BillionTon
$100/ton
$2,817billion
Rp26,761T
$5,960billion
Rp56,620T
Reserve
Unit
US$ Price
Oil
7.73
BillionBBLs
Gas
152.9
Coal
28.17
Total
Note: If, for example, production cost and Investor's part are consecutively 50% and 20% from the reserve assets can
be monetized, there will be available fund amounting to Rp5,662 trillion that can be used to settle for the debts and
build massive infrastructure across Indonesia!
Source: Kurtubi, 2013
he calculation above is based on the assumption that the amount
of reserves and the price are constant. Whereas, the potential of
Natural Resources ASSET TO BECOMING A GREAT NATION
269
oil reserves, which is about 50 billion bbls, and the activities of
exploration for new reserves can still be improved, for example,
by dismissing the Oil and Gas Law No.22/2001, which is the
causing factor for the decrease of exploration activities all this
time, resulting in the fact that the amount of oil reserves and
production in Indonesia also decreases.
From the non-conventional oil and gas resources, such as coal
bed methane (CBM) and shale gas, obviously in the future the
actual immense amount of reserves remembering that CBM and
shale gas resources potential are 453 tcf and 574 tcf respectively.
So is with the oil price. In the future, there is a big probability
that the trend of oil price will nominally keep on increasing.
his is due to the non-renewable nature of oil, meaning that its
amount is limited, whereas its exploitation and production keep
on happening.
With the same approach, we can calculate the estimation of
asset/reserve value of mining materials such as copper, gold,
nickel, iron ores, bauxite, and tin. Deinitely, if the management
system refers to article 33 of the 1945 Constitution (controlled
by the state and used as much as possible for the prosperity of
the people), the wealth of Indonesian nature in the forms of oil,
gas, coals, copper, gold, nickel, iron ores, bauxite, manganese, tin,
etc., will become assets that can drive this nation to become a
great country. he conservative tentative estimation of the value
of the actual reserves of oil-and-gas and mining material natural
resources is about IDR 200,000 trillion.
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he problem is whether with the existing management system
of the abundant oil-and-gas and mining materials wealth in the
earth of Indonesia is already pursuant to article 33 of the 1945
Constitution or not. he fact is that the management system
applied today is still far from the management designed to
dedicate itself to the prosperity of Indonesian people. In the
oil-and-gas sector for instance, there are so many holes that
provide opportunities for cunning rent seekers to exploit some
beneits from what should be the state’s income. he leaking
holes, among others, source from the Managing Entity of Oil
and Gas Wealth, which is handed to Non-Business Institution.
Likewise, in the general mining sector, the high level production
with high mining commodity price in the international market
has not yet contributed to the state’s income optimally. he
proits are enjoyed more by the business actors and a group of
rent seekers. his is due to, among others, the type of contract
frequently used in the mining sector for all this time is the
Working Contract and the likes, such as PKP2B, in which the
royalty value is terribly low and the one who is involved in the
contract is the Government, hence the ‘B to G’ model.
Based on the Oil and Gas Law No.22/2001 efective today, the
managing entity of the national oil and gas wealth is organized
by non-business Governmental Institution, the BP Migas (which
is then changed into SKK Migas, after the Decision of the Court
of Constitution in 2012) with a State-Owned Legal Entity
(BHMN), and not State-Owned Company. All oil companies
Natural Resources ASSET TO BECOMING A GREAT NATION
271
operating in Indonesia will do their contracts with BP Migas, or
are contractors of BP Migas. BP Migas controls the cost recovery,
which is a cost (investment and operational costs expensed by
oil companies) paid back by the state from the oil-and-gas
production of the related companies.
Meanwhile, the State-Owned Company in the oil and gas ield,
which was formed based on the Law No.8/1971, was dismissed
and a new State-Owned Company, named PT Pertamina, was
created based on a Notary Certiicate. he Mining Control,
which according to Law No.8/1971 is granted to Pertamina,
was then taken over by the Government/the Ministry of Energy
and Mineral Resources. Pertamina’s status becomes equal to
foreign and private oil companies having contracts with BP
Migas/SKK Migas. he petrol price is completely given to the
mechanism of the market, while the state’s share of oil and gas
coming from foreign contractors have to be sold through BP
Migas designation.
After the application of Oil and Gas Law No.22/2001, the
condition of the national oil and gas industry has not yet
obtained a signiicant progress; it even tends to experience a
setback, with such facts as the followings: Firstly, the production
of crude oil keeps on experiencing a decrease, from 1.5 million
bbls/day in 1998 to about 830 thousand bbls/day in 2013. As its
result, the import of crude oil keeps on increasing. Secondly, the
development and selling of Tangguh LNG with a terribly low
price until now cannot be corrected to gain a decent price. As its
result, the state loses about IDR 30 trillion/year and the State
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Electricity Company is forced to use petrol as their raw material.
hirdly, the cost recovery that keeps on soaring and being not
transparent. Repeatedly Financial Auditory Board has found
improper cost recoveries. As its result, the potential of the
state’s revenues reduces. Fourthly, after the responsibility for the
fulillment of petrol needs shifts from the shoulders of Pertamina
to the Government’s via BPH Migas, Pertamina is reluctant in
building new reineries, using the small margin as its reason. As
its result, Indonesia has to import an immense number of petrol,
and this number keeps on increasing.
Fifthly, though the program of petrol to gas conversion has
been set for so long, its realization is still almost zero because
of the unclarity regarding who will be responsible for its
implementation. In addition to the fact that the infrastructure
is still inadequate, the certainty concerning its gas supply is also
not clear. Whereas, the gas production is relatively abundant. As
its result, petrol subsidy worsens. Meanwhile, the Government is
politically ‘afraid’ to enforce petrol price hike because the people
keeps on rejecting it. Sixthly, the asset, in the form of oil and gas
reserves in the earth of Indonesia, cannot be used as a prominent
source of funding.
Seventhly, the managing entity of the national oil and gas
wealth is a non-business institution. he result is that it is the
contractors who beneit from the assets/reserves contained in
the Indonesian soil; and they use this wealth as collateral to gain
funding. Whereas, oil and gas assets are completely owned by
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the state. Eighthly, the privatization of the State Gas Company
(PGN) has the efect that the role of PGN as a Trader becomes
more dominant, while its task to build gas infrastructures, such
as the infrastructures needed for city gas and gas fuel stations, is
ignored.
From the legal aspect, until now the Oil and Gas Law No.22/2001
has been through a Judicial Review in the Court of Constitution
for three times, and the Court has dismissed 17 articles of it.
hose articles are article 12 sub-article 3: the Minister stipulates
the Company and Permanent Enterprise Body which are given
the authority to conduct exploration and exploitation activities
in the Working Areas as meant in sub-article (2). Article 22
sub-article 1: he Company and Permanent Enterprise Body
should submit at most 25% of its share from the oil and gas
production to fulill the domestic needs. Article 28 sub-article
2: Petrol and Geothermal Gas prices are submitted to a healthy
and natural business competition mechanism. And all articles
related to BP Migas.
Putting in mind that there have been so many articles in the Oil
and Gas Law No.22/2001 that have been stated by the Court
of Constitution as non-binding, and that the Oil and Gas Law
has been empirically proven as being detrimental for the state
inancially and as weakening the national energy security, then
the most rational solution is that a Change and Restoration of
the National Oil and Gas Management System is needed by
discarding the Oil and Gas Law No.22/2001. A new Oil and Gas
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Law must be created, based on such basic principles as: Firstly,
assets in the forms of oil and gas reserves in the earth of Indonesia
must be declared as being ‘State-Owned’ and its management
must be handed to a Special State Company formed based on the
Law; this can be done by changing the recent SKK Migas into a
State Company.
Secondly, it is only the State, as the owner and represented
by the State Company, that is permitted to conduct oil and gas
mining. In the case where the State Company lacks of funding,
technology, and intends to share the risks, then the State Company
is granted the authority to have a contract with an investor/
contractor, both foreign and domestic one, by applying the ‘B to
B’ model. he Government as the Policy and Regulation Holder
is not involved in the contract and occupies a position above the
contract. hirdly, the State Company is obliged to maximize the
State’s Revenues from the Oil and Gas Sector, including, among
others, in monetizing the assets or reserves. Fourthly, the State
Company is obliged to fulill the domestic needs for petrol and
gas, whose prices are stipulated by the Government.
2. Forestry
he development of the forestry sector has to be done in a wellplanned and measurable ways, and focusing on the achievement
of the short-termed, medium-termed, and long-termed
prioritized strategies. hough ever ministry and institution has
already had its own strategic plan, meticulous observation and
inputs still need to be given to support the program achievement.
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In the context of driving the rise of the forestry sector, there are
three key strategies which need to be given attention to in the
next ive years (2014-2019). hose three strategies are, irstly,
pushing forward the development of forest plantations; secondly,
developing the highly valued forestry product export market; and
thirdly, optimizing the system of forestry management based on
needs and local characteristics.
a. Pushing forward the development of forest plantations
he width and productivity of Indonesian natural forests
keep on decreasing due to forest loggings, both through
the activity of legal harvesting or illegal activities, such as
illegal logging, encroachment, and other activities. hus, the
fulillment of the needs for timber in the future can no longer
rely on natural forests. In this context, the development
of forest plantations is a must to ensure the continuity of
timber supplies in the future times. he program of forest
plantation development is actually not a new thing. he
Government has initiated the development of Industrial
Forest Plantation (HTI) since the beginning of 1990s.
In addition to HTI, the development of forest plantations
are also implemented with various schemes, such as
Community Forest Plantation (HTR), Social Forest (HKm),
and Community Forest. he rise of the forestry sector can
only be driven by revitalizing the development of forest
plantations, as one of the ways. he growth of GDP from the
forestry sector will happen if a continuous HTI investment
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in various extents is implemented. hough the development
of HTI is believed to be able to drive the downstream sectors,
the relative increase of the contribution of the forestry
sector which is directly inluenced by the presence of HTI
development is estimated to be between 1-2% only. If we are
to expect a higher GDP growth from the forestry sector, HTI
development is not enough. Such efort has to be accompanied
by a collective organizing of the strategy of the use of nontimber forest produces and other intangible beneits, such as
forest environment services.
b. Optimizing the system of forestry management based on
needs and local characteristics
One of the must-do strategies to optimize the development
of forestry is the application of such a management system
which is based on the needs and local characteristics. he
forest management based on the needs requires a lexibility in
the forest management system without changing the primary
function of the forest. he productivity of production forest,
for instance, pursuant to its function, has to be improved as
maximum as possible, so we need to be lexible in determining
the types of plants and the management system. If there is a
national or regional demand for the fulillment of the target
of production of certain commodities, such as rubber, cofee,
cocoa, paddy, or other crops, it will be better if we open a
chance to develop such crops in the forest zone, especially
in production forest, with the agroforestry pattern, without
altering its primary function as a forest. With such approach,
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various forestry programs, such as the Community Forest
Plantation, Village Forest, Social Forest, and the partnership
patterns which for so long are experiencing a hiccup, will
obtain bigger supports from the communities.
Recently, there are a lot of production forest areas which are
not burdened over rights and this triggers encroachment due
to their status as open access property for forest resources.
To discipline this is not an easy task because it concerns
with tens of million hectares extents and with the interests
of millions of communities living around the forests. In fact,
there are a lot of production forest areas which have been
used (read: encroached) by the communities as plantations
or other allotments. In this context, the rehabilitation of
production forests cannot be carried out without looking at
the reality of the land use on the ield. Disciplining by the way
of muzzling the plantations and lattening the people’s crops
and replacing them with forest plants is obviously not a wise
option because it will certainly create a social conlict that
is diicult to disentangle. Meanwhile, conniving this issue
is neither a good step to take since it will only procrastinate
the problem. he best step is to do a registration and to give
the right of land use to the community and to apply such
regulations which, in phases, will regulate the composition of
the crops with the agroforestry pattern.
Biophysical factor is one of the most important factors which
needs to be considered in determining the system of forest
management. Single forest management system, such as the
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TPTI which applies for natural forests and THPB which
applies for forest plantations, needs to be improved by applying
silviculture multi-system which enables the application of
various system of forest management pursuant to the local
speciic conditions. In general, the TPTI system is actually
good to be applied in primary natural forests and logged over
areas (LoA) with minor damages. Meanwhile, the Intensive
TPTI, or what is known as the intensive silviculture, is
appropriate to be applied in LoA with intermediate damages.
If the LoA has experienced major damages, the THPB system
is the most rational choice.
More than the diversity of the application of silviculture
system, a space needs to be open for the management of
multipurpose forests, with an integrated planning system under
the management of one management unit. With this system,
then, in the future a management unit of forest management
should be enabled to manage forest areas with various
purposes, such as the use of natural forests, the development
of HTI, the establishment of forest ecotourism, the cluster
of the use of forest areas for mining purposes including the
reclamation of mined areas, the carbon storage/absorption
business, and the activities of restoring the ecosystem and
other environment services implemented on the basis of an
integrated forest management plan. Without a breakthrough
of multipurpose forest management, the productivity of forest
areas will still low, so that they are prone to the threat of land
conversion, both done legally or illegally.
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3. he national ishery
he potential of Indonesia’s ishery since 1983 to 2012 had
been relatively stable. here seems to be no increase of ishery
potential, whereas the activities of ishery tend to increase. Several
important points in the context of ish resources potential, among
others, are (a) the estimation of Indonesia’s ishery potential is
still carried out based on secondary data, with the process of
estimation towards production possibilities from various aspects;
(b) there has never been a comprehensive estimation regarding
the stocks of pelagic, demersal, or coral ishes in the entire
regions of Indonesia; (c) the stock potentials are spread in 11
Indonesian Fishery Management Areas (FMA); and (d) the
process of monitoring the potential of the national ish stocks is
not yet carried out well, so that illegal use of ishery potential still
happens frequently.
Indonesian ishery is designed in 11 FMAs to help ease the
management of isher according to the characteristics of the ish
resources. Each FMA has a certain ish resources characteristic.
he potentials of ish resources in such FMAs are, among others,
big pelagic ish, small pelagic ish, demersal ish, penaeid ish,
consumption coral ish, lobster, and squid. Recently, the potentials
in the FMAs ranges from 276 thousand tons to 1.1 million tons
per year. he distribution of such potentials is 52% in the western
part and 48% in the eastern part of Indonesia.
To manage such potentials for the welfare of the people, various
eforts and strategies of the development of this ishery and marine
sector are needed. he ishery development strategy can include
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the development of capture and breeding isheries, and ishery
industry, which can be explained as follows: Firstly, applying
the agribusiness strategy in the ish catching ield, namely with
the cold-chain system, in managing the catch results, starting
from the time the ishes are stored in the ships, ishery harbors,
distribution/transportation, until the products arrive at the hands
of the consumers.
Secondly, improving the capabilities and skills of ishers through
human resources capacity improvement. hirdly, providing
adequate facilities supporting the industrialization of ishery.
Fourthly, modernizing the armada of traditional ishers by giving
a loan/capital of ishing ships having a tonnage more than 30 GT
with a more sophisticated ishing equipments and equipments
which can give better level of safety. Fifthly, easing ishers to
access capitals through cooperatives, the foster father system,
business partnership, and self-help credit services, and various
governmental credit services which are not burdening.
Sixthly, improving ishing equipments, attached motor, motor
boat, and ish aggregating device installation. Seventhly,
revitalizing and developing ish harbors in several islands, in line
with the its rapid development and strategic location, such as
the Seashore Fishery Harbor or Fish Catch Landing Dock in
various regions in Indonesia. Eigthly, increasing the number of
supervising apparatuses to prevent direct illegal selling for ish
catch abroad, or to handle illegal ishers.
In addition, the development of breeding ishery business, which
in practice can take the forms of: Firstly, developing the business
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281
diversiication, so the pattern that ishers depend on ish catching
will start to be directed to the breeding pattern. Secondly, sea
breeding extensiication, which is done by educating, training,
and providing internship accompanied with giving an aid package
to stimulate breeding enterprises. hirdly, developing superior
ishery commodities, such as shrimp, patin, milk ish, seaweed,
and other land-water commodities which have comparative
superiority.
Fourthly, diversifying species or types of breeding commodities,
such as shrimp breeding, is better done not only by breeding
tiger shrimps, but also other new species which have a high
economic value, such as vannamei shrimps, Penaeus merguinsis, P.
semisulcatus. Fifthly, providing adequate seeds (seeds self-reliance)
to ensure the business of ishery production. Sixthly, revitalizing
damaged and no-longer-productive breeding ponds. Seventhly,
preserving the mangrove forest and coral reefs, as important
habitats of marine organisms. Eightly, applying consistent and
sustainable RTRW so that disruptions or interest overlapping
in a certain area will not happen. Ninthly, creating a conducive
business climate for the business actors, with easiness in getting
permits for private parties, trainings, and stimulating aid.
In addition to the aspect of production, the processing sector also
needs to be developed. For that, there are several things to carry out,
namely: (a) revitalizing the industries of ish canning, ish lour, cold
storage, surimi, ish meal, and illet to become more eicient and
having a high competitive power; (b) improving the added value
of ishery products by increasing the eiciency of the processing
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industry; (c) building up and supervising the quality of ishery
products starting from the levels of producers, both ishers and ish
breeders, distribution, to the end market (consumers) domestically
or internationally; (d) developing and operationalizing hygienic ish
markets; (e) providing the transportation facility for ishery products
from the producer location to the ish consumer location (the market),
such as: box cars with air conditioning system, sea and air transports;
(f ) focusing the industry of ishery produce processing on the
development of freezing, canning, ish lour, added-value products,
surimi, surimi-based products, ishmeal, and illet industries.
Another strategy we need to win this competition is the use
of the competitive superiority of a nation. As an archipelagic
nation with such a wide sea, in addition to ishery, another
attraction the regions have is tourism activities. Such activities
can be in forms of historical tourism, cultural tourism, adventure
tourism, and sight-seeing tourism, each of which has its own
speciic market group. herefore, the existing various marine
tourism locations will be of high-value if, in the process of
their development, in addition to making use of the attraction
and uniqueness of bio-resources of the local seas, we are able
to create a conducive climate for tourism activities, both from
the aspects security and convenience.
hus, there are two important factors in the strategy of tourism
activities development. Firstly, the internal factor, in terms of
the strategy of the management of the tourism spot attractions,
which is related to a range of aspects from the technical aspect, the
strategy of service provision, to the marketing strategy. Secondly,
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283
the internal factor, in terms of the support of the set of policies
from the government and the creation of a conducive security
climate for tourism activities.
According to Dahuri (2010), to realize such development, it has
to be followed with such development steps as follow: Firstly,
improving the provision of sea transport services which guarantee
the safety and security of the consumers and a reliable and superior
service. Such step must be supported by the readiness of reliable
human resources and properly managed armada which complies to
sailing regulations. Secondly, in the development of sea transports,
we need to prepare and empower the human resources who own
intensive marine insight, and who own adequate sailing ability, so
that they can contribute positively to the realization of quality and
competitive sea transportation.
hirdly, the development of sea transports needs to be followed
by sets of such legislative regulations which are applicable,
anticipative, and adaptive with the development of the strategic
environment, especially in the context of the implementation of
regional autonomy. he sets of legislative regulations regarding
sea transportation essentially cover the following aspects: sailing
safety, navigation, vessel manning, sea contamination prevention,
sailing economy regulation, and sailing civil law. Fourthly, the
development of sea transportation business must take side with
the community’s economy by prioritizing the sea transportation
business development to the small and medium enterprises,
especially in areas in which new economic growth will be
developed, such as potential small islands zone.
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Fifthly, in improving the role of the private parties in the
development of sea transportation, a conducive business
climate must be created, such as the provision of facilities and
infrastructures, permit facility, security, and the certainty of legal
guarantee. In addition, in its development, this point can be
realized through the partnership patterns between the content
owners and the vessel owners which is carried out in a long-term
contract. Sixthly, in the development of sea transportation, we
need to arrange a set of policies that can drive capital provider
agencies to support or fund the national sea, in terms of vessel
provision, maintenance, operationalizing, and treatment.
Overview and Recommendation
Recently, the Oil and Gas Management System has been proven
as being opposed to the constitutions and is inancially detrimental
to the state. Geologically, the potential of oil and gas resources of
Indonesia is relatively immense, and according to the constitutions,
these must be controlled by the state for the prosperity of the people.
In the next ive years, the National Oil and Gas Management
System has to be altered and restored through the amendment of
the constitution. It must be put back to a position pursuant to the
Constitutions in order to be directed to become a source of funding,
remembering that the nature of the assets or reserves is bankable and
tradeable.
he Government and the House of Representatives after the 2014
General Election must be able to create a constitutional Management
System to be able to drive the acceleration of the double-digit
Natural Resources ASSET TO BECOMING A GREAT NATION
285
economic growth, so that Indonesia can be a country that is great,
advanced, prosperous, and respected by the world. he funds from
the Oil and Gas (mining) natural resources can be used to: settle
the state’s debts, establish education, health, transportation, and
agriculture infrastructures massively in all over Indonesia. To reduce
the dependence on imported energies (crude oil, petrol, and LPG),
Indonesia needs to accelerate the production of oil and gas in the
Cepu Block and to optimize old ields and the construction of new
petrol reineries in a more well-distributed way and not concentrated
in Java island only. In addition to accelerating the petrol to gas fuel
conversion. Meanwhile, to accelerate the fulillment of the national
electricity needs with a high-level reliability, Indonesia needs to
immediately improve the capacity of power plants by optimizing
the domestic primary energy sources together with transmission and
distribution systems, including the use of nuclear energy power plant.
In the forestry sector, the sustainability of the development must
obtain a serious attention. his is because forestry sector has a very
important role as a bufer of life system and a determining factor of
climate change, as a motor that drives the economy, as an opener
of areal isolation, and as a means to create employment. Forestry
industry has to be continuously pushed to stand on its feet again. his
can be done, among others, by organizing the forestry regulation from
upstream to downstream, by giving adequate iscal and non-iscal
intensives to drive the development of forest plantation business, by
working on various alternatives of timber and iber producers from
outside of the forest zones (for example, the use of timber and iber
from plantation rejuvenation), by developing products with character
to fulill certain market segments with high prices in the international
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market, and by rebuilding the collective market system of forestry
products so that Indonesia can play its role as the market leader of
timber products in the international market.
he width and productivity of natural forests in Indonesia keep on
decreasing, so that the strategy of forest plantation development
is a must. he development of the export market for high-valued
forestry products can be implemented by improving the quality
and competitive power of Indonesian forestry products in the
international market. his can be done, among others, by rejuvenating
the machines of production and selling forestry products through a
collective marketing agency. he strategy of optimizing the system
of forestry management based on needs and local characteristics has
to be implemented in order to improve the forest productivity and
to prevent deforestation due to forest conversion legally and illegally.
he strategy of optimizing the system of forestry management has to
accommodate the reality of diversity, both in terms of social-economy
and the biophysical condition of the forests, so that in the future
we need to promote a management system of multi-purpose forests
managed by one management unit, for instance: Forest Concession,
Industrial Forest Plantation, Community Forest Plantation, mine
land reclamation, eco-tourism, the business of carbon storage/
absorption services, and the restoration of the ecosystem with an
integrated forest management planning.
In the ield of ishery and marine afairs, Indonesia needs to build
a conducive business climate through: Firstly, the consistency of
policies so that business actors do not hesitate to do investments in
regions. Secondly, business security and legal certainty such as what
Natural Resources ASSET TO BECOMING A GREAT NATION
287
the neighboring countries have. hirdly, the removals of high-cost
economy and the eradication of corruption, collusion, and nepotism
practices. Fourthly, the provision of adequate infrastructures (such
as roads, electricity, telecommunication, clean water, seaport, and
airport) especially in the foremost and small islands zone. his
can be implemented through providing development budget. he
government has to give bigger budget for the development of real
sectors and infrastructures directly related to the development of
marine afairs, including the development of its marketing.
Fifthly, the provision of skilled human resources having high working
ethics. he low-level education the workers in marine ield have – for
instance the ishers, most of who are only primary school graduates –
can be a hindrance for the revitalization of the marine ield real sector.
Sixthly, the provision of the information regarding business potential
and opportunity. Seventhly, the development and dissemination of
science and technology for the business actors. Eighthly, monetary
(the Rupiah exchange rate, soft credit service, etc.) and iscal policies
which take side with the real sectors. Monetary policies from the
Bank of Indonesia, such as policies on interest rate and credit
services in the marine ield, can be made as a policy instrument
in stimulating the development of marine industry. hen, we also
need the balance of the credit allocation towards the upstream and
downstream industries, so that both subsystems of marine afairs can
develop more evenly.*
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Chapter vi
Defense
BUILDING UP
A POWERFUL INDONESIA
Defense BuILDING uP A POWERFuL INDONESIA
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“Build up an army that can be the pride of Indonesian people, that
can protect the independence of Indonesia, and that can guarantee the
security of Indonesian people”.
~ Commander in Chief General Sudirman ~
photo © A v.d. Wolde
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Defense
Building up
a powerful indonesia
D
efense system is an integrated unity of defense elements
owned by a country both at the level of defense doctrine
as the software, and at the level of personnel and Major
Defense Equipment Armament System as the hardware. he essence
of organizing defense system aims to ascertain the continuity of the
life of the nation and state within the corridor of the Republic of
Indonesia. herefore, Indonesian defense system must be placed as
one of the state’s fundamental systems to be able to anticipate all
threats and security challenges the nation might face in the future. In
the rapid development of the strategic environment, both internally
and externally, it seems that until now Indonesia has not yet igured
out what type of war it could be engaging into. his causes the
unclarity of concept, system, and operation on the ield.
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Defense System and Posture
Indonesia’s defense has to be viewed in terms of two big approaches,
conceptually as Indonesian Defense System and operationally as
Indonesian Defense Posture. In a Defense System, there are two main
elements, namely the aspect of territory and the aspect of resources.
he concept of territory in Indonesian defense system divides the
country’s defense territory into layered defense consisting of three
parts, which are the defense in the Exclusive Economic Zone (EEZ),
Jurisdiction Territory (Territorial Water), and Innermost Islands
Territory.
Based on the UNCLOS convention in 1982, EEZ of a country
spans as far as 200 miles, measured from the nautical base line of
its territory. A country has the right to beneit from the natural
resources and other potentials within its EEZ. Although it is not a
territorial area of a country, EEZ is part of the national interest of
the country.27 In this EEZ, a country has sovereign rights over the
natural resources contained within. hus, securing this EEZ is an
essential task to do.
he Jurisdiction Territory, or the Territorial Water, is an area
that spans as far as 12 miles from the outermost point of islands
in Indonesia at the time of tidal towards the sea. 28 It is this area
which becomes the territorial sovereignty post of a country. In such
area, the concept of spatial sovereignty is something absolute and
undebatable. he sovereignty meant in this matter also covers aerial
spaces above and the sea and land bottoms beneath. An illegal border
breach and other physical breaches towards this area is a real threat
for the existence of a country.
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he Innermost Island Territory is a very crucial area in the aspect
of a country’s sovereignty. his area spans from the seashore line to
covering all land areas owned by a country. In this area, there are vital
objects of a country, the centers of government, economy, and living
spaces of the people. It is in this area that security over incoming
threats, either internally or externally, becomes something extremely
fundamental. he sustainability of the existence of a country lies on
the mastery of defense and security within this area.
By observing the three-layered spatial concepts, how the defense
system of a country is established could be examined. Does the
country build its defense system based on continental concept,
maritime concept, or archipelagian one? As for the case of Indonesia,
for instance, is it the establishment of naval force aimed to form
Brown Navy, Green Navy, or Blue Navy? his establishment of naval
force is based on the projection of strength committed by a country
on the basis of territorial concept.
As in Brown Navy, the naval force is built to safeguard the areas
surrounding the coast line of a country against the coming threats.
Meanwhile, as in Green Navy, the naval force is built to be able
to guard the areas and counteract threats coming in the country’s
territorial areas (20 nautical miles). As for the Blue Navy, a country
has projected its naval force establishment beyond its own territory.
his is done to guard the country’s national interests in the EEZ
(20-200 nautical miles) or to protect a country’s national interests in
other regions in the world.
In terms of the aspect of resources, the defense system of Indonesia
consists of human resources, natural resources, artiicial resources,
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and defense infrastructures which generally are categorized into
primary component and secondary component. Primary component
is the force having been integrated oicially and managed and
mobilized in the military force unity of a country. his force is then
classiied into three primary dimensions, namely land, sea, and air.
Meanwhile, secondary component is divided into reserve force,
defense infrastructures, and military draft.
Until recently, at least up to 2012, the defense reserve force of
Indonesia has not yet been formed in an organized way or structured
in the body of the Indonesian National Armed Forces (TNI). he
process of forming reserve component is still at the preparatory stage
worked on by the government through the Ministry of Defense.
Other activities being carried out related to reserve component,
among others, are the process of stipulating the legislative
regulations, calculating the needs of the force, and calculating the
infrastructures needed in its formation. his reserve force constitutes
military elements which are trained and able to mobilize at any time
of emergency to assist or replace the personnels from the primary
component. he target number of Reserve Component force until
the next 20 years is 160,000 personnels. he allocation of this number
is as follows: 130,000 personnels for the Indonesian Army reserve,
20,000 personnels for the Indonesian Navy reserve, and 10,000
personnels for the Indonesian Air Force reserve.29
Defense infrastructures is diverse in nature. In general, the primary
element of defense infrastructures consist of: Defense Industry,
Transportation and Communication, Logistics (food, energy, et cetera),
and Defense Research. Meanwhile, in the Military Draft sub-section,
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there are two parts we can examine closely, which are 1) preparing the
citizens for the interest of defense and defending the country in general
followed by 2) preparing the laws for dangerous situations and a set of
regulations for mobilization mechanism.
In addition to Defense System, what needs to be paid attention to is
Defense Posture. In general, the outline of defense posture consists
of three primary elements, namely defense force, defense ability,
and also defense exhibit. Defense force in the defense posture of
Indonesia can be perceived from the magnitude of force possessed
by TNI, which is in terms of Major Defense Equipment Armament
System and the number of personnels. At this time, TNI has 302,000
personnels, 233,000 of them are in the Army, 45,000 are in the Navy,
and the other 24.000 are in the Air Force.30 Meanwhile, in accordance
with the category of United Nations Registration of Conventional
Arms (UNROCA), Major Defense Equipment Armament System
consists of seven categories of conventional weapons, namely: Battle
Tanks, Armoured Combat Vehicles, Large Caliber Artillery Systems,
Combat Aircraft, Attack Helicopters, Warships, and Missiles.31
Battle Tanks: Armoured wheeled or chained vehicles with high
mobility with a minimum 16.5 metric tons unloaded weight and
having at minimum 75 mm primary canon caliber. In 2011, it was
recorded that Indonesia had 275 Battle Tanks.
Armoured Combat Vehicles: Wheeled, semi-wheeled, chained, or
semi-chained armoured vehicles with a cross-country ability.
Designed to accommodate four or more infantry troops or
armed with integral or organic weapons with the 12.5 caliber or
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rocket launcher. In 2011, it was recorded that Indonesia had 622
Armoured Combat Vehicles.
Large Caliber Artillery Systems: Either canons, howitzer or artillery
combining the characteristics of a canon, howitzer, mortars, or
rockets with multiple-launch system which are able to destroy
surface targets with indirect shooting ability and having 75 mm
caliber or above. In 2011, it was recorded that Indonesia had
1132 Large Caliber Artillery Systems :
Combat Aircraft: Fixed-wing aircrafts or aircrafts with a
geometrical elements wing design, equipped or modiied to
destroy targets by using, either missiles, unguided rockets, bombs,
weapons, canons, or other destroying weaponries, including
aircrafts with electronic war mission, air defense destroyers, and
surveillance aircrafts. he term ighting aircraft does not include
primary training aircrafts, unless designed, equipped, or modiied
as explained above. In 2011, it was recorded that Indonesia had
32 Combat Aircrafts.
Attack Helicopters: Rotary-wing aircrafts designed, equipped, or
modiied to destroy targets by using anti-armoured rockets, either
guided or not, air to surface rocket, air to below surface rocket, or
air to air rocket, and equipped with integrated shooting controller
and target marking system for such weapon type including kinds
of this aircrafts specially designated for surveillance or electronic
war mission purposes. In 2011, it was recorded that Indonesia
had 6 Attack Helicopters.
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Warships: Both armed surface warships and submarines for
military use, with a standard weight of 750 metrical tons above or
the ones with 750 metrical tons below standard weight, equipped
either with at minimum 25 km-range missile launcher or torpedo
of the same range. In 2011, it was recorded that Indonesia had 36
Warships.
Missiles: Guided or non-guided missiles, ballistic missiles, cruise
missiles able to carry warheads or destruction weapons having at
minimum 25 km of range and specially designed and modiied to
be able to launch such missiles and rockets.
Defense capability, as part of the defense posture, is the qualitative
and functional aspects of defense forces that is classiied into four
primary capabilities. he four components are defense capability,
security capability, logistics capability, and intelligence capability.32
Defense capability. Defense capability includes defending the
national air space, strategic ofense, and electronic warfare.
he ability to defend the national air space is developed by
implementing detection, observation, aerial surveillance, and
protection towards all areas of the national air space. his ability
is conducted by the National Air Defense Command and the
air defense elements by maximizing air defense weapon system
organized in each dimension.
he strategic ofensive capability is prepared to handle 4
trouble spots simultaneously. his operation is orchestrated
by the Quick Reaction Beater Troops of TNI, and strategic
naval and aerial ofensive forces.
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he electronic war capability
is prepared to support the
operation and practice activities
of TNI. his war covers
electronic war equipments, the
human resources operating
those equipments, and other
supporting elements.
Indonesian defense
force is projected
to secure national
interests. herefore,
instead of ofensive
and provocative in
nature, it exists to
efectively defend the
sovereignty of the
Unitary State of the
Republic of Indonesia.
Security
capability.
Security
capability covers: First, the ability
to observe and secure aerial, naval,
and land territories, and to map
border areas, foremost and remote small islands, as speciallytreated regions. Second, the ability to enforce laws in the national
naval and aerial spaces to prevent and to overcome every breach
and threat endangering the national and public interests. hird,
the ability to overcome domestic security disturbances, such as
separatist movement, terrorism, armed rebellion, insurgence,
piracy, hijacking, communal conlicts, and other security
disturbances whose handling is implemented through military
operations other than war.
Support capability. Support capability covers: First, the ability to
deliver supports towards the implementation of governmental
functions outside military defenses, such as delivering
humanitarian aid to relieve natural and artiicial disasters, mass
strikes, and other assistances in helping overcome diiculties
experienced by the public. Second, the ability to conduct
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299
compulsory basic military trainings for citizens in terms of State
Defense. hird, the ability to empower the people as supporting
forces. Fourth, the ability to help the non-military defense
function in terms of defense logistics provision, strengthening
diplomacy, state territorial surveys and mappings, national
spatial structuring, defense activities, research and development
of national technology and industry for defense purposes. Fifth,
the ability to implement world peace or perform humanitarian
missions at the international and regional scopes.
Intelligence Ability. Intelligence capability is the integration of these
seven aspects of intelligence, namely: Human Intelligent (Humint),
Imagery Intelligent (Imint), Measurement and Signal Intelligent
(Masint), Communication Intelligent (Comint), Telemetry
Intelligent (Telint), Electronic Intelligent (Elint), and Open Source
Intelligent (Osint). Intelligence ability is developed to avoid ambush
and espionage activities from opponents, supporting the process and
implementation of state defense policy and strategy, and providing
correct and accurate information.
State Defense Intelligence is developed within three levels of
competence, namely strategic intelligence level, which is carried
out by the defense intelligence agency (now implemented
by the TNI Strategic Intelligence Agency); operational
intelligence level, which is carried out by military intelligence
agency; and operational-to-tactical intelligence level, which is
carried out by dimension intelligence agency. At the defense
intelligence agency level, the scope of ability developed is the
ability to analyze the nine components of strategic intelligence
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covering: geography, history, politics, economy, socio-culture,
transportation & telecommunication, technology, biographies,
and military. To make its roles into practice, the State Defense
Intelligence develops an early warning system, information
system, and analysis system. he scope of intelligent activity and
operation includes investigation, security, and gathering, which
are conducted constantly in regards to the Intelligence Cycle.
At the operational and tactical levels, the intelligence ability to
develop covers: First, the ability to conduct investigations to
detect military factors related to early warning for all levels of
command of TNI, and in each dimension for military operation
interests. Second, the ability to implement security at ields of
personnel, materials, information, documents, military activities,
operations, strategic national vital objects, and security provision
for VVIP and VIP. hird, the ability to gather and form opinions
in order to create intended conditions for conducting military
operations for war and non-war purposes. Fourth, the ability to
process intelligence information materials into predictions for
intelligence interests, both operationally and strategically. Fifth,
the capability to implement counter-intelligence, electronic
war, counter-iniltration, and counter-insurgence. State Defense
Intelligence is arranged in the organization structure of State
Defense Agency, Military Intelligence Agency, and Dimension
Intelligence Agency, which consist of land, sea, and air.
Additionally, defense force, as the third element of defense posture,
is aimed to produce deterrent efect by prioritizing factors of threats,
geographical positions, and the eiciency of available resources. For
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301
this, the defense doctrine and strategy on the basis of the integrity
of the three dimensions (land, sea, and air) become a rational option,
whose operation is held by forming Defense Area Command.
However, the integration concept implemented by the three forces
still has shortcomings, for instance, this concept is applied only
during exercises. In the future, defense force exhibit will be divided
into ive Defense Area Commands.
he defense force of Indonesia is aimed to secure national interests.
herefore, the defense force exhibition of Indonesia will not be
ofensive and provocative in nature, yet still for the purpose of
efectively defending the sovereignty of the Republic of Indonesia.
For that reason, the development of defense posture to build a
professional TNI and to place TNI fully under the supremacy
of political authority is needed. On the other hand, civil political
authority is responsible for delivering full support to TNI in the
eforts of strengthening its capabilities, so that TNI can perform its
duties efectively and eiciently. In this context, a gradual increase of
defense budget becomes important.
TNI professionalism is built through the development of defense
posture implemented gradually, starting from 2012 until 2029, and
is divided into four phases. he irst phase is inished in 2014, the
second phase will be started in 2014-2019, the third phase will
commence in 2020-2024, and the fourth phase will be implemented
in 2025-2029. At the second phase of defense posture development,
the budget allocation for the development of defense posture in the
second phase is estimated to be 2.2% up to 2.61% of the PDB.33
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In addition to an ideal defense posture, another requirement
for a professional TNI is the guarantee of the soldiers’ welfare.
herefore, the phase of the 2014-2019 defense development
should also be concerned on improving the welfare of TNI
soldiers. he development of military defense posture can be
outlined as follows 34:
INDONESIAN ARMY
At this second phase of defense posture development, the
Indonesian Army will continue developing the Army Strategic
Command into 4 divisions and the Development of the Army
Fliers (Penerbad) in serving every Military Area Command with
the force of 1 squadron of light choppers, Penerbad Group and
Army Airstrip and adding several units of transport and attack
choppers. he development of the Indonesian Army’s territorial
power at this phase is aimed to actualize the stabilization of
deterrent territorial power through the formation of Military
Resort Command Headquarter, Military District Command,
Sub-district Military Command, and Infantry Brigade
Headquarter with its reinforcement, and Cavalry Brigade
Headquarter and the new formation of Military Area Command
consisting of Airborne Infantry Battalion and Raider Infantry
Batallion gradually with the priority emphasized on the Military
Area Command having land border with another country.
INDONESIAN NAVY
he development of posture of the Indonesian Navy at the Second
Phase is aimed to continue the phase of improving the ability
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303
of KRI (Kapal Republik Indonesia/Indonesian Navy) warships,
Aircrafts, the Marines, and Bases. he posture development of
the Indonesian Navy can be observed in the table below.
Striking Force
Patrolling Force
Supporting
Force
Submarine
Light Frigates
Corvette
Anti-Submarine Warfare
Patrol Boat
Fast Missile Boat
Fast Patrol Boat
Patrol Boat
Landing Ship Tank
Tanker
Hydro Oceanography
Coastal Troop Transport
Patrol Minesweepers
Fleet Tug
3
7
3
2
4
8
60
6
2
1
2
1
1
Source: Ministry of Defense, Postur Pertahanan Negara 2009-2029
( Jakarta: Kementerian Pertahanan, 2007)
INDONESIAN AIR FORCE
he development of the posture of the Indonesian Air Force is
in accordance to the development designed at the irst phase,
through the addition of Air Squadron, Radar Unit, Missile Unit,
Canon Unit, Special Forces Corp (Kopaskhas), and Airbase. he
posture development of the Indonesian Air Force can be observed
in the table below.
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1 Combat squadron
Air squadron
Radar unit
Missile and air
defense canon
unit
Special Forces
Corpse
(Kopaskhas)
14 Multi-role
Fighters
2 light/medium transport
squadrons
1 strategic surveillance
squadrons
1 helicopter squadron
1 basic-training squadron
1 advanced-training
squadron
3 units of radar
12 battalions of short-range
PSU
5 battalions of mediumrange new missiles
27 units of radar
4 squadrons
1 wing
Source: Ministry of Defense, Postur Pertahanan Negara 2009-2029
( Jakarta: Kementerian Pertahanan, 2007)
Pursuant to the TNI Law Article 11 Sub-article (2), the direction
of defense posture development of Indonesia is prioritized for
vulnerable areas, border areas, conlict-vulnerable areas, and remote
islands in regards to the geographical condition and the defense
strategy.35his is done, among others, to minimize border conlict
potentials in volatile areas. To make TNI a reliable force, the defense
posture development has to consider the trend of threat potentials
coming from the sea and air.
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he development of maritime forces is not only conducted from the
aspect of quantity, but more importantly in quality, through the use
of stealth and unmanned weaponry technology.
Threat Dynamics
here are several actors, state and non-state, and issues which
become threat potentials or give pressure to the security of Indonesia
in 2014-2019. State actors which can threat, pressure or signiicantly
inluence the security of Indonesia are the countries which for so
long have strategic interests with Indonesia, namely the US, China,
India, Australia, Malaysia, Singapore, and the Philippines.
Meanwhile, non-state actors identiied to be able to threaten the
security of Indonesia are cyber threats, situational threats, and
remnants of the Independent Aceh Movement (GAM), transnational
crime organizations, Independent Papua Organization (OPM), and
terrorists.
Below are several graphs depicting the threat potentials or pressures
of the actors towards the security of Indonesia. he line 0 in each
graph indicate the status of security of the country in dealing with
such threat potentials from the actors. If the graphics of an actor is
above the line 0, Indonesia is safe from such threat potential. On
the other hand, if the actor’s graphics is below the line 0, or is in the
negative number, Indonesia is unsafe from such threatening potential.
he explanation related to the dynamics of threat potentials from
several countries is detailed as follows:
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Graphics 1. he Dynamics of hreat Potentials of the US
China, and India
0
2014
2015
2016
2017
2018
2019
-0.02
-0.04
-0.06
-0.08
United States
China
India
-0.1
-0.12
Source: hese data are processed by the Compiling Team
he irst thing to observe from the above graphics is that the three
countries, the US, China, and India are below the line 0. his means
that Indonesia is not safe from the threat potentials coming from
those three. Of the three countries in the above graphics, the US has
the largest potential to become a threat for national security. his
prediction is based on the military force calculation of the US and its
operational preparedness, especially its ability to control important
dimensions of defense and territorial security, and its possession of
weapons of mass destruction. Obviously, this does not necessarily
mean that the US will launch military attacks on Indonesia; rather, it
indicates that the US is able to control strategic points in Indonesian
territory. In addition, from various aspects, the US has the capability
to give political pressures on Indonesia.
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307
he trend of the threat potentials from the US seems to be luctuating
in the next ive years. Starting with very high in 2014, and then
decreases quite drastically in the next two years. However, starting in
2017 until 2019, the potentials for threat or pressure given by the US
starts to hike, approaching the number -0.1. his is probably related
to the US endeavors to face against the increase of Chinese military
forces and maneuvers at the region.
his calculation means that Indonesia will be at a very weak position
when facing the US. Moreover, in an extremely negative situation,
the threat presented by the US will be bigger than the other threats
coming simultaneously, especially in 2014, 2018, and 2019, as
described in the graphics below:
Graphics 2. hreat Map for Indonesian Defense
0.02
0
United States0
2014
-0.02
2015
2016
2017
2018
2019
Cyber Threats
Situational Threats
Australia
-0.04
China
-0.06
The Philippines
-0.08
Free Aceh Movement
India
-0.1
Malaysia
-0.12
Source: hese data are processed by the Compiling Team
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China, the so-called “candidate for substituting the US power” shows
a tendency of decreasing threat potentials, gradually from 2014 until
2019. hough China does develop its military forces, it is still much
less signiicant than the US, especially if seen from the geographical
distribution of military allocation and the alliance networks owned
by the US in the world. In addition, China will tend to maintain a
good relationship with Indonesia and ASEAN in general, as shown
in the last several years. China also needs a strategic environment
that supports its economic interests. herefore, until 2019, the threat
potentials from the Chinese side will not be as large as the strength
shown by the US. Nonetheless, it is important to note that the
competition between China and the US, which is inluenced by the
global and regional security politics, cannot be ignored. his will be
analyzed further in the Analysis of hreat Dynamics section.
Lastly, India is the one whose threat potentials are the lowest,
compared to the US and China. In addition, India is also showing a
decreasing trend (approaching the number 0). Moreover, until 2019,
the threat potentials from the Indian side are only half of what is
shown by China.
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309
Graphics 3. he Dynamics of hreat Potentials of Australia,
Malaysia, Singapore, and the Philippines
0.006
0.004
0.002
0
Australia
2014
2015
2016
2017
2018
2019
-0.002
Philippines
Malaysia
Singapore
-0.004
-0.006
-0.008
Source: hese data are processed by the Compiling Team
he countries in the above graphics share one trait, which is the fact
that they are geographically in a close proximity with Indonesia. Based
on the above graphics, Indonesia is safe from the threat potentials
of the Philippines, Malaysia, and Singapore. he Philippines is the
only country, of the three above, which is always above the line 0,
or in other words whose threat potentials can always be faced by
Indonesia.
In 2014-2018, the graphics of threat potentials of Malaysia against
the security of Indonesia has a positive score. his means that, in
those years, Indonesia is still safe from the threat potentials of
Malaysia. Interestingly, in 2019, the threat potentials coming from
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the Malaysian side is in fact a negative score. his is caused by the
increase of security issues between both countries, covering issues
on borders, the politics of identity, and competitions in terms of the
maritime dimension. However, the threat potentials coming from
Malaysia that year is not bigger than that of Singapore.
Singapore itself shows a more luctuating trend. In 2014 and 2015,
Singapore is not a threat potential that is dangerous for Indonesia.
Yet, in 2016, the situation starts to change, that is, Singapore
will have a bigger force. he reason for this is that Singapore will
become a strong part of the US strategy in South East Asia and
the Paciic Asia. In the 2018-2019 period, the threat potentials from
the Singaporean side will be beyond that of Australia. his is made
possible due to, alongside the fact that Singapore becomes stronger
because of its relation with the US, Australia emphasizes more on
non-ofensive policies in the military, economic, and political sectors.
Based on the graphics above, it is obvious that Australia has massive
military and economic powers, supported by the stability of its
political system. However, the developing political trend shows that
Australia will make Indonesia its international policy focus (being
Jakarta-centric and not Washington-centric), without putting aside
its cooperation with the US. As the result of this, the military threat
potentials of Australia over Indonesia is showing a decreasing trend.
here is a luctuation in terms of its relationship with Indonesia
due to the wire-tapping case, but Australia seems more likely to
need Indonesia, both in terms of bilateral relationship and of facing
regional security issues.
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311
Unlike the previous two graphics, the following graphics demonstrate
the threat potentials coming from the non-state actors. Based on the
graphics above, it can be seen that Indonesia is able to overcome nonstate threat potentials. he higher the score means that Indonesia
has the capability of handling those threats, and vice versa. Here it
can be acknowledged that the lowest security score Indonesia has
is against the threat posed by the Independent Papua Organization
(OPM), while the highest is against situational threats. If the trend
of Indonesia’s ability in facing threat potentials from the OPM is
seen more carefully, it can be understood that the score is getting
more positive, especially starting from 2016. his means that, from
2016 until 2019, Indonesia is safer in dealing with threat potentials
coming from the OPM.
Graphics 4. he Dynamics of Non-State hreat Potentials
0.012
0.01
Cyber Threats
Situational Threats
0.008
Free Aceh Movement
Transnational
Crime Organization
0.006
Free Papua Movement
0.004
Terrorists
0.002
0
2014
2015
2016
2017
2018
2019
Source: hese data are processed by the Compiling Team
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he graphics above shows that Indonesia is safer from the threat
potentials from the remnants of the Independent Aceh Movement
(GAM) than the ones from the OPM. However, it must be put
into consideration that this projection is based on the most recent
condition of GAM, which is inactive because the special autonomy
given by the central government to Aceh Province has been working
positively in attenuating the separatist movement. hus, Indonesia
has to anticipate, or prevent, the come-back of this separatist
movement due to autonomy failure, which can worsen the situation
in the future.
On the other side, Indonesia is relatively more prepared to deal
with natural disasters, terrorism, and cyber threats. Indonesia has
had experiences and institutional development in managing natural
disasters. In addition, the level of solidarity of the society in providing
aid for the victims and to recover infrastructures of the public seems
to be very high. At the state level, TNI and the security apparatuses
are ready to assist the handling of disaster situations.
Indonesia is relatively successful in dealing with terrorism. In the
future, this trend will continue along the strengthening of capacity in
terrorism countermeasures on one side, and the change of methods
and targets of terrorist attacks on the other. As an example, attacks on
international hotels and nightclubs have been decreasing. Terrorist
attacks nowadays are aimed more to places which are ailiated to
certain religions (churches and mosques) and state symbols, but
implemented at a small scale.
Cyber issues, which recently become the concern of the public, have
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313
not yet been a main threat that underlies the making of security
policies. he cause is that the activities of the state and the public
have not been carried out wholly in an online network. his is
diferent from the US, which already has an integrated system. A
part of it being attacked means that the information from the other
systems will be easily accessed and retrieved. his is why Indonesia is
still safe from cyber threats. However, it needs to be underlined that
cyber attacks will become serious threat and war modus in the future.
he identiication of hreat Dynamics in the previous explanation
displays the force threat and ability of each actor towards Indonesia.
Another aspect that must be observed in analyzing threats is the
strategic interaction among those actors which forms undesirable
situation for Indonesia. In this section, how such interaction among
actors afect the security of Indonesia will be elaborated more clearly.
1. he US - China Competition
After the end of the Cold War and the fall of the Soviet
Union, many people have predicted that the international
system would become unipolar, i.e. the rise of the US as
the sole superpower, which bears the responsibility as the
hegemony. However, the unipolar moment in fact ends
quickly. The US hegemony faces challenges from new powers
in the competition at the global level 36.
In the last two decades, China grows as a new power at the
global level. As indicated by the identiication of threat dynamics
above, China will still be a country which has the most ability
to get near to the power and ability of the US at the global
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level. Moreover, seen from the military expenses, if the trend
does not change, China will surpass the US in 2030s. In such
development, the challenge for the international system is how
the US, as the status-quo superpower, would respond to the
increase of power and ability of China. History has shown that
when a country is increasing its ability and power signiicantly,
which has the potential to disturb the global power balance, the
status-quo country or power will respond by doing the politics
of balancing.37 he strategic interaction between the rising state
and the status-quo state doing the balancing would usually end
in a war. Such thing happened, for instance, in the irst half of
the 20th century, when the German eforts to rule Europe was
responded by the status-quo states, which then triggered World
War I and II.
he strategic interaction between the US and China becomes more
relevant for Indonesia due to the physical competition between
the two in the Asia Paciic region. his region in the next several
years will witness the naval force competition. China recently
has already had strategic nuclear submarines and is predicted to
develop its submarine forces. It is predicted that in 2016 China
will already have challenged the supremacy of the American
naval force in the region. China has planned the provision of 5
new nuclear submarines, 30 new attack submarines, and a nuclear
mother ship. In 2011, China had launched a new mother ship.
According to the Congressional Research Service, China will have
about 72 modern attack submarines until 2020.38
Although not oicially stated as aiming to respond to the increase
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315
of the Chinese power, the US government has altered its focus of
foreign policy by attempting to guarantee its presence in the Asia
Paciic region. According to the Council on Foreign Relations, the
direction of the US policies in the Asia Paciic covers the eforts
of strengthening the traditional alliances, such as the ones with
Japan and South Korea; strengthening the partnership relation
with other countries in the region; managing and developing a
cooperative relation with China; participating and cooperating
through multilateral mechanisms in the region; developing
and strengthening trade relationships, either bilaterally or via
the multilateral scheme (for instance through the Trans-Paciic
Partnership).
According to the Chinese government, the enhancement of its
military forces and the expansion of its projection are justiied
as an efort to secure national interests, including the issue of
territorial integrity (covering issues of Taiwan and Xinjiang) and
an efort to defend its sovereignty in the South China Sea area.39
With the Chinese government claiming over most part of the
South China Sea, that particular area becomes China’s defense
perimeter and power projection.
On the other side, the US presence in the South China Sea is
justiied as its efort to guarantee the freedom of navigation in
that area. he South China Sea itself is connected to the main
oil trade and transportation line of the world. More than a half
of the total tonnage of the world’s trades per year crosses the
Straits of Malacca, Sunda, Lombok, and Makassar. he amount
of crude oil passing the Malacca Strait to be forwarded to the
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South China Sea is six times larger
than the one crossing the Suez
Canal, and 17 times larger than the
one crossing the Panama Canal.40 In
addition, one tenth of the amount
of production of the ishery sector
of the world comes from the South
China Sea. As for China itself, 80%
of its crude oil imports pass by this
line.41
In geopolitical point
of view, Indonesia
has a good chance
to play a central role
in preventing and
managing potential
conlicts between the
United States and
China in the Asia
Paciic region.
For the US, parts of the South China Sea which are free to be
sailed by trading and military ships are a national interest and an
international security interest to defend despite the huge budget
consumption. his is related to the US interest in maintaining
the economic growth of its allies in the East Asian region,
such as Japan and South Korea. It becomes paradoxical seeing
that actually by guaranteeing the freedom of navigation in the
South China Sea, the US is also guaranteeing the continuity of
the economic growth of China. he complex interdependence
entwined between China and East Asian countries and the US
makes the US also dependent to the economic growth in that
region. A research even shows that approximately 30% of the
US manpower sector depends on the security in the East Asian
region. With such condition, the conlict potentials become so
real in the South China Sea and this creates disadvantageous
conditions for the security of Indonesia in the future.
Geopolitically, Indonesia actually has a chance to play a central
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317
role in preventing and managing conlict potentials between the
US and China in the Paciic Asian region. As a state located
right in the heart of this conlict of hegemony, Indonesia should
be able to present initiatives of security regulations that can
guarantee the regional and global stability. his of course has been
started through multilateral cooperation frameworks such as the
ASEAN Maritime Forum and the Extended Maritime Forum,
ASEAN Regional Forum and East Asia Summit, in which the
US and China are both included.
he challenge in fact rises from the inability of ASEAN, as the
engine of such multilateral cooperation frameworks, to direct
them towards the formation of security regulation outlines which
is actually contributive to the regional and global stability. his
is, among others, because of its own institutional weakness, as
shown in several important issues, such as the stipulation of Code
of Conduct, in which the members of the association are unable
to speak in the same voice, and there are still difering opinions
among themselves. Some of the members are still under the
Chinese inluence, while some others are under the inluence of
the US. his condition sadly turns ASEAN to an arena for the
contest of inluence between the US and China, which eventually
will hinder the endeavors of forming the security regulation
outlines of the region and of managing conlict potentials. Given
that, the challenges faced by Indonesia are: (1) actively bringing
out new initiatives for conlict potentials management between
China and the US and its allies in the region, and (2) multilaterally
diminishing opinion discrepancy among ASEAN members and
realizing the actual ASEAN centrality in the management of
conlict potentials.
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2. Regional competition
At the regional level, the threat against the security of Indonesia
is present through conlict potentials with its neighboring
countries. In the South East Asian region, one of the important
issues which can trigger conlicts is territorial and border
disputes. In addition to the complicated process of negotiation
among the countries involved, territorial and border disputes are
also inluenced by the government’s lack of attention in putting
forward the development of border areas, either from the socioeconomic aspect or from the defense-security aspect.
Border issues become important issues due to several reasons.
First, border issues are related to territorial problems, which
means that they are directly related to issues on the sovereignty
and existence of a nation. Secondly, border areas always have
strategic values. hirdly, border areas are the foremost doors of
the physical interaction with a country and of the external forces.
Some countries are geographically located as such so that border
issues can be managed in a more unimpeded way. Such a thing
does not apply to Indonesia. Due to being located in an open
area, with a sea lane providing access for international sailing, and
being an intersection of international interaction, border areas
become one of the threat potential sources for the security of
Indonesia.
At sea, Indonesian territorial borders consist of territorial sea
border, EEZ border, continental land border, and additional
zone border. In such areas, the general condition happening is
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the presence of sea border violations, be it by the apparatuses
of the neighboring countries, their people, or other illegal
activities. In addition, a number of bordering lines between
Indonesia and the neighboring countries have not yet been
agreed upon, for instance, between Indonesia and Malaysia
regarding the EEZ borders in the Malacca Strait, the South
China Sea, and the Sulawesi Sea. While Indonesia intends
that the continental land and EEZ are within two diferent
regions (diferent border lines), Malaysia intends that the
continental land and EEZ borders are on one single line.42
In addition, up to the 22nd technical negotiation, the length
of the Provisional Territorial Sea Boundary (PTSB) line in the
Ambalat Block has not yet been agreed upon by the Indonesian
and Malaysian governments. 43Indonesia is still defending its
claim on the EEZ boundary in the southern Malacca Strait
and the claim over the territorial sea boundary in the eastern
Singapore Strait (the north part of Bintan Island), which are still
disharmonious with the claims made by Malaysia.44 Meanwhile,
with the Philippines, Indonesia has not yet agreed upon two
segments of the EEZ boundary lines in the Sulawesi Sea.45
he EEZ boundary line between Indonesia and India has not
yet been agreed on as well.46 his causes frequent arresting of
Indonesian ishermen by India and vice versa. With Papua
New Guinea, Indonesia actually has an issue of sea boundary
also, where both countries have not agreed on the stipulation
of the width of the Fishermen’s Traditional Rights area and of
the forms/natures of the activities.47 With East Timor, the issue
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of sea boundary stipulation becomes more complex because it
has to involve Australia in a multilateral treaty outline.48 his is
because, before establishing itself as an independent state, the
determination of boundary line applicable in that particular
area was made in a cooperation treaty between Indonesia and
Australia, the Timor Gap Treaty.49 Moreover, the issue of sea
boundary between Indonesia and East Timor in the north
part between the Ombai and Leti Straits is closely linked
to the stipulation of the Indonesian Archipelagic Sea Lanes
(ALKI).50
Furthermore, with Singapore, Indonesia has not yet agreed on
the sea boundary line in the east segment II of the Singapore
Strait area (the water around the South Ledge-Middle RockPedra Branca), especially for the possession of South Ledge. 51
his would be a delicate negotiation because it involves three
countries (Indonesia, Malaysia, and Singapore) in regards to
the decision of the International Court of Justice (ICJ) over the
possession of Karang Pedra Branca by Singapore and Middle
Rock by Malaysia.52 he EEZ boundary between Indonesia and
hailand in the north water of the Malacca Strait has not yet been
stipulated/negotiated as well. his will cause problems of sovereign
right and law enforcement in the EEZ boundary, especially the
boundary for ishermen.53 With Palau, a small archipelagic state
in the north of Papua, Indonesia also has a border issue, in which
the extension of ishery zone up to 200 nautical miles in pursuant
to the EEZ regime by Palau will overlap the Indonesian EEZ
claim.54 he fact that there has been no maritime boundary, in
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this case the EEZ boundary, will hamper marine natural resources
management and law enforcement in that particular area. By so,
Indonesia intends to accelerate the resolution of the stipulation
of maritime boundary through negotiation.
As for land border issues, Indonesia also has a number of problems
with several countries. With East Timor Indonesia has not yet
agreed on the boundary line in Oecussi area, which is an ex-clave
area included in the territory of East Nusa Tenggara province.55
With Malaysia, the negotiation related to the possession of
Tanjung Datu and Camar Wulan areas in Kalimantan Island is
not yet resolved.56 With Papua New Guinea, Indonesia also has
an issue where the government of Papua New Guinea for several
times expressed a protest regarding illegal imigrants’ coming from
Indonesia to the territory of Papua New Guinea, which emerges
repatriation issue for the country.
As for the airspace, most of the border issues there are not a
problem faced by Indonesia only. he lack of special provisions
regarding delimitation of horizontal and vertical boundaries of
the national airspace until now can also be a threat potential
for the security of Indonesia. As for the status-quo, the
national airspace is horizontally delimited in accordance to
the provisions of land and sea boundaries, where the areas
becoming the national airspace are the airspaces above the land
and sea territories. Meanwhile, vertically, the national airspace
is delimited, pursuant to the national airspace provision, from
0-±110 km above sea level, and the rest of it is outer space, as a
region for international interest.
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his lack of special provision regarding the regulation of air
boundary often results in the fact that the airspace is determined
by the ability of a certain country in beneiting from it. For
example, based on the resolution of Regional Air Navigation
(RAN) meeting in 1946, Indonesia is obliged to delegate its
airspace control in Riau Island (including Batam, Tanjung
Pinang, and Natuna) to Singapore.57 his is because at that time
Indonesia was considered unable to control its own airspace.
his authority owned by Singapore is called Flight Information
Region (FIR). Based on the mandate from the RAN meeting
in 1946, all aircrafts, including Indonesian military aircrafts,
which intend to land, take of, or ly-by the sky above Batam,
Tanjung Pinang, and Natuna are obliged to inform their activity
to Singapore and have to acquire a permission from Singapore.58
In addition, Singaporean government, on behalf of the government
of Indonesia, is also given a right to collect fee or payment from
all airlines lying by the FIR, including fees from Malaysian
airline crossing from cities of Malaysian Peninsula to East
Malaysia in Kalimantan and vice versa.59 Based on the agreement
made by both parties, some of these fees will indeed be payable
to the government of Indonesia; however, the actual amount of
the aviation fees collected by Singapore is of course diicult to
acknowledge. hrough FIR, the total width of territorial control
Singapore has over the airspace of Indonesia reaches the number
of 100 nautical mile (±200 km).60
he control of Riau Islands airspace by the Singaporean authority
obviously becomes a source of disadvantage and at the same time
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of threat potentials for the security of Indonesia. In addition to
the aspect of economy, where Singapore has a right to collect
aviation fees in that area, Singapore’s control of the airspace of
Riau Island can also incur threats in terms of defense aspect.
Singaporean military force is known to frequently conduct
military trainings in Indonesian airspace covered by FIR.61 In
2003, the government of Indonesia has terminated unilaterally
the Defense Cooperation Agreement which allows Singaporean
military force to conduct military trainings in Indonesian airspace
(Military Training Area I which covers the southwest part of
Singapore up to the areas of Batam and Tanjung Pinang, and
Military Training Area II which covers the east side of Singapore
up to Natuna Islands). Yet in fact, Indonesian Radar Unit in that
areas, namely the 213 Radar Unit of Tanjung Pinang and the 212
Radar Unit of Natuna, often detect foreign aircraft movements,
especially Singaporean military aircrafts committing black lights
in MTA I and MTA II.62
he discretion of Singaporean military aircrafts to ly far into the
airspace of Indonesia deinitely becomes a source of threats for
the security of Indonesia. On the other side, the implementation
of operations and law enforcement in the areas around Tanjung
Pinang and Natuna both by the National Air Defense Command
(Kohanudnas) via the Sector I Command (Kosek I) and also by
the Indonesian Navy conducting Maritime Operation frequently
faces hindrances because the airspace control of that particular
area is on the Air Traic Control of Singapore.
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If concluded in general, the threats presented by the presence of
border issues between Indonesia and its neighboring countries
are, among others, irstly, the potential for conlicts in border areas.
Each country surely has an interest to secure its own border areas,
because this is related to the problems of a country’s sovereignty
and existence. his is implemented usually by placing military
forces in border areas, be it land, sea, or air boundaries. With
the overlapping claims on borders, frictions between Indonesian
military forces and its neighboring countries’ in border areas
become highly probable. his issue, if not anticipated, can
become a source of bigger conlict between Indonesia and the
neighboring countries.
Second, the loss of territory due to poor management, both
physically and administratively. he experience Indonesia has
had from the case of Sipadan and Ligitan Islands should have
taught the government of Indonesia that the management of
the outermost islands through the presence of the state both
physically and administratively becomes a necessity if it wants to
secure border areas. In addition, several other things need to be
done: institutional strengthening at the national level to handle
border issues, strengthening the capacities of the government and
apparatuses of the border areas, building trans-border posts and
strengthening land, sea, and air patrols, developing air patrol ability,
socializing to the people of the border areas the importance of the
state border and the respect towards state border, and improving
the level of understanding about international law provisions, be
it of the central and regional government apparatuses and of the
citizens themselves.
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hird, the loss of natural wealth and economic resources. It is
estimated that Indonesia experiences a loss up to $2-4 billions/
year in the forestry sector, and $3 billions/year in the ishery
sector. It is estimated that about 3,000 ships operate without
permission in Indonesian water). With this, Indonesia loses $22.5 billions/year due to sand smuggling and $5 billions/year due
to crude oil smuggling.63 Fourth, illegal trans-border trading.
Fifth, the emergence of transnational threats such as terrorism
and human traicking. Sixth, the emergence of ideological and
political threats (which tarnishes the feeling of ‘Indonesia-ness’).
Seventhly, the weakening of state legitimation.
In addition to border issues, other issues at the regional level
which have the potential to threaten the security of Indonesia
are the change of the direction of regional power policies and the
strategic interaction happening between those countries. he two
countries to be paid attention to here are India and Australia.
Motivated by the need and the change of strategic environment,
India puts more attention to the development in the Asia Paciic.
Since 1991, India has been applying the Look East Policy (LEP).
hrough this policy, India attempts to integrate its economy with
the East Asian region. his is done by bilaterally working on, the
formation of Free Trade Area (FTA) with East Asian countries.
he expectation is that these FTA bilateral agreements will be
able to cover all countries in the East Asian region, and thus
fully integrating India into the economic community of East
Asia. In addition to the bilateral initiatives, politically India is
also actively involved in multilateral forums such as East Asia
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Summit, ADMM Plus, and ARF.
India’s policy to be actively involved in East Asia incurs a
problem with China. Until now, the factor of rivalry between
India and China, though lessening, is still one of the important
factors determining the dynamism of strategic environment in
East Asia. Previously, India excluded China from the economic
cooperation initiatives it made. he Bay of Bengal Multi-sectoral
Technicaland Economic Cooperation and Mekong-Gangga
Cooperation, regional cooperation initiatives made by India in
1990s, for instance, were designed to balance the expansion of the
Chinese inluence in the region.64
he Indian-Chinese rivalry is worsened by the fact that both
countries are still involved in a border dispute. In the future,
the rivalry factor between India and China will still become an
important factor which shapes the strategic environment in the
region, and, if not carefully monitored will cause a detrimental
impact for Indonesia.
he same thing also applies to Australia, which is highly aware
of the importance of Asia in the formulation of the direction of
its foreign policy. Australia will become one of the increasingly
important actors in the political constellation of the region in
the coming years. his is by all means caused by the Australian
government’s awareness to engage in the political regional politics
in Asia. In 2012, the Australian government released the Australia
in the Asian Century: White Paper document.65 In that document,
the government of Australia shows its attention towards the so-
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called ‘rise of Asia’.66 Based on that, the Australian government
determines its vision that in 2025 the country will become more
prosperous, will have sustainability, and will become an integral
part of the Asian region. To make that idea into reality, one of the
ways Australia takes is what it calls “building sustainable security
in the region”.67
he Australian government perceives that there are three
challenges against the security in the region, namely: (1) the
impact of the economic growth of Asia which triggers the increase
of demand over resources and the environmental consequences it
may incur, (2) the economic growth and regional power interests,
especially of China and India, and (3) the activities of non-state
actors. Especially in regards to China, Australia perceives that
the relationship between China and the US will become one
of the important considerations in the constellation of security
of the region.68In such context, Australia sees that its roles in
contributing to the security of the region will be conducted
through strengthening its alliance with the US.
“We consider a strong and consistent presence by the United
States in the region will continue to be as important in
providing future conidence in Asia’s rapidly changing strategic
environment as it has in the past. We will support this through
our alliance with the United States (Australia, 2012).” 69
Australia is aware of the role of Indonesia as one of the emerging
powers as well as the largest country in ASEAN. herefore,
various forms of cooperation such as collective trainings, patrols,
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et cetera are prepared by the Australian government to approach
Indonesia.
“As regional countries modernise their defence forces, these
programs are opening up opportunities for us to pursue deeper
strategic and security partnerships. We will direct increasing
efort in the period ahead to the development of deeper
defence cooperation, joint exercises and other forms of defence
and security engagement with our neighbours, particularly
Indonesia, other Southeast Asian countries, Japan, South Korea,
India and China(Australia, 2012).” 70
Australia’s aspiration to get close to Asia can open a number of
opportunities for Indonesia. Indonesia can beneit from a number
of security cooperations ofered by the Australian government.
However, the way Australia poses its attitude and perception
towards the relationship between the US and China still has a
potential to incur threats for Indonesia. With its position as the
US ally, Australia’s active role in the relationship between the
two major players can in fact add heat to the complexity of the
regional security constellation. Moreover, Australia will focus
more on developing military cooperations with the US in the
Indo-Paciic area frame, which is not far from the strategic points
in Indonesia.
he expansion of the security projection of China, part of which
is aimed at the South East Asian region, can also trigger Australia
to keep accelerating the strengthening of its defense capability
and strengthening its relation with the US even more. Under
such condition, Indonesia will ind itself in a disadvantageous
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situation between the projection expansion of the Chinese power
and the Australian response, which is supported by the US. Such
condition, therefore, can be avoided by, among others, accelerating
the development of the defense capability of Indonesia itself,
so that Indonesia can have a higher bargaining position in the
constellation of the security of the region.
he development of the constellation of this region shows
that economic relationships do not necessarily diminish the
basic characteristics of the state to survive and compete, which
brings about implications on the importance of military power
establishment. Many countries are still holding on to this paradigm
and the worst case scenario in the international relationships.
3. Transnational Crime
Ralf Emmers explains that transnational crime can be perceived
both from the perspective of crime and the perspective of security
(Emmers, 2003).71 As an act of crime, transnational crime must
be discriminated from international crime which can be handled
by international laws, and be distinguished from domestic crime
which only needs the hands of domestic laws.72 A crime can
only be categorized as transnational crime if it goes beyond state
boundaries and jurisdictions. In other words, in the discourse of
crime, such act relates to legal aspects. here are 18 categories
of transnational crime, included in which are money laundering,
terrorism activism, piracy at sea, human traicking, and the
traicking of narcotics and forbidden drugs. On the other hand,
if studied within the discourse of security, transnational is handled
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through securitization, where the referent object being threatened
is the state’s sovereignty, in terms of its political, economic, and
social aspects.73
In ASEAN, transnational crime can be viewed as a security issue
(Emmers, 2003) which allows the use of diverse approaches and
security cooperations in terms of its handling.74 he ASEAN
eforts to eradicate translational crime as a security issue can be
seen in the making of various declarations and joint communiques.
One of the declarations regulating that matter is the ASEAN
Declaration of Principles to Combat the Abuses of Narcotics,
which was adopted in Manila in 26 June 1976.75 However, the
characteristics of transnational crime and the eforts to overcome
it will bring about implications towards sovereignty (the noninterference principle) which for so long is hold tightly by
ASEAN. hus, the implementation of those various declarations
and documents is very weak due to the interest of national
security of each countries.
For instance, Laos, hailand, and Myanmar are the centers of
narcotics production in ASEAN, the three are known as the
‘golden triangle’.76 hese three countries produce approximately
60 percents of the total production of opium in the world.77 From
them, the products are then distributed through certain port cities
in Indo-China, making their way to Singapore and Malaysia. In
addition to becoming one of the distribution chains, Singapore is
also a place for laundering money raised from opium productions
of the above countries. From Malaysia and Singapore, these
forbidden items enter Brunei, the Philippines, Indonesia, and
then to Australia and New Zealand.
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he problem becomes even more complicated when, either
in the producer countries or destination countries, there is no
adequate governance to overcome this threat of narcotics trading.
In Myanmar for instance, some of the governmental apparatuses
have been co-opted by the interest of narcotics businessmen. he
same happens in the destination countries like Indonesia: several
cases have been found that the governmental apparatuses are
involved in narcotics trading. he creation of good governance,
thus, becomes one of the prerequisites to overcome the threat of
transnational crime, especially the one which is committed in the
form of narcotics trading.
In its development, there is a close relationship between
transnational and terrorism. he huge potentials of terrorism
in South East Asia and the increasing number of narcotics
trading become the reason to be alerted in terms of the threat
potentials incurring from the relationship of the two. he threat
incurring from the relationship between transnational crime and
terrorism can be overcome by establishing good governance and
implementing institutional reform at the regional level. If such
eforts fail, the countries outside of ASEAN will tend to want
to interfere with the handling of that particular transnational
crime. For instance, Australia in several cases unilaterally and
multilaterally conducted preventing actions to cut of the
narcotics distribution lines to its territory.
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4. Terrorism
In the last three decades, terrorist groups have been demonstrating
their ability as non-state entities threatening the security of
Indonesia. Since 1980s, terrorist groups have been utilizing
diferent methods and targets, but the ones which still have
symbolic meaning or value. his is viewed in several cases of
terrorism as follow:
he act of terrorism happened in several locations in Indonesia
starting from 1985 until 2005 with diferent targets.
In 2009, attacks were launched simultaneously towards J.W.
Marriott and Ritz-Carlton Hotels.78
In 2011, attacks were aimed at the Christ Cathedral Church
of Serpong, and a church in Solo, and the Resort-City Police
Headquarter’s Mosque in Cirebon.79
he examples above show the decreasing trend of impacts
of terrorist attacks. his results in a better projection of the
security of Indonesia against terrorist threat in the 2014-2019
period. his is due to the more efective intelligent activities, law
enforcement, counter-terrorism ability, and the active role of the
society. However, due to its latent characteristics, it needs to be
emphasized that the potential of the occurrence of terrorism will
always be present, with more diverse modus operandi, either in
terms of methods, forms, or attack targets.
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5. Cyber
Cyber threats become a new threat issue in the security of the
countries in the world, including Indonesia. In the context of
international relationship which is understood as an international
interaction, cyber threats occur from threatening state-authorized
cyber activities (cracking and hacking). he US have for several
times accused the government of China to be the actor behind a
number of cyber attacks aimed at the governmental institutions
of that country. One of the examples is when the Chinese military
was accused to be the mastermind of a number of attacks to the
US government’s and defense contractors’ computer systems.80
In the annual report of the US Department of Defense to the
Congress regarding the capability of the Chinese military, China
was even mentioned as having been the strongest country with
ofensive cyber-technologies of the time.81 China’s electronic war
is developed to be able to “blind” the American satellites and to
push back the presence of the US military not less than 2,000
miles to the Paciic.82 With such ability, there is a threat potential
of cyber attacks authorized by the Chinese government towards
the countries in the region, including Indonesia (Sanger, 2013).83
However, diferent from the US, Indonesia is still safe from the
potential of cyber threat. At least, this is what the prediction
says for the 2014-2019 period. he cause for this is that cyber
attacks are generally aimed at the databases or centers of strategic
information of a country. Meanwhile, in Indonesia, information
held by the state agencies have not all been in the online world
yet. here are still many of the state’s crucial agencies which
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entrust their information to a physical storage. In addition, if
there is information stored online, the information system of one
agency has not yet been integrated with that of the other. hus,
if an attack is launched towards one agency, the information
possessed by other agencies will not be threatened as well. his
is signiicantly diferent from the US, which as integrated all
information systems of its agencies. A cyber attack committed
at one point will enable the attacker to steal other information
too. hat is why the US, compared to Indonesia, is more prone to
cyber attacks.
6. Ideology
Basically, every country in the world will be threatened by
ideologies which contradict the fundamental values of the
country. Another condition for such ideologies to be considered
as a threat is that they are manifested into radical movements
which do not acknowledge diferences in terms of socio-political
interaction in a plural society. If both conditions have been
fulilled – being opposed to the country’s ideology and being
manifested into radical movements – ideologies will become a
threat to the security of the state and of the people. In other
words, as long as such ideologies have not yet been manifested
into a movement, or when they are still in form of fantasies,
then they cannot be declared as a threat that must be faced with
instruments of violence.
he development happening in the last several years has
indicated the intensity of radicalization movements of some
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335
of the elements of the society, both using religious and nonreligious symbols. Radical movements can be manifested in
terms of acts of destroying places considered as the symbol of
the country and groups considered as being opposed to their
ideologies. Such actions will result in several impacts. he irst
one, and the most easily noticed, is the damage to public facilities
or the state’s infrastructures. he party which seems to be facing
losses irstly is the state, because the facilities it provides become
damaged. However, the real loss is burdened on the people. his
is because the state’s infrastructures are built using the taxpayers’
money. Secondly, the presence of group of people expressing
their ideologies radically will bring about unrest situations to
the people and will claim victims. In addition, radical ideological
movements will also carry out ‘recruitments’ of the public, which
causes the damage of the social capital of the society.
In Indonesia, the ideologies developing and opposing the
ideology of the country and the people’s stability in general roots
at the deviation against Islam. One of the groups known to spread
misleading Islamic ideology is the Islamic State of Indonesia
(NII) and radical and terrorist movements or groups which act
on behalf of a certain religion.
he NII began as a group with the name Darul Islam (DI) as
a political movement proclaimed by Sekarmadji Maridjan
Kartosoewirjo in Tasikmalaya, West Java, in 7 August 1949.
hat movement was based on an objective to make Indonesia
as a theocratic state with Islam as its foundation. his is clearly
against the Pancasila (the national ideology of Indonesia). Darul
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Islam attempted to accomplish its objective by criminal actions
such as robbing, stealing, defrauding, blackmailing, plundering,
and other law-breaking activities. Such actions were obviously
committed to fund the eforts of spreading its ideology. In
addition to breaking the law, NII allegedly also brainwashed
university students. here have been several cases of students
missing, which are then suspected as the act of NII.
7. Separatism
a. Independent Aceh Movement (GAM)
GAM’s long history started in 1976, when the Independent
Aceh was declared for the irst time.84his aspiration was
aimed to challenge the government of Indonesia and to obtain
its independence as the state of Nanggroe Aceh Darussalam.
he aspiration was to put into reality through armed repressive
resistance which then resulted in the government’s declaring
the province as a Military Operation Area (DOM) in 19801990s. hough military operation had been put into efect,
GAM was not entirely eliminated. GAM kept on operating
and involving into contacts with TNI.
In 2000, GAM conducted an attack for about 3 hours by
launching three rockets, claiming the lives of six marines
in Banda Aceh. his incident was exactly before President
Abdurrahman Wahid visited that place. A series of attacks
were also done by GAM in 22-23 May 2001. he attacks
were launched in two diferent places, one was aimed at the
military patrol held by TNI/POLRI in Lampeneurut Ujong
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337
Village, Darul Imarah District, and the other was at security
oicers in Lhokseumawe.
Eforts on crushing GAM forces were also committed. In
May 2003, President Megawati gave a permit to implement
another military operation in Aceh by deploying 30,000
soldiers and 12,000 police oicers. he result of this military
operation is still considered positive since thousands of GAM
members were killed, captured, and surrendered. TNI seemed
also to be active in this endeavors, as seen in what happened
in August 2004.85hat time, TNI launched air attack towards
GAM, which succeeded in disintegrating GAM forces.
hough it can be seen that attacks had ever happened in
2000s, the condition faced by Indonesia in regards with GAM
is diferent from that with OPM. Both GAM and OPM are
movements based on the aspiration to be independent from
Indonesia. However, various factors have made GAM to not
become such a huge threat as OPM. Firstly, the aspiration
for independence of GAM is based on the particularity of
he Aceh area. hat province uses the sharia law, which is
not applied co other areas. his condition makes Aceh have
a characteristic that cannot be equated to all Indonesia.
Nonetheless, this particularity can still be bridged through
special autonomy. If compared to Papua, which is also granted
a special autonomy, GAM does not refer to the promise for
independence given by the Dutch or other parties, as is the
case with OPM. heir reference for independence from
Indonesia is the uniqueness in using the sharia law. his
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diference – OPM with its intention to gain independence
due to local particularity and the promise for independence
given by the Dutch and GAM with its intention due only
to particularity – makes its threat potential to become not as
signiicant as that of OPM.
he solution that can be done by the Indonesian government
to reduce the threat of GAM is by respecting such
particularity. his is carried out by keeping the relation of
the central government with Aceh via a special autonomy.
hrough special autonomy, the particularity in Aceh can
be acknowledged and respected. In other words, there is an
answer that can be delivered to Aceh, an answer that is not in
terms of independence yet also does not force it to give up the
sharia law particularism. his is related to the second factor,
namely the intensity of armed contact.
Armed contact intensity between GAM and the Indonesian
security apparatuses was not high. his is seen in the trend
happening in recent years. If GAM wanted to show its
existence, now they tend to express it through raising the
GAM lag. his does not signiicantly threaten the security of
Indonesia, since it is just a commemoration of the particularity
of Aceh. In other words, what is shown intensively is
sentiments over local particularity, and not by armed contact.
b. Independent Papua Organization (OPM)
he main threat of OPM is its demand on independence.
his organization can threat the state’s security based on
Defense BuILDING uP A POWERFuL INDONESIA
339
two layers of analysis. he internal
dynamics of OPM is formed by several
conditions. Firstly, there is a spirit to
reject development and modern life.
his spirit justiies why OPM does
not need the government of Indonesia
and the programs that all this time are
attempted to be applied in Papua, leading
to the demand on independence. his
condition can threaten the security of Indonesia. It is because
that spirit directly collides with the approaches implemented
to build the sense of collectivity and the unity of Indonesia.
During this time, the programs mainly focused on in Papua
have been aimed to realize these two things. One of the
examples of economic and modern life development tried to
be carried out is the Kampong Improvement Strategic Plan
(Respek).86 If perceived profoundly, this program emphasizes
on closeness with locales. his can be seen from the three
areas of development, namely approach on the locales,
empowerment, and autonomy. However, remembering the
spirit of rejecting economic development and modern life,
such programs as Respek are of no interest to the OPM.
he approach taken
should focus on
intelligence operations,
fundraising, and
development, instead of
combat operations we
customarily carry out.
OPM refuses aid given by the central government with
an excuse that such aids are not what the Papuans want.
If analyzed further, as long as the programs carried out by
the central government only put emphasis on development
and modernity, that will still be contradictory to the spirit
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possessed by OPM. his condition can incur a threat for
the national integrity of Indonesia because it strengthen the
justiication of OPM’s demand for independence, i.e. that the
central government does not provide answers for its needs.
Moreover, the foundation for hopes to be able to build the
sense of collectivity as one Indonesia only relies on such
development and modernity programs.
Secondly, it is indicated that OPM has its own system to
earn incomes by committing illegal drugs traicking. In 31
January 2012, one OPM member was captured bringing one
kilogram of marijuana in the border between Indonesia and
Papua New Guinea. he product was allegedly to be sold in
Jayapura.87
he threat potentials from OPM are not only limited to the
entity itself. Furthermore, OPM has support basis from many
other countries. In several countries, there are movements
supporting the independence of West Papua from Indonesia.
his can be seen in Australia, New Zealand, and the most
recent, in England. In 28 February 2012, a regional forum
named the International Parliamentarians for Papua was held
in Australia.88 In that forum, several leaders of the state from
Australia, Papua New Guinea, and New Zealand were present.
Compared to Australia, New Zealand is more apparent in
terms of expressing its support for the independence of West
Papua. In 2011, the celebration of the 50th independence day
of Papua was marked by the raising of the “Bintang Kejora”
lag in Auckland and Wellington. 89
Defense BuILDING uP A POWERFuL INDONESIA
341
he most recent dynamics is the opening of OPM
representative oice in Oxford, England.90 his act is severely
criticized by Indonesia. his is understandable since it
has a potential to threaten the security of Indonesia. If relinked to the elements constituting a country, the opening
of OPM’s representative oice in Oxford can be seen as a
form of acknowledgment by England to the movement.
his condition indicates that there is a sovereign country
which acknowledges an entity that is inside the territory of
Indonesia. In other words, the sovereignty of Indonesia itself
has been disturbed. In the future, such event can disturb the
security of Indonesia because it can incur pressures from
outside the country.
he analysis above becomes the reason why in the prediction
for 2014-2019 Indonesia is relatively un safe from the threat
potentials of OPM compared to the ones posed by other
non-state actors. his still applies though the potentials are
still manageable by Indonesia. So long as the intention to
be independent is continuously expressed, the turmoils in
Papua will still be present. At the same time, the support
from the mass bases abroad will keep on pressing Indonesia.
hus, the approach that should better be done is emphasized
on intelligence operations, raising, and developing, and not
combat operations like the one conducted during this time.
his covers, for instance, gathering information related to the
socio-economic needs of the people and the strengthening
of institutional capacity. Policies as such aim to overcome the
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root of such problems in terms of social, economic, and cultural
problems which for so long enable the rising of separatist
movements.
8. Situational hreat
he potential of this threat is far diferent to the ones resulting
from state and non-state entities. Natural disasters are a threat that
cannot be avoided by Indonesia. his is in respect to Indonesia’s
geographical position, which is located between three tectonic
plates, namely the Indo-Australia and Eurasia plates which
collide at the outer seas of Sumatera, Java, and Nusa Tenggara,
and the Paciic plate which is in the north of Irian and North
Maluku.91 he presence of Indonesia within the heart of those
three plates make this country prone to earthquakes. If a major
earthquake under a shallow seabed occurs, it is highly probable
that tsunami will follow.92 herefore, Indonesia is also vulnerable
to tsunami.
he position of the Indonesian archipelago in such location makes
this country vulnerable to natural disasters. Due to its unavoidable
nature, the measure that can be prepared to face such inherent threat
lies on its management. However, related to disaster management,
the shape of the country itself is already a threat. Indonesia is an
archipelagic country which will face challenges in mobilizing aid
to the areas alicted by disasters.
Natural disasters become one of the national security threats
because of several reasons. Firstly, natural disasters along with
Defense BuILDING uP A POWERFuL INDONESIA
343
environmental damages reduce the state’s capacity in providing
welfare for the society. he efort of managing and recovering the
condition to become normal will always consume a huge amount
of money. Secondly, natural disasters can devastate the living
environment, national infrastructure, and the society – which cause
a decrease in terms of the ability in fulilling their needs. hirdly,
natural disasters claim human lives. In addition to the factor of
nature, disasters can also be caused by humans, especially mistakes
on the life pattern, development pattern, and policies in fulilling
the state’s and humans’ interests.
Natural disasters have to be put into consideration in directing
the development of defense, economic, social, and political
powers. Japan can be an example of how a country learns from
the nature and include such learnings as an integral part of its
policies. To avoid or at least minimize the number of victims,
measures to be taken are designing policies which are concerned
with the living environment, developing special abilities to face
disasters, starting from the readiness of the community, early
warning system development, up to developing an emergency
system when disasters happen.
Indonesian Defense Forces in
Confronting Threats
After mapping the threat potentials encountered by Indonesia, we
can see how signiicant the resilience level of the defense system of
Indonesia is in facing the coming threats. In general, Indonesia is
able to tackle situational threats, such as natural disasters, very well.
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Indonesia is able to face natural disasters up to 300 times. Meanwhile,
the ability to handle attacks coming from other actors, either from
state or non-state entities, varies, starting from being almost unable
to face the coming attacks up to being able to tackle them well.
If we put aside the potential of situational threats to be able to make
clear the resilience level of Indonesia in confronting other threat
actors, in details the resilience level can be seen as presented by the
graphics below.
Graphics 5. Indonesian Defense Forces in Confronting hreats
8
7
United States
Cyber Threats
6
Australia
China
5
The Philippines
Free Aceh Movement
4
India
3
Malaysia
2
Free Papua Movement
1
Terrorists
0
Transnational Crime Organization
Singapore
CumulativeThreat
2014
2015
2016
2017
2018
2019
Source: hese data are processed by the Compiling Team
Indonesia is also almost unable to tackle threats coming from the
US. At average, Indonesia’s power in 2014-2019 can only tackle one
tenth of the US’s. his also means that, if the US deploys its forces
approaching 10 percent around the Indonesian archipelago, Indonesia
needs to be cautious about it. he same thing happens if Indonesia
Defense BuILDING uP A POWERFuL INDONESIA
345
is faced with the threats coming from China and India. Indonesian
forces in 2014-2019 can only tackle one ifth of the Chinese forces at
the same years, which also means that Indonesia needs to be cautious
if China deploys about 20 percent of its forces around the Indonesian
archipelago. As for the threats coming from India in 2014-2019, at
average Indonesia can only tackle 40 percent of the Indian forces.
his also means that Indonesia needs to be cautious if India deploys
about 40 percent of its forces around Indonesia.
Graphics 6. Indonesia’s Defense Ability in Confronting
hreats from the US, China, and India
0.6
0.5
0.4
United States
0.3
China
India
0.2
0.1
0
2014
2015
2016
2017
2018
2019
Source: hese data are processed by the Compiling Team
If confronted by the Australian forces in 2014-2019, on average
Indonesia can only tackle 70 percent of them. Meanwhile, as for
Malaysia in the same year, on average Indonesia’s force equate that of
Malaysia. Malaysian force is above Indonesia in 2014 until 2018. It is
in 2019 that Indonesia will be able to surpass Malaysia. However, the
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TOWARD 2014-2019
strength diference is not so signiicant. As for Singapore, on average
Indonesia is able to tackle threats from Singapore though the force
disparity is not very signiicant. Indonesia will be able to surpass
Singaporean forces in 2016 and will tend to get stronger until 2019.
Meanwhile, as for the Philippines, Indonesia on average is able to
tackle the Philippines’ forces; however, it needs to be paid attention
to that the increase of the Philippines’ forces will be getting better
after 2016.
Graphics 7. Indonesia’s Defense Ability in Confronting hreats
from Australia, the Philippines, Malaysia, and Singapore
2.5
2
1.5
Australia
1
Malaysia
Philippines
Singapore
0.5
0
2014
2015
2016
2017
2018
2019
Source: hese data are processed by the Compiling Team
In general, Indonesia is also able to tackle all threats coming from
non-state actors. Situational threats such as natural disasters are
a type of threat which Indonesia can face the most readily, while
OPM is the threat actor which has a force that almost equates
Defense BuILDING uP A POWERFuL INDONESIA
347
Indonesia’s. hough at average Indonesia can tackle the threat, the
not too signiicant force diference makes OPM a threat actor that
Indonesia has to be extremely aware of. If the remnants of GAM
reactivate their rebellious movement cells, GAM will become a nonstate threat that Indonesia needs to be aware of after OPM. hough
Indonesia is able to tackle threats from GAM up to, at average, twice
larger than the existing force, the threat potential needs to be paid
attention to. Likewise, the threat potentials from transnational crime
organizations, cyber world, and terrorists must also be monitored
cautiously. hough in general in 2014-2019 Indonesia is able to tackle
such threats, readiness becomes crucial since the threat escalation
can change in a very short time.
Graphics 8. Indonesia’s Defense Ability in Confronting from
hreats Non-State Actors
8
7
Cyber Threat
6
Free Aceh Movement
5
4
Transnational Crime Organization
3
Free Papua Movement
2
Terrorists
1
0
2014
2015
2016
2017
2018
2019
Source: hese data are processed by the Compiling Team
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TOWARD 2014-2019
Overview and Recommendation
To increase the ability of the defense of Indonesia, governmental
institutions have to have a uniform perception on threats. In
addition, Indonesia also has to keep developing defense cooperation
with various countries, not limited to joint trainings, but also defense
technology transfer. Indonesia’s defense cooperations to be developed
in the future stay inside the frame of the country’s foreign politics
manner: free and active. hus, Indonesia will avoid forming defense
pacts with any countries.
In regards to budget, more funds should be allocated to build defense
forces with efective and transparent procurements. Meanwhile, the
espionage case the US has with several European Union countries
and Australia’s tapping Indonesia spark a signal that Indonesia has
to be ready and anticipative towards international challenges. In
other words, Indonesia has to be ready with worst case scenarios that
might happen.
Indonesian sovereignty in its territories which for so long have been
used by another country, such as the case of Flight Information
Region (FIR), also needs to be reinforced. his is related to eforts
in guaranteeing national interests in the future, which obliges the
country to determine a long-term vision: to become a regional force
in South East Asia. he development of the defense posture of
Indonesia has to be in line with this vision.
As a country which has diverse ethnic groups and cultures, seeds of
disintegration can grow at any time. hus, it is the obligation of the
government to realize justice and welfare to prevent the presence of
Defense BuILDING uP A POWERFuL INDONESIA
349
opportunity for certain groups to exploit their conditions. Moreover,
the government has to be cautious about the interests of foreign
countries and forces which put the integration of Indonesia as
their issue. In this context, the role of diplomacy becomes vital in
safeguarding and realizing the interests of Indonesia.*
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Chapter vii
International Relation
Struggling For
National Interest
International Relation STRuGGLING FOR NATIONAL INTEREST
351
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“he foreign politics of Indonesia has to be based on self-conidence
and a struggle with its own ability. However, it should not mean that
Indonesia does not follow the development of the international situation
and make use of it for the national interest.”
~ Mohammad Hatta - Proclaimer of Indonesia’s Independence ~
- he First Vice President of Indonesia ~
photo © Leo Francini
International Relation STRuGGLING FOR NATIONAL INTEREST
353
International Relation
STRUGGLING FOR
NATIONAL INTEREST
A
s a sovereign country, Indonesia is an independent and
autonomous actor adopting the free and active principle
of foreign politics. In such position, Indonesia has tried to
navigate global changes with a number of adjustments and strategic
anticipations. Indonesia can perform its very role because it has a
foreign politics posture that is adequately recognized in the South
East Asia, Asia-Paciic, and even at the global level. his posture
is determined by several things, such as its geo-strategic position,
its success in maintaining a good relationship with a number of
countries; its active role in initiating a number of activities, either
at regional or international level; its involvement in G-20; and its
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dynamic and relatively high economic
growth compared to the average
economic growths of other countries in
the world.
In the practice of
world diplomacy,
promoting national
interests of each
country in point of fact
stands out. To date,
such aspect currently
tends to be ignored by
Indonesian diplomacy
practice.
In addition, Indonesia is also respected
because of its active role in speaking up
for a number of commitments which
come into attention of other countries.
For examples, the commitments in
reducing the green house gas emission,
reducing protectionism in trading, and
applying democracy in a signiicantly plural society. Indonesia’s
achievements in terms of international relation and diplomacy needs
to be paid attention to by the of people in the homeland. Especially
the youth who are going to take over the leaderships in various ields
in Indonesia. hey also need to be responsible for maintaining and
developing the authority of Indonesia in the eyes of the international
world.
Indonesian National and Vital
Interest
Diplomacy and International Relation are not only to help other
nations which are facing problems or to create a better world system,
but also to strive for national interests. In the practice of the world
diplomacy, championing national interests of each country is in fact
of prominence. It is this aspect which tends to be ignored in the
practice of Indonesian diplomacy this whole time.
International Relation STRuGGLING FOR NATIONAL INTEREST
355
At least there are several national interest aspects which need to be
monitored in the contexts of diplomacy and international relation.
hose aspects are the interests in the ield of economy, of politics, of
social, and of defense, which can be elaborated as follow:
1. National interest in the ield of economy
he economic growth of Indonesia is indeed relatively good since
its growth score is still positive despite of the drastically slowing
down economic growth of the world. However, that achievement
will not last if not accompanied with a suicient planning. We
see that economic growth slow-down is also experienced by
Indonesia and this is not something to be triled with. In 2011,
Indonesia’s economic growth reached 6.5%, but that percentage
decreased to 6.23% in 2012 and it was assumed to have another
fall into 5.9% in 2013. If the domestic macro economy condition
is fragile, the level of economic growth of Indonesia will also be
corrected.
What we need to be aware of is that the economic growth of
a country is a necessary condition to achieve welfare, yet it is
not a suicient condition. he more the economy of a country is
integrated to the economy at the global level, then the perception
Indonesia has cannot be limited solely to economic growth.
Economic growth is a consequence of dynamic economic
activities. Indonesia needs to establish relations, perspectives,
and institutions within itself which are sensitive towards changes
happening in each era, and the change of status of Indonesian
nation, or such growth will be pseudo and momentary. Indonesia’s
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foreign politics instruments, either those working in the Ministry
of Foreign Afairs, the House of Representatives, the Presidential
Oice, the regional governments, or the technical ministerial
oices assigned by the President, need to support the eforts of
building such sensitivity.
he concrete example is as follows. In the modern world, there
are markets that support the dynamic real economic activities,
for instance the capital market. his is one of the essences of the
integration of the world’s countries’ economies into the global
market. here are foreign funds looking for a parking lot, with
a hope to gain proits in such parking lot. Indonesia has made
use of such market. It is just the way it should be since there is a
certain attraction for the investors to get into the markets of new
economy countries. However, Indonesia’s sensitivity towards the
work model of the players in such market is not good enough so
that its performance in the capital market is in fact not optimal
yet in supporting the economic works in real sectors.
Until the end of 2012, the capitalization of Indonesian market is at
the ninth place in Asia despite the fact that the age of our exchange
market is the fourth oldest in Asia after Hongkong, Mumbai, and
Tokyo.93 he growth of the capitalization of Indonesia’s capital
market deserves an appreciation since the growth of the Jakarta
Composite Index ( JCI) is at the third place in Asia after Japan
and China. his means that the investors’ trust towards Indonesia
is relatively good, yet the basis of that performance is small. he
number of companies recorded in Indonesia’s share exchange
is 459 companies (all of which are domestic ones), while in
International Relation STRuGGLING FOR NATIONAL INTEREST
357
he inancial market
is a voting machine
that is independent,
spontaneous, and
pragmatic, not to
mention cruel. Market
actors decide to engage
only if Indonesian
political leaders,
e.g. President, the
Minister of Finance,
and the Governor of
the Central Bank are
deemed credible.
India, for instance, there are 5,191
companies recorded in its capital
market. In Singapore, 776 companies
are recorded and in Malaysia there
are 920 of them. Diferent from the
capital markets in the neighboring
countries such as the Philippines,
exchange market capitalization
in Indonesia is only 35%, and 5055% of which are owned by foreign
companies.
he growth of activities in the capital
market demonstrates that there is a
good chance to gain fresh funds to
motorize the economy; yet, the risk is there too. he involvement
in the capital market needs an awareness that the funds being
parked by the investors are to seek for proit certainty, so that
capital market goers are very much sensitive in considering the
economic foundation of a country. According to the observers,
inancial market is an independent, spontaneous, pragmatic, as
well as devilish voting machine.94 he market players actor decide
to get involved only if the political leaders of Indonesia, such as the
President, Ministry of Finance, and the Central Bank Governor
are deemed credible. Whether the socio-political condition is less
conducive to conduct business is not of their worry.
However, if the macro economy foundation is considered as
being reliable, they will keep on investing. On the contrary, if the
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macro economy foundation is seen as being porous – moreover,
if the country chooses to acquire so much debts – the investors’
trust will decrease. It means that, in 2007 the capitalization of
the Indonesian capital market had contributed 60 percents of
the Gross Domestic Product (GDP),95 the worst risk for the
economic growth of Indonesia is when the investors compete to
leave Indonesia due to the loss of trust and panicking.
In addition, the exchange market has not yet become fresh funds
for the economy if the number of companies in the real sector
registered in the stock exchange is still limited. he fact that there
are a lot of foreign players entering the capital market of Indonesia
is a good medium to invite even more funders (both domestic
and foreign ones) to invest their capital in the real sector. his
is indeed harder to do since people tend to want to “play” in the
sector which is easy and swift in producing proits. In Indonesia,
the reluctance of the investors to make their way into the real
sector needs to be responded more sensitively as an urgency for
performance and facilitation improvements in the real sector.
On the other side, foreign investors have a tendency to lee if the
trade balance of a country is at a deicit. It means that, if Indonesia
solely relies on the raw material commodities export, especially
mining materials, as is being done today, Indonesia becomes
highly dependent solely on global demands. If the global demands
keep on decreasing, it will be diicult for Indonesia to improve
its export; meanwhile, Indonesia’s production is limited only
to the traditional markets, both within the country and in such
countries whose product demands are weakening. It means that
International Relation STRuGGLING FOR NATIONAL INTEREST
359
Indonesia’s sole
reliability on the export
of raw commodities
–particularly mining
products– as practiced
nowadays may force
Indonesia to become
highly dependent on
global demand.
capacity improvement of Indonesia
along with its integration to the global
market needs to be supported by the
government, among others by opening
opportunities
to
non-traditional
markets and by reviving the real sector
so that exports in the manufacture and
processing industries are maintained or
improved. Here, foreign policies and
strategies become very important.
A strong foundation of the economy of a country is determined
by three primary things. hey are the robustness of the domestic
production competitiveness, the socio-political management of
the economy which is sensitive to the changing times, and good
co-operations between the policy implementers and the policy
makers. he export and import activities may experience a
deicit if it is of temporary nature, not marked by the decrease of
productivity of the real sector, and supported by responsive iscal
and monetary policies. Indonesia will be more free in managing
ofers of free trade cooperation if such foundation is already
strong. With a strong foundation, the problems Indonesia
needs to be aware of becomes clearer so that the arrangement
of strategies becomes easier to do. he fulcrum of a strong
foundation is a thoughtful design of policies and activities.
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Figure 1: he Illustration of the Design of
Policies & Activities
Investors'
Trust
Global
Crises
ECONOMIC
ACTIVITIES
POVERTY
ALLEVIATION
ETC.
GOOD
COOPERATION
ECONOMY BETWEEN ACTORS
AND POLICY
POLITICS
MAKERS
SOCIALIZATION
MANAGEMENT
SENSITIVE TO TIME
CHANGE
Foreign
Cooperation
Offers
STRONG
PRODUCTION
COMPETITIVENESS
Source: Dinna Wisnu, 2013
It is these three determining factors of the economic foundation
of Indonesia that are still insuicient. A number of economy
observers believe that the foundation of the economy of Indonesia
is porous because, since 2000s, the real sector performance
has kept on being sluggish. he data also show that the public
investment of the government of Indonesia is far below Malaysia,
India, hailand, and even South Korea. his means that the
government’s role in driving the economy is weak. Moreover,
the government’s budget is drained due to being used for fuel
subsidy, and employee and capital expenditures.96
International Relation STRuGGLING FOR NATIONAL INTEREST
361
Graphics 1: he Comparison of Public Investments
in Several Countries
Public Investment1/
(Inpercent of GDP, currentprices)
10
9
8
7
5
4
3
2
1
0
India
Korea
Indonesia
Malaysia
Thailand
Source: Faisal Basri, as quoted from the IMF Country Report
No. 12/278, September 2012
Graphics 2: he Comparison of the Government’s
Expenditures (in Trillion)
350
300
250
200
150
100
50
0
2005
2006
2007
2008
2009
2010
2011
2012
Personnel expend
Goods expend
Capital expenditure
Loan interest
Energy subsidy
Social assistance
Source: Faisal Basri, as quoted from the IMF Country Report
No. 12/278, September 2012
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2013*
Meanwhile, the economy actors in Indonesia are still complaining
the high-cost economy, which is caused by the overlapping and
ineicient bureaucracy, stealth expenses, and patchy policies.
What the government earns from taxes is still very low compared
to the other countries which book such an economic growth as
Indonesia, which means that the economic growth of Indonesia
is driven more by the consumption.
he number of middle class people in Indonesia does increase,
but most of them are ‘lower end’ middle class members. he
measure of the middle class in Indonesia is the $2 per day
consumption level, while the level of consumption of the middle
class people in other countries is $10-100 a day.97 he society’s
purchasing ability is still very low in general, related to the fact
that 38% of wage recipients in Indonesia are those who work
without contracts and that the other 54% work in informal
sectors98, most of who are in micro and small businesses. his
means that the level of vulnerability of Indonesian workers can
be categorized as high. hus it is not surprising that the trading
balance of Indonesia could experience so much deicit in 2013
since the average Indonesian population are merely consumers
and the goods imported are indeed consumer’s good.
What cannot be ignored too is the magnitude of socio-economic
gap in Indonesia. No matter how high the number of economic
growth at the macro level is, the fact is Indonesia is still unable
to resolve the problem of structural poverty in its own land. We
cannot dodge this by saying that the per person poverty number
decreases because the stipulation of the poverty line is in fact
International Relation STRuGGLING FOR NATIONAL INTEREST
363
administrative and political in nature. Individual poverty number
does not relect the depth of poverty problem in Indonesia.
he data from Statistics Indonesia as per September 2012 shows
that from year to year there has been no improvement in regards
to the percentage of poor population in each province. hose
provinces known as being poor remain poor, especially those which
are in the eastern part of Indonesia. Likewise, the percentage of
poor population in highly populated provinces in Java is actually
relatively stable. he gini coeicient, namely the consumption
gap measure, increases from 31.7 in 1999 to 35 in 2009.99 hose
who live in villages are still characterized as living poor lives. he
poverty characteristics in urban and bufer areas also remain the
same. his is somewhat ironic since the government, at least in
President SBY’s administration, claims that they have poured an
immense amount of poverty management funds. We also know
that foreign aid funds, including those from debts, have been
channeled to poverty management programs.
his economic gap problem is also relected in the quality of
education in Indonesia, until now there is only six percent of
the Indonesian population who receive undergraduate university
education. Most of them are still busied by the problem of lack of
money to even inish basic and intermediate levels of education.
It is then reasonable that problems like cheap labors and low
income from taxes arise. hough we can see the ubiquitous
presence of department stores and luxurious shopping centers,
the rapid development of new housing clusters and skyscrapers,
and the intensive population of motorized vehicles in urban
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roads, all of those are pseudo since such phenomena rest on an
economy 92% of which is managed by workers and business
owners with micro and small scales economy and non-contractual
workers. he data from Shubham Chauduri (Panel Discussion on
Economy organized by Kompas, 21 June 2012) reveal that it is
only 2% of the workforce in Indonesia who are employers, 6%
work as permanent employee with clear contracts, 38% work as
wage-workers without contracts, and the other 54% run informal
businesses.
If all of the data above are combined, it is clear why the
economic growth in Indonesia is still a vicious circle. Imagine,
high-cost economy problems still exist, where unoicial fee
collection, employees ofering projects to and fro, or the weak
law enforcement in extractive sectors still happen. his is thus
understandable since more than 90% of the population live with
an uncertain socio-economic future. It is not surprising then
that Indonesia inds it diicult to formalize the economy sector
and revive real sector, and that the workers keep on protesting,
shouting their demand for a raise, while business owners keep on
rejecting that demand. It is no wonder then that the poverty level
is high and the life quality of the people is low. If these situations
persist, it is impossible for Indonesia to become a great country.
In the 2013 crisis, it can be seen that such economic proile makes
the average population act as consumers, forcing Indonesia to
import inished goods including capital goods from outside the
country. his erodes the country’s foreign exchange, whereas
the state’s income from tax is low and we want our debt to be
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low too. As the result, the investors’ and speculators’ trust to
Indonesia decreases as well. hus, it is our currency that becomes
the target. Whereas, when our monetary condition is disturbed,
what the government takes as its action is increasing the interest
rates, which then afects the society’s pocket since the level of
consumption falls down.
Indonesia needs to realize that our national interest is to end the
economic vulnerability which is now developing and deepening.
he trickle-down efect paradigm is obsolete, or at least it is proven
that the efect has not yet happen in Indonesia. It is impossible for
us to wait until the aforementioned 92% of Indonesian citizens
working without contracts and being in the informal sector can
get out of the economic uncertainty by themselves.
On the other side, Indonesia needs to realize that the global
economy is that mired by the practice of competitive advantage
is sharpening, where the government helps each other with
business actors to increase the scale of production of a certain
good/service, to seek for the cheapest production factors, and to
push down the distribution costs so that the good/service unit
produced can be competitive and attractive in the eyes of the
consumers. he Indonesian government needs to realize that,
though the domestic economic activities must be kept dynamic,
such a huge country as Indonesia must also be oriented to the
expansion of economic power to other countries, and even other
continents.
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herefore, it can be identiied
he Indonesian
that Indonesia’s national interests
government has
in the ield of economy are:
to realize, despite
Firstly, driving the domination
the commitment
of Indonesian products in the
of maintaining the
world’s market. Our oicials
dynamics of domestic
need to calculate realistically
economic activities,
each time they gain cooperation
Indonesia needs to
be oriented on the
ofers from other countries, and
expansion of economic
not to throw themselves into
power to other countries
a vicious competition among
and even continents.
fellow
ministries.
Second,
maintaining that Indonesian
products are always more
competitive compared to those from other countries. hirdly,
preventing acts of smuggling and illegal economic activities by
keeping its sovereignty in border areas, demanding for accurate
documentation from countries providing logistical services for
Indonesian products, and placing law-abiding stafs supported
by a tight monitoring system in border areas and the strategicpartner countries.
Fourth, protecting the interest of growth in the micro, small,
and medium business sectors to be “upgraded” and develop
themselves as a part of the global value chain. he information
provided for business actors must be more comprehensive
and detailed so that their intention to expand their businesses
to friendly countries increases. Fifth, building the trust of
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investors and the governments of other countries towards the
performance of the Indonesian government. his is ultimately
necessary since the government of Indonesia needs to develop
such iscal and monetary policies which are sensitive to the needs
of the current age. Comparative studies from the representative
oices of Indonesia outside the country and the intelligence
agency are sources of information which can enrich the corpus
of considerations in taking decisions regarding this matter.
Sixth, cultivating the courage of foreign parties to comply to the
principle of development which is based on the even distribution
of facilities and infrastructures to the remote areas of the country,
including for ishery and agriculture sectors. With the facilities
being developed, farmers and ishermen need to be directed to
producing products that are highly valued in the world’s market.
Seventh, speaking up to the world concerning the realistic
design of sustainable economic growth, not merely with
rhetorics but also by demonstrating the harmonization of land
use management policy: which one is for agriculture, which one
is for industrial forest, and which one is for conservation. he
representative oices of Indonesia need to employ technical
ministry oices and regional governmental oices to facilitate
foreign parties which deserve to be ofered cooperation in
the country, by avoiding non-formal channels which put
the government’s accountability at stake. Eighth, actively
monitoring the availability of energy supply with afordable
prices for industrial and household purposes up to the rim lands
of the country. Indonesian diplomacy must be aimed at mining
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companies, energy companies, and the trend of cooperation in
the ield of energy, both at regional and global levels.
2. National interest in the ield of politics
In the international relations front, political solutions need to be
developed in resolving the tension between countries. We do not
want unilateral ways of using military forces to be suggested by
other countries in resolving their problems with Indonesia. Once
Indonesia is put forth to the forum of the United Nations as
a country that “needs assistance” due to its domestic problems,
indirectly Indonesia will be known as a terrible country.
In general, there is an agreement among actors of international
relation100 that the current international condition gives a better
lexibility for Indonesia so that its targets of foreign politics
should be relatively easier to achieve. his convenience is formed
following the transition towards democracy experienced by
Indonesia since 1998 and by the fact that the civil society is now
more involved in putting forward the practice of democracy
and the protection of Human Rights. Indonesia is active in
organizing meetings among NGOs concerning the cooperation
of strengthening Human Rights protection. Likewise, Legal Aid
Institution, the National Commission for Human Rights, the
National Commission for Women and the National Commission
for Child Protection gain signiicant attention from the society as
places to express complaints and to seek for solutions. A number
of activities which put forward the characteristics of Indonesia
which respects democracy, values of diversity, Human Rights
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369
Neighboring countries
see Indonesia as a country
determined in practicing
democratic consolidation,
including in creating
a more conducive
atmosphere for free press,
free association, and free
speech, among others, by
providing opportunity for
peaceful demonstration
and protection of women
in public spaces.
promotion, security and peace
recovery, and economy recovery
have become a turning point
which contributes to the change
of diplomacy activity. In general,
these are felt more positive and
also supporting the response from
the international world towards the
activity of international relation
conducted by Indonesia.
With its political status as a
democratic state, Indonesia is indeed
perceived by friendly countries as
being adequately serious in doing
democratic consolidation, including creating a more conducive
atmosphere for the freedom of press, the freedom of association,
the freedom of speech by giving chance for peace demonstration
and protection for women in public spaces. At the ASEAN level,
for instance, Indonesia is appreciated for its role in giving birth to
the ASEAN Inter-governmental Commission on Human Rights
(AICHR), ASEAN Institute for Peace and Reconciliation, and
managing the Institute for Peace and Democracy in Bali. At the
Advisory Board for the President, there is an active sharing of
practice of democracy, which is appreciated by new democratic
countries such as Egypt and Myanmar.
However, the criticism that develops at domestic and international
levels is also sharp, so there seems to be an indication that the
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credibility and reputation of the government in democratic
consolidation, especially in the inclusiveness portion (including
all layers and groups of the society in democracy) is weak.
he case of rejecting the granting of the “World Statesman Award
2013” from the Appeal of Conscience Foundation in New York
in May 2013 is one of the examples. he public inside the country
still considers that their leader needs to pay his due, admitting
that an international award should be earned by actually having
the citizens to experience the reality for which that award is
given. Prof. Magnis Suseno, a philosopher and religious igure,
highlighted the weak protection to minority groups and the legal
uncertainty in terms of the freedom of religious faith as essential
items being absent in the leadership of President SBY, so that the
granting of such award is taken as not in a correct place, let alone
such award is given for the performance of the recipient in terms
of religious tolerance.101
Negative notes are also given by the UN Board of Human
Rights. hough Indonesia has been selected three times in a row
as a member of the UN Board of Human Rights, including for
the 2011-2014, in this very period Indonesia keeps on getting
bad grades. It is mentioned that, though Indonesia has the
commitment and instruments to promote and protect Human
Rights, the mechanism for its implementation is not adequate.102
he police is still accused as perpetrating Human Rights
violation for the conduct of torture or excessive violence. Peaceful
political activities, such as demonstrations, including those held
by Human Rights supporter, and news coverage by journalists are
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still experiencing criminalization, intimidation, physical assaults,
and there is still also a hindrance in implementing sexual and
reproductive rights for women.
Related to the issue of minority religious groups and the freedom
of religious faith, Indonesia is urged to remove all forms of
discrimination and violence experienced by minority religious
groups, to increase tolerance among religious communities, to
review and discard policies which are discriminative and limiting
the freedom of religious faith, to ensure that statutory policies
comply with the International Human Rights law, to accelerate
the Religious Harmony Bill, to provide trainings for campaigning
anti-discrimination for minority groups, and to take legal
measures for the spreading of hate, discrimination, harassment,
and violence experienced by the minority religious groups.
Such appraisal happens at the time Indonesia is seen as being
heroic and spry in struggling for the rights of the people in other
countries. he diplomacy done by the members of the House of
Representatives, for instance, becomes a very relevant example
for such heroism. hrough the IPU (Inter-Parliamentary Union),
the Indonesian House of Representatives delegation pleaded
for Palestine to become a permanent member of the IPU, that
the members of the Palestine parliament be freed from the
Israeli imprisonment and blockade; even the diplomacy igures
of the Indonesian House of Representatives such as Marzuki
Darusman, heo Sambuaga, and Abdillah Toha pushed the
Executive Committee of IPU to bring the case of Palestine to
the IPU Governing Council court and the result was as expected:
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Palestine was welcome as a permanent member in the next IPU
assembly in Addis Ababa, Ethiopia, in 05-10 April 2009.
If we put the fact above together with the slogan “thousands of
friends and zero enemy” of President SBY and the concept of
“dynamic equilibrium” raised by the Minister of Foreign Afairs
Marty Natalegawa, there is one big puzzle here. What does
Indonesia itself want in the global politics symposium? Just
friends and global political equilibrium? What is really troubling
is that adding as many friends as possible and seeking for global
political equilibrium for others have the potential to just doing
other countries’ interests a favor. he cynical way to express it:
Indonesia is just dancing over the beats of the drums played by
other countries.
Based on the elaboration above, it is clear that Indonesia’s national
interests in the ield of politics are: (a). To ensure other countries
that the government of Indonesia is able and has the credibility and
a positive reputation in the eyes of its people. Domestic trust and
support will be read by the foreign parties as a form of the solid move
Indonesia has as a nation in the global politics arena. (b). To show
to other countries that Indonesia has strategies, be it short-termed,
medium-termed, or long-termed, which ensure the protection of
Human Rights. he criticisms from the international world need
to be accepted wisely and solutions for that matter must be found.
Indonesia must not let those problems go unmanaged. Indonesia,
which is active in speaking up democracy, needs to be consistent
in showing its commitment in resolving problems disturbing the
serenity of the public in implementing the principles of democracy.
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In addition, Indonesia also needs: (c). To show its commitment
in law enforcement, including in terms of ighting practices of
unclear and haphazard regulations, including corruption, law
violation, and Human Rights violation. If Indonesia is picky in
enforcing the law, not only is the credibility of the government
doubted, but also Indonesia is facing the potential of being
broken into pieces. Indonesia also needs to build such reputation
that whoever is elected as the leader of the state will not sacriice
the national interests of Indonesia for temporary interest of other
countries. (d) To support multilateral means and regional cooperations in resolving the tension between countries. From the
experience of a being involved in issues of developing countries
and helping countries cynically perceived by the Western
countries, Indonesia can learn that the instrument of multilateral
and regional cooperation is the instrument that will help in crucial
times. When multilateral and regional institutions are negligent
in supporting their troubled members to be able to resolve their
problems elegantly and by keeping the non-intervention principle
from other countries, then the chance is bigger that the country
which feels that it is stronger will “play vigilantism”.
3. National interest in the socio-cultural ield
In the international relation, the socio-cultural issue is considered
as a low issue, the issue which does not need to be paid attention
to from the top leader of the foreign politics. It is assumed that
the accomplishment in this ield is technical. Whereas, if carefully
observed, a good strategy structuring in the socio-cultural ield
will bring about advantages which can be felt more concretely
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by the individual citizens. For instance, related to the expansion
of job opportunity, chance to receive high education scholarship
to renowned university outside the country, cooperation between
educational institutions or research institutions, copy right
acknowledgment, the development of creative industry such as
design, culinary, movie, et cetera.
he foreign policy for the socio-cultural ield needs a new
breakthrough to strengthen the soft power. Soft power is the
ability to shape other people’s preference through attraction and
persuasion. It means that the development of diplomacy which
put forward the need in the socio-cultural ield is a very good
investment to make individuals in other countries be moved in
supporting the agenda of our national interest without being
heavy hearted. If this soft power can be run smoothly, political
and economic costs in the cooperation scheme with other
countries can be minimized because voluntarily the residents of
other countries follow our means.
Countries with huge population such as the US, India, and
China, mobilize their citizens to reach for their national interests
through methods that are convenient for other countries. he
format is not merely art exhibition or performance, such as
what the representative oices of Indonesia keep on using, but
also a demo of competence uniqueness and the creations of
the children of the nation that are put into competition at the
international level. Movie making is also promoted to pass
through the international market. Indonesian-made products
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are promoted through displays in movies or music concerts. As
for the case of employment, the governments of other countries
are active to attach the activity of foreign aid granting by
expanding the opportunities for their citizens to work outside
their motherlands and to learn the working culture and political
culture in other countries.
Especially for education, Indonesia also needs to be bold
in promoting the competence of universities and research
institutions in Indonesia as producers of innovative ideas in the
international discourse. he conidence of the children of the
nation needs to be cultivated, that their works and thoughts are
promoted to have a broader inluence towards other countries.
herefore, Indonesia’s national interests in the socio-cultural
ield are as the followings: (a). Developing the initiative and
works of the children of the nation through activities facilitated
by the government or the representative oices which make
such initiatives and works more recognizable at the global
state. (b). Introducing the originality of the values and works
of Indonesian people as part of the contributors of the new
civilization of the world. (c). Developing the activities which
strengthen the use of soft power in Indonesian diplomacy And
(d). Promoting the competence of educational institutions in
Indonesia to the international world.
4. National interest in the ield of defense
In the ield of defense, Indonesia’s posture is deemed as doubtable.
In many occasions, the government is considered to be relaxed in
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guarding the foremost areas in the
While China and India
Republic, let alone the territorial
are very protective of
waters. Studies have shown that
their border regions,
in reality there are a number of
Indonesia has not
policies on the management of
even possessed proper
border areas and territorial waters,
documentation on
but the obstacles lie on the weak
current condition of the
cooperation among the authorized
leading regions in the
country.
governmental agencies, especially
between the regional and central
governments, on the fact that
there is an indication about transnational crime maias which
hound the security in border areas, on the fact that there is a lack
of supporting defense facility such as radar and agile ships, and
on the fact that there is a lack of budget to fulill the needs of the
guarding stafs.103
his contrasts signiicantly with China and India, for instances,
which are known to be very much protective towards their border
areas. hey are not reluctant to confront anyone proposing a
challenging claim. Conlicts rooting from these two countries
cannot be seen trivial. In the beginning of July 2013, when the
Ministry of Defense of India would visit China, the Deputy of
the General Director of the Military Research Department in
the Chinese Armed Forces said that India should be careful in
words and actions since India is the only country in the world
which explicitly claims that the development of its military
forces is based on the military threat posed by China.
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377
hat statement was aimed to India, which was considered
excessive in responding the Chinese military activities in the
India-China border in Himalayan mountains, namely between
Jammu and Xinjiang, and Anurachal Pradesh. Previously, the
Indian government claimed that China had trespassed up to
20 km to the area claimed by India. India’s confronting attitude
towards China is actually not entirely unique because in history
shows that China has always had problems with its neighboring
countries sharing border areas with it. here are Vietnam, the
Philippines, and Indonesia in the South East Asia, and also India,
Taiwan, and Russia, to mention some of them. he intensity of
the problem is diferent one to another, but China is indeed
very much protective towards its border areas and often uses the
component of history as its border areas.
Meanwhile, Indonesia has not even had adequate documentations
over the most recent conditions of the foremost areas in the
homeland. Dr. Makarim Wibisono, the General Director of
Foreign Economic Relation in the Ministry of Foreign Afairs
of the Republic of Indonesia (2000-2002) and the Director of
the ASEAN Foundation (2010-2013) states that the Indonesian
Archipelagic Sea Lanes (ALKI) areas are not fully respected
by neighboring countries. Australia, for example, in urgent
situations can decide to just cut of the Indonesian territorial
water lanes from the East to West without caring of the cross
lanes determined in ALKI.
Prof. Dorodjatun Kuntjoro-Jakti, the Coordinating Minister
of Economy of the Republic of Indonesia in the President
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Megawati Sukarnoputri’s administration, even stated that ALKI
in the Eastern Indonesia is very much vulnerable to be passed
through by submarines crossing without permission, due to its
condition as a deep sea area and Indonesia has not yet had hightech instruments to detect breachers of its sovereign territories.
his is conirmed as well by Brigadier General Jan Pieter Ate, the
Director of International Cooperation in the Ministry of Defense
of the Republic of Indonesia. Indonesia until now has just had 2
submarines, and they are not the most sophisticated ones so they
cannot reach down to the deep sea. he presence of Indonesia is
still on the shallow sea borders, which are mostly passed through
by commercial ships. Brigadier General Ate admits that Indonesia
has serious limitations in terms of guarding the maritime areas
and until now the budget problem is still the most signiicant
cause for this issue. If Indonesia intends to add its submarine
armada, the purchasing of other defense instruments has to be
pended and it must be prepared to add the number of defense
workers.
Actually, Indonesia has had a number of regulations concerning
sovereign territory, namely the Governmental Regulation No.
6/1996 on Indonesian Waters, the Governmental Regulation No.
37/2002 on the Rights and Obligations of Foreign Vessels and
Aircrafts in Implementing heir Right to Cross the Archipelagic
Sea Lanes, and the Governmental Regulation No. 38/2002 on
the List of Geographical Coordinate of Points of Base Lines of
the Indonesian Archipelago. he Geographical Picture of ALKI
is as listed below.
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379
Figure 2. he Geographical Picture of ALKI
SLOC MALAKA
Kuala Tanjung
Bitung
Makasar
ALKI-I
ALKI-IIIC
ALKI-II
SeaLaneofCommunication(SLOC) andALKI
Primary National Sea Lane
Secondary National Lane
Main Land Lane (Road and/or Railway)
ALKI-III
ALKI-IIIB
Primary Port
International Airport
International Main Port
Alternative Port International Hub
Remembering the importance of safeguarding border areas
and crossing areas in the Indonesian waters, Indonesia needs
to concentrate more on the entering points at the ALKI lanes.
High-tech instruments and weaponry need to be placed in areas
that is prone to iniltration; not to open a confrontation with
the iniltrators because it will be counter-productive the national
interest of Indonesia, but to lead those who for so long are not
compliant to the regulation to pass through the determined lanes.
In addition, ALKI also has a strategic aspect Indonesia needs to
consider since what pass through those lanes are not only legal
products such as crude oil and goods, but also weapons, wastes,
and forbidden drugs.
It needs to be clariied as well that defense and security cannot
rely on weaponry alone because obviously that would be costly
and there is no certainty that that method would be efective.
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hus, defense and security have to be synergized to the activities
of the people living in the near-most areas. In the condition of
conlict, those who have the interest of guarding the security of
their living environment are the local communities. hat means
that the involvement of the society is really crucial to keep the
eforts of safeguarding the border areas running efectively and
peacefully.
By so, Indonesia’s interests in the ield of defense and security are
as followings: (a). Guarding the border areas and protecting them
in a meticulous and integrated way.(b). Managing the foremost
areas of the Republic of Indonesia by organizing patrols and
community activities so that the defense posture and security of
Indonesia are respected and the management of the community’s
livelihood sources in strategic waters is optimized. (c). Developing
cooperations with other countries to ensure that the security of
the border areas be free from transnational crime. (d). Equipping
defense and security facilities, including rejuvenating the defense
and security equipment owned by the armed forces, police, and
instances guarding the border areas of Indonesia. (e). Tending to
the emergence of experts in the ields of maritime management,
international laws, and border areas. (f ). Involving the community
in the border areas in implementing the defense and security
tasks.
In addition to the national interests mentioned above, there are
also vital interests or irmer interests that may not be violated,
both by other countries and by Indonesian citizens themselves.
Such vital interests must be really understood by all citizens,
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381
let alone those involved in the international relation and
diplomacy. Diferent from the national interests whose ways to
be achieved can still be done in several alternatives considering
the atmosphere of the diplomacy, the vital interests are rigid and
not to be bargained. hey are like a boundary which, if breached,
will trigger war or strict sanction.
Based on a series of discussion in composing of this report, at
least Indonesia has 2 vital interests that have to be seriously
guarded in the near future: Firstly, the national and territorial
integrity. Indonesia has fought hard to gain the international
acknowledgment over its maritime areas. Indonesia is accepted as
an archipelagic state, a concept that did not exist before. Because
of this struggle in the UNCLOS (United Nations Convention
on the Law of the Sea), the territory of Indonesia which was
2 million kilometer per square area can add up to 8 million
kilometer per square area. And because we are located above
the tectonic plate, each time a tsunami occurs, the territory of
Indonesia will grow at least 4,000 km per square are. his is the
wealth of Indonesia. his is the country’s achievement that needs
to be seriously guarded. As for Natuna, we have been negotiating
with Vietnam for 25 years. herefore, we may not let China
catches us of guard.
Secondly, demography and the socio-cultural concerns. Indonesia
is a country that the world recognites for its demographic and
socio-cultural richness, so this needs to be utilized seriously.
Indonesia’s involvement at the international level may not
compromise the Indonesian people and the richness of the socio-
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cultural values that for so long have been the ‘glue’ and ampliier
of the development in
Indonesia down to the most remote areas. he problem now is
that we are facing such issues as human traicking, narcotics
smuggling, guns smuggling, terrorism networks, illegal mining,
and the eviction of customary lands by foreign interests. hese
are examples of violation of Indonesia’s vital interests and these
must be stopped. We also need to be aware that other countries
use a variety of ways to do an iniltration so that our supervision
over such vital interests be loosened, for examples, through the
activities of NGOs which are actually run by the governments
of other countries. KGB and CIA have such institutions, so
that Indonesia must be sensitive on types of non-governmental
organizations developing in the country.
Weaknesses to Improve
Whatever the chances, challenges, and threats in the international
world, one thing that can be a very good capital is the actors and
institutions that are solid yet sensitive towards the needs of the
age. For that, before we talk about chances, potential challenges,
and threats for the next ive years, the internal conditions of the
players and policy makers of Indonesian foreign policies need to be
highlighted.
1. he design of the foreign politics.
he design of the Indonesian foreign politics at this time, it must
be admitted, is more likely to be reactive rather than anticipative
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383
and visionary. Based on the interviews with a number of actors of
international relation in the Ministry of Foreign Afairs and the
observation on their activities, the point of view in implementing
the tasks is: seeing how other countries will do or say, and then
afterwards Indonesia will determine its attitude on that matter,
and do a post-facto reaction. In the international forums, the
average Indonesian diplomats have limited preparation before the
trials and they just read the situation when present in the court
room. In the representative oices of the Republic of Indonesia,
especially in such areas where there are numerous migrant people
from Indonesia, the attention of all Indonesian diplomats are
directed to the consular services or the protection of the migrant
workers. So, it is just the technical and routine tasks that consume
most of the energy of the stafs.
his lack of clear design is also felt by the directors in the
Ministry of Foreign Afairs of the Republic of Indonesia, who
admit that they have no guidelines over what actually is the
interest of Indonesia in a region. he directors who feel that they
need such guidelines then have the initiative to create their own
and usually it is centered to the protection of migrant workers
or Indonesian citizens outside the country. hings related to the
economic political interests cannot be stipulated authoritatively
since their level of position is “just” director.
With the absence of such grand design, staf recruitment and
the allocation of human resources do not it the needs on the
ield. Indonesia’s representative oice in Malaysia, for instance,
admits that it is so bothered by the piles of administrative desk-
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job related to Indonesian Migrant Workers service and to legal
service when Indonesian workers are in trouble with the law in
Malaysia. his is, among others, because of the fact that there is
no long-term vision related to the presence of the Indonesian
Embassy in responding to the problem form Indonesian migrant
workers. his is highly contrasting with Malaysia, which has
already prepared itself to become a place for the workforce market
from the South East Asian region to the whole world. Malaysia
does not have an adequate force of workers, but it is ready to pick
up beneits from its neighboring countries which experience an
excess in terms of the number of workers.
2. he institutionalization of the foreign politics.
In terms of law, Indonesia has the Law No. 37/1999 on
International Relation. here, a number of items that needs to be
raised to the attention of all parties are emphasized: Firstly, the
President is the party having the authority to organize the activity
of international relation, and whenever necessary the President
will delegate such authority to the Minister of Foreign Afairs.
If there is another ministry appointed by the President, the
Minister will have to consult and coordinate with the Minister
of Foreign Afairs. Secondly, there is a possibility that other
actors such as the regional governments, governmental instances,
enterprises, political organizations, community organizations,
non-governmental organizations, and the citizens of Indonesia in
general to be involved in the international relation. he relation
and communication line are indeed not clearly depicted in this
Law, though it can be assumed that, remembering the irst point,
all things have to refer to the consultation and coordination with
the Ministry of Foreign Afairs or the President.
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385
hirdly, the activities of international relation need to be dedicated
to the national interest with the free and active principles.
Fourthly, the free and active principle is essentially not a neutral
politics, but it is a foreign politics that is free in determining the
attitude and policies towards the international problems and not
binding oneself in an a priori to one of the world’s power, and
actively giving contributions, both in terms of thoughts or active
participation in resolving conlicts, disputes, and other problems
of the world, for the sake of the realization of world peace
based on freedom, eternal peace, and social justice. Fifthly, the
dedication for the national interests is the foreign politics applied
to support the realization of the national objectives as mentioned
in the preamble of the Constitution of 1945.
Sixthly, the diplomacy should describe the identity of Indonesian
diplomacy which is not just routine in nature, but also able
to take non-conventional means, not always bound to the
protocol customs, but not ignoring basic norms in the etiquette
of international diplomacy. Indonesian diplomacy should be
equipped with irmness in terms of principles, assertiveness in
terms of attitudes, lexibility and rationality in terms of approach,
and should rely on self-conidence. Seventhly, Indonesian
diplomacy seeks for harmony, justice, and compatibility in
international relation, avoids confronting attitudes and power
politics, contributes to the resolution of various conlicts and
problems in the world, by increasing the number of friends and
decreasing the numbers of foes.
In the practice of the international relation, in fact, there are a
number of evaluations about the realization of international
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relation as is plotted in the Constitution. Based on the evaluation
of the implementation of the international relation for the
previous 10 years, it is true that the President is the holder of the
highest international relation authority. Almost in all occasions
of international gathering, the President handles them himself.
he Minister of Foreign Afairs seems to be involved only in the
follow-up, as an opener, or a complement. A number of other
ministries are given huge authority by the President, concerning
the negotiations with foreign parties in the ield of economic
development, for examples, the Ministry of Trades, Coordinating
Agency for Capital Investment, the Ministry of Industry, and
the Ministry of Defense. However, the level of coordination and
consultation happening between the ministries that have been
given authority and the Ministry of Foreign Afairs tends to be
just a formality only or even no coordination and consultation
at all. In addition, there is no inter-ministerial synergy and no
synergy between those ministries and the special stafs of the
President and Vice President, such as the UKP4, TNP2K, the
Advisory Board for the President, Special Stafs of the President
for the ield of Politics, Special Stafs of the President for the ield
of International Relation, Special Stafs of the President for the
ield of Economy, Special Stafs of the President for the ield of
Food, and many more.
If the design of foreign politics of Indonesia is clearer, this
problem of coordination will not present an excessive negative
consequence. Indeed there have been eforts to create such
grand design, such as the Master Plan for the Acceleration
and Expansion of the Development of Economy Indonesia
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387
(MP3EI) and the Master Plan for the Acceleration of Poverty
Alleviation of Indonesia (MP3KI), but such plans look odd
on the paper since their scale of priority are still invisible, and
there are no guidelines about what the forms of cooperation
or ways of policy that must be built to achieve such priority
are. It is only the output and time targets that are outlined, the
rest of it is unclear. Without such grand design, it is hard to
imagine that the actors of diplomacy have a guide regarding
what Indonesia wants. Just like what repetitively is said by a
number of parties in the Ministry of Foreign Afairs: Indonesia
knows enough about what it does not want, but it never knows
about what it wants.
In the practice of diplomacy, indeed there is a space for “city
diplomacy”, or the relation between the regional governments
and the government of another country, but the consultation
space with the central government is very clear. In Indonesia,
such task division needs to be clariied. he authority of the
regional government should be very much limited, especially if
it relates or is inluential to the national policies. In Indonesia,
there have not been such ethics and regulations for this matter.
It is then natural that there have been various responses from
the regional governments regarding the relation with foreign
parties. Some are more active than others and some interpret for
themselves the roles of the regions in the politics of the global
economy. his is a normal thing of the process of democracy and
regional autonomy consolidation. We cannot expect a uniformity
of perceptions. What needs to be regulated is the allotments
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of the regional involvement in the sectors which relate to the
livelihoods of many people. his is what is still vague in Indonesia.
In addition, within the Ministry of Foreign Afairs itself, there is
also a challenge. Before 2002, the management structure in the
Ministry of Foreign Afairs was sector-based and was relected
in the authority of the General Directorate functionally (at the
politics, economy, and socio-cultural ields) each of which is
assisted by 6 Directors. he implication is that, in the cabinet
meeting for instance, the General Director of Foreign Economic
Relation will always be present to accompany the Minister
of Foreign Afairs. Since the Director of Foreign Economic
Relation is a senior, in terms of the echelon, and is assisted by the
functional directors who give reports regarding the conditions
of various regions in the world, the cabinet meeting can run in a
more directed way.
he condition has changed since 2002 because the task
arrangement in the Ministry of Foreign Afairs recently is based
on the regional approach. he General Directors are tasked
based on the regions, for instance: the US-Europe, Paciic Asia,
and Middle East regions. As the result, each General Director
must have his/her own stafs for economic, political, and sociocultural afairs and the level of these stafs is very low, namely
the echelon 3 or 4. his means that the number of stafs in the
Ministry of Foreign Afairs is increasing but in the cabinet
meeting, the Minister of Foreign Afairs is diicult to gain
integrated information concerning such strategic issues as food,
energy, and manpower because each of those issues are present
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389
in all general directorates. When a meeting or seminar regarding
issues is held, including the one held abroad, a lot of stafs from
the echelon 3 or 4 level need to be there to conduct a brieing
with the ambassador. hen, as for money and funding, they are
managed separately by the Secretary General oice so that each
General Directorate can only wait for the distribution of
the budget quota from the Secretary General and it will be
difficult to push forward the activity priority target, unless
they are willing to dive themselves into a debate on it. This
is almost impossible to be done in the institutional culture
of the Ministry of Foreign Affairs. It is obvious that the
arrangement of such institutional structure is not effective.
his kind of structure model is indeed conventional. Yet, a
number of countries now start to make a re-arrangement. For
example, in Australia, the Ministry of Foreign Afairs is now
also regulating the trading afairs, so that the ministry is named
the Ministry of Foreign Afairs and Trading. his model of
integrating the tasks of two ministries was also adopted by
South Korea since 1998, but then it was put back to what it
was in 2013. In Bahrain, the Ministry of Foreign Afairs is
structured also by regions, but the number of regions to be
paid attention to is only two and they are joint with issues, and
the echelon level is 2 (Assistant Undersecretary): he Director
of Arabic Afairs, Afro-Asian and Organizations, the Director
of GCC Afairs and Western States, the Director of Legal and
Human Rights, the Director of Consular, Protocol and Process,
the Director of Human Resources, Finance, and Information.
It means that it is possible to have an adjustment here and
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there concerning the institutional structure of the Ministry of
Foreign Afairs so that the movement of the national interest
achievement can be more lexible and efective.
his institutional arrangement is very much needed since the
foreign parties refer to the institutional system when doing
diplomacy with Indonesia. Related to trading and the opening
of business relation, for instance, there is an ambassador of our
friendly country who admits his confusion regarding who can
be relied on to score the target of his country’s national interest
achievement. his is because, after spending years in Indonesia,
he realizes that it is not enough to talk only to the Ministry of
Foreign Afairs, but he also needs to meet with the Ministry
of Trade, the Ministry of Industry, the Ministry of National
Development Planning, the Chamber of Commerce and
Industry, the regional governments, etc. Just imagine if each of
the aforementioned party has a diferent perception regarding
policies and the approach of policy.
he assisting presidential stafs related to international relation
also need attention. Recently, a number of the best stafs in the
Ministry of Foreign Afairs are actually “lent” to other ministries,
such as to the Vice President oice, the Advisory Board of the
President, to the Secretariat of the Vice President oice, to the
Special Stafs of the President for Foreign Afairs ield, to the oice
of the Special Stafs of the President for the Living Environment
ield, and many more. Such positions are tantalizing for the stafs
of the Ministry of Foreign Afairs because it helps raise their
echelon level and putting them closer to the circle of power in the
Republic of Indonesia.
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391
Practically, such staf borrowing will incur problems since it is
found that there are tendencies that those stafs of the Ministry of
Foreign Afairs working at other oices or ministries often have
diferent perceptions with the Ministry of Foreign Afairs. his
means that, instead of strengthening the synergy, consultation,
and coordination across ministries and institutions, these stafs
in fact widen the gap of perceptions concerning diplomacy
measures that need to be taken. It is unknown where such gap
starts since these “lent” stafs are actually of high quality in terms
of knowledge and experience.
On the other side, at the practical state in other ministries
outside the Ministry of Foreign Afairs, it is indicated that
the average of oicials in technical ministries, such as the
Ministry of Health, the Ministry of Trade, the Ministry of
Industry, the Ministry of Manpower and Transmigration, and
the Ministry of Information and Communication, have such a
limited knowledge about the condition of Indonesia’s strategic
environment at a given time. hough they know that there is
the free and active foreign policy principle, their understanding
is restricted only to the eforts of safeguarding the sovereignty
of the country, and this term ‘sovereignty’ tends to be deined
narrowly, that is, the fulillment of the physical needs of the
Indonesian society. In general, outside the environment of the
Ministry of Foreign Afairs, the orientation of the state oicials’
attention is limited to the domestic orientation. It would be
much better if this is changed so that their sensitivity is higher,
both towards the needs of the policy actors domestically and
those internationally.
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As for the arrangement of the funding for ministerial activities,
it in fact also becomes a source of criticisms from the actors of
international relation. Especially for the representative oices
abroad, the space of fund available for unexpected activities is
seen as too small so that if there is an extraordinary event that
happens in a sudden, such as natural disaster, armed disputes, or
capital punishment for Indonesian migrant workers, the space
of movement of the representative oices is not as lexible as
those of the US or even of Malaysia. he funds for other posts
are impossible to be diverted to the extraordinary events because
that would be considered as a breach.
3. he relation among actors of foreign politics.
Actors of foreign politics also need to be paid attention to
since they are the ones who become the actors of diplomacy
to translate targets of national interests. he readiness of these
actors in implementing the task of diplomacy still need to be
developed further, be it from the side of the recruitment system,
the trainings provided, and the capacity development done
through assignments. hese actors obviously have to master
various aspects of national interests, and are able to articulate and
struggle for such interests in the international arena.
he training model of the National Defense Institution can
be adapted pursuant to the needs. he delivery of Wawasan
Nusantara (the Insight of Archipelago) needed is not simply an
understanding on the physical condition and the philosophy, but
also an understanding on the psychology of the business world
International Relation STRuGGLING FOR NATIONAL INTEREST
393
and governmental actors in the homeland. he high-level oicials
and diplomats need to be able to feel the logic, for instance, of
why the cacao and palm farmers choose to sell their raw fruit
illegally to Tawau, Malaysia, rather than to the collectors in the
country,104 and what cooperation options we need to establish in
the border areas.
In addition, the factor of leadership in foreign policy taking needs
to be underlined here. It is because this issue is always raised in
every discussion regarding the achievement of Indonesia’s national
interests, especially in the representative oices of the Republic
of Indonesia abroad. here are still many vacant leadership in a
number of embassies, whereas to open one representative oice,
usually it needs such a long time for the purposes of assessment
and time adjustment. he Indonesian government’s target in
general is to establish itself in as many countries as possible, no
matter how minor such establishment is. he reason is that the
multilateral diplomacy target introduced since the time of the
Minister of Foreign Afairs Hassan Wirajuda is that each country
has one vote. hus, Indonesia needs to have a representative
oice in whatever country which is strategic for the interest of
Indonesia, such as what we now have recently in Kazakhstan,
Uzbekistan, Azerbaijan, and Ukraine. In addition, Indonesia also
considers the reciprocal factor towards the countries which for
so long have opened their representative oices in Indonesia,
such as Ecuador, Chile, Peru, Venezuela, and Columbia. he
opening of a representative oice in Bahrain is organized on the
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consideration that Bahrain will become one of the centers of the
world’s investment in the future.
At this time, such considerations have not yet been followed
with the readiness of the suicient human resources and
with clear and standard line of communication. A diferent
Indonesian embassy, in a diferent country, means a diferent
staf performance. he leadership of an ambassador is very
much inluential in the variety of institutional cultures.
Unfortunately, an ambassador at average only has a 3 yeartime working period and many of them do not come from
the Ministry of Foreign Afairs and are political igures only.
As the result, at the representative oices whose leadership is
lexible and communicative, the relationship among the stafs
will run well. However, if the leadership is rigid and introvert,
the relation among the stafs will be disturbed.
he relation among diplomats and attaches in the representative
oices of Indonesia, for instance, often becomes a problem
though they should help and complete each other. In several
representative oices, the tension between the two parties still
happens frequently. Attaches are seen as being not loyal to
the ambassador since the information they have collected is
delivered directly to the “center” ( Jakarta) and they are busy
with their own agendas. Meanwhile, there are also attaches
that are not satisied because they are not served with good
cars and drivers like what the stafs of the Ministry of Foreign
Afairs get. hese supericial things obviously disrupt the
achievement of the national interests.
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395
4. he “free and active” philosophy
As discussed in the Law No. 37/1999, the free and active
philosophy is a guideline in addressing the challenge and chance
abroad. he actors of international relation from Indonesia are
expected to have a freedom in determining their attitude towards
international problems, not to be bound in a priori to one of the
powers of the world, and to be active in giving contributions as
a part of the solution for the global problems so that freedom,
eternal peace, and social justice can occur.
Based on the monitoring and interviews with the actors of
international relation in several ministries, this free and active
philosophy for the 10 years of President SBY’s administration
has been translated into the principle of “a thousand friends zero
enemy”, as an efort to maintain harmonious good relation and to
not seek for enemies. As a marketing branding, the derivation of this
free and active philosophy is indeed quite catchy. he Minister of
Foreign Afairs Marty Natalegawa deines this principle in the form
of Indonesia’s task to maintain the dynamic equilibrium, which is to
keep the balance in the global politics by not taking sides here and
there and to seek for a win-win solution in every occasion.
On the paper, the principle and its derivation above sound
rational; however, in the daily practice in the Ministry of Foreign
Afairs, the President’s and Minister’s directions are frequently
seen as a mere jargon and have not been able to become a
practical guide. Young diplomats, especially, ind it diicult to
translate ‘zero enemy’ and ‘to seek for dynamic equilibrium’, since
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in many cases Indonesia is indeed
he philosophy of free
in the face-to-face situation
and active within 10 years
with foreign parties which only
of SBY’s reign translates
press and seek for beneits for
into "thousand friends
themselves. If Indonesia keeps on
zero enemy", as an efort
seeking for a balance, it will tend
to maintain harmonious
to become a follower in the global
relations instead of
looking for enemies.
politics; diplomats will only ask
questions to the left and right
and adjust their statements with
other countries. he question is:
what does Indonesia look for? he ‘zero enemy’ concept is indeed
positive for the sake of seeking allies, but this will be meaningless
for the purpose of promoting the national interests. What is
missing in the President’s and Minister’s directions is the direction
regarding the scale of priority aimed by the government.
For example, in ASEAN. On one side, the ambassadors of our
friendly neighboring countries, both in the circle of ASEAN or
outside of it, see that the free and active principle is the excellence
and power of Indonesia’s foreign politics. Indonesia is perceived
as being not egoistic in putting forward its national interests
and as always thinking independently though there are external
pressures pushing Indonesia to take side. he Ambassador of the
Philippines for Indonesia admiringly stated that the free and
active principle is bequeathed from generation to generation of
the implementers of foreign policies in Indonesia and it becomes
a connecting thread for Indonesia’s foreign policies, so that there
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397
is a small chance that what was proposed by one administration
will be directly turned down by the next one.
But on the other side, such freedom is confusing since there
are many partners Indonesia can couple with, for instance for
economic cooperation afairs, but the resources to establish such
cooperations are limited and the authority owned by the Ministry
of Foreign Afairs in designing the policies is also limited. A
senior researcher in the House of Representatives of Indonesia
said that the country’s energy is drained by heroic agendas to
help other countries, but in fact such agendas have little impact
domestically.
Chances and Challenges
A number of chances to realize the achievement of national interests
are widely open. Among those chances are: Firstly, the countries in the
world will still be resting on the intensiication of the improvement
of their own economic performances. his can also make Indonesia
become more focused in carrying out a number of protections for
the domestic economic interests, such as the state’s intervention in
terms of capital purchasing, iscal policy improvement, trade policy
improvement, monetary policy improvement, and the revitalization
of industrialization, so that they would not be viewed as obstacles
in economic cooperation, but as an investment of business world
certainty in the future. What needs to be guaranteed by the technical
ministries and promoted by the Ministry of Foreign Afairs is the
short-termed output of such policies, for examples, the single window
system, result certainty for foreign investors, and intermediate and
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consumer goods that are of good quality and worthy of selling in the
markets of other countries.
his window of chance is probably temporary, namely, until the
next ive years cycle of economic crisis. his is due to the signs
of quantitative easing done by the US, which is the action of the
Federal Reserve in the US to slow down the purchasing of bonds so
that the current of money will low to the US and not absorbed by
other countries. It is not impossible that the US domestic economic
condition would be far better than today, so that the US will move
more actively and lexibly after the next ive years. Finally, it will be
more diicult for other countries like Indonesia to tidy up things
domestically.
China has read this sign posed by the US and it invites its
neighboring countries to form a trade cooperations based on swap
and regional currency. It is thus not impossible that China’s inluence
will be stronger in the Asian region. Its condition will become even
stronger remembering the exchange reserves of China in 2012 had
already been the largest in the world, as much as $3.31 Trillions.
he strengthening of China will mean risks for the relatively
weaker economic powers in the region, since China has already
“mastered” proitable practices in trading points, even in harbors, in
such strategic places as Singapore, Dannang Vietnam, Cambodia,
Myanmar, et cetera.
he domination for the US government’s securities by China
and Japan has the potential to cause for a diferent stretch in the
relation of these two countries in the times after the next ive years,
International Relation STRuGGLING FOR NATIONAL INTEREST
399
especially if the US then realizes that such dependence will disturb
its sovereignty. If this happens, the global condition will also change.
Recently, China keeps on making use of its exchange reserve to
buy the securities of the US government. It is said that there are
approximately 70% of the US securities dominated by China.
Secondly, the countries of the world are still at the phase of seeking
for the economic governance, be it domestically, regionally, or globally,
that is appropriate with the conditions of the local communities.
his means that the liberal market model of economy is not the
only, and clearly not the most dominant, model in the practice of
economy of the recent time. Here, the top leaders of the Indonesian
foreign politics, and also the leaders after the 2014 general election,
need to realize that local wisdom has a place and in fact has to be a
unique characteristic not to be left out in the practice of the politics
of the global economy of this time. he mere liberal orientation of
Indonesian oicials is proven to be unable to resolve the problem of
commerce system and production system inside the country since
the basis communities in Indonesia are not managed based on the
liberal economy concept. Indonesia in fact needs to raise the model
of poverty alleviation on the base communities to the global level
as an alternative for the signiicantly liberal discourse of economy
developing all this time. Economic and social igures, and even
cultural igures, who for so long have been involved in the state of
developing base economy need to be coupled with to add values in
Indonesia’s policy initiative proposition in the governance of recent
global economy.
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hirdly, the countries of the world
Indonesia needs to be
are still at the phase of seeking for a
more aggressive to pave
new form of economic cooperation.
the way for its national
hus, there is a space for Indonesia
industries to expand
to push the cooperation formula
abroad. he Ministry
which puts forwards the interest of
of Foreign Afairs
the workers and the compliance to
needs to urge technical
spatial layout. he real dilemma in the
ministries to develop
special incentives for
next ive years will be about how to
businessmen who are
increase the economic growth and to
ready to take the for
activate the industry and the people’s
global expansion.
economy and still preserving the
living environment and guaranteeing
the dignity of the workers. his
has been proven diicult to apply in the history of the world’s
economy. When an industrial revolution occurs, workers become a
commodity that are forced to accept their fate, whatever amount of
wage they receive, and whatever working conditions they are facing.
Industrialization in the US, Europe, Russia, and China is state-led,
which means that it is strongly intervened by the state (though the
intervention points and types vary), so that such industrialization
has claimed so many lives, caused the shift of life styles, and so much
misery for the lower-middle class people. In the next ive years, such
dilemma will re-appear and will be much more complicated since the
number of population and the per capita population concentration
will have already been far larger than the number we had in the 18th
or 20th centuries.
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401
he recent tendency is that countries take the strategy of expanding
the operation areas for their industries. Businesses are supported by
diplomacy, their economies make way to other countries to open new
employments for the workforce there. We can see that Japan, the US,
China, India, England, and even Brazil are applying this strategy. his
is beneicial for the businesses of those countries because, in addition
to cutting of the cost of production, it also incurs sympathy since
a political cooperation between countries is established, and it also
make the business closer to the consumers. heir space of movement
is bilateral cooperation and the free trade cooperation which have
been developing all this time, where each country involved in a
free trade has the obligation to provide a space of movement for its
partner to develop business in its country.
By so, domestically, Indonesia has a space to push the foreign
companies to give a larger room for local workers to work there, and
that such foreign companies comply to the spatial layout applied in
Indonesia. his should be a strong basis to deconstruct the scheme of
cooperation which is derailed from the two cooperation allotments.
his is because those countries are indeed in a position where they
really need a cooperation partner that can get along well politically.
Indonesia qualiies for that requirement. In addition to the fact that
it has a huge domestic market, politically Indonesia is also accepted
by many countries in the world due to its geostrategic position.
Indonesia’s bargaining power is strong at that point.
Meanwhile, at the international level, Indonesia needs to be more
aggressive in opening ways for Indonesian industries to expand
themselves abroad. he Ministry of Foreign Afairs has to push
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technical ministries to develop special incentives for business actors
who are willing to take the risks by expanding their businesses outside
the country. he Ministry of Foreign Afairs also need to develop the
expertise of market intelligences in representative countries so that
the map of business lanes in other countries can be built and can
become a valuable input for the business actors and the technical
ministries.
Fourthly, the attention of the major countries will be focused on
the conlict of inluence seizure in the Middle East. Diferent from
the South China Sea case, where the countries involved compactly
attempt to mule the internationalization of the case and the
spreading of issues of the tension there, the cases in the Middle East,
such as Syria, Iraq, Iran, Egypt, and Turkey, can be easily spreading to
become horizontal paralyzing conlicts because domestically they do
not have an authoritative government and there is no association of
regional countries that is perceived as having an adequate legitimacy
to mediate the conlicts happening there.
Such conditions give a chance for Indonesia to establish its inluence
in the Middle East, especially in the countries which are relatively
stable in terms of politics and which are being ambitious to become
a regional economic power. Bilateral economic cooperations need to
be motivated to grow rapidly there, for examples in Qatar, Bahrain,
United Arab Emirates, and Saudi Arabia, for the development of
sharia inancial business and economy and the lines of cooperation to
expand Indonesia’s market there, for instance, for fashion, food and
beverage products, and hotels which serve tourists from Indonesia or
South East Asia.
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403
Fifthly, the increasing number of middle class people in almost all
countries in Asia. his means that there is a chance to expand business
opportunities and employment for Indonesian people. he middle
class people are the cantilever for the improvement of economy and
development, so that their presence needs to be facilitated so that the
impact can spread further.
Service sector is the tertiary sector of economy which are reliable for
countries in Asia to pump up their exchange values. Service sector
is actually a sector that needs to be driven in the next ive years
remembering that the number of middle class people in developed
countries all this time has increased. Along with the improvement
of the standard of living, the intention to enjoy vacations, the need
to stay at hotels or indulging in standardized culinary dishes are
business opportunities that must be addressed in an workmanlike
manner.
Service sector is frequently highlighted as a potential workforce
absorber in ASEAN. he technology in this sector develops rapidly.
Take a look at the dot.com industry, the health service industry,
education industry, tourism industry, and banking industry. he
potential is huge but in fact it has not been a sector which is optimally
absorbing manpower in Indonesia. It is recorded that this sector
absorbs not more than 2% of the workforce in Indonesia. Indonesian
government’s investment in the tourism ield is still low compared to
our neighboring countries in ASEAN. Indonesia chooses to market
the tourist spots which are already been “settled” or to rely on the
private players.
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Compare this to Malaysia, which does a signiicant investment to
build Langkawi, or to Singapore, which keeps on beautifying and
equipping the commerce centers in the Changi International Airport.
As the result, the number of foreign tourists coming to Indonesia is
far smaller compared to those who choose to go on vacation and
contribute to the local economies of Singapore, Malaysia, hailand,
and even Vietnam.
he development of the middle class people needs to be sustained
so that it will be well-distributed to the remote areas. If the middle
class people are well-distributed, the spread of industry will be welldistributed too and the economic participation will be higher so that
Indonesia’s total production can be accelerated. In other countries, the
development of the middle class is sustained with huge investment
in terms of expanding the electricity access (electriication).
his investment is so much important to optimize international
cooperation in the ield of the development of infrastructure and
connectivity between countries.
Indonesia is obviously still left behind in terms of a quick
response to the development of source of energy. Electriication
is still low in the Eastern part of Indonesia. he endeavors aiming
to the development of electricity is also really slow, though a
number of studies have explored and pushed the State Electricity
Company and the government to move faster. he Research and
Policy Development Body in the Ministry of Foreign Afairs once
published a study on the Hydropowered Electricity and Electric
Steam Power Plant which involved the journey of a number of
researchers to neighboring countries in 2010. hat study was
International Relation STRuGGLING FOR NATIONAL INTEREST
405
published in 2011. he Agriculture Institute of Bogor also has a
research on the use of sea current for electric generator.
If Indonesia does not change the pattern of developing its source of
energy, it is not impossible that one day it has to buy electric power
from Malaysia for the Kalimantan region, whereas that source of
electricity is from a river that also lows in the Indonesian territory.
As for the Java-Bali areas, there has been no breakthrough; we will
still be bothered with the problems of excess power, high-priced
electricity, and load shedding. We even have not given attention to
the development of biofuel technology, geothermal technology, solar
technology, let alone nuclear technology. Whereas, since the regime
of President Soekarno, Indonesia has founded the National Nuclear
Power Agency (BATAN), but until now it has not prepared itself
seriously to develop a Nuclear Power Plant which is really safe like
the one South Korea has.
hose ive chances are indication that if dilapidated and intricate
things within the country are resolved, the chance Indonesia has to
amplify its role in keeping the world order is actually wide open.
In addition to those chances, there are also challenges against
the achievement of the national interests, both coming from
the international world and from the country itself. From the
international world, the challenge is the efect resulting from the
action of economizing and the inward orientation posed by Indonesia’s
cooperation partners, such as the European Union, Australia, Chile,
and Brazil. So far, Indonesia has not yet signiicantly feel the impact
since its main trade partners, the US, China, and Japan are still willing
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to buy Indonesian products and
to provide aid for socio-political
and cultural development.
However, this developing trend
may not be seen trivially.
A question occurs: Is
Indonesia still the leader
of the ASEAN? he
answer to this question is
clear: Yes. As, whether we
like it or not, Indonesia
was undeniably one of
ASEAN initiators and is
still exceptionally active in
promoting the survival of
ASEAN.
his economizing action also
means tightening the regulation
for other countries to enter the
market, so that the competition
will tend to be iercer. he
investors are observing China
to see whether this country will
decide to close itself from the
global integration. If this happens, Indonesia’s space of movement
will be more restricted and this means that Indonesia needs to be
more ingenious in penetrating the narrow spaces available.
In addition, the strategy that has been developed by Indonesia to
conduct business diversiication to ASEAN is a good asset to start,
though it is still not enough. If Indonesia’s orientation is still on the
countries which are relatively prosperous in ASEAN, its economic
performance will remain the same as what it has now, i.e. easily
becoming unstable when economic slow-down and competition
happen with the non-ASEAN partners. he challenge is to open the
market in new ASEAN countries. he alacrity of the representative
oices in ASEAN is needed to read the business situations. he next
challenge is the fact that the inter-area infrastructure connectivity in
ASEAN is still weak. ASEAN moves really slow in this case, whereas
International Relation STRuGGLING FOR NATIONAL INTEREST
407
to develop business, infrastructure is a facilitation factor that is easier
to encourage business actors to do their investments.
he ASEAN’s movement to revive the discourse of the acceleration
of ASEAN connectivity needs to be appreciated, and at the same
time paid a careful attention as well. In September 2013, the United
States Trade and Development Agency sponsored an ASEAN
meeting related to the connectivity issue, which re-discussed the
US initiative, named the ASEAN-US Connectivity Cooperation
Initiative, launched in 2011. In that forum, the discourse of
implementing the plan to build railways from Singapore to
Kunming was revived. he countries which have not yet responded,
Cambodia, Vietnam, hailand, Laos, and Myanmar, are pushed to
support the initiative. Malaysia supports this initiative on the basis
of the need for an environmentally friendly mode of transportation.
Here, it can be seen that the US has an interest to ease the line of
transportation from China to the heart of South East Asia. he
question is: what would be loaded in the those train cars? Will it
be cheap natural resources? Will it be value-added products? Of
course, such trans-country railway as this one needs presciently
calculated iscal regulation, security, and defense. his is a challenge
that should be responded immediately by Indonesia, and not to be
taken lightly.
From the aspects of design, institution, and relation among individuals
making and carrying out the foreign politics, the challenge that
needs to be anticipated is the monitoring of the performance of the
leaders and stafs, both in terms of the accuracy of the planning and
the accuracy of the implementation. All this time, the representative
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oices run in a system which seems more likely to be an autopilot,
rather than being fully-directed. he stafs complaints in the
representative oices about “what information do I have to look
for?” and “where should I direct the information I hear to?” must be
able to be resolved with more responsive communication lines and
institutional means. his is information that is possibly not simple
and has its own challenge.
here is a question whether Indonesia is still a leader in ASEAN. he
answer to this question is actually clear enough. Yes, it is, because like
it or not, Indonesia is one of the countries that pioneered ASEAN,
and is considered very active in struggling for the sustainability of
ASEAN as a united entity with a more popular brand in the world
at this time. he note is that the leadership in ASEAN is actually
not limited to inevitable problems, such as the historical facts and the
issue of merit mentioned before, but also the problem of Indonesia’s
ability to be present as the largest power in ASEAN.
Being face-to-face with China, Indonesia is a step behind the
Philippines and Vietnam which have already able to penetrate the
complexity of business operation there. Indonesia is still hampered.
Talking about the use of sea and air lanes, the one which wins the
most beneits so far is Singapore, which are more prepared with
more reliable and competitive airline and logistic companies. As for
investment, ASEAN countries in fact rely on China, the US, Japan,
and South Korea, those of which are non-ASEAN countries, as the
investors in ASEAN region. Indonesia is still unable to answer the
ASEAN needs. his is so unfortunate since its technical implication
is clear enough. hat is, ASEAN is more diicult to build a centrality
International Relation STRuGGLING FOR NATIONAL INTEREST
409
in the eyes of its members since in reality their economic interests
have to comply with the agendas of non-ASEAN countries.
Disruptions and Threats
he disruptions of the achievement of the national interests in the
next ive years are such things resulting from the poor management
of the bureaucracy in Indonesia and the low-quality politicians in
Indonesia. his would happen mainly in the beginning of the next
ive-year period, when the public oicials are still at their “learning”
phase. With a once-in-three-year management rotation in the
Ministry of Foreign Afairs, the coordination in inding solutions
and resolutions will face issues. his is the source of disruptions for
the achievement of the national interests.
Meanwhile, at least there are ive threats for the achievement of the
national interests in the future. hose ive are: Firstly, Indonesia’s
failure in rushing the improvement of the economic foundation so
that it has a irm and integrated design as an asset in the competition.
If in the next ive years all managements of economy will still be the
way they are now, in the next period Indonesia will lose so many
momentums. he efect of losing such momentums would be quite
signiicant so that it deserves to be categorized as a threat since there
are 4 types of major conlicts that can bother Indonesia in these ive
years, such as those explained above, and we would have no idea
about what the results of such conlicts are.
he study from Dorodjatun Kuntjoro-Jakti105 shows that the chance
Indonesia has to take of is very short, namely until 2030 at the latest,
and we know that there are a lot of things that can be worked on
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in terms of phases. Domestic threats are quite real because there
is a bad habit of blaming other parties, and there is a tendency to
be less sensitive about the needs of the age because the attention is
excessively given merely to routine technical businesses.
Secondly, the reluctance of big countries to use the multilateral
diplomacy instrument in resolving their protests against other
countries. he threat is the apparent contest of power, whereby if the
strategy is taken wrongly, the image of Indonesia as a peace-loving
country will be broken. Indonesia’s continuous bad grades in the ield
of Human Rights is a special not that need to be paid a cautious
attention to. It is no longer a secret that there is something jammed
related to the follow-up of enforcing a number of Human Rights
violations in Indonesia, such as the assassination of Munir in 2004,
which until now has not yet been resolved.
Various Human Rights cases can be raised to become an international
issue which can be detrimental to the government’s legitimacy. For
such a complex and huge country as Indonesia, a faulty legitimacy of
the government would become a serious threat for the unity of the
nation.
hirdly, the fact that the communication between foreign policy
makers at the central level and the regional governments is not
cohesive. In the context of the recent time, the regional governments
have an important place in diplomacy and cannot be ignored. If
they are not regulated and coupled with, they will become more
free in building direct cooperations with foreign business actors and
even with other countries, whereas they have no macro picture of
International Relation STRuGGLING FOR NATIONAL INTEREST
411
the global mingling. To make it even worse, potentially they would
establish policies which are on the contrary to the ones issued by the
central government.
he change of the Chinese economic strategy from dependency on
export and investment strengthen the domestic industrialization.
Recently, China is one of the three largest market segments for
Indonesian products, so that the strengthening of the domestic
industry in China means that there is a potential that the demands
for Indonesian products will decrease. his can be a threat since all
this time a large portion of Indonesia’s natural resources is absorbed
by China, such as coals, rattans, timbers, acacia seeds, and iron ores.
With this shift of strategy, Indonesia is facing the risk of being
slumped, let alone if there is no signiicant improvement of the
behavior of the domestic business owners.
he problem is that China is the largest coal producer in the world,
followed by the US and India respectively, while Indonesia is only
at the ifth place. Compared to the characteristics of coals in other
countries, Indonesian coal has a low-level of sulfur so that it is safe to
be used for electric generator and is sought by countries in the world.
It is no wonder then that India vigorously conducts acquisitions
over coal mining companies in Indonesia.106 We also see that, by
exporting rattans, timbers, and acacia seeds, some of which are done
illegally, Indonesia is indirectly “killing” the local industries, such
as furniture and steels, and it is giving a chance to China to grow
even more massively. he behavior of Indonesian business actors
who rollickingly export iron ores though the price is falling is also
so much confusing, because China fears the lack of raw material
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supply so that it is chasing for stocks. Apparently, this behavior
is triggered by the plan to apply the clean and clear (CnC) policy,
which obliges business actors to have an export license when putting
advance a proposal for building a smelter. So, instead of supporting
the governance improvement at the mining sector, these Indonesian
narrow-minded business actors keep on eroding the growth of the
country.
Overview and Recommendation
Collectively we need to be aware of the fact that Indonesia is the
largest archipelagic country in the world, which has a strategic
position because it is located on the meeting point of the two oceans,
Indian and Paciic Oceans, and the South China Sea. his is a very
important position in the world since it becomes the crossing point
for the transportation and communication of the world, connecting
two continents whose growths are really dynamic, and is located
in the equator with a tropical nature rich of natural resources. For
decades, despite the shortcomings owned by the Indonesian nation,
it is proven that we can survive being an archipelagic country whose
role is well considered, both regionally and globally. his must be
remembered as an asset for the activities to be done by the successors
of this Republic. Indonesia’s geo-strategic position makes it a
country that cannot be ignored nor replaced. hus, the entire actors
of international relation and diplomacy in Indonesia, both state and
non-state ones, need to be lexible in relating to other nations.
he opportunities in the next ive years are actually quite bright for
Indonesia. he challenges are also not as complicated as those that
need to be managed by the countries of the world which are bothered
International Relation STRuGGLING FOR NATIONAL INTEREST
413
by the recession. However, the point of view of the Indonesian
government, which is inspired by the seeking for dynamic equilibrium
is in fact slowing down its ability to achieve its national interests
because Indonesia is marching to the beats of the drums played by
other countries which are more sensitive towards the development of
the global situations and are hastening their steps in improving their
economic foundations and governances within their countries.
Remembering the potential of these four types of conlicts in the next
ive years, namely the proxy war among big countries, the conlicts of
seeking regulations in international forums, the conlicts in the border
areas, and the conlicts for the use of natural resources, Indonesia is
terrible vulnerable in terms of being absorbed into the uncertainty
of international relation. For the sake of the irmness of the role
of Indonesia, which actually has such a profound commitment to
become a part of the solutions for the world’s problems, Indonesian
diplomats, in whatever ministries or agencies, need to focus on
the achievement of the national interests which would create the
solidity of Indonesia’s economic foundation, create a force to be
reckoned with and at the same time attract other countries, promote
and develop the initiatives and works of the children of the nation,
develop activities which strengthen the use of soft power, ensure the
world that the Indonesian government is able, has the credibility
and positive reputation in the eyes of its people, that the Indonesian
government does have the strategy and commitment with clear
phases of priority, and that Indonesia has a realistic design for the
development of a sustainable economic growth sensitive towards the
dynamics of the age, including towards the development of its status
as a country whose prestige is getting even brighter in the eyes of the
world.
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From the explanations above, it is clear that there are more parties
participating in determining the level of success of the politics of
Indonesia’s economy at the global level. here are the involvements
of the central government from various agencies and ministries,
the regional governments, the business actors from various lines
and scales, the parliament, the society, universities, mass media,
and even non-governmental organizations. he performance of
their involvements has to be efectively measurable in work groups.
Indonesia’s diplomacy activities need to touch and address each of
these parties in order for their movements to be monitored and
not counter-productive towards what the government has planned.
On the other side, the monitoring of their movements should also
be captured well by the government to be used as a material for
policy improvement. Indonesia’s foreign policy need to be placed
on the position which is adequately high and clear, so that even all
parties which do not communicate to each other can get a reference
regarding the direction to take together, and what the consequences
are if they decide to sail against the wind.
From the aspect of cooperation, the paradigm that needs to be
built is that the achievement of the national interests should be
pursuant to the real conditions on the ield. With the countries in
Asia, Indonesia should ind a way out from the shadow of control
of China, especially in terms of the economy, so that Indonesia will
not depend on the demands from China, and expand its eforts in
looking for other cooperation partners. It would be good if Indonesia
explores such business ields it has excelled with all this time as the
agribusiness, food and beverage products, banking, property, and
creative industries to be expanded to other countries, starting from
International Relation STRuGGLING FOR NATIONAL INTEREST
415
the nearest in ASEAN up to the farthest in Central Asia, Africa,
and South America. he representative oices abroad need to be
sensitive about the needs of the business actors inside the country
and facilitate their needs so that they can develop their business to
friendly countries.
Indonesia’s representative oices abroad need to be rearranged so
that the people placed there are those who really understand the real
conditions of the business sectors and the people of Indonesia. hey
have to be sociable with business actors in order to be able to capture
the global opportunity, but at the same time not to fall to the trap of
entertaining the interests of foreign parties other than of Indonesia.
he direction of our economic policies should no longer be aiming to
pursuing rents, but to increasing the value-added goods production
that are loaded with innovations and science, and enriched with the
rich and unique dimension of Indonesian culture.
Related to defense and security, the next generation of the nation needs
to be more conident that Indonesia can be maintained to be always
intact. he young generation needs to be sensitive about the diferences
between conlicts that must be resolved in a short time and those
that can be managed for a long time. Not all things can be managed
by guns; likewise, not all things can be managed by diplomacy only.
Indonesia has to be persistent and introspective in terms of guarding
the vital interests and in making use of the momentum so that the
national interest to take of can be implemented as soon as possible.
For that, the entire foreign policy makers and doers, both those who
are in the Ministry of Foreign Afairs and those in other ministries,
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also need to have a vision regarding the situation of defense and
security as well as the complexity of their management. hus, training
in the National Defense Agency needs to be taken so that even
civilians are familiar with mingling with people with military and
intelligence backgrounds, and can comprehend the on-ield situation
in terms of defense.
he term of duty in the ministries need to be reviewed. he threeyear period is too short to conduct a transformation and reformation.
A good communication and activity monitory system needs to be
built so that an oicial reassignment does not mean that the policies
should be restarted from zero. he system for recruiting oicials also
needs to be paid attention to so that it will not sacriice the national
agendas just because the oicials appointed do not have an adequate
competency. In addition, the system for arranging the directorates in
the Ministry of Foreign Afairs needs to be reviewed so that it will
not be based only on the terms of region. It is because, as it is proven
to be, this kind of system in fact creates a huge gap of communication
and information among the diplomats, who are supposed to play an
important role in informing and coordinating the direction of the
foreign policies.
hought the President has the right to lead the foreign policies, s/
he needs to be aware that s/he is a politician. he President has to
always listen to inputs and suggestions from the experts of each
ield, and if s/he is still unsure, s/he can build a communication with
the stake holders in the country. Indonesia has to ind a way out
of the vicious circle of patchy development just because its oicials
and politicians do not understand the real situation on the ield and
International Relation STRuGGLING FOR NATIONAL INTEREST
417
prefer to entertain oicials from other countries rather than their
own people.
Remembering that the diplomacy of this time can no longer be
supported by the activities of the diplomats or the residential
ambassadors only, the oicials from the technical ministries also need
to be more luent and sociable in the international-level mingling.
In addition, due to the increase of the number of population who
perceives themselves as global citizens, the Indonesian government
needs also to make use of the roles of the Indonesian diaspora outside
the country. Diplomacy activities also need to be expanded to support
the eforts of introducing the thought process and the imagination of
Indonesian people through the arts of movie, music, culinary, fashion,
and other forms of graphic artworks. his is because, as one needs to
remember, open confrontation will always be avoided in the future
times, but international competition will not grow less and in fact
will grow more, whereas the communication whose directions are to
the terms of Human Rights and political rights protection is hard to
do because of the problem of sovereignty.
herefore, the “thousand friends zero enemy” principle and the
“dynamic equilibrium” doctrine can only be voiced at a certain state
and will in fact be a backire for Indonesia if applied to all ministries
which are involved in international relation. Also Indonesia must not
forget about the national interest priority as elaborated above, and
needs to be able to avoid being played by other countries.*
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NOTE
1
See e.g “General Election Commission Instructed to Work Hard to
Reduce Abstain Group Rate,” accessed from http://www.sayangi.com/
politik1/read/4854/kpu-diminta-bekerja-keras-kurangi-angka-golput, 29
August 2013.
2
Value limit to go to “free” category is 1-2,5. herefore Indonesia goes to
‘”free” category, but in the minimum limit. See http://www.freedomhouse.
org/report/freedom-world-2013/methodology. For Indonesia value in
2013, see http://www.freedomhouse.org/report/freedom-world/2013/
indonesia.
3
Corruption Eradication Commission, accessed from http://acch.kpk.
go.id/statistik-penanganan-tindak-pidana-korupsi-berdasarkan-tingkatjabatan
4
Larry Diamond and Svetlana Tsalik, “Size and Democracy: the Case
for Decentralization,” in Larry Diamond (Ed.), Developing Democracy:
Towards Consolidation, (Baltimore: the Johns Hopkins University Press,
1999), page 117-160.
5
Meazuring Democracy in Indonesia: Indonesia Democracy Index 2009
( Jakarta: Bappenas/UNDP, 2009).
6
Chairul Tanjung, “Indonesia Economy Outlook,” accessed from http://
alumniconnections.com/olc/filelib/HAA/cpages/180/Library/CT%20
presentation%20materials.pdf
7
Ibid.
8
National Team of Acceleration of Indonesia Poverty Prevention, “Poverty
and Economy,” accessed from http://tnp2k.go.id/images/uploads/
downloads/Poverty%20Brief%20February%202013-%20Bahasa%20
version.pdf
9
Graphic taken from Riyana Miranti, Yogi Vidyattama, Erick Hansnata,
Rebecca Cassells and Alan Duncan, “Trends in Poverty and Inequality in
Decentralising Indonesia,” page 31.
10 Taken from Riyana Miranti, Yogi Vidyattama, Erick Hansnata, Rebecca
Cassells and Alan Duncan, “Trends in Poverty and Inequality in
Decentralising Indonesia,” page 25.
TOWARD 2014-2019
419
11 See e.g Vedi Hadiz, “Reorganizing Political Power in Indonesia: A
Reconsideration of So-Called Democratic Transition,” The Pacif ic Review,
Vol. 16, No. 4, 2003, page 591-611.
12 STATT, “NGO Sector Review: Phase I Findings,” can be accessed in
http://www.ausaid.gov.au/business/Documents/indo-ks15-ngo-sectorreview-phase1.pdf
13 ibid.
14 Accessed from http://www.socialbakers.com/blog/647-top-10-biggestfacebook-cities
15 Indonesia Corruption Watch (ICW ), Annual Report 2012, ( Jakarta: ICW,
2012), page 20.
16 Ibid., page 21.
17 CSIS, “National Survey CSIS: Political Party, President Candidate and
New Parties ( July 2012-April 2013),” power point presentation, July 2013,
unpublished.
18 Karen Remmer and Francois Gelineau, “Sub National Electoral Choice:
Economic and Referendum Voting in Argentina, 1983-1999,” Comparative
Political Studies, Vol. 36, No. 7, 2003, page 801-821.
19 Corruption Eradication Commission, Report of Public Sector Integrity
Survey 2012, ( Jakarta: KPK RI, 2012).
20 “Indonesia’s Middle Class: Missing BRIC in the Wall,” The Economist, 21
July 2011. Accessed from http://www.economist.com/node/18989153
21 Saiful Mujani, “Consolidating Indonesia Democracy: Relextion of Eight
Year Democracy,” he Report of Indonesia Survey Institution, May 2006.
22 Anies Rasyid Baswedan, “Islamic Politics in Indonesia: Present and Future
Trajectory,” Asian Survey, Vol. 44, No. 5, September/October 2004, page
669-690. In the article, Baswedan also proposed his opinion that before
groups gave political aspiration through Islamic parties, now they give in
various parties: (1) Islamic parties; (2) Inclusive Islamic parties; and (3)
Secularistic Inclusive parties.
23 Edward Aspinall and Mark T. Berger, “he Break Up of Indonesia
Nationalism after decolonization and the limits of the nation-state in
post-cold war Southeast Asia,” Third World Quarterly, Vol. 22, No. 6, 2001,
page 1005.
420
TOWARD 2014-2019
24 Harry J. Benda, The Crescent and the Rising Sun: Indonesian Islam under the
Japanese Occupation 1942-1945, (he Hague and Bandung: W. Van Hoeve
Ltd., 1958).
25 Martin van Bruinessen, “Islamic State or State Islam? Fifty Years of State
Islam Relations in Indonesia,” in Ingrid Wassel , Indonesien am Ende des
20. Jahrhunderts. (Hamburg: Abera Verlag, 1996), page 19-34.
26 Bachtiar Efendy, Islam and the State in Indonesia, (Singapore: Institute of
South East Asian Studies, 2003)
27 United Nation, United Nations Conventions on he Law of he Sea,
adopted on 10 December 1982, Montego Bay, Jamaika, article 56-57,
http://www.un.org/depts/los/convention_agreements/texts/unclos/
unclos_e.pdf.
28 Ibid., article 21.
29 he Ministry of Defence, State Defence Posture 2009-2029 ( Jakarta: he
Ministry of Defence, 2007), 62.
30 International Institute for Strategic Studies, he Military Balance 2013
Chapter Six: Asia (London: Routledge, 2013), 279.
31 UNROCA, “he Global Reported Arms Trade: he UN Registered of
Conventional Arms,” Un-registered, accessed on 26 August 2013, http://
www.un-register.org/Background/Index.aspx.
32 he Ministry of Defence, State Defence Posture, 2009-2029, 50-52.
33 Ibid., 69.
34 Ibid., 69-71.
35 he Law of Indonesia National Army
36 he term of “unipolar moment” used by Charles Krauthammer to refer to
early years after Cold War in which US as a great power, does not have a
rival after Russia collapsed. According to Krauthammer, the international
structure at that time is unipolar and US is the hegemony. See Charles
Krauthammr, “he Unipolar Moment,” in Foreign Afairs 70, no. 1
(1990/1991).
37 Political balancing can be seen in main texts such as Kenneth Waltz,
Man, the State and War: A heoretical Analysis (New York: Columbia
University Press, 1959); Kenneth Waltz, heory of International Politics
(New York: McGraw-Hill, 1979); John Mearsheimer, “Back to the Future
TOWARD 2014-2019
421
Instability in Europe after the Cold War,” in International Security 15, no.
1 (1990), 5-56;John Mearsheimer, he Tragedy of Great Power Politics
(New York: W. W. Norton, 2001), Robert Gilpin, War and Change in
World Politics(Cambridge: Cambridge University Press, 1981); Stephen
M. Walt, “Alliance Formation and the Balance of World Power,” in
International Security 9, no. 4 (1985), 3-43; Stephen M. Walt, he Origins
of Alliances (Ithaca: Cornell University Press, 1987); Randall Schweller,
“Bandwagoning for Proit: Bringing the Revisionist State Back In,” in
International Security 19, no. 1 (1994), 72-107
38 Ronald O’Rourke, ‘’China Naval Modernization : Implications for U.S
Navy Capabilities-Background and Issues for Congress, ‘’ Congressional
Research Service, 10 June 2010, 23.
39 he Diversiied Employment of China’s Armed Forces (Beijing:
Information Oice of the State Council he People Republic of China,
2013).
40 Robert D. Kaplan, “he South China Sea is the Future of Conlict”, Foreign
Policy, Sept/Oct. 2011, accessed on 2 January 2012, www.foreignpolicy.
com/articles/2011/08/15/the_south_china_sea_is_the_future_of_conlict
41 Ibid.
42 “Maritime Border in 10 States, “ General Directorate of Indonesian
Defence Strategy, accessed on 10 October 2013, strahan.kemhan.go.id/
web/produk/perbatasan.pdf
43 Ibid.
44 Ibid.
45 Ibid.
46 Ibid.
47 Ibid.
48 Ibid.
49 Ibid.
50 Ibid.
51 Ibid.
52 Ibid.
53 Ibid.
54 Ibid.
422
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55 “Timor Leste: Oecusse and the Indonesian Border,” International Crisis
Group, 20 May 2010, accessed on 10 October 2013, www.crisisgroup.org/
en/regions/asia/south-east-asia/timor-leste/B104-timor-leste-oecusseand-the-indonesian-border.aspx
56 I Made Andi Arsana, “Understanding border issues in Camar Bulan,
Tanjung Datu,” he Jakarta Post, 20 October 2011, accessed on 10 October
2013, www.thejakartapost.com/news/2011/10/20/understanding-borderissues-camar-bulan-tanjung-datu.html
57 Chappy Hakim, Quo Vadis he Indonesia Air Force Sovereignity?
( Jakarta: Red &White Publishing, 2012), 186.
58 Ibid., 186-187
59 Ibid., 193.
60 Ibid., 192-193.
61 Ibid., 195.
62 Ibid., 191.
63 Edy Prasetyono, “he Problem of Border Regions,” working paper discussed
in General Hearing Meeting of Indonesian Legislative Assembly, 17 May
2010.
64 Dong Zhang, India Looks East: Strategies and Impacts, AusAID Working
Paper (Canberra: AusAID, 2006), 6.
65 Australia in the Asian Century: White Paper (Canberra: Australian
Government, 2012).
66 Ibid., 28-47.
67 Ibid., 222-249.
68 Ibid., 228.
69 Ibid., 228.
70 Ibid., 230.
71 Ralf Emmers, “ASEAN and the Securitization of Transnational Crime in
Southeast Asia,” in he Paciic Review Vol. 13 no. 3 (2003): 420.
72 G. Mueller, “Transnational crime: deinitions and concepts,” in Combating
Transnational Crime, a Special Issue of Transnational Organized Crime
4, P. Williams and Vlassis (eds) (1998): 13–21.
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423
73 Emmers, “ASEAN and the Securitization of Transnational Crime in
Southeast Asia”: 424.
74 Ibid., 432.
75 ASEAN, ASEAN Declaration of Principles to Combat the Abuses of
Narcotics, adopted on 26 June 1976, Manila, Filipina, http://treaty.kemlu.
go.id/uploads-pub/195_ASEAN-1976-0012.pdf.
76 Emmers, “ASEAN and the Securitization of Transnational Crime in
Southeast Asia.”
77 “United Nations says opium production in South East Asia’s ‘Golden
Triangle’ up 22 per cent,’’ Australia Network News, accessed on 26
August
2013,
http://www.abc.net.au/news/2013-12-18/an-opiumproduction/5163102 .
78 “Fatal Blasts Hit Jakarta Hotels,” BBC News, accessed on 21 August
2013, http://news.bbc.co.uk/2/hi/8155084.stm; John Aglionby, “AlQaeda Link is Suspected in Jakarta Bombings,” he Washington Post,
accessed on 21 August 2013, http://www.washingtonpost.com/wp-dyn/
content/article/2009/07/17/AR2009071700756.html; Lee Glendinning
and Matthew Weaver, “Eight Dead as Bomber Target Western-Owned
Jakarta Hotels,” he Guardian, accessed on 21 August 2013, http://www.
theguardian.com/world/2009/jul/17/bombs-explode-hotels-indonesia.
79 “Serpong Bomb exploded incompletely,” Kompas, accessed on 21 August
2013,
http://nasional.kompas.com/read/2011/04/22/18494676/Bom.
Ser pong. Sempat.Meledak; “he Boms is supposed exploded in Solo,
“BBC News Indonesia, accessed on 21 August 2013, http://www.bbc.
co.uk/indonesia/berita_indonesia/2011/09/110925_bomsolo.shtml; “he
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80 Dexter Roberts, ‘he U.S.-China Showdown Over Cyber Attacks Heats
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81 Ibid.
424
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82 David Sanger, ‘’U.S. Blames China’s Military Directly for Cyberattacks,’’
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83 Ibid.
84 Kirsten Schulze, he Free Aceh Movement (GAM): Anatomy of a
Separatist Group (Washington: East-West Center, 2004), 1-3.
85 Schulze, he Free Aceh Movement (GAM), 46-8.
86 M. Widjojo, et.al, Papua Road Map: Long Term Model of Conlict
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87 ‘’A Member of Independent Papua Organisation Arrested Bringing
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88 ‘’Oz Govt Denies Support for Meeting on W. Papua’s Independence,’’ he
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com/archive/oz-govt-denies-support-for-meeting-on-w-papuasindependence/501179/.
89 “New Zealand Support for Papuan’s 50th Anniversary of Independence
Declaration,’’ Radio New Zealand International, accessed on 28 August
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90 “Controversion of Opening of Independent Papua Organisation’s Oice
in Oxford, England, Australian Radio, accesed on 28 August 2013, http://
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91
“Earthquake,” he Body of Meteorology, Climatology and Geophysiscs,
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92 Ibid
93 “In Asia, he Growth of Market Capitalism is the hird Highest,” Bisnis.
com, 16 August 2013, http://www.bisnis.com/m/di-asia-pertumbuhankapitalisasi-pasar-tertinggi-ketiga
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94 he interview with Budi Hikmat, Chief Economist and Investor Relation
Director at PT Bahana TCW Investment Management, 18 September
2013.
95 “he Capitalism in Money Market Contributes 60% to PDB,” Antaranews.
com, http://www.antaranews.com/print/88222/
96 he Presentation of Faisal Basri in Nurcholish Madjid Memorial Lecture,
December 2012.
97 Dinna Wisnu, 13 June 2012, “What is the meaning of Being Suicient,”
Koran Sindo.
98 he Interview with Faisal Basri, 25 May 2013.
99 he bigger of coeicient rate, the bigger of social economy gap between
individuals and households in that State.
100 he Interview with 2 oicials and 1 senior specialist from he Ministry of
Foreign Afairs, and also based on literature study.
101 “Franz Magnis-Suseno: Religious Tolerance is SBY Responsibility”, tempo.
com, 4 June 2013, http://en.tempo.co/read/news/2013/06/04/241485763/
Franz-Magnis-Suseno-Religious-Tolerance-is-SBY-Responsibility
102 See he Analysis of Dinna Wisnu, Indonesian Human Rights in
International Opinion,” Koran Sindo, 26 September 2012.
103 Wawancara dengan Prof. Dorodjatun Kuntjoro-Jakti, juga dengan
mencermati hasil studi Tirta Mursitama & Dinna Wisnu terkait illegal
logging, dan tesis mahasiswa Pascasarjana Bidang Diplomasi Universitas
Paramadina yang dibimbing oleh Dinna Wisnu yakni Abdul Halim
terkait pengelolaan Selat Malaka.
104 “Geliat Ilegal Perkebunan di Perbatasan”, Media Perkebunan, Edisi 18,
September 2013.
105 Dorodjatun Kuntjoro-Jakti (2012).
106 Cepi Setiadi, 2013, Tesis Program Magister Bidang Diplomasi Universitas
Paramadina.
426
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LAWS AND REGULATIONS
Law Number 14 of 1985 on the Supreme Court
Law Number 18 of 1997 on Regional Tax and Regional Levy
Law Number 28 of 1999 on State Oicials hat Are Clean and Free
from Corruption, Collusion, and Nepotism
Law Number 31 of 1999 on the Eradication of the Criminal Act of
Corruption
Law Number 34 of 2000 on the Amendments to Law of the Republic
of Indonesia Number 18 of 1997 on Regional Tax and Regional Levy
Law Number 20 of 2001 on the Amendments to Law of the Republic
of Indonesia Number 31 of 1999 on the Eradication of the Criminal
Act of Corruption
Law Number 2 of 2002 on the National Police of the Republic of
Indonesia
Law Number 30 of 2002 on the Committee for the Eradication of
the Criminal Act of Corruption
Law Number 18 of 2003 on Lawyers
Law Number 24 of 2003 on the Constitutional Court
Law Number 4 of 2004 on Judicial Authority
Law Number 5 of 2004 on the Amendments to Law of the Republic
of Indonesia Number 14 of 1985 on the Supreme Court
Law Number 10 of 2004 on the Establishment of Laws and
Regulations
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Law Number 16 of 2004 on the Attorney General Oice of the
Republic of Indonesia
Law Number 22 of 2004 on the Judicial Commission
Law Number 32 of 2004 on Local Governance
Law Number 3 of 2009 on the Second Amendments to Law Number
14 of 1985 on the Supreme Court
Law Number 46 of 2009 on the Court for the Criminal Act of
Corruption
Law Number 48 of 2009 on Judicial Authority
Law Number 8 of 2011 on the Amendments to Law of the Republic
of Indonesia Number 24 of 2003 on the Constitutional Court
Law Number 17 of 2011 on State Intelligence
Law Number 18 of 2011 on the Amendments to Law of the Republic
of Indonesia Number 22 of 2004 on the Judicial Commission
Law Number 3 of 2002 on National Defense
Law Number 34 of 2004 on the Indonesian National Army
Law Number 2 of 2002 on the National Police of the Republic of
Indonesia
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This book contains the thoughts and predictions on the dynamics to be faced by Indonesia, both the
nation and the state. With sharp analyses on the threats, interferences, obstacles, and challenges, the
future entire Presidential administration will be more flexible in planning strategic responses to
them more quickly and accurately.
Gen. (ret.) Prof. DR. A.M. Hendropriyono S.T., S.H., M.H. - Chief of the State Intelligence
Agency of 2001-2004
This book can be a starting point for the state policy makers to identify Indonesia’s position
and what we want to achieve in the dynamic changes political, economic, and defense
constellations.
Prof. Dr. Ikrar Nusa Bhakti – The Research Professor of Indonesian Institute of
Sciences
This book observes Indonesia in the next five years. Development achievements in the
complexity and uncertainty of the global economy then become valuable assets to build a
prosperous, just, and equitable society in the future.
Prof. Dr. Firmanzah – Professor of Economics in the University of Indonesia (UI) and
Presidential Special Staff of Economics
From time to time, the management of natural resources still depends on foreigners. As the
result, 'we are like dead rats in a granary'. This book is drawn up as an effort to promote the
natural resources management policy to the society, allowing them to participate in its
monitoring.
Prof. Ir. Ida Ayu Dwi Giriantari, M.Eng.Sc, Ph.D. – Professor of Udayana University
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