Megawati holds the key to Abdurrahman Wahid future. But this does not mean that she will necessarily become the next president. It depends on the process. But basically while she no longer can be regarded as a strong ally of Gus Dur, she is still very hesitant to see Gus Dur ousted. I think, if one understands Megawati, what she expects is that Gus Dur will say that he will no longer be able to manage these things-because he is a terrible manager, he is a very ineffective leader and he cannot govern-that I think everyone agrees. But he is not willing to give the power to Megawati; as many has already suggested since August last year. He is not ready to. He considers not only a challenge but his responsibility to stay in his job and he believes that he has been given the mandate from heaven and he is going to stay at least till 2004. So that is his position. Megawati, as I said before, is very hesitant. It depends on the nature the nature of the transfer of power but she is not going to take it from Gus Dur. People who are close to Megawati understand why. She still remembers vividly what happens to her father, Sukarno. And also being influence by some cultures of the Hindu religion, her grandmother is from Bali. She believed in karma. She thought that what happened to Suharto was karma because he did it to Suharto so she did not want to repeat the same thing and that is why she is so hesitant. She is only going to accept the leadership position if it is handed to her on a silver platter by Gus Dur himself. But that is not likely to come.
So, the big risk that we are seeing in the coming few days, maybe weeks or month, is that the political process will try to force Abdurrahman Wahid out. And this is likely to lead to some blood bath. I hate to say it but the possibility is there. You have strong supporters of Abdurrahman Wahid from East Java, from his organization. Mostly the peasantry and people from the countryside who does not understand this political problem but all they see is that people are trying to oust Gus Dur for political reasons. So that is very risky. We are in a very risky situation. If this doesn’t happen on the thirtieth of April, maybe the second of May or so. The thirtieth of April is when the Parliament, the House of Representatives can see to begin a discussion on the second sanction. It is part of the so-called impeachment process. The fact that the meeting takes place is considered by a number of Abdurrahman Wahid supporters in East Java, already, as a sign of forced attempt to get him out of his present position. And so we don’t know what the reaction is going to be.
Abdurrahman Wahid himself is not helpful in this case because while he made a number of statements asking his followers to comedown and to go to Jakarta. But on the other hand, he could always say that he understands why they are so angry. And so this has resulted in what in Indonesia people call the mob politics, using the mob to sort of influence the outcome of political gain and this is of course a very dangerous game. And civil society is at a loss. They had so much hope in Abdurrahman Wahid and saw in him the person that could lead us into democracy. But now that he is making use of mob politics, it is something totally unacceptable to many of us. So civil society, in fact, is put into a dilemma, and therefore it has not been saying anything about this struggle for power. Because on the other hand many have been supporters of Gus Dur, now a little bit is a solution because he did a lot and encouraged mob politics to develop in the country. The alternative is equally not attractive especially to civil society. Whether it is true or not, but the perception is that Megawati is not supportive of political reform. In fact, she blocked constitutional reform in the People's Consultative Assembly last time. She was not supportive and in fact also blocked the attempt to introduce direct presidential election. Her party also was the one that was against the move to limit the terms of the involvement of the military in politics. These all do not appeal to civil society in Indonesia. So they are facing a dilemma because the alternative to Abdurrahman Wahid is also not attractive to them. So there isn’t much civil society thinks it can do now. And many of us are at a loss but the attitude that we have taken is that it is like if somebody is sick. You can’t cure it; there is no medicine. So you have to sweat it out. That is the attitude that we are taking, that it can’t happen. Because while we think that the best strategy is just to sweat it out and if Gus Dur is not provoked, maybe he will not react to the way he is reacting now. So we want to see all this provocation being eliminated. Let’s all sit down and try to understand.
But of course certain political parties have different agendas and by now I think that many of them, the main agenda of many of them is just . And so you can no longer talk and I don’t think there is a possibility of a political compromise. So, we are also trying to limit the damage if this happens. Many of my friends are going to various places to try to talk to people and make it known how important it is for us to prevent this because we do not want to see any reversal of this democratization. But civil society is, of course, not very strong yet so it is a major task. That is the political scene.
Maybe I will talk a little bit about two other aspects that also are not helpful to the process. One is what happens in the economy and the second one is on the big decentralization experiment that we have in the economy. Let me begin by saying there is a discussion going on but it goes on in limited amounts, you know, a few of us. And the big question is this. Do we have to look for a new economic development type. Given that the strategy of development was adopted before has led to the financial crisis and an economy that has been vulnerable and a lot of corruption has been going on. Is there a different type? Another group would say no because the basic concepts of economic development in Indonesia is still valid; because you have certain characteristics that are desirable. For instance, a very prudent and disciplined macroeconomic policy. Maybe what needs to be injected is a greater sense of justice. And so the talk is about the democratization of the development strategy that we have. You know, make it more democratic so that issues of justice, equality and so on. Governance, because governance is of course an important problem. So that is it, the debate. And it is not settled but I think the mainstream feel is for the democratization of the development model that we have already adopted.
The democratization of the economic development requires the creation and the nurturing of new economic institutions. Unfortunately, this is also not happening because our agenda continues to be focused on the recovery process. So the reform process is not at the forefront because the economy is basically; if one cannot say that in a crisis, but the economy is still sick. And the recovery program has been very slow. The reasons for this slow progress are twofold. One has to do with our capacity to manage the economy given that we have a totally new government in place and the problems are so huge. The capacity is just not there to manage. Second, there is the problem with the International Monetary Fund. What was supposed to be a working partnership with the Fund, became a problem of continued bargaining, hard bargaining on both sides. And this was of course not helpful to the process. We invited the International Monetary Fund to come here. The main criticism that you may have heard is perhaps it was not totally justified because it was Indonesia’s decision to bring it. It was a wrong judgment on both sides, on the Indonesian side and that of the IMF.
That basically when we wanted the IMF to come in and help us in late ’97 we thought that all that was necessary was to restore confidence, having the IMF support us with a pledge of forty billion or so, it was very large. The assumption was, of the negotiators on both sides, that it would scare away the speculators. And that both the Indoensians and the IMF were so confident that we would not have to make use of the forty billion dollars. It was simply a matter of restoring confidence. But there was then one problem namely, that this arrangement did not help restore confidence, in fact it destroyed even more the confidence. And the reason that again, there was some history with this. When the IMF was brought in, it was the Indonesia side and some in the government that already felt hopeless in pursuing the deregulation for the reform of Indonesian, it started in the mid 1980s. In the early 1990’s there was a reform that peaked but also there was, it stopped, the whole process stopped and the reason was that Suharto was against it. Because the many reforms that needed to be introduced involved the business activities of his children, his family and his cronies. So nothing could be done. So when the crisis came, a few people in the government said "e;Oh, this is a blessing in disguise. Let’s people put all the structure and reform programs also in the IMF program so that Suharto will accept this."e; Because he did in fact in 1983, in 1986 when the country was sort of in a crisis he was willing to make the tough decisions, the necessary decisions. So all of us were aware of this. It was a risky strategy that Suharto would again repeat what he did in the past. We all forgot that in 1983, all the big projects that were terminated were state-owned projects. This time around it was those of the children so he behanved totally differently. So it backfired, because immediately when Suharto was confronted with the reform package, he saw what was in there and he made a statement explicitly saying that the technocrats were trying to undermine him. To some extent they were undermining his policies but I know that the intention was to save Suharto from continuing to go in that direction. They were hoping this would bring him to his senses. But to make things short we had this package. That in fact, at the beginning, the IMF was very unhappy, saying that it is none of my business dealing with all this structural reform programs. All I need to do is the macro economy, stabilization, and strengthening of the financial sector. The IMF didn't want to talk about the state-owned enterprises, the monopolies and all the other issues that were in the package. So basically, Indonesia was trying to use the IMF to clean up the system. It was a wrong judgment.
That was the beginning of the two things. One is that IMF involvement did not help to restore confidence because each time you do not deliver what you speak. And so the markets were always reacting negatively. And the whole the process of bargaining led to in fact, a more complex program each time, we did not deliver what was promised in the plans. And so the whole time it led to a more complex program; it was reviewed and amended. And, in a sense, also, given that we did not implement the first package, led the IMF to tighten the second package. So initially there were ten points in the program, it became like fifty points after it was and then by January in 1998, it became one hundred and fifty points. So the accusation, when dealing with Indonesia is that IMF is trying to micromanage the while thing. They want to be involved in everything. Now, if it was the same team that negotiated with the IMF before, maybe it would have worked because you know each other well. But we have had two governments since and three or four cabinets. And each time there is a new cabinet, a new economic side, they want to reassert, this position and say I am in control of things. And so, on the Indonesia side they raised their voice. Therefore it has become a very unproductive process. Not helpful to the whole economy and reform program. Now is there good news in all this? At the beginning of this year many of us have some optimism because what happened last year in the year 2000 is that under all these circumstances the economy was growing at close to five percent last year. And there is an explanation for this. You can, in fact, look at the economy from a totally different perspective now. It is a dualistic economy in a sense.