Nov. 23 (Bloomberg) -- Susilo Bambang Yudhoyono is taking a well-deserved victory lap for restoring order to Indonesia.
Fifteen years ago, the nation with the world’s largest Muslim population looked set to break apart in Asia’s answer to the Soviet Union. The ouster of brutal dictator Suharto in 1998 opened the way for a reform-minded leader. Yudhoyono, a former general, wasn’t an obvious first choice, and it wasn’t until 2004 that he won office, becoming the country’s fourth post-Suharto president.
Yudhoyono exceeded just about everyone’s expectations. He was a steady hand when his country’s 240 million people needed it, modernizing the economy, surrounding himself with competent deputies, reducing terrorism, cutting the military’s role in society and attacking the corruption machine that Suharto built during almost 32 years in power.
Today, when the Organization for Economic Cooperation and Development gives Southeast Asia kudos for emerging resilient from a period of global turmoil, it is really recognition of how far Indonesia has come these past eight years. The OECD forecasts growth of 6.4 percent for Indonesia from 2013 to 2017, equal to that recorded in the two decades before the 1997-1998 Asian crisis.
That performance helped make Yudhoyono the toast of this week’s East Asia Summit in Cambodia, an event attended by U.S. President Barack Obama. Yudhoyono is also emerging as a regional powerbroker. He has slipped comfortably into a senior Asian statesman role, speaking out about the Muslim Rohingya minority in Myanmar and events in the Middle East. In Phnom Penh, Yudhoyono gave voice to many in Asia when he called on Obama to pressure Israel to end airstrikes on the Gaza Strip.
Yudhoyono, 63, is thinking openly about his plans after 2014, when his second term ends. They include becoming a thought leader in retirement to help guide Indonesia. Jakarta’s political class is also thinking beyond the Yudhoyono years -- pundits are looking at general-turned-businessman Prabowo Subianto or Jakarta Governor Joko Widodo to succeed him.
With all this looking ahead, it is easy to forget that Yudhoyono still has two years left in the presidential palace. That’s two years when he can use his clout as a reformer and apply it in earnest. Two years to redouble efforts to end the corruption that leaves almost half the population living on $2 a day, to increase competitiveness and to implement the upgrades needed to expand the economy almost fivefold to at least $4 trillion by 2025. But will he?
If Yudhoyono resigned tomorrow, his report card would be a good one. When he took over, Transparency International ranked Indonesia 133rd in its Corruption Perceptions Index along with the Democratic Republic of Congo and Tajikistan. By 2011, it came in 100th out of 183 countries, tied with Argentina and Mexico. In January, Moody’s Investors Service Inc. reinstated its investment grade, which Indonesia lost in the Asian debt crisis.
Yet his legacy doesn’t have to be just good -- it could be great. When Jim O’Neill, the Goldman Sachs economist credited with coining the BRIC acronym, speaks of one day adding another “I” so that Indonesia joins Brazil, Russia, India and China -- the BRIIC -- it is the promise of Yudhoyono’s second term he is betting on.
Yudhoyono’s re-election in 2009 was greeted as a game-changer. That mandate would give him the political cover needed to take on the rent-seeking at the core of Indonesian business. It would free him to build stronger, more-independent courts and democratic institutions. It would allow him to go further to rein in Islamic extremism.
Yet Yudhoyono has at times seemed content with the achievements of a half-finished agenda, as if stability and the status quo were sufficient. He almost seems to forget that in a nation like Indonesia, stasis is the equivalent of retreat.
This year’s high-profile brawl between the government’s anti-corruption agency and the national police shows how progress has stalled. The police, naturally, want allegations handled in-house; the government knows better. Even though Yudhoyono backed the anti-corruption agency in the dispute, the standoff sucks up valuable time and energy. It is the kind of gridlock Indonesia can ill afford.
Strengthening the anti-corruption apparatus is vital to the surge in infrastructure investment at the core of Yudhoyono’s strategy. He plans to spend $12 billion on ports alone so that companies such as Unilever NV, which is building a $150 million factory on the western coast, can bring more business to Indonesia.
Yudhoyono needs to work harder to keep much of that investment from being siphoned off by corrupt political elites and corporate executives. That means giving prosecutors a stronger, broader mandate and watching their back as they follow dirty money wherever it leads. In the twilight of his presidency, Yudhoyono is offering nothing new or bold in this respect. He needs to do so.
It is vital that Yudhoyono capitalize on these last two years to bring about all the change he can. He articulated a vision of cleaner government and more-inclusive growth. If he can’t accomplish this when the economy is booming, you have to wonder who can.
(William Pesek is a Bloomberg View columnist. The opinions expressed are his own.)
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