Short-term survival, long-term disappointment

By webadmin on 01:39 pm May 04, 2012
Category Archive

Keith Loveard

If it’s true, as one British academic believes, that our brains are related to those of lizards, it’s surprising that we have managed to get as far as we have as a civilization. Perhaps we’re relatively well-developed lizards.

That said, events of the past few months have made it clear that short-term considerations continue to dominate the general view of life and therefore limit our prospects. In the Indonesian context, they certainly pose an uncertain future.

Combine the short-term view of life with the expediency of politics and it is quite likely that Indonesia is heading into a stage in which much of what has been gained over the past decade will be sacrificed to naked ambition.

At the same time as humanity with its lizard brain plans only for the next few years or even the next season and no further, other human characteristics come into play at times like this. In the literature of every culture, the most venomous character is the traitor. Despised by the bulk of humanity, the traitor is akin to the snake: venomous, slippery and loathsome. And, of course, the traitor is ever-present, driven by the short-term lure of power.

It could be argued that the treachery enacted by the members of the country’s so-called coalition parties has outdone even the snake in these past few months, while the government has demonstrated itself to be inept at running the country.

The victims are likely to be not only the struggling poor who were touted by the opponents of the fuel price rise but all Indonesians, who now face the prospect of yet another round of political and economic instability just as the country appeared ready to move to a higher plane of development.

Benedict Anderson, early in his career as a student of Indonesia, argued that the concept of power in Javanese society bore no relationship to questions of morality. Power was a goal in itself and you did what you needed to do to get it.

And while Aburizal Bakrie is not Javanese, he appears to have learned the lesson well, putting the knife into the back of the so-called coalition government only a matter of hours before the critical vote on fuel subsidies. Susilo Bambang Yudhoyono, despite being Javanese, gained power and then did not appear to know what to do with it.

That was certainly true in the last days of March with protests in every major city, with students appearing to want to outdo each other in the degree of nuisance they could cause. And, some evidence suggests, money was passing hands to ‘encourage’ hot-headed youth to make trouble, in yet another replay of Indonesia’s apparently tireless theater of political confrontation.

First fatal mistake

The government was set to fail from the day that it decided to put a tiny clause into the Budget bill for 2012, stating that the price of fuel would not rise. That proved to be a fatal mistake as, from the beginning of the year, oil prices began to rise and kept on rising.

Spurred on by all sorts of analysts from the World Bank, the Asian Development Bank and the major ratings agencies, the government finally decided to act and floated the idea of limiting access to subsidized fuels for car owners, deemed to be able to afford to pay the real market price.

That policy direction was major error number one. While fine in theory, in practice it demonstrated what can only be described as the incompetence of the country’s decision-makers. Anyone who has ever had to look for gasoline outside the major cities would know that the only brand available is the subsidized Premium brand.

To impose the policy of restricting access to Premium across the country, operators of gas stations would have had to install new tanks, a not inconsiderable expense. All of this would also require considerable time to provide the tanks to the thousands of gas stations across the country. The plan was simply unworkable from day one.

Apparently unfazed by its embarrassing inability to consider the problem of logistics, the government then moved to another plan: simply raising the price of fuel. After all, it had succeeded in achieving this three times already since the beginning of the Yudhoyono administration in 2004.

The idea was first mooted early in February. Two months on, it was hard not to conclude that what initially was an impression of confusion and indecisiveness had been translated into stark reality. During that two-month period, the government allowed opposition to build so that forces that wanted to embarrass the administration were in a strong position to do so.

What the government should have learned from its earlier three successful gasoline price hikes was to impose higher prices quickly, without allowing the forces of opposition to organize.

It didn’t. It prevaricated and, because of that single article in the Budget Law, was forced to go to the House of Representatives to clear the way. The rest is history.

The government should also have realized that it could not rely on its coalition of parties at the House, which had shown their penchant for treachery too often in the past. The government also raised the ire of its supposed allies with the offer of cash payments for 60 million people – double the number of the poor – in what was immediately denounced as a blatant bid to buy that many votes.

In such circumstances, the rationality of fuel price rises was thrown aside. Golkar Party and the Prosperous Justice Party (PKS) stabbed the government in the back and at the last minute announced that they would vote against the removal of the article on price rises, making it impossible for the rise to go through.

Negative outcome

Having displayed its political naiveté, the government is now faced with the fact that it has no allies, at least none that matter when the numbers are counted. Its one-time allies have stabbed it in the back and there is no reason why they will not do so again.

It now remains to be seen what will happen if the amount of subsidized fuel calculated in the budget revision bill is not enough to see the year through. Government money, meanwhile, will be pumped into the gas tanks of those who can afford to pay market prices.

Most seriously, the government has shown itself to be unable to operate as an active and constructive force that can pursue the best outcomes to take advantage of the enormous potential that exists for Indonesia’s economy. From now on it will struggle to apply the worst form of short-termism in an attempt at simple survival.

There is rumbling of further attempts to undermine public confidence in the government, with the next two years now almost certainly given over to infighting and cheap point-scoring.

Almost inevitably, the economic nationalist line will be played out by every political party in attempts to look more ‘red and white’ than the next one, potentially hurting investment. Most importantly, attention will not be where it should be most focused – on the economy – but instead will be concentrated on a myopic and increasingly desperate search for political support.