This chapter will provide an overview of national-level political developments from the chaotic conditions that accompanied the fall of President Soeharto to the attainment of a degree of normality under President Susilo Bambang Yudhoyono. Reform was launched after President Habibie had suddenly been catapulted into the presidency by the events of May 1998. Habibie had no reputation as a reformer but he quickly understood that the crisis demanded drastic reforms. His successors, Abdurrahman Wahid and Megawati Soekarnoputri, had been part of the growing moderate opposition to Soeharto but neither was able to form strong coherent governments committed to continuing reform. The “crisis-ridden” reforms forced on Habibie lost momentum after the worst of the crisis had passed. Facing fragmented legislatures — the DPR and MPR — formed after the free 1999 elections, Abdurrahman and Megawati were more concerned with maintaining legislative support than embarking on radical reform. Nevertheless, although Abdurrahman's failure to maintain that support eventually led to his dismissal, significant political reforms were adopted by the DPR and the constitution was overhauled by the MPR during Megawati's tenure. By the time Yudhoyono won the presidency in 2004, the authoritarian political structures of the New Order had been transformed into institutions that met international standards of formal democracy. But, while legislative institutions had been able to reform themselves, major obstacles stood in the way of further reform of the military and the judiciary. Although dubbed the Reformasi era, the achievements of the post-Soeharto governments were quite mixed.

THE NEW ORDER AND THE FALL OF SOEHARTO

When President Soeharto was forced from power in May 1998, he had ruled over one of the world's most durable authoritarian regimes for more than three decades. Backed by the military, Soeharto's New Order combined repression with co-optation to prevent the rise of organized political challenges. Blessed by an abundance of natural resources, particularly oil, the Indonesian economy had grown steadily until 1997. By the 1990s it was no longer the “basket case” that it had been in the mid-1960s but moving towards “newly-industrializing- country” status. Indonesian society had been transformed with the emergence of an educated middle class in an increasingly urbanized, although still predominantly non-urban, population.

The collapse of the New Order lifted the lid on simmering communal tensions in many regions of Indonesia. During the New Order violent conflicts between local ethnic and religious communities had broken out from time to time, but from 1998 to the early 2000s the extent and intensity of violence increased sharply. Rioting in cities and towns caused many casualties and damage to property but usually lasted no more than a few days. In several regions, however, conflicts took the form of one-sided massacres while in others they were more akin to civil war. By the early 2000s, the number of lives lost in these conflicts had exceeded ten thousand and well over a million refugees had been forced to flee their homes to which many never returned. In East Timor, Aceh and Papua, the weakening of central authority provided the opportunity for the resurgence of existing separatist movements, one of which is discussed in the case study of the Aceh conflict in Chapter 8. In West and Central Kalimantan, Poso and Maluku, communal conflict intensified to a level that was beyond the capacity of the state to contain, as will be illustrated by the case of Maluku in this chapter. These regions — whether afflicted by separatist or communal conflict — were overwhelmed by crises in which the state ceased to function effectively. If they had been independent countries, they would have been classified as “failed states” but in fact, of course, they — except East Timor — remained part of the Republic of Indonesia. As we will see in the cases of both Aceh and Maluku, these regional conflicts had local origins but were also linked to political rivalries at the national level.

Maluku had been perceived as a peaceful region in which relations between Muslims and Christians were relatively harmonious. A complex combination of disparate factors, however, contributed to the breakdown of order in Maluku after the fall of the New Order regime. Demographic change had upset the balance between the two religious communities, the holding of free elections exacerbated uncertainty about the new constellation of power, national politics under Soeharto had encouraged increased Muslim assertiveness, divided religious loyalties immobilized local security forces, and radical Muslim groups outside Maluku sent militia forces to fight alongside their co-religionists.

Throughout Indonesia' history, women have made up only a small proportion of the national parliament. During the New Order period (1966–98), the proportion of women in parliament averaged about 9 per cent, peaking at just over 13 per cent in 1987. The first general election in the post Suharto period was declared free and fair, yet it produced a worrying result for those who had hoped that democracy would bring greater gender justice: the percentage of women elected to the national parliament fell from 10.8 per cent to 8.8 per cent. In 2004 the proportion of women parliamentarians increased to 11.3 per cent, but the magnitude of the increase fell far short of that hoped for by women' groups. In 2009, 17.8 per cent of those elected to the national parliament were female. This represented a historic high for Indonesia, falling just short of the (very low) global average of 18.8 per cent.

Over the past decade, women' groups have actively called for measures to correct the gender imbalance in parliament. In 2003 parliament introduced Indonesia' first gender quota, with stronger quota provisions included in the 2008 laws on political parties and elections. In 2004 and 2009 Indonesia had in place two measures widely associated with greater numbers of women in parliament—proportional representation and a quota. These had positive effects, but the parliamentary representation of women nevertheless remained low.

This chapter explores the reasons for the low number of women in Indonesia' national parliament. In the first section I examine three key factors that have been shown internationally to have a significant influence on the number of women elected to parliament. Next, I examine how each has played out in Indonesia. Finally, I ask whether the historically high number of women elected to the national parliament in 2009 can be considered a success for gender equality.

THE INTERNATIONAL EXPERIENCE: WHAT WORKS?

The proportion of women in parliament is influenced by a range of political, economic, cultural and structural factors. In particular, there are three factors that international experience suggests are important determinants of the number of women in parliament: the broad policy and legislative framework, the electoral system and the use of quotas.

Since the 1980s, many developing countries have embarked on decentralization in a wide variety of circumstances and for diverse reasons. In some countries decentralization was part of an ongoing programme to raise the efficiency of public administration, but in others it was associated with fundamental changes in the structure of government. The fall of a centralized authoritarian regime, for example, often led not only to constitutional and electoral reform but also the re-structuring of centre-region relations. Democratization extended naturally from the centre to the regional and local levels, although the degree and form of decentralization varied considerably. While most countries decentralized incrementally, Indonesia's initial reform was dubbed a “big bang” that transformed the highly centralized unitary structure of the New Order into one that was highly decentralized. Observers described it as “the most daring decentralization policy in developing countries” based on “the most radical decentralization laws in Asia and the Pacific”.

This chapter opens with a brief description of the centralized New Order regime before discussing the drastic “big bang” decentralization measures introduced after Soeharto's fall. Despite their previous support for virtually unfettered central domination of the regions, Golkar and its military partner, which together constituted an overwhelming majority in the unreformed DPR elected in 1997, quickly reversed their position on centre-region relations and supported radical reform legislation proposed by President Habibie. The 1999 regional autonomy laws were adopted in the shadow of a national crisis and the prospect of national disintegration — circumstances that Grindle and Thomas would call “crisis-ridden”. But by the time that the 1999 laws were replaced in 2004 concerns about national disintegration had largely abated and “politics-as- usual” had been more or less restored, to borrow another term from Grindle and Thomas. The rushed adoption and implementation of the 1999 laws had led to much confusion and controversy that generated resistance inspired by ideological, pragmatic and interest-based considerations. The revised 2004 laws were the product of “normal” bargaining and compromise between the major parties in the legislature. Although they restored some of the central government's authority, the new laws fell far short of the centralization of the Soeharto regime while further entrenching decentralization by introducing direct elections of provincial and district heads. Finally, the chapter raises the question of the vulnerability of regional governments to elite “capture” and its implications for democratic accountability.

Democratic military reform, following the fall of a military-backed authoritarian regime, involves a series of conceptually distinct steps although in reality they often overlap. First, the military must withdraw from its political role as a dominant or major force in the government and concentrate on its professional military functions. Second, the civil government has to establish control over the military which should loyally carry out the policies determined by that government. And third, if “democratic civilian control” is to be achieved, the military must accept its obligation to be accountable through the government to an elected legislature and public opinion. As Muthiah Alagappa argues, “Ultimately, success in democratic civilian control will hinge as much if not even more on the consolidation of democracy and development of state capacity than on the specific measures instituted to control the military”. The actual path towards military reform, however, is always affected by the specific circumstances of the country undergoing reform.

The collapse of Soeharto's New Order and the launching of Reformasi posed huge challenges for civil-military relations. How would the post- Soeharto regime deal with the military and, no less important, how would the military adjust to completely new circumstances? Advocates of military reform often envisage a Western-style professional military that takes its orders from a democratically elected civilian government and is primarily concerned with the defence of the nation against foreign military threats. The Indonesian military, of course, with its origins among the nationalist fighters who conducted the successful guerilla war against the Dutch colonial power in the late 1940s, had never conformed to the apolitical Western model. Like the Dutch colonial military, its main purpose was to maintain order and put down rebellion within it own territory. It was also structured in such a way as to provide political support for the incumbent president. During the New Order, the military was closely integrated with the Soeharto regime and served as the ultimate guarantor of its longevity.

Democratic political reform required that the military be dislodged from the position it held during the New Order. Unlike military-dominated governments in countries where the military had acquired power in a relatively recent coup, the New Order regime had been thoroughly penetrated over several decades by active and retired military officers who occupied key positions at all levels of civil government, stretching from the national cabinet to provincial and district administration.

In the run-up to Indonesia' 2009 legislative and presidential elections, very few international observers believed that the polls would pose a serious challenge to the country' continuing process of democratisation. Successful national elections had been held in 1999 and 2004, and Indonesia had conducted around 500 direct local ballots without significant problems since 2005. The expectation, therefore, was that the third postauthoritarian elections would be a routine affair.

But while the 2009 ballots did have a successful political outcome, they were in fact surprising chaotic. The conduct of the elections fell short of important basic standards of democratic electoral performance and they were organised in an ad hoc manner. The accessibility and quality of the electoral process varied widely across the country. A delayed and poorly crafted legal framework, a lack of resources and a dysfunctional voter registry all contributed to the difficulties experienced in 2009, demonstrating that Indonesia' election management processes had performed far less well than what could reasonably have been expected based on past performance. If it had not been for the convincing margin of victory achieved by President Susilo Bambang Yudhoyono and his Democratic Party (Partai Demokrat, PD) in both the legislative and presidential elections, the poor management of the elections could easily have become a catalyst for more serious political disagreements. As it was, the Constitutional Court played an extraordinary role in averting a last-minute boycott of the presidential election by the opposition candidates. Its transparent adjudication of results-related disputes after both the April and July elections was the main reason that a potentially damaging period of political paralysis was averted.

This chapter discusses the quality of management of the 2009 polls in four steps. The first section provides some background on the importance of elections for democratic consolidation, discusses Indonesia' electoral experience since 1998 and describes the main problems besetting the 2009 ballots. The second section looks at one of the chief reasons for the decline in the quality of election administration in 2009: the weakened capacity of the General Elections Commission (Komisi Pemilihan Umum, KPU) following considerable changes to Indonesia' electoral laws. The third part begins by assessing the areas of electoral organisation in which Indonesia performed satisfactorily in 2009: political parties were able to exercise freedom of expression; media reporting was balanced; the elections were conducted peacefully; and procedures for post-election dispute resolution were effective.

In an afterword to Robert Taylor' The Politics of Elections in Southeast Asia (1996), the late political scientist Daniel Lev expressed relief at discovering that ‘culture’ had been entirely ignored in the collection of essays. Lev was obviously dissatisfied with the previous efforts of some of his contemporaries who had analysed elections in Southeast Asia in general— and Indonesian electoral politics in particular—from a ‘culturalist’ standpoint. However, both Lev and those he criticised appeared to recognise only some outdated conception of ‘culture’. In their view, ‘culture’ was something static, unique or essential to a particular society. Presumably Lev and his counterparts were unfamiliar with the growing body of literature in anthropology, gender and cultural studies where culture— as a concept and practice—is critically problematised, instead of being essentialised or avoided. To this day, many political analysts continue to ignore, overlook or underestimate the cultural aspects of electoral processes, leading to a serious gap in the scholarship on elections and their meaning for citizens’ daily lives. This chapter attempts to fill this gap by offering an alternative perspective on elections in Indonesia, highlighting key trends since the downfall of the New Order government in 1998.

My discussion focuses on the street politics of non-elite groups—often conveniently referred to as ‘the masses’—during the election campaign period. The political and electoral dynamics of the post Suharto period have produced a new kind of disempowerment—one that is marked by the dominance over the electorate of the entertainment industry and its values. In addition to the rise of the politics of entertainment, the populace has been seriously fragmented by the heightened political competition among its members. As a result, Indonesia' contemporary masses appear to have voluntarily become dispersed and domesticated. Ironically, this is a situation that the New Order strongly desired but was incapable of achieving. Under Suharto, the masses often engaged in rowdy activities when elections were held, eventually worrying the authoritarian government. The regime' attempts to curtail the actions of unruly male youths during election campaigns largely failed.

The 2009 elections marked a new stage in Indonesian electoral politics. For the first time voters were able to elect directly members of the legislatures, because of the introduction of an open party list system. In the past, political parties were the key to political success: voters simply chose the party they preferred and it was a candidate' place on the party list that determined whether or not that person was elected. Now, if a party gains enough votes in a particular electoral district to win a seat, it is the candidate from that party with the highest number of individual votes who gets the seat. This system continues a trend that began with the introduction of direct presidential elections in 2004 and then of direct elections for heads of local government in 2005. The introduction of direct elections has caused dramatic changes in electioneering and campaign strategies, throwing the political spotlight onto individual candidates in campaigning at all levels. The mass media and image building by candidates have become all-important.

Before the introduction of direct elections, the most important actors in election campaigns were the party machines, which had organisations that stretched down to the grassroots. The chief method of communicating with voters was face-to-face. In direct elections, by contrast, victory is determined not by how a candidate reaches out to potential voters through a party machine, but by how issues are framed and an image built in the media. Victory is determined by the candidate' performance, the issues he or she raises, and how the person looks in advertisements (Nimmo 1976). As a result, the role of the mass media and advertising in Indonesian elections has increased massively. In the 1999 elections, parties spent Rp 97.2 billion (about $10 million) on advertising. After 10 years this sum had gone up tenfold. During the recent legislative elections, total expenditure on advertising by the parties was Rp 1.1 trillion ($117 million) (AGB Nielsen Media Research 2009).

This new media-driven political landscape has given birth to important new categories of political actors in Indonesia: polling organisations and political consultants. Direct elections call for experts who can map voter preferences, understand the strengths and weaknesses of a candidate, create and package issues, build an attractive image, and understand what strategies will persuade voters.

In 1999, Indonesia embarked on an ambitious decentralisation program that initiated a restructuring of the country' political institutions on a scale unprecedented since the 1960s. Only a year after Suharto' New Order regime was overthrown, two new laws were adopted that shifted political and economic power from the centre to the subnational level of government. Law No. 22/1999 on Regional Government spelled out the conditions for the devolution of political authority, while Law No. 25/1999 on Revenue Sharing outlined a new system of fiscal arrangements between Indonesia' national and subnational political entities (Aspinall and Fealy 2003: 9). With the implementation of these laws in 2001, a considerable amount of political authority was handed to the district (kabupaten) and municipality (kota) level of government, leaving the centre with just a few key responsibilities, namely security and defence, foreign policy, justice and religious affairs (Usman 2001: iii). At the same time, much of the executive' fiscal authority was shifted from the centre to the district and municipal governments. The new regulatory framework required the central government to transfer a minimum of 25 per cent of domestic revenues to subnational governments, of which 90 per cent had to be allocated to districts and municipalities. In short, Indonesia has been transformed from a highly centralised state into one of the most decentralised in the world.

There were various reasons for the government' decision to shift power away from the national level after 1999. Several active secessionist movements, some of which had been lingering for decades, had raised fears among the political elite in Jakarta that the collapse of the oppressive New Order regime would reinvigorate demands for independence in such areas. Consequently, the government believed that transferring some power to the regions would meet their mounting demands for more authority and thereby forestall secessionist aspirations (Hadiz 2003: 12; Turner and Podger 2003: 25). It was this consideration that motivated the government to shift most power to the district level, with the national elite harbouring concerns that excessively empowered provinces could push for secession. While the central government was anxious to avoid the disintegration of Indonesia, it also faced tremendous pressure to reform the kleptocratic institutions the New Order government had left behind.

When Indonesia' long-time ruler Suharto fell in 1998, very few observers expected that the country would be able to build a stable democracy. Most predictions for Indonesia at the time were gloomy, ranging from a quick return to military dictatorship and continued paralysis to the complete break-up of the state. Yet in 2009, just a little over 10 years later, Indonesia stood out as the most democratic country in Southeast Asia (Freedom House 2009). Despite the persistence of some severe democratic deficits—including widespread corruption and continuing limitations in the application of the rule of law (Davidson 2009)—the world' most populous Muslim state has reached a number of remarkable democratic milestones since 1998, especially with regard to what the World Bank calls ‘voice and accountability’.1 Perhaps most strikingly, elections have been widely accepted as the only legitimate means to distribute formal political power, even in those parts of the country that experienced separatist or communal violence in the early years of the transition (Tomsa 2009a; Palmer in this volume).

The successful entrenchment of elections, however, has somewhat distracted from the poor performance of the political parties that contest them. Not many scholarly analyses of Indonesian party politics have been published so far, but the few available works have been mostly unfavourable, to say the least. One of the first sustained critiques came from Vedi Hadiz (2004: 619), whose neo Marxist analysis of post-New Order Indonesia described political parties as little more than ‘expressions of shifting alliances of predatory interests’. Others have used institutionalisation theory to explore the weaknesses of the parties and the party system (Johnson Tan 2002, 2006; Tomsa 2008). The negative views of Indonesian parties were perhaps best summed up by Carothers (2006: 175), who asserted that:

More recently, however, some scholars have sought to counter or at least modify the prevailing consensus on the poor state of Indonesia' political parties.

The global financial crisis that began at the epicentre spread forcefully across the globe and affected nearly every economy, big or small. We now look at the impact on and challenges to Asia.

The Asian Financial Crisis of 1997 (“AFC”)

Not long after Asia recovered from the Asian Financial Crisis (AFC), it is hit with another crisis in 2007; this time the epicentre was the United States. While each crisis is different from another, they share enough common characteristics from which valuable lessons can be drawn.

It is generally accepted that what happened in Asia before the AFC was the influx of foreign capital that resulted in misallocation of capital, mismatch of short-term borrowings with long-term investments, aggravated by pegged exchange rates. In the early 1990s, interest rates in developed countries were low and investors were chasing for higher yields in the “emerging markets” starting in Latin America and culminating in Southeast Asia. In 1990 private capital flows in emerging markets were $42 billion and by 1997, they reached $256 billion (Krugman 2009a, p. 79). Most of these were short-term capital flows in the form of portfolio investments and other investments (loans and deposits) through the banking system.

Faced with huge capital inflows, it is almost inevitable that much went into speculative investments in the stock and property markets, or ended up in financially unviable projects. From the experience of one of the authors as a debt restructuring specialist in Southeast Asia during the AFC, it was commonly known among financial specialists that in the heyday of bank syndicated loans, both foreign and local banks were lending more than what was required or financially viable. Like the subprime saga of today, lenders and borrowers had over-optimistic financial projections at best, or engaged in fraud and financial mismanagement at worst. The results were asset bubbles and over-leveraged corporations with foreign currency loans that imploded when sudden massive reversal of capital flows caused huge depreciation in the borrowers’ currencies (Corden 2007).

The AFC was not the boom and bust of a normal business cycle but one associated with speculative and erratic financial flows. The current account deficits in many countries before the AFC were not the result of low savings rates.

This book grew out of a series of articles I (the principal author) wrote and public lectures I gave in various parts of Asia in 2007 and 2008. As a matter of fact, when I gave one of my first lectures on the financial crisis in October 2007 at the Asian Development Bank (ADB), it did not attract much attention. As the Director General of the Private Sector Operations Department of the ADB was reported to have said, it (the crisis) was just a tempest in a teacup. In a later lecture I gave to the Bankers Association in Singapore in January 2008, I ended the talk by saying it was a perfect financial storm, and I was questioned about the validity of such a conclusion at that time. At the end of 2008, when the crisis was still raging, I was invited to speak at the Institute of Southeast Asian Studies, Singapore. After one of the talks, I was encouraged by the Director and the staff of the Institute to write a book on this subject. One of my good friends and tennis partner, Professor Lim Chin of the National University of Singapore, attended one of my lectures. During the height of the financial panic, he had separately written several articles and edited a book on the crisis. His offer to work with me on this book led to a fruitful partnership in this intellectual journey that has benefitted both of us.

In August 2007, a few weeks after the collapse of two hedge funds managed by Bear Stearns, reportedly the start of the great financial crisis, I started my research fellowship with the Asian Public Intellectuals (API) Programme of the Nippon Foundation. The topic of my research was the Asian financial crisis. I had spent twenty years as a banker in various international banks (Chemical Bank (now JP Morgan Chase), Credit Suisse First Boston, Deutsche Bank, Standard Chartered Bank and the Asian Development Bank). And prior to that I had done research on and taught political economy and sociology in various universities in the United States and Malaysia. When I left the field of banking and finance in 2007, I wanted to spend time to reflect and write on my experience in this area.