The shape of the world a generation from now will be influenced far more by how we communicate the values of our society to others than by military or diplomatic superiority. William Fulbright, 1964

Wednesday, June 10, 2009


Beefing about Indonesia Duncan Graham

In the slightly less polluted suburbs of Jakarta and other big Indonesian cities, restaurants specialising in beef dishes are doing well, particularly those serving steaks from New Zealand and Australia.

It’s another sign of the growing prosperity of the middle classes, their discriminatory palates and smart marketing; the flashing signs outside the eateries are usually in English (for snob value) and often stress the breed of beast customers will allegedly consume. Black Angus is a favourite.

It’s also an indicator that the Indonesian economy is managing to fend off the global recession. While Westerners suffer negative or minimal growth keeping us housebound, Indonesians are enjoying a four per cent growth rate allowing the well heeled to continue dining out.

Beef has long been out of reach of poor Indonesians who get their protein from chicken, fish and soybeans. Feedlot local beef tends to be tough and apart from a speciality called rujak cingur made from the cow’s snout, few know how to cook it well.

Free-range steaks from NZ and Australia have a reputation for being tender and tasty, and NZ’s clean-green image resonates with educated and health-conscious diners, mainly ethnic Chinese. Trendy restaurants give their customers a flat pre-heated stone and a slab of raw meat. The stone retains its heat long enough for diners to sizzle their own steak.

The growing popularity of Kiwi and Ozzie beef over the local product was one of the reasons put forward for this week’s sudden ban on Antipodean beef imports by Indonesian authorities, allegedly because the meat did not meet the halal (permitted) standards demanded by Muslims.

The ban was triggered by a letter from the Majelis Ulama Indonesia (MUI – Indonesian Islamic Scholars’ Council). This advisory body issues fatwa, or religious edicts. Apart from rejecting Kiwi T-bones it has passed fatwa on men and women exchanging texts, chanting during yoga and, more importantly, smoking in public places.

In brief the MUI implied Kiwi cattle were not having their throats slit while facing Mecca by an approved Muslim butcher chanting the name of Allah as the knife goes for the jugular.

There are 60 meatworks in NZ licensed to supply halal meat to the Indonesian market and they’ve been operating smoothly for decades. The trade is worth almost $100 million a year.

But suddenly the abattoirs’ halal licences were found to have expired, just as more than 70 containers landed on Jakarta’s Tanjung Priok wharf. A similar surprise ban occurred last July when Kiwi export labelling was deemed defective.

That problem was quickly and effectively handled by Amris Hassan, the Indonesian Ambassador and his Wellington staff, but this time the task has been tougher, involving Trade Minister Tim Groser who was in Bali for trade talks.

Groser is no naïve newcomer to dirty trade wars. He’s a former ambassador to Jakarta and the World Trade Organisation, a trade negotiator before entering politics and an Indonesian speaker. So when he told National Radio that he “didn’t quite know what went wrong” - the sub-text suggested devious doings.

After three days of confusion the containers started rolling off the wharves. The face-saving explanation was that an MUI letter warning the halal licences had to be renewed before October had been misinterpreted by government authorities.

During the 2008 labelling crisis there were dark hints that Indonesian importers of Brazilian beef had used their political clout to engineer the ban on NZ beef. Since then NZ and Indonesia have signed a free trade agreement (FTA) which progressively reduces tariffs on Kiwi exports to the republic.

During the negotiations the Indonesians lobbied for a deal similar to the FTA signed in April 2008 with China. This involved work visas for a swag of Chinese professions and trades, including chefs, tour guides and teaching aides.

But by February this year unemployment was rising in NZ and the jobs vanished from the negotiations. Jakarta trade officials publicly accused NZ of giving too little and demanding too much, but the agreement was signed despite the posturing.

Then the local meat trade demanded protection, with Agriculture Minister Anton Apriyantono promising to impose quotas to protect the nation’s four million beef farmers who supply about 70 per cent of the local market.

Indonesia’s leading and conservative English-language newspaper The Jakarta Post commented: ‘Beef importing business practices have been rather murky with numerous vested interests backed by top government officials reportedly working together to maintain their advantage in the huge Indonesian market of 230 million people.’

The fourth most populous nation in the world presents great trade opportunities, but it’s a market where exporters need to tread warily.

(First published in Scoop, 10 June 2009)

Saturday, June 06, 2009


Is the Indonesian election result a fait accompli? Duncan Graham

Among the many problems in the complex Indonesian electoral system are its cumbersome procedures. The general election was held on 9 April. There were 38 parties contesting and the big ballot paper confused many.

The results came within a month confirming early counts, but the presidential election will not be held till 8 July.

If no candidate gets more than 50 per cent of the vote there’ll be a run off on 8 September.

Under Indonesian law the people directly elect the president and vice president for a five-year term. In the 2004 election the Democratic Party was a tiny player with less than eight per cent of the vote. But the electorate wanted the DP leader Susilo Bambang Yudhoyono (best known as SBY), not his principal rival Megawati Soekarnoputri, by a margin of three to two.

On the surface it looks as though the ballot in July will be decisive, but only the naïve make confident predictions about Indonesian politics. Although the present president is scoring a whopping 70 per cent in popularity polls against Megawati at 15 per cent, a lot can happen in the next six weeks.

Take, for example, the arrest this month of the Corruption Commission boss Antasari Azhar on charges of being involved in the murder of a businessman. Although no one has been convicted, the scandal, which also involves a female golf caddy, has damaged SBY’s clean-up campaign.

Apart from more similar weird happenings the main problem is elector fatigue. If all the pundits are saying SBY will win, why bother to go through the boring and complex process of exercising the democratic process yet again, particularly when it’s not compulsory?

SBY’s Democratic Party doesn’t have the industrial strength machinery to get the voters mobilised when compared to Megawati’s Democratic Party of Struggle (PDIP) and Golkar.

This is the party created by the late authoritarian president Soeharto and ensured he was elected for 32 years by crushing dissent. Golkar’s candidate for the presidency is Jusuf Kalla, the present vice-president who’s standing against his boss.

Kalla has selected Wiranto, a former general, as his VP candidate. Megawati has also gone to the army for her running mate, picking Prabowo Subianto, another retired general with a questionable human rights record and Soeharto’s former son-in-law.

Curious couplings indeed, but offering a glimpse of the residual influence of the military in Indonesian affairs and the complex undercurrents of ethnicity, religion, history and money that swirl through Indonesian politics.

Westerners dealing with Indonesia have been barracking for SBY, not because he’s been an outstanding leader but because the alternatives look so scary.

During the corrupt rule of General Soeharto that ended in 1998 with the Asian economic crisis, the men with the guns ran the country and just about everything else. The army had seats in Parliament, controlled many businesses, had a major internal security role, oversaw the police and were considered untouchable.

Although the military’s influence is no longer so blatant it’s still a force behind the scenes. Boosters for SBY highlight his academic qualifications (he has a doctorate in agriculture), his urbanity and English skills learned while studying in the US, and his middle ground, ultra-cautious politics. He appears to genuinely believe in democracy and has gravitas on the international stage.

Supporters play down his past as a four-star general before entering politics and his military family. His father, father-in-law and a son are, or were, soldiers.

The 9 April election results closely followed informal exit polls. The Democratic Party ran ahead of all in the crowded pack seeking power, winning 21.04 per cent of the vote.

Second was Megawati’s PDIP with 14.52 per cent, a whisker ahead of Golkar mustering 14.23 per cent.

With these results a coalition will have to run the 560-seat Parliament, known as the DPR. How that’s going to be engineered is the critical question, though this time round SBY can bargain from a position of strength.

Optimists say all this shows Indonesians have embraced democracy and are making it work. Those who don’t use rose-coloured glasses note only 61 per cent of the nation’s 171 million eligible electors bothered to vote and millions were disenfranchised through registration stuff-ups.

Fourth in the April election with 8.16 per cent was the Prosperous Justice Party (PKS), which kept its Islamic credentials in the background while campaigning hard against corruption. Liberals suspect the party has other agendas and were concerned SBY might pick his running mate from a party that’s against pluralism and women’s rights, and for Sharia law.

Instead SBY cannily selected economist and Bank Indonesia governor Boediono, who studied at the University of Western Australia and Monash, and later in the US. He was Minister of Finance during Megawati’s 2001 – 2004 presidency.

When introducing Boediono to the miffed PKS the president stressed his partner’s dedication to Islam ahead of his impressive financial skills.

Some PKS members reacted by shifting support to Kalla because SBY’s wife Kristiani, and Boediono’s wife Herawati don’t wear headscarves; the sub-text was that the men are poor Muslims unfit to run the country because they can’t control their wives.

Critics of SBY’s administration during the past five years often overlook the huge problems he faced and give insufficient weight to his skills in keeping the political system intact, the economy on course and the nation relatively safe.

In 2004 SBY campaigned for the nation’s top job with businessman Jusuf Kalla, thereby binding Golkar into the government. Golkar gave SBY the numbers on the floor of Parliament, but the compromises required eroded much of his authority.

Megawati, 62, is a lacklustre candidate famous for being aloof and believing she deserves to have the job again just because her dad was the country’s first president. She is widely regarded as being a tool of the military.

Kalla, 67, has been an effective vice-president in the past five years and was instrumental in settling the long-running civil war in Aceh. As a prominent businessman he gave the administration credibility with the big corporations. However he’s not a Javanese, and that’s a major handicap to winning the presidency. He’s also not trusted by the non-Muslims.

SBY, 60, has been unable to stop the imposition of some aspects of Islamic Sharia law in the provinces. These include forcing female bureaucrats and students to wear headscarves, banning alcohol, enforcing prayers and setting up community patrols to sniff out sexual naughtiness, though the Constitution appears to prohibit such local initiatives.

By contrast, and after decades of oppression, the media in Indonesia is now the freest in South-East Asia, robustly pushing the old barriers on a wide range of social and political issues.

Despite doomsayers claiming Indonesia would become another Pakistan as fundamentalism flourished, that hasn’t happened. The battle against terrorism, with significant help from the Australian Federal Police, has notched up many wins against the bombers.

SBY’s push against corruption has had limited success; pulling out the wallet remains the standard way to bypass stalling bureaucrats at all levels.

The judiciary is still a mess, continuing to use colonial Dutch law from early last century. The over-staffed public service remains a dinosaur sturdily resisting attempts to force change. Decentralisation has compounded the confusion. Outsiders trying to do business need to tread warily.

The economy has slumped, though not as much as expected and less than other Asian nations. Poverty and poor quality education remain major concerns, although there have been patchwork successes in improving the lives of those on Kampong Bleak.

The consensus, both inside and outside the Republic seems to be that SBY has made a reasonable fist of handling one of the world’s toughest tasks – and given the line-up against him is clearly the best bloke around.

There are two standout dangers: If he wants to divorce Golkar and get a workable majority in the Parliament, SBY may be forced to cohabit with the PKS and other minor Islamic parties. This could let the extremist tail wag the reformist dog.

The other concern is that the opposition parties frustrated at their inability to find candidates with popular appeal may combine to spoil SBY’s legislative program out of spite. Success here seems less likely; though the emotion is real they’ll find it hard to work together because so many are single-issue or policy-free parties that have yet to learn the arts of compromise.

(First published in On Line Opinion, Friday 5 June 09)