INDONESIA UNDER YUDHOYONO (2004-2014)

YUDHOYONO TAKES POWER

Yudhoyono was formally sworn in as president in October 2004. His appointed several military men to his cabinet. His vice president, Jusuf Kalla, was a non-Javanese and a wealthy businessman. Yudhoyono ran on the platform "more just, more peaceful, more prosperous, and more democratic Indonesia." Among his cabinet appointees were Finance Minister Sri Mulyani Indrawati and Trade Minister Mari Pangetsu — considered two of Asia's most powerful women.

Associated Press reported: “Yudhoyono was sworn in as Indonesia's sixth president today after winning the country's first-ever direct elections for head of state last month. Yudhoyono, 55, begins his five-year term amid high expectations he can fix the many problems that saddle the world's most populous Muslim nation, among them rising Islamic militancy, massive poverty and widespread corruption. "In the name of God, I swear that as the president of the Republic of Indonesia I will uphold the law and the constitution . . . and serve the nation," he told the country's parliament. An Islamic leader held a copy of Islam's holy book, the Koran, over Yudhoyono's head as he made the oath. [Source: Associated Press, Reuters, October 20, 2004]

“Yudhoyono won the election with promises to focus on the common people, tackle endemic corruption among the ruling elite, get tough on terrorists and boost a sluggish economy failing to keep pace with an expanding work force. In the limbo between the election and taking office today, Yudhoyono opened his home on the outskirts of Jakarta, receiving thousands of well-wishers who flocked from across the archipelago, chatting with them about affairs of state. He faces a combative parliament stacked with members of the old elite. Analysts say his honeymoon probably will be short unless he makes some tough decisions early on reform and security aimed at reviving foreign investment. "We don't know much, but what we do know is he is incredibly cautious. . . . The consummate Javanese gentleman and not very confrontational," says Ken Conboy, an Indonesia expert who heads a Jakarta-based risk management firm. "Just because he had a few stars once upon a time doesn't make him the pick of the military," said Conboy. "He is not really a general in the traditional Indonesian sense." [Ibid]

The Economist reported: During the month-long transition between his election and inauguration, he consulted such a motley array of advisers that it was impossible to tell where his own instincts lay on any given subject. His public statements, although unobjectionable, were studiously vague. There are four former generals among the 36 ministers, frightening those who believe that Mr Yudhoyono, a former general himself, has authoritarian leanings. On the other hand, as defence minister the new president chose Juwono Sudarsono, a civilian who held the post once before, at a time when the government was struggling mightily (and, it has to be said, largely fruitlessly) to bring Indonesia's powerful armed forces under control. [Source: The Economist, October 21, 2004 \^/]

“The economic team is equally muddled. The co-ordinating minister will be Aburizal Bakrie, an ex-chairman of the chamber of commerce. A background in business would be an asset, were it not for the fact that Mr Bakrie's conglomerate ran up debts of roughly $1 billion during the Asian financial crisis. On the other hand, Mr Yudhoyono called back an employee of the Asian Development Bank to serve as finance minister, and the regional head of the IMF to run the planning ministry. His minister of trade, Mari Pangestu, is a known free-marketeer who will probably push for the reversal of protectionist measures imposed by the outgoing government, including a ban on rice imports—though that is not to say that she will necessarily prove successful. \^/

“The new attorney-general, who will lead a long-expected campaign against corruption, is Abdul Rahman Saleh, a respected Supreme Court judge. He used to preside over the judiciary's internal anti-graft campaign, which has won praise from NGOs. He earned further praises when he boldly dissented from his fellow judges when they acquitted a suspected embezzler last year. Mr Saleh has some sensible counter-corruption schemes in mind, such as giving a new body that scrutinises the conduct of judges the job of keeping tabs on policemen and state prosecutors as well. Nonetheless, Mr Saleh is hardly the attack dog many Indonesians had expected. They had hoped that a known and exceptionally brave reformer, Marsillam Simandjuntak, would get the job.\^/

“Politically, Mr Yudhoyono is hedging his bets. He has appointed several cabinet ministers from Golkar, the biggest party in parliament, despite its leaders' vow to keep the party in opposition. Indeed, Mr Yudhoyono has included both Mr Bakrie, a member of Golkar in good standing, and Fahmi Idris, who was expelled for criticising the party leadership. The Crescent Star party, a radical Muslim outfit, the National Awakening party, at the opposite end of the Islamic spectrum, and his own, secular Democrat Party are all represented. The only big party left out is that of Megawati. \^/

“During the campaign, Mr Yudhoyono sold himself not as a radical reformer, nor even as a man of action, but as a thoughtful, level-headed leader. He clearly places a premium on unity—witness his frequent assertion that his priority in office will be defusing Indonesia's various separatist movements. He has even dubbed his new ministerial line-up the “United Indonesia Cabinet”. Since his victory, he has tried repeatedly to contact Miss Megawati (who refused to concede defeat, much less speak to him) in the name of “reconciliation”. He will presumably govern in a similarly cautious, consensual manner. That need not necessarily mean that his many pledges of reform will come to naught. But it might take him his full five-year term to make good on them.” \^/

Yudhoyono as President

Yudhoyono was generally hailed as a reformer. He promised to be a strong leader and take firm action to fight terrorism and get the economy on course. He also vowed to crackdown on corruption, reduce poverty, improve the economy, end separatist conflicts in Aceh and Irian Jaya, and reform the military. If anybody could reform the military he argued it would be him because he was still respected in the military. His Democratic Party was relatively small. It came in forth in the 2004 general elections with 7.5 percent of the vote and 57 seats in the 550-seat legislature. According to Al Jazeera: “he plans a very different, more communicative and transparent administration than the shambolic regime of Mrs Megawati. He wants to modernise the presidency and has slotted a “West Wing-style” team of young, often foreign-educated, advisers into crucial positions at the palace.”

Yudhoyono was credited with raising Indonesia’s profile abroad and praised for leading Indonesia through a period of extended political stability, consolidated democratisation and economic growth. AFP reported: “Highlights of his first term included a peace deal with Acehnese separatists which ended a bitter 30-year conflict, multiple high-profile arrests of corrupt officials and steady economic growth despite the global financial crisis. But he also came under fire from civil society groups for caving in to calls from hardline Islamists for restrictions on the minority Ahmadiyah sect, and for backing a sweeping anti-pornography law despite broad opposition.”

The BBC reported: “Besides proposing military reform, President Yudhoyono has been recognised for his efforts to establish regional autonomy laws and resolve the separatist conflict in the Aceh and Papua provinces. He has also been credited for reviving the economy, and for his market-friendly approach to reform. He works closely with the Corruption Eradication Commission (KPK) to clean up graft and corruption in Indonesia. The resulting economic and political stability has been attributed to his unique influence and the power of his personal leadership in the country. The first year of Mr Yudhoyono's first term brought perhaps his biggest challenge, the 2004 Asian tsunami disaster. His administration also won international plaudits for signing a peace deal in 2005 with separatist rebels in Aceh province. [Source: BBC, April 8, 2014]

A few months after becoming president, Eric Ellis wrote in The Times, “Yudhoyono has wasted no time in mapping out an ambitious agenda for his five-year term.“I want our country to become normal,” he said. “My duty and my role as President is to restore Indonesia from a slide and a crisis, to rebuild the country.” But the task confronting him is immense. One of the world’s poorest and most populous countries, sprawling Indonesia does not function as a “normal” state. The rule of law has been so denuded by generations of official corruption that Transparency International ranks it as the world’s fifth most corrupt state. Meanwhile, separatist civil war rages in its heavily Islamic westernmost province of Aceh, and threatens to erupt at its easternmost edge, in mostly Protestant Papua. In between, the Hindu resort island of Bali has been bombed by homegrown Islamists, one of three deadly attacks on foreigners in two years by the extremist Jemaah Islamiyah (JI), al-Qaeda’s South East Asia branch. [Source: Eric Ellis, The Times, November 8, 2004]

According to Thomaswhite.com: “Through the string of crises, Yudhoyono remained stoic, winning appreciation on the global stage. “He has shown leadership, poise, and grace under extreme pressure,” says Ray Jovanovich of Hong Kong’s Credit Agricole Asset Management to Business Week. With aplomb, Yudhoyono walked the fine line between cracking down on Islamic extremist groups and taking care not to upset the clergy in the world’s most populous Muslim nation. He also successfully tackled the long raging civil war in Aceh. Yudhoyono has disentangled the tightly knit web of corruption rampant in the archipelago’s government bodies, sending numerous politicians and bank officials, including his son’s father-in-law, to jail. [Source: Thomaswhite.com]

According to Lonely Planet: Under SBY, corruption remained endemic, terrorism remained a threat and the military, although no longer having automatic representation in government, still held great sway over society. Despite some reforms and freedoms, political activism and dissent remained a risky pursuit as was shown when Munir, a human rights activist, was poisoned on a Garuda flight in 2005. After the 2003 tsunami, SBY won favour by making sure foreign aid could get to the affected areas (including Aceh, which was still under martial law). He also took the initiative to restart talks with Acehnese rebels, which resulted in a peace deal in 2005. Whether these efforts have a lasting effect is uncertain. [Source: Lonely Planet]

Yudhoyono and the 2004 Tsunami

Yudhoyono’s early months in power were dominated the tsunami disaster and after that he helped hammer out a peace deal in tsunami-struck Aceh. The Yudhoyono administration was able, with international assistance, to cope reasonably competently and transparently with the December 2004 tsunami, thought to be the most destructive ever recorded and responsible in Indonesia alone for at least 166,561 deaths and 203,817 displaced persons, mostly in Aceh, as well as untold devastation. A combination of skill and goodwill also made it possible for Jakarta to turn the catastrophe to some good account by negotiating a peace settlement with GAM the next year. [Source: Library of Congress]

Alan Sipress wrote in the Washington Post, “When the tsunami crashed into Indonesia's westernmost province of Aceh in December, President Susilo Bambang Yudhoyono was nearly 3,000 miles away at the far end of the archipelago. It took him more than a day to reach the scene of the disaster, but that was a sprint by the standards of Indonesia's traditionally lumbering leadership. He has returned to Aceh four more times, winning widespread applause from ordinary Indonesians for his high-profile presence in the devastated region. [Source: Alan Sipress, Washington Post, February 27, 2005]

Indonesian political analysts and commentators said, however, it was not enough to turn up at the scene. Yudhoyono appeared to be too stiff and proper, dressed for a meeting rather than a rescue mission, many analysts said. During his trips, the president wore a formal shirt with long sleeves neatly buttoned at the wrist instead of rolling his sleeves up and wading into the wreckage. Critics fault Yudhoyono for missing a golden chance to energize his young administration, which took over in October, and rally a nation that has grown cynical about politics in recent years. Moreover, they blame the president for failing to provide clear direction for recovery efforts in Aceh, where at least 120,000 people were killed by the tsunami and many more left homeless. "He should have used much more urgent rhetoric to drive home the message of national emergency," said Dewi Fortuna Anwar, a political commentator with the Habibie Center, a private think tank. "It was characteristic of Bambang Yudhoyono. He was good, but he could have gone the extra mile." [Source: Alan Sipress, Washington Post, February 27, 2005 */*]

“Faced with a natural disaster unparalleled in the country's modern history, Yudhoyono fell short in marshaling Indonesia's resources, she said. For instance, he deferred to military commanders when they resisted the emergency deployment of two army battalions to the province to help in relief efforts. Then, after proposing the establishment last month of a special authority to oversee Aceh's reconstruction, Yudhoyono seemed to back away from the idea, creating confusion over who will orchestrate the massive effort. Two months after the disaster, critics say there remains little coordination among government ministries, private charities and international organizations. "Who's in charge? Who's going to be the conductor?" asked Humam Hamid, chairman of the Aceh Recovery Forum. "The president needs to be more decisive. People are waiting." */*

“Hamid said, for instance, that Acehnese refugees living outside designated camps had yet to receive emergency food supplies because of confusion among government officials. And he said the central government had been slow to formalize its plan to establish coastal buffer zones. As a result, some refugees have already begun to rebuild destroyed homes in locations where the government may ultimately ban development. Presidential spokesman Andi Mallarangeng said: "The president, since day one, instructed that we do our best to see that all resources are mobilized and nothing be spared. We have done tremendously. Of course we could do better." */*

“Analysts repeatedly said Yudhoyono should have followed the example of former mayor Rudolph Giuliani, who galvanized New Yorkers after the attacks of Sept. 11, 2001, or of Thai Prime Minister Thaksin Shinawatra, whose media-savvy response to the tsunami helped him win an overwhelming reelection victory” a month after the tsunami. “But those two names are unknown to most Indonesians, who remain largely supportive of Yudhoyono's performance. According to the Indonesian Survey Institute, about 80 percent of Indonesians polled in January said that they were satisfied with his handling of the Aceh crisis; preliminary results in February show a similar level of approval. Muhammad Qodari, the institute's deputy director, attributed these high ratings to Yudhoyono's visibility on the issue, in particular his early visits to the province. "The president gets a lot of media on Aceh," Qodari said. */*

“The public response to his handling of the tsunami has been so favorable that Qodari said it had compensated for disapproval of Yudhoyono's economic policies, in particular his proposal for sharply higher fuel prices. The issue of government fuel subsidies has loomed large since Yudhoyono was elected in a landslide victory in August. After steep increases last year in global oil prices, his economic advisers urged him to slash price supports in an effort to save the government budget more than $5 billion. */*

“Foreign diplomats who follow recovery efforts offered generally positive reviews of the president's performance. In the days after the disaster, Yudhoyono quickly belied his reputation for indecisiveness by inviting foreign military forces, including about 8,000 U.S. troops, to participate in emergency relief efforts in Aceh, diplomats noted. The invitation was extended despite long-standing Indonesian fears of foreign interference in the restive province, where government forces are battling separatist rebels. Yudhoyono also moved swiftly to adopt a Singaporean proposal for an emergency tsunami conference. The meeting, which was held in Jakarta less than two weeks after the disaster, drew 26 countries and international organizations pledging about $4 billion for tsunami relief efforts. The president also took advantage of the heightened international interest in Aceh to press forward with negotiations over a peace deal with the separatist Free Aceh Movement. */*

Yudhoyono, Pancasila and the Indonesian People

In 2006 President Yudhoyono made a point of giving a major national speech on the then-neglected Birth of Pancasila Day (June 1), recommending that politicized niggling over the historical origins and other details surrounding the Pancasila—which he described as the “state ideology”—cease and that greater attention be paid to its precepts. There were numerous calls for making June 1 a national holiday, and the minister of education said that the Pancasila would remain part of the curriculum. It looked very much as if a key element of the New Order was about to be reinstated. *

The president made a special effort, however, to emphasize that he did not intend to return to the past. The authoritarian Suharto government had, he said, “twisted the ideology to promote conformity and stifle dissent” with what he termed “Pancasila brainwashing,” which caused the populace to turn against it and its sponsors. But in reality, he said, the Pancasila is “not an absolute doctrine but a compromise reached by the nation’s founding fathers,” and it should be accepted as such, not as a sacred document used to enforce uniformity. It is a compromise that sees all Indonesians as equal and protects pluralism and tolerance; it supports democratic reform and human rights, at the same time as it promotes a sense of unity under a common sense of social justice. This is precisely what is needed, Yudhoyono argued, at a time when rapid political decentralization and vigorously competing ethnic and religious identities threaten national unity. Whatever the degrees of public trust in Yudhoyono’s message, it will, of course, be some time before it is clear where it will lead. Nevertheless, making the effort to see elements of change where continuity is most apparent at least brings observers closer to the realization that an easy, either/or reading is inadequate. *

Yudhoyono made various efforts to reach the Indonesian people directly. Some of his ideas may have been a little unrealistic. John Aglionby wrote in The Guardian, If Yudhoyono “thought he could get closer to his people by giving out his mobile phone number and inviting complaints, then he seriously miscalculated the scale of the nation's discontent. "If you think [we] don't care, never come to you and your problems are left unsettled, my cellular phone is active 24 hours a day," he was quoted yesterday as saying at a small gathering of farmers on Saturday afternoon. But as soon as Mr Yudhoyono gave out his number - +62 811 109 949 for those outside Indonesia - the media started broadcasting it nationwide. Within minutes the presidential mobile was inundated with calls and text messages, and by yesterday morning the flood of complaints had become so great that the service was overwhelmed. "We're now looking at a system which can accommodate more messages," said a presidential spokesman. "If we change the number of course we will announce it." Callers to one radio chat show welcomed the president's initiative but suggested it might be easier if he had an email address as well. [Source: John Aglionby, The Guardian, June 13, 2005]

Yudhoyono and Terrorism

The Yudhoyono government proved itself unexpectedly determined and adept in bringing to justice those responsible for various terrorist activities. In November 2008, it proceeded with the execution of the three men responsible for the 2002 Bali bombings, who had been held since their capture and conviction in 2003. [Source: Library of Congress]

According to the Muslim 500: Yudhoyono’s popularity was “due in part to the sincerity with which he actualises his promises to the Indonesian people such as the promises for anti-terrorism enforcement made during his 2004 election campaign. Indonesia worked closely with Australian intelligence and security forces to quell extremist threats. In March, 2010, he was awarded the Honorary Companion of the Order of Australia (AC) by former Australian Prime Minister Kevin Rudd who said the award was in recognition of the Indonesian leader’s efforts in tracking down the people behind the October, 2002 Bali bomb attack. In response to the July 2009 hotel bombings in Jakarta, President Yudhoyono was vigilant about openly condemning the perpetrators as agents of terrorism and simultaneously voiced his dedication to establishing peace and security in Indonesia through programs that target education and poverty-alleviation in key areas where militants may prey on youths.

Eric Ellis wrote in The Times, “Yudhoyono told The Times of a course of “shock therapy” to fight terrorism and eradicate corruption. President Yudhoyono’s remarks on terror will hearten Western leaders frustrated at his predecessor Megawati Sukarnoputri’s half-hearted efforts to crack down on the JI. “The main issue is no longer whether there is or is not such a formal organisation called Jemaah Islamiyah. What is important is whoever performs the act of terrorism in Indonesia, JI or any other groups. “We will undertake all of our effort to prevent and fight against terrorism. We will take stern action. We will not give room for terrorists to develop and perform acts in Indonesia.” [Source: Eric Ellis, The Times, November 8, 2004]

Yudhoyono and Corruption

Yudhoyono was praised both at home and abroad for instituting processes to tackle the widespread corruption in Indonesian public life and in reinforcing the mandate of the Corruption Eradication Commission (KPK). A few weeks after Yudhoyono took office, Matthew Moore wrote in The Age, “A governor's arrest is the first dose of the Indonesian President's "shock therapy". The wealthy Governor of Aceh, Abdullah Puteh, spent the night in Jakarta's Salemba Prison after he was unexpectedly detained by anti-corruption officials. The officials are investigating allegations that he marked up the purchase price of a Russian helicopter to cream off $560,000. Mr Puteh is the first high-profile official detained for corruption for years in Indonesia.His detention has received much publicity because it is widely linked with the election of Indonesia's new President, Susilo Bambang Yudhoyono. That Indonesia's new Anti-Corruption Commission (KPK) jailed a Government official who has been routinely accused of bribe taking is seen as the start of Mr Yudhoyono's drive to combat endemic corruption. [Source: Matthew Moore, The Age, December 9, 2004 ***]

“After his election, Dr Yudhoyono promised "shock therapy" in his first 100 days, which many observers expected would involve the arrest of prominent figures accused of corruption. Although the KPK was set up as a powerful, independent body that can operate without reference to government, Dr Yudhoyono openly admits he is working closely with the KPK, encouraging it to tackle systemic corruption. Dr Yudhoyono's spokesman, Andi Mallarangeng, said the President was in "constant communication" with the KPK over Mr Puteh and had "conveyed a message that he's fully backing them". Dr Yudhoyono has also decided to suspend Mr Puteh as governor once he is charged, a step that happens when he appears in court. ***

“Mr Mallarangeng said the President had also given approval for police and the Attorney-General to lay charges of corruption against a dozen other government officials, including the Governor of West Sumatra, a member of the national parliament and 10 local government officials. "This has not been done before," Mr Mallarangeng said. "No governor or even a bupati (local government official) has been put in court, but now you have not only governors but members of parliament . . .and there will be more." ***

On the eve of presidential elections in July 2009, Patrick Guntensperger wrote in the Asia Times, “The conviction on corruption charges of a close relative to President Susilo Bambang Yudhoyono has significantly bolstered his graft-fighting credentials. Former Bank of Indonesia governor Aulia Pohan, the father-in-law of Yudhoyono's son, was convicted and sentenced in mid-June to four-and-a-half years in prison on embezzlement charges. Some political analysts believe the timing of the conviction could be decisive for the Yudhoyono-Boediono ticket, which was already leading comfortably in most preliminary opinion polls. Those perceptions will have been strengthened by the conviction of ex-West Java governor Danny Setiwan on "collective corruption" charges, and the sentencing of a former supplier for the Ministry of Manpower and Transmigration, Erry Fuad, to over two years in prison for embezzling funds. [Source: Patrick Guntensperger, Asia Times, July 2, 2009 <<<]

“Yudhoyono first rose to power in 2004 on an anti-corruption platform, an issue that dominated that year's polls. True to that campaign vow, he has during his five-year tenure presided indirectly over the conviction of several top officials and politicians. Earlier, Yudhoyono was accused of netting more opposition-linked politicians and officials than from his own camp, but the conviction of Pohan has symbolically countered that criticism at a crucial juncture in the election campaign. Since the Corruption Eradication Commission's (KPK) establishment, Yudhoyono has scored significant political points for the quasi-independent agency's take-no-prisoners approach. Although officially established in December 2003 under Megawati Sukarnoputri's administration, the KPK's record of independence, probity and an extraordinary 100 percent conviction rate developed and grew on Yudhoyono's watch. <<<

“The KPK has tackled Indonesia's endemic corruption head-on and in the process built Yudhoyono's international reputation as a good governance champion in one of the world's perceived most graft-ridden countries. Through May, the KPK investigated and prosecuted 143 cases, winning guilty convictions and prison sentences in every case. The fallen have included congressmen, mayors, regents, diplomats, former governors and legislative commissioners. <<<

Corruption Charges Against the Yudhoyono Administration

The Yudhoyono administration did not escape being charged with corruption. Thousands of protesters accused him and some of his allies of pilfering from the 2008 government bailout of a bank worth $710 million. Yudhoyono was shaken by allegation and denied his involvement. A national poll found that only 10 percent of Indonesians thought the President was guilty. [Source: Thomaswhite.com]

In April 2009, Indonesia has launched an investigation into allegations of vote buying by Yudhoyono's youngest son ahead of national elections. Electoral authorities in East Java province were probing allegations Edhie Baskoro, a candidate for Yudhoyono's Democratic Party, handed out money to voters at a rally. AFP reported: “The Indonesian president's corruption-fighting credentials were on the line after his son was embroiled in vote-buying allegations. Authorities initially said they were investigating allegations that Baskoro was handing out 10 000 rupiah (88 cents) notes to potential voters at a campaign rally, allegations vehemently denied by Democratic Party officials. But at a press conference police said Baskoro had been cleared of suspicion and named several people, including a rival party official and journalists, as suspects for allegedly defaming the president’s son. Three media groups—Okezone.com news website, the Jakarta Globe English-language daily and Harian Bangsa newspaper—were accused of spreading lies against Baskoro, along with Gerindra Party legislative candidate Naziri, who filed the initial complaint against him with election authorities. [Source: AFP, April 8, 2009]

Economy Under Yudhoyono

Yudhoyono was regarded as pro-business. After he was elected the stock market shot up. In 2004 the year he was elected president he promised to halt unemployment from 19 percent to 5 percent by 2009. He said he would do this by attracting foreign investors. When he took office analysts said Indonesia needed to rebuild its banking system and encourage ethnic Chinese to invest.

After Yudhoyono officially became president Eric Ellis wrote in The Times, “Yudhoyono vowed to rebuild the economy. He set himself the goal of creating jobs for 50 million of the 220 million unemployed Indonesians. “I want our country to become normal,” he said. “My duty and my role as President is to restore Indonesia from a slide and a crisis, to rebuild the country.” [Source: Eric Ellis, The Times, November 8, 2004]

The Yudhoyono administration showed it could make difficult economic decisions when it announced dramatic cuts to subsidies on gasoline and cooking fuel in order to save a troubled budget; significantly, this move did not result in angry protests and demonstrations. Strong domestic demand as well as relatively low dependency on exports have insulated Indonesia from the 2008-2009 global economic crisis, and the local stock market has soared almost 80 percent in the first half of 2009.

Despite the many political and social problems its people face, Indonesia’s economy appeared to perform remarkably well in 2009 and early 2010. In May 2010, the International Institute for Management Development in Zürich placed Indonesia thirty-fifth on its annual list of the most competitive economies, jumping it ahead of seven other nations (the Philippines was listed thirty-ninth, and Malaysia was listed tenth). The economy grew 6.1 percent in 2008, 4.5 percent in 2009, and 6.1 percent in 2010. Consumer expenditures were growing, but even the top strata were spending cautiously; government spending was strong, offsetting declining exports. [Source: Library of Congress *]

Average per-capita income rose from US$1,180 in 2004 to US$4,200 in 2010. Most important, statistics indicated that poverty was declining: the nation’s poorest stratum, earning US$65 or less a month, declined during roughly the same period, from about 40 percent of society to slightly more than 20 percent. According to the latest Gini index, which measures inequality of wealth, Indonesia enjoyed considerably more equitable income distribution (0.36) than neighboring Thailand (0.42), Singapore (0.43), or Malaysia (0.46), although the gross domestic product (GDP) in all those countries was higher. As had been the case two decades earlier, such figures did not go entirely unchallenged but were widely accepted among economists. *

In 2010 foreign investment rose 52 percent to US$16.2 billion, the stock market rose 20 percent in the first half of the year, and the rupiah (Rp) appreciated nearly 5 percent against the U.S. dollar. In the first quarter of 2011, Moody’s and Standard and Poor’s raised the nation’s sovereign debt rating to BB+, or just one level below investment grade. Strength within the Asian sphere was particularly marked. For example, the largest share of foreign investment came from member countries of the Association of Southeast Asian Nations (ASEAN), and, as of late 2010, Indonesia was poised to become the world’s largest manufacturer of footwear, as more companies from Taiwan and South Korea relocated there. Still, 15 percent of Indonesia’s population lives below the poverty line of US$1 per day. In recognition of this disparity, President Yudhoyono began 2011 by outlining the government’s “growth with equity” philosophy of planning.*

According to Thomaswhite.com: “Social sculpting apart, Indonesia’s economy has shown a remarkable turnaround under Yudhoyono’s watch. Already, Indonesia is expected to gallop ahead in the next six years to become the world’s biggest exporter of power-station coal and largest producer of palm oil. The global financial crisis left but a few scratches on this economy, which was mostly sheltered by its weak dependence on exports. [Source: Thomaswhite.com]

Yudhoyono, who holds a PhD in economics, has held the reins steady on the country’s political environment, and this has boosted consumer confidence. He has slashed budget deficits drastically and facilitated procedures for new businesses. Indonesia grew 4.5 percent in 2013. And now Yudhoyono has pledged to pin economic growth at 6.6 percent by the end of 2014. Forbes observed that the country’s 40 richest people saw their combined wealth double in 2009, a feat matched only by China in the Asia Pacific. The President’s critics say that concerted efforts are needed if Indonesia hopes to achieve the economic growth he has promised. After all, fourteen percent of the population remains living below the poverty line, a crumbling infrastructure becomes more worrisome with time and entangled bureaucracies continue to challenge foreign investors.” [Ibid]

Yudhoyono Foreign Policy

Yudhoyono was labeled Pro-American when it came to foreign policy. Paul Dillon of Aljazeera wrote: A career soldier, Yudhoyono and graduate of US military training programmes at Fort Benning, Columbus (1976 & 1982), and the Command and General Staff College at Fort Leavenworth, Texas (1991), Yudhoyono has fond memories of the US. "I love the United States, with all its faults. I consider it my second country," the International Herald Tribune quoted him as saying last year. [Source: Paul Dillon, Aljazeera, July 4, 2004]

Eric Ellis wrote in The Times, Yudhoyono “pledged to fix the often fractious relationship with Jakarta’s southern neighbour, Australia. In foreign embassies in Jakarta, he is regarded as the most Western-friendly leader in Indonesian history. He has already opened his doors to American magazines, Australian television, Japanese newspapers and The Times. [Source: Eric Ellis, The Times, November 8, 2004]

John Kurtz of the World Economic Forum wrote: Yudhoyono made “a long string of impressive public appearances at global conferences. His remarkable ability to exude both humility and strength, especially as he talked of preparing the country for many more years of growth, strikes a chord with investors and with his many regional friends.” [Source: John Kurtz, World Economic Forum, May 23, 2014]

Indonesia role within Southeast Asia was viewed as a means of generating economic growth. Addressing the disparity of income problem in Indonesia and developing world, Yudhoyono gave a special address entitled “The Big Shift and the Imperative of 21st Century Globalism,” delivered at the World Economic Forum in Davos, Switzerland, in January 2011. He called for a new sense of globalism that is “open-minded, pragmatic, adaptive and innovative,” a globalism in which regional groupings play a crucial role in supplying both dynamism and restraint. The world economy, he stated, should be managed “so that it functions to meet our needs rather than satisfying our greed,” and he repeated Indonesia’s own national goal of “growth with equity,” implying that the world community could well aim for something similar. Indonesia took up the chair of ASEAN in 2011, and it was clear on the eve of the organization’s annual meeting in late July 2011 that Indonesia would use that opportunity to emphasize the same themes and enhance its growing international reputation as a political and economic power to be reckoned with.

Yudhoyono’s Second Term

Yudhoyono began his second and last term with hopes. On the day he was sworn in to his second five-year term, AFP reported: “A massive security blanket descended on the centre of the capital, with about 20,000 police backed by armoured vehicles on hand to secure the inauguration.The event was attended by the leaders of Australia, Brunei, East Timor, Malaysia and Singapore, as well as senior officials from around the world.: Yudhoyono “promised to crack down on corruption, boost infrastructure spending to unlock economic potential and advance bureaucratic reform.” He appointed “a broad coalition government of secular and Islamic parties, combining trusted technocrats in key economic seats with party-political appointees. Economists applauded Yudhoyono's decision to replace Kalla with US-educated economist and former central bank chief Boediono as vice president. [Source: AFP, October 20, 2009]

As his Yudhoyono second term was winding down, Ben Bland wrote in the Financial Times, “In his first term, Mr Yudhoyono led a successful rehabilitation operation after the devastating Aceh tsunami, tackled entrenched Islamist terrorism and oversaw a dramatic turnround in the country's economic fortunes. He secured a second term with a landslide election victory in 2009 after vowing to fight widespread corruption. However, Mr Yudhoyono's approval rating has since slumped as the once booming economy has fallen victim to poor management, key policy decisions have been kicked into the long grass and his Democrat party has become mired in high-profile corruption scandals. Until recently a darling of international investors, Indonesia is now considered one of the “Fragile Five” emerging markets that are vulnerable to a painful downturn because of their overheating economies and underperforming governments. [Source: Ben Bland, Financial Times, February 3, 2014 ^*^]

“Many observers believe a too-eager-to-please president was hamstrung by his rift with Jusuf Kalla, the straight-talking tycoon who was vice-president during the first term before the men fell out and Mr Kalla ran for the top job himself. Mr Kalla was replaced by Boediono, a bookish economist and former central bank governor who had neither the profile nor the political heft to play the necessary “bad cop” to Mr Yudhoyono’s “good cop”. ^*^

“While Indonesia’s gross domestic product grew by an average of nearly 6 per cent per year under Mr Yudhoyono, little progress was made on revamping the country’s woeful infrastructure, reforming its Byzantine bureaucracy or fixing its ailing education and health systems. High on hot money inflows and a general sense that Indonesia was taking its rightful place on the world stage, Mr Yudhoyono’s government implemented protectionist economic policies with as much ease as it dodged tough calls. The tapering of the US Federal Reserve’s extraordinary monetary stimulus is adding to the financial pressures on emerging markets with large current account deficits such as Indonesia. Mr Yudhoyono’s successor will need to show more resolve if the country is to live up to the high expectation of investors and the fast-growing middle class.” ^*^

Writing about revelations revealed by Wikileaks, Philip Dorling wrote in The Age, “Although Mr Yudhoyono won a big victory in the 2009 election, US envoys quickly concluded he was running out of political puff. After political controversies through late 2009 and into 2010 led to his popularity taking a sharp fall, the embassy said the President was increasingly "paralysed". "Unwilling to risk alienating segments of the Parliament, media, bureaucracy and civil society, Yudhoyono has slowed reforms," it said.” [Source: Philip Dorling, The Age, March 11, 2011]

Near the end of Yudhoyono’s term, the BBC reported: “Yudhoyono has cultivated an image as a tough corruption fighter with high moral integrity; pledges to crack down even harder on corruption were one of the main planks of his 2009 election campaign. But the sentencing in 2012 of a former Democratic Party treasurer on corruption charges caused embarrassment for the president's ruling party. Mr Yudhoyono is credited with having ushered in an era of financial stability. The global financial crisis of 2008-9 did not hit Indonesia as badly as som”e of its neighbours, though millions of Indonesian citizens still live under the poverty line. [Source: BBC, April 8, 2014]

Wikileaks: Yudhoyono “Abused Power'

In 2011, Philip Dorling wrote in The Age, “Secret U.S. diplomatic cables have implicated Yudhoyono in substantial corruption and abuse of power, puncturing his reputation as a political cleanskin and reformer. The cables say Mr Yudhoyono has personally intervened to influence prosecutors and judges to protect corrupt political figures and pressure his adversaries, while using the Indonesian intelligence service to spy on political rivals and, at least once, a senior minister in his own government. They also detail how Mr Yudhoyono's former vice-president reportedly paid millions of dollars to buy control of Indonesia's largest political party, and accuse the President's wife and her family of seeking to enrich themselves through their political connections. [Source: Philip Dorling, The Age, March 11, 2011]

The US diplomatic reports — obtained by WikiLeaks and provided exclusively to The Age — say that soon after becoming President in 2004, Mr Yudhoyono intervened in the case of Taufik Kiemas, the husband of former president Megawati Sukarnoputri. Mr Taufik reportedly had used his continuing control of his wife's Indonesian Democratic Party, then the second largest party in Indonesia's Parliament, to broker protection from prosecution for what the US diplomats described as "legendary corruption during his wife's tenure". In December 2004, the US embassy in Jakarta reported that one of its most valued political informants, senior presidential adviser T.B. Silalahi, had advised that then assistant attorney-general Hendarman Supandji, who was leading the new government's anti-corruption campaign, had gathered "sufficient evidence of the corruption of former first gentleman Taufik Kiemas to warrant Taufik's arrest".

But Mr Silalhi, one of Mr Yudhoyono's closest political confidants, told the US embassy the President "had personally instructed Hendarman not to pursue a case against Taufik". No legal proceedings were brought against Mr Taufik, an influential political figure who now serves as speaker of the People's Consultative Assembly, a largely ceremonial body representing members of parliament.

The US embassy also reported that then vice-president Jusuf Kalla allegedly paid "enormous bribes" to win the chairmanship of Golkar, Indonesia's largest party, during a December 2004 party congress. The President's wife and relatives feature prominently in the US embassy's political reporting, with American diplomats highlighting efforts of the President's family "particularly first lady Kristiani Herawati . . . to profit financially from its political position". As early as 2006 the embassy commented to Washington that "first lady Kristiani Herawati is increasingly seeking to profit personally by acting as a broker or facilitator for business ventures . . . Numerous contacts also tell us that Kristiani's family members have begun establishing companies in order to commercialise their family's influence." Highlighting the first lady's behind-the-scenes-influence, the embassy described her as "a cabinet of one" and "the President's undisputed top adviser".

Other leaked cables indicate Mr Yudhoyono has used the Indonesian State Intelligence Agency (BIN) to spy on his political allies and opponents. According to a senior Indonesian intelligence officer, Mr Yudhoyono directed BIN chief Syamsir Siregar to instruct his officers to conduct surveillance on one of the most senior cabinet ministers, State Secretary Yusril Mahendra, while he made a secret trip to Singapore to meet Chinese businessmen. The President also reportedly tasked BIN to spy on rival presidential candidates. Mr Silalah told US diplomats Mr Yudhoyono "shared the most sensitive BIN reporting on political matters only with himself and Cabinet Secretary Sudi Silalahi".

Australia's Spy Agencies Listen in on Yudhoyono’s Mobile Phone

“The leaked material is a slide presentation, marked top secret, from the Australian Department of Defence and the Defence Signals Directorate, or DSD, (now called the Australian Signals Directorate), dealing with the interception of mobile phones as 3G technology was introduced in Asia. It includes a slide titled Indonesian President Voice Intercept, dated August 2009 and another slide, titled IA Leadership Targets + Handsets, listing the president and the first lady as having Nokia E90-1s, Boediono as having a BlackBerry Bold 9000, as well as the type and make of the mobile phones held by the other targets. Also named as targets for the surveillance are Dino Patti Djalal, at the time the president's foreign affairs spokesman, and Hatta Rajasa, and possible presidential candidate for the National Mandate party. Hatta was at the time minister for transport and his daughter is married to the president's youngest son. ~~

“A slide entitled Indonesian President Voice Intercept (August '09), shows a call from an unknown number in Thailand to Yudhoyono. But the call did not last long enough for the DSD to fulfil its aims. “Nil further info at this time (didn’t make the dev threshold – only a sub-1minute call),” a note at the bottom says. Another slide, titled Indonesian President Voice Events, has a graphic of calls on Yudhoyono's Nokia handset over 15 days in August 2009. It plots CDRs – call data records – which record the numbers called and calling a phone, the duration of calls, and whether it was a voice call or SMS. The agency, in what is standard procedure for surveillance, appears to have expanded its operations to include the calls of those who had been in touch with the president. Another slide, entitled Way Forward, states an imperative: “Must have content.” Australian attempts to monitor Yudhoyono's phone ~~

“Also on the list of “IA Leadership Targets” are: 1) Jusuf Kalla, the former vice-president who ran as the Golkar party presidential candidate in 2009; 2) Sri Mulyani Indrawati, then a powerful and reforming finance minister and since 2010 one of the managing directors of the World Bank Group; 3) Andi Mallarangeng, a former commentator and television host who was at the time the president's spokesman, and who was later minister for youth and sports before resigning amid corruption allegations; 4) Sofyan Djalil, described on the slide as a “confidant”, who until October 2009 was minister for state-owned enterprises; 4) Widodo Adi Sucipto, a former head of the Indonesian military who was until October 2009 security minister. ~~

“Asked about the previous revelations about the embassies, Tony Abbott emphasised that they occurred during the administration of the former Labor government, that Australia's activities were not so much “spying” as “research” and that its intention would always be to use any information “for good”. The prime minister has repeatedly insisted Australia's relationship with Indonesia is “good and getting better”.” ~~

Yudhoyono's Legacy

In May 2014, the World Economic Forum awarded Yudhoyono the title of Global Statesman—only the third time the WEF has bestowed this honor. The forum’s founder and chairman Klaus Schwab noted that Yudhoyono presided over an extraordinary period for Indonesia. His long list of accomplishments, includes strong economic growth, the survival of several major disasters, and the continued strengthening of democracy in the world’s fourth-largest nation.[Source: John Kurtz, World Economic Forum, May 23, 2014]

John Kurtz of the World Economic Forum wrote: Beset at the end of his term “by difficult corruption cases in his own party that led to a remarkable drop in voter support in April 2014’s legislative elections, SBY nonetheless deserves grand praise for his success in raising Indonesia’s profile in the eyes of the world. Deploying a slew of integrated and well-orchestrated methods, Indonesia went from being among Asia’s lowest-regarded states in the early part of past decade to a darling of the international community. As John Riady, the talented successor to the leadership of his family’s Lippo Group, framed it in his comments prior to the award luncheon, Indonesia during SBY’s leadership went from pariah to darling. From the standpoint of someone who has been associated with Indonesia for 25 years and has written extensively—and often critically—about its leaders, I found myself applauding loudly along with the whole room, with a special sense of pride among those of us who were along for the 10-year ride.” [Ibid]

As Yudhoyono’s second and last term was winding down, Ben Bland wrote in the Financial Times, “Fifty years after Mao Zedong’s “little red book” was first distributed in China, Bambang Yudhoyono has published his own rather less pithy “big white book” of reflections on politics and leadership. Eager to revive his flagging reputation before he steps down in October after a decade at the helm of southeast Asia’s biggest economy, Mr Yudhoyono’s book – entitled There is Always a Choice – stretches to an eye-watering 822 pages. The unfortunate timing of the release, coming as Indonesia battles deadly floods in Jakarta and Manado and a huge volcanic eruption in North Sumatra, has seen the president lampooned by his many critics. [Source: Ben Bland, Financial Times, February 3, 2014 ^*^]

“With one eye on his personal legacy and one eye on the political prospects for his party and his family, the book is an attempt to set the record straight. Mr Yudhoyono recounts discussions with Indonesian politicians and world leaders to explain why he has not achieved more. He recalls revered former Singapore prime minister Lee Kuan Yew telling him that even though he might only be able to complete 70 per cent of his objectives, that will be more than any other president could achieve in such a vast, complex nation. Then Mr Yudhoyono turns to history for support, citing a John F. Kennedy dictum that although presidents must have goals, there is insufficient time to achieve them, even in two terms. ^*^

“The book, which the president insists is only a precursor to his memoirs, gives little insight into the vicissitudes of policy making and coalition building in this young and rambunctious democracy, the world’s third biggest. But, says Yohanes Sulaiman, a politics lecturer at the Indonesian National Defense University, it does shed light on Mr Yudhoyono’s thin-skinned nature. Without naming names, Mr Yudhoyono bemoans his adversaries from the press to analysts to the mysterious “thick black cloud” that one day invades his residence and can only be expelled through prayer. Chapter titles such as “A president often feels alone” and “Maintain communications although you are often frustrated” do little to dispel the notion that this is one long exercise in retrospective self-justification. ^*^

“Unfortunately, it fails to explain the main mystery surrounding Mr Yudhoyono: why he did so well in his first term only to disappoint during his second, when he has equivocated on key issues such as cutting costly fuel subsidies and failed to make headway in the fight against endemic corruption. “The president is a nice guy who tried his best but lots of opportunities were wasted in the second term,” says Mr Sulaiman. “That’s what people will remember.” Indonesians do not doubt that the president always had a choice. But, as Mr Yudhoyono completes his second term, many are left asking: where were the decisions?” ^*^

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.

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© 2008 Jeffrey Hays

Last updated June 2015

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