ASEAN destroys its own credibility

Asiasentinel
www.asiasentinel.com

Thang D. Nguyen
03 December 2007

The publicity over ASEAN's failure of nerve about Burma obscures other troubles with its new charter


While international organizations and regional blocs like the European Union are trying so hard to stay relevant, the Association of Southeast Asian Nations (ASEAN) seems not to be bothering.

First was the disastrous and disgraceful climbdown at the recent 13th ASEAN summit in Singapore, when the organization bent to the demands of Burmese Prime Minister Thein Sein in refusing to allow United Nations Envoy Ibrahim Gambari to brief leaders and their dialogue partners from Australia, China, India, Japan, New Zealand and South Korea on Burma’s crackdown on Buddhist monks and civilian protesters — forcing Prime Minister Lee Hsien Loong of Singapore, which now chairs ASEAN, to scrap the meeting.



Worse yet is the ASEAN Charter, which confirms that the principle of non-interference will remain unchanged. Gloria Macapagal Arroyo, herself mired charges of corruption and a domestic mess last week with an attempted coup, at least stood up and said she wouldn't sign the charter unless the long-confined Nobel laureate and opposition leader Aung San Suu Ky is freed and Burma agrees to some degree of human rights liberalization.

Leaders from the 10 member countries ended up signing a charter that aims towards comprehensive integration, but that has significant problems that certainly render the charter problematical, if not meaningless. On the economic front, the charter contains the ASEAN Economic Community (AEC) Blueprint that was adopted at the summit. Similar to — if not inspired by — the European Economic Community, the AEC Blueprint aims for complete economic integration among 10 member countries by 2015.

For a group as diverse as ASEAN, whose members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand, and Vietnam, the AEC Blueprint is, indeed, a bold and encouraging vision. But at the same time, the very diversity of or imbalance among the 10 members' economies makes it very difficult to realize the AEC Blueprint by 2015 as planned.

At the heart of this plan is the Common Effective Preferential Tariff (CEPT), which ultimately targets a zero tariff rate among the 10 members. While this goal is easier to reach for advanced economies in ASEAN, namely Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand, it is more difficult for their less developed fellow economies, namely Cambodia, Laos, Burma and Vietnam. The main reason is that the latter group, as do most developing countries, tends to have high tariff rates as a way to maintain or improve their terms of trade (prices of a country's exports over its imports).

Understandably enough, ASEAN's less-developed economies are given a later schedule for tariff reduction. But for the AEC vision to be realized, it will require a strong political will, discipline and leadership from them and the rest of ASEAN.

Put differently, what happens if any member — regardless of its economic stage — which does not respect and meet the deadline of tariff reduction and other requirements set out by the AEC Blueprint? Is there some sort of punishment for those that don't do their parts and, thus, fail the whole AEC vision altogether? And may other members have any say?

Sadly, the answer to these questions is negative. The cause of this is nothing other than ASEAN's fundamental principle of non-interference.

Forty years ago when ASEAN was founded, its founding fathers — some of whom are still alive — agreed that all ASEAN members would not interfere with matters considered to be a fellow member's domestic affairs. After the Cold War, this principle seemed to work well for ASEAN, whose members then were Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand.

As the group grew larger and inducted Cambodia, Laos, Burma and Vietnam in the early 1990s, however, the political structure changed. Indeed, the new four members' political systems and ideologies were, and still are, very different from those of the original six. Nevertheless, ASEAN's political culture, or the principle of non-interference, stayed the same.

To be fair, ASEAN did surprise the world in 2003 when it urged Burma's military rulers to free Ms Suu Kyi, whose National League for Democracy secured a landslide, but unrecognized, victory in a 1990 election. Last year, an ASEAN Inter-Parliamentary Myanmar Caucus was even established, with the primary aims of pushing democracy in Burma and helping free Ms Suu Kyi. To ASEAN's credit, the pressure it exerted in the past led to Burma giving up its scheduled turn as the chair of the association last year (the Philippines took the position, as it was next in line).

And at first in September, when the Burmese junta cracked down brutally on protestors, ASEAN initially showed that it was breaking away from its excessively polite political culture and the principle of non-interference. Singapore’s Lee, who currently chairs the group, said ASEAN cannot "credibly remain silent or uninvolved in this matter."

"National reconciliation means opening of meaningful dialogue with Aung San Su Kyi and the NLD (National League for Democracy); (it) means releasing political detainees, including Aung San Su Kyi; (it) means moving forward to achieve a peaceful transition to democracy and to address the economic hardships of the population of Myanmar," he said.

But, alas, ASEAN is not in favor of sanctions or dismembering Burma, as the US Senate and the Human Rights Watch Group have urged, although during the summit, ASEAN did make its position clear that Burma cannot go back to the status quo — a position obscured by the cave-in on Gambari's briefing. By all accounts, ASEAN is the loser, having first attempted to discipline Burma and then being forced to back away. In addition, international outrage over Burma's military crackdown is stalling ASEAN's trade negotiations with the United States and causing serious diplomatic difficulties with the European Union

This is no way for ASEAN to maintain its credibility. Now that it has broken its premise of non-interference through its statements and actions towards ASEAN thus far, maintaining the principle, if anything, will make ASEAN hypocritical.

Burma, as a consequence, will get spoiled again, as it knows that it can continue to keep Aung San Suu Kyi under arrest and suppress democracy and ASEAN won't do a thing since it is considered an internal matter. Not only has ASEAN continued to back the wrong horse, but it has lost its face in the international community.

The writer is a Jakarta-based columnist. More of his writings can be read at www.thangthecolumnist.blogspot.com .

Jakarta's poor need jobs, not law

The Business Times
Singapore

Published October 17, 2007

Outlawing begging will not help as it is the job of the government to pursue policies which create jobs for its citizens

By THANG D NGUYEN

(JAKARTA) In other parts of the world, giving a few coins to help a less fortunate person would be considered a humane act. But if you do that in the Indonesian capital city of Jakarta, it can cost you a lot more money.

Last month, the Jakarta City Council approved a bylaw that bans busking, begging and street hawking as well as banning people from giving money to beggars, vendors and hawkers.

Initiated by the city's departing governor, Sutioyoso, the bylaw says that anyone who is caught giving money to beggars, and others of their ilk, will be fined of 50 million rupiah (S$8,072).

While this new policy is well-meant as it is intended to help make Jakarta, a city of more than 12 million people, a less squalid place and, thus, a more attractive destination for visitors, it is - like many Indonesian laws - vacuous and ridiculous.

For one thing, this policy violates a personal liberty. Giving, after all, is a personal choice and, as such, it should neither be forced nor prohibited.

Thus, by enforcing this bylaw, the City of Jakarta is denying its residents their freedom to give.

Furthermore, like prostitution, begging is one of the world's oldest professions. Even in the world's richest countries one can find beggars.

And in a country like Indonesia, where half of its 230 million people live on less than the equivalent of US$2 a day, and there is no social welfare system, it is no wonder that there are so many beggars in Jakarta and elsewhere in the country.

To be sure, many of the beggars one sees in Jakarta are members of syndicates run by gangs who rent out toddlers and are said to earn more than an average Indonesian government official. But not all of these beggars are con artists. Unemployment, old age and poor health are among the other factors which force people to beg for a living.

'I have nowhere to work in my hometown, so I came to Jakarta and start selling cigarettes on the street to get a little money to live,' Chakim, a 24-year-old streetside cigarette vendor in Jakarta, told Deutsche Presse-Agentur (dpa).

Countries like Switzerland and Luxembourg have not become some of the world's richest places by banning their citizens from giving to beggars. Instead, they try to ensure that their citizens can find jobs.

And for those who are unemployed, disabled, aged, or in poor health, there is a social welfare system - financed with tax revenues - that saves them from begging for a living.

In Indonesia, the establishment of such a social safety net is currently impossible. This is because there is no effective tax revenue and expenditure system in place and there is still so much corruption entrenched in the government.

Employment creation is possible, however. It is, after all, the job of the government of Indonesia and the City of Jakarta to pursue policies which create jobs for their citizens.

And if they can't do their job, at least they should let unemployed, poor, and less able citizens find a way to make a living, even if that happens to be by begging.

By the same token, those who are willing and able to help other less fortunate Indonesians should be allowed to do so.

While Mr Sutioyoso and his colleagues may insist that their policy is the way to clean up Jakarta, it is not.

Simply put, the bylaw won't work because there is no sound alternative, that is, employment.

Beggars may move away from begging on Jakarta's streets, but they will simply do it somewhere else.

'I have agreed with many buskers that we will stay on the streets, whatever it takes. The new bylaws don't scare me too much,' said Susi, a transvestite who sings daily at a dusty and congested intersection in Central Jakarta. 'I can earn up to 30,000 rupiah a day.'

While beggars like Susi are determined to stay on the streets, departing Governor Sutioyoso is said to be running for president in 2009.

If that is the case, the beggar bylaw may not be a good thing for him when the time comes for Jakarta residents like Susi, Chakim, and thousands of beggars to cast their votes for the president in two years' time.

And should Mr Sutioyoso make it, it may be good for him to keep in mind three things that make a country peaceful, prosperous, and clean. They are: jobs, jobs, and jobs.

The writer is a Jakarta-based columnist.

UN needs to give Myanmar an ultimatum

The Jakarta Post
October 4, 2007

By Thang D. Nguyen

JAKARTA—As the crisis in Myanmar worsens, protesters in neighboring Malaysia and elsewhere in Asia are increasing their calls for the Association of Southeast Asian Nations (ASEAN) to play a more proactive role in overcoming the situation.

But really, what else can ASEAN do about Myanmar?

ASEAN - whose members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam - has tried to work with Myanmar in a constructive way to bring democracy into the country.

In 2003, foreign ministers from ASEAN issued a statement urging Myanmar's military rulers to free Nobel Laureate and democracy leader Aung San Suu Kyi, whose National League for Democracy secured a landslide, but unrecognized, victory in a 1990 election.

Last year, an ASEAN Inter-Parliamentary Myanmar Caucus was established, with the primary aims of pushing democracy in Myanmar and helping free Ms. Suu Kyi.

Let's not forget that ASEAN has only recently moved away from its founding principle of non-interference - i.e. members will not get involved in issues considered to be the internal affairs of other members.

To ASEAN's credit, the pressure it exerted in the past led to Myanmar giving up its scheduled turn as the chair of the association last year (the Philippines took the position, as it was next in line).

After consulting other members, Singapore, which assumed the chairmanship of ASEAN in July, called on the organization to make a statement on the crisis in Myanmar.

Prime Minister Lee Hsien Loong said ASEAN cannot "credibly remain silent or uninvolved in this matter".

But, let's face it, a statement from ASEAN may be helpful, but it won't be a critical force. In other words, the Myanmarese junta is really beyond the reach of ASEAN at this point.

Do not forget, this is the same government that defied calls from the U.S., the European Union, ASEAN itself and the entire international community to free Aung San Suu Kyi and allow democracy to take place.

The proof is that despite U.S. sanctions that President George W. Bush announced in New York during the United Nations (UN) General Assembly last week, the Myanmarese junta went ahead with its crackdown on Buddhist monks and civilian protesters, arresting more than 100 and killing at least 17.

India and China - two neighboring countries outside ASEAN that have influence on Myanmar - have reacted disappointingly to the situation. While they both expressed concern about the crisis, they clearly said it falls into the category of Myanmar's internal affairs.

As a close trading partner and corridor to the Indian Ocean, Myanmar must be stable in China's eyes.

However, a Beijing-backed crackdown on the monks over their protests would hurt China's image, especially as it prepares to host the Olympics next year.

As for India, Myanmar is its source of oil, so it will remain diplomatic.

With news from Myanmar overwhelming the mood at the General Assembly, the UN Security Council held an urgent meeting and agreed to send the UN Secretary-General's special envoy, Ibraham Gambari, to Myanmar to deal with the junta.

However, Gambari's presence is not strong enough for the junta.

He handed over a message from the UN urging the junta to stop its crackdown on the monks and civilian protesters.

But this regime has shown, and continues to show, defiance of instructions, no matter how strong they are or who they are from.

After all, the junta has been living with warnings, sanctions and other forms of pressure from the international community for the past 19 years.

So as sad as it may be, another visit from another envoy with another message from the UN is nothing new for the junta.

Therefore, if the crisis in Myanmar is to be resolved, the UN needs to gather its will, consensus and resources to send an ultimatum to the junta.

The ultimatum is simply this: If the junta does not stop its crackdown, the UN will move its troops into Myanmar!

The junta is smart enough to know that its military resources do not outnumber those of the UN, should it decide to take this path.

And if this scenario materializes, the people of Myanmar will side with - you guessed it - the UN troops, adding more force to this democratic revolution.

This is an opportunity for the international community to bring peace and democracy to Myanmar once and for all. And if the world misses this opportunity, Burma - as Myanmar it is affectionately known - will never be free.

The writer is a Jakarta-based columnist. More of his articles can be found at www.thangthecolumnist.blogspot.com

Martyring for freedom in Burma

By Thang D. Nguyen

JAKARTA—Politics and religion should not be mixed. And for good reasons, that is. For one thing, secularism prevents a nation from becoming a theocracy—the antithesis of democracy.

And in the case of radical Islamic groups, their battle for God, or jihad, is carried out as massive, deadly terrorist attacks.

But in Burma, a Buddhist-majority country, religion is now a powerful force for democracy.

It has been over a week since a few hundred Buddhist monks started a protest against the ruling junta in the former capital of Rangoon and other major cities in Burma.

Walking in the rain in Buddhist robes and with their hand clasped, the monks demand for an apology from the Burmese junta for the violent break-up of a civilian rally that was triggered by protests over price rises last month.

Civilians have joined the monks, even though they have asked not to do so for fear of provoking reprisals by the security forces.

To be sure, many activists have been jailed and some have allegedly been tortured for participating in earlier protests.

As a matter of fact, the monks’ march sends a chilled reminder of a mass protest in 1988 when the junta cracked down on activists, killing hundreds, if not thousands, of them.

In the beginning, the junta was reluctant and cautious. The main reason is that, in a country where Buddhist monks are the highest moral authority, a crackdown on them will certainly cause a massive national outcry.

But, after a week of mysterious silence, the junta broke its silence and warned the monks of military action if they did not stop protesting.

Next, military forces arrested over 100 monks and civilians for participating in the protest. But the protesters did not give up, and the military started to crack down on them with tear gas and gun-firing.

So far, three monks are dead and 20 other protestors injured during their clash with security forces. As part of the crackdown, security forces have also raided several Buddhist monasteries.

If anything, the clash shows how defiant the junta is—as always.

As he spoke before the UN general assembly in New York this week, President George W. Bush announced US sanctions against the Burmese military regime.

“Americans are outraged by the situation in Burma, where a military junta has imposed a 19-year reign of fear. The ruling junta remains unyielding, yet the people's desire for freedom is unmistakable,” he said.

The junta obviously did not care much about Mr. Bush's speech.

Lest we forget, this is the junta that has kept democracy leader and Nobel Laureate Aung San Suu Kyi under house arrest since 1990 when her National League for Democracy (NLD) won landslide elections but was never allowed to govern.

This is the same junta that has since defied pressure from the US, the European Union, the Association of Southeast Asian Nations—of which Burma is a member—and the entire international community to free Aung San Suu Kyi and allow democracy to take place.

Sadly, the one country that can influence the junta’s action, China, has only urged for stability but refused to get intervene, saying that the protest is a matter of Burma’s internal affairs.

As one of its trading partners and corridor to the Indian Ocean, China does not like an unstable Burma.

But, a Beijing-backed crackdown on the monks over their protest will hurt China’s image as it is hosting the Olympics next year.

It remains to be seen how the clash between the junta and Burmese protestors will turn out in the coming days.

Meanwhile, the protest is most significant in several ways.

First, it is a protest initiated and organized by a religious force, as opposed to a civilian one. To be sure, Burmese monks were involved in the 1998 bloody protest, but only from behind the scenes.

Second, because of their position in Burmese society, the monks present the most serious challenge the junta has faced thus far in the country’s modern history.

Third, if protest results in a crackdown similar to that in 1988, it will be remembered as a most significant event that has ever happened for democracy in Burma.

Fighting for democracy is never easy. Or, as Thomas Jefferson put it: “The tree of liberty must be refreshed from time to time, with the blood of patriots and tyrants.”

More monks and civilians will get hurt in this protest. More will die because of it.

But they will die martyrs, not for God, but for democracy.

The writer is an Asia-based columnist. His writing can be read at www.thangthecolumnist.blogspot.com.

TIME ruling a setback for democracy in Indonesia

By Thang D. Nguyen

JAKARTA—Sometimes when things appear to be better, they are actually worse. This is certainly the case with press freedom in Indonesia.

As the largest Muslim-majority nation, Indonesia’s democratic transformation since 1998—when strongman Suharto was toppled—has been an exemplary example for the world.

In addition to having free elections and a government they select, Indonesians today practice a variety of democratic rights, including demonstrating—something that would put them in jail or could cost them their lives under the old regime.

Indeed, Indonesia has thus far shown a steady democratic transition, despite resistance from some minor groups—mostly hard-line Muslim organizations.

For instance, in 2002, the Indonesian Parliament rejected a motion to institute sharia, or Islamic Laws, across Indonesia.

What is more, in July this year, the Constitutional Court scrapped Articles 154 and 155 from Indonesia’s Criminal Code and banned the government from imprisoning anyone whose expression of thoughts and ideas was considered hostile or subversive towards the state.

Media and civil society organizations, among others, gladly welcomed this decision and considered it another step forward for democracy in Indonesia.

But, alas, only a month later, Indonesia’s Supreme Court did something that, de facto, undoes what the Constitutional Court did. On 30 August, the Supreme Court ordered Time magazine to pay former president Suharto Rp. 1 trillion (US$ 106 million).

The ruling resulted from a suit filed by Suharto against the US magazine over an article in which it said that he had stashed a massive amount of his wealth abroad.

In an article titled “Suharto Inc.: The Family Firm”, published in May 1990, Time wrote that it “has learned that $9 billion of Suharto’s money was transferred from Switzerland to a nominee bank account in Austria”.

For someone who does not know much about Indonesia, this article might have brought some startling facts. But for those who do, it is hardly any news.

During the 32 years when he was in power, Suharto himself, his children, and cronies are said to have accumulated trillions dollars worth of personal wealth and kept it both here in Indonesia and overseas.

But where they have kept their monies is not the issue. Rather, it is that their monies have come from what Indonesians call KKN, or corruption, collusion, and nepotism.

As a matter of fact, there have been efforts to try Suharto for corruption, but so far, they have been unsuccessful.

Back in 2000, Suharto was indicted for alleged corruption, but judges dismissed a US$600m corruption case on the grounds of his ill health. Last August, the Office of Attorney General dropped Suharto’s corruption charges altogether on the ground that his poor health did not allow him to stand trial.

"Our conclusion, after hearing the statement from the doctors, is that Suharto's condition is getting worse [sic],” said former attorney general Rahman Saleh.

While it remains to be seen if Suharto will ever be tried for corruption, the Time ruling has several negative impacts.

For one thing, it paints a wrong picture of Indonesia abroad as a nation that indulges corruption.

Together with the decision last year to drop Suharto’s corruption charges, the Time ruling sends a message to the world that he is, indeed, above the law.

Interestingly enough, the Time ruling came out just two weeks before the United Nations and the World Bank issued a joint report on the so-called Stolen Asset Recovery Initiative. In the report, Suharto is mentioned as one of the leaders who have misappropriated national assets in developing countries.

What’s more, the Time ruling illustrates the self-contradiction in the Indonesian government. On the one hand, the Susilo Bambang Yudhoyono administration prides itself on fighting corruption. But on the other hand, Indonesian courts continue to make such counterproductive decisions as the Time ruling.

In other words, how can corrupters be brought to justice if the media, Indonesian and foreign alike, are scared of paying millions worth of defamation for filing stories about their corruption?

But most importantly, the Time ruling is a setback for democracy in Indonesia. In addition to freedom of speech, a free press is a sign of a healthy democracy.

To be sure, the media have found a lot more freedom in Indonesia now than they ever did under the old regime.

The Time ruling, however, undermines the very democratic progress that Indonesia has made so far.

The writer is a Jakarta-based columnist and editor of two books on Indonesia. His writing can be read at www.thangthecolumnist.blogspot.com.

Jakarta turns off investors, big time!

The Business Times

Singapore, 31 August 2007

Dark clouds a-gathering: Business-unfriendly laws, corruption, lack of infrastructure and political and legal uncertainty raise the costs of doing business for investors in Indonesia and may drive them away

By Thang D. Nguyen

SOMETIMES, when things appear to be better, they are actually worse. Recent events in Indonesia show that this is the case with the country's business climate.

In late April, Newmont - the world's second largest gold miner - was acquitted after being accused three years ago of dumping unsafe levels of waste in a bay on Sulawesi island.
Not only was this a vindication for Newmont Indonesia and its chief executive, Richard Ness, but it was also a positive development that the business community in Indonesia gladly welcomed.

More importantly, the government of Indonesia initiated a number of economic reforms earlier this year in an effort to boost investment in Indonesia. Specifically, these reforms were designed to improve tax and investment laws and therefore create more incentives for investors in South-east Asia's largest economy.

The business community viewed these reforms as well as the Newmont verdict positively as they showed that Jakarta was serious about making Indonesia a more attractive place for investment.

But before it can show progress on these reforms, the government has already built another hurdle for businesses.

In late July, Indonesian lawmakers passed a bill that makes corporate social responsibility, or CSR, mandatory for businesses - particularly resource-based industries - in Indonesia.

The bill, of course, met resistance from the business community.

'CSR programmes should be (voluntary). They should not be made a corporate responsibility,' said Sofyan Wanandi, chairman of the Indonesian Employers Association (Apindo).

Despite opposition, the bill was passed, making Indonesia the only country in the world where CSR is a duty, not a choice.

For one thing, CSR is a form of social contribution, not a tax. Thus, it is unclear why the bill was drawn up in the first place and then passed in Indonesia's House of Representatives.

Furthermore, there is no point making CSR a duty for businesses in Indonesia when many companies are already doing it as a matter of corporate practice. But most importantly - now that the CSR bill has been passed - it will only be a burden for the business community and another barrier for investors in Indonesia.

Let's face it. Investors, both foreign and domestic, already have more than enough laws and regulations, among other issues, to deal with in Indonesia.

The last thing they need is another law that makes their business in Indonesia more difficult and costlier.

By passing the CSR bill, Indonesian lawmakers might have meant well and seen the good of CSR for society.

Making it a duty, however, is likely to discourage investors from Indonesia and thereby hurt the country's investment as they might find it better and cheaper for them to do business in another country where they don't have to deal with this law.

Thus, not only does the CSR remind us of how challenging Indonesia's business climate still is, but it also shows Indonesia's lack of competitiveness in today's global economy.

In addition to its business-unfriendly labour and investment laws, investors face a host of issues in Indonesia, including corruption, the lack of infrastructure, political instability and legal uncertainty.

Together, these issues raise the costs of doing business for investors in Indonesia and may drive them away.

To be fair, the Susilo Bambang Yudhoyono administration does recognise these problems. Since assuming power in October 2004, Dr Yudhoyono's administration has taken a number of initiatives to improve Indonesia's investment climate.

For example, it has held two major conferences to lure foreign investors to infrastructure projects in Indonesia. But, alas, little has resulted from these events.

Likewise, Dr Yudhoyono, who campaigned, among other things, on the platform of fighting corruption, set up the Corruption Eradication Commission (KPK).

For about three years, the KPK did its job, tackling a number of high-level corruption cases. But earlier this year the KPK was dissolved, as though its job were completed.

Does that mean that corruption in Indonesia is eradicated? Far from it! If anything, now is the time when the government needs to do more, not less, to carry out its economic, legal and social reforms.

Just as importantly, the government has to ensure that investment laws, such as the CSR law, that the Indonesian parliament passes do not clash with its efforts to improve the business and investment climate in Indonesia.

If not, it will create distrust among investors and drive them away, and that will make FDI not 'Foreign Direct Investment', but as The Economist put it, 'Foreigners Ditching Indonesia'!

The writer is a Jakarta-based columnist. His articles are available at http://www.thangthecolumnist.blogspot.com/

Democracy the right choice over theocracy

The Jakarta Post
Tuesday, 28 August 2007

Thang D. Nguyen, Jakarta

As Indonesia turns 62 this month, Indonesians should be proud of their nation's democratic transformation.

Since 1998 when strongman Soeharto was toppled, Indonesia has become a rising democracy. With free elections and a democratically selected government, Indonesia is, in fact, the world's third-largest democracy, after the U.S. and India.

But what makes Indonesia's democratic transition outstanding is that it has taken place in the world's largest Muslim-majority nation.

Amid global debates on whether Islam and democracy can coexist, this transition has, indeed, been an inspiring success story.

Although most Indonesian Muslims are considered moderate, radical, hard-line Islamic groups do exist in Indonesia, and they are not happy with the country's democratic change.

What these groups want, instead, is a theocratic state, an Indonesia that is ruled by sharia, or Islamic law. And to that end they have made numerous attempts.

In 2002, for instance, a motion to institute sharia in Indonesia was put before the People's Consultative Assembly (MPR), but it was rejected.

This Aug. 12, 90,000 Muslims gathered at Jakarta's Bung Karno Stadium for the International Caliphate Conference. This was the second conference by Hizbut Tahrir, a global Islamic organization whose mission is to build an Islamic state throughout the world.

During the event, the group blamed democracy as the main reason why Indonesia is lagging behind other nations.

"What has democracy brought us?" asked Muhammad Ismail Yusanto, spokesperson of Hizbut Tahrir Indonesia, a chapter of two million members. "Democracy only brings us secular policies, like what's happening nowadays (sic)."

But, seriously, what can theocracy, or sharia, bring to Indonesia, where 39 million people live in poverty and 22 million others are still unemployed?

And if sharia is the key to Indonesia's, or any other country's, problems, why is it that the Islamic world is so far behind the West and other non-Muslim countries in economic development and other spheres?

To be sure, if we take a good look at the Islamic world today and ask ourselves which countries are peaceful, prosperous and advanced, we can only name a few: Brunei, Malaysia, Qatar and the United Arab Emirates.

As for the rest, some are either at war with a foreign country or in a civil war, e.g. Iraq, while others face the threat of terrorism masterminded and launched by homegrown radical Islamic groups, e.g. Indonesia.

Ironically, this is the Islamic world that is 1.3 billion strong and has the biggest oil reserve in the world, among a wealth of other natural resources. And, lest we forget, this is the same Islamic world that was the most powerful, advanced and enlightened civilization at one point in history.

Unfortunately, as the West developed and gained dominance following the Renaissance and the Industrial Revolution, the Islamic world continued to live in its once-glorious past and gradually fell behind.

And as the development gap between the West and the Islamic world has widened, Muslim groups, such as Hizbut Tahrir, have put the blame on democracy as the cause of all the wrongs in the Islamic world.

Some other groups, such as al-Qaeda, have taken a more extreme view, calling the West the enemy of Islam. Thus, they have turned to jihad as the way to fight against the West, particularly the U.S. and its allies, in defense of Islam.

This is certainly the case of the al-Qaeda-linked Jamaah Islamiyah (JI). With its links and operations across Southeast Asia, the JI has been responsible for major terrorist acts in Indonesia, namely the Bali bombings of 2002 and 2005; the Jakarta JW Marriott blast in 2003; and the attack on the Australian Embassy in Jakarta right before the 2004 elections.

As we have seen, violent jihadism is no solution to poverty, backwardness and other problems that Islamic countries are facing today; in fact, it has done more harm to Islam and Muslim-majority nations.

In the JI attacks, for instance, most of the victims were innocent Muslim Indonesians. What is more, these attacks have damaged Indonesia's global image, investor confidence and tourism industry.

But most importantly, these attacks have darkened the good name of Islam.
In a nutshell, such jihadism is no way for Indonesia, or any other Muslim-majority nation, to overcome its national challenges and move forward.

Likewise, instituting sharia, as Hizbut Tahrir would have you believe, is not the answer to Indonesia's problems either.

To be sure, democracy may not be the best political system in the world. Or, as the former British prime minister Winston Churchill put it: "It has been said that democracy is the worst form of government except those other forms that have been tried from time to time."

So, until Indonesia finds a better form of government, it had better stick with democracy.

The writer is a Jakarta-based columnist. His writing can be read at www.thangthecolumnist.blogspot.com

Just Do It instead of playing blame games

Business Times - 07 Aug 2007

Indonesia must step up moves to improve its investment climate to retain foreign players

By THANG D NGUYEN

IF you want to solve a problem, the first step is to acknowledge it exists. But sadly, this is not the case with some people in Indonesia, who like to blame foreigners for many things that go wrong in the country.

Take the case of Nike. Recently, thousands of workers from Naga Sakti Parama Shoes Industry (Nasa) and Hardaya Aneka Shoes Industry (Hasi) took to the streets in rallies against the American athletic apparel company because it ended working contracts with them.

Nike said it did this because of poor quality and late deliveries.

But the workers thought otherwise. Carrying banners like 'I hate Nike' and 'Go to hell Nike', they demanded the company restore its contracts with their factories - and denied the problems that Nike said it had.

What these workers do not realise is that Nike is not responsible for their problem and therefore they are not entitled to seek compensation from it.

'Nike is only a buyer - not the investor who owns the factories and employs the workers,' Nike spokesman Maretha Sambe was quoted by The Jakarta Post as saying. Furthermore, Nasa and Hasi were given the chance to improve their production quality and retain their contracts with Nike. But they failed.

'Nike had already warned them of their sub-standard output and other problems in March this year,' said Nike's director for corporate responsibility communications Erin Dobson.

And 'because there has been no significant change in quality and delivery, Nike headquarters sent termination notices', said Maretha Sambe.

Like many Indonesians, Nasa and Hasi workers do not realise that in today's global economy, making a good product is no longer enough for investors or buyers.

They demand the best product in terms of both quality and production cost. And if this demand is not met, they will go somewhere else where it can be met.
That's exactly what Nike did. It shifted orders to 37 other sports-gear factories in Indonesia to meet its demand.

What's more, Nike, which started sourcing from Indonesia in 1989, said this week that it remains committed to doing business with Indonesia despite the problems it has had with Nasa and Hasi and despite the worker protests. Nike could have shifted its orders to India, China or Vietnam. It could have wound up doing business with Indonesia because of the problems it has faced and the Nasa-Hasi protests. But it did not.

As opposition against Nike mounted, the Indonesian Investment Coordinating Board (BKPM) intervened and helped resolve the dispute.

And the outcome is positive: Nike agreed to extend its contracts with Nasa and Hasi, ending weeks of confrontation among the parties involved.

Still, the Nasa-Hasi protest reminds us of how challenging Indonesia's business or investment climate is.

Besides labour laws and worker protests, foreign investors face a host of issues including corruption, inadequate infrastructure, political instability and legal uncertainty. Together, these issues raise the cost of doing business and drive investors away.

To be fair, the Indonesian government does recognise the problems. Since taking office in October 2004, the administration of President Susilo Bambang Yudhoyono has taken numerous steps to improve the investment climate.

It has held two major conferences to lure foreign investors for infrastructure projects, though little has resulted from these events.

There are major problems, like poor infrastructure as traffic jams in Jakarta and Bandung are getting worse day by day.

Mr Yudhoyono, who campaigned for fighting corruption among other things, set up the Corruption Eradication Commission (KPK). And for about three years, KPK did a good job, filing several high-level cases. But earlier this year it was dissolved, even though its job was far from completed.

If anything, now is the time that the Mr Yudhoyono's government needs to do more - not less - to carry out its economic, legal and social reforms.

If not, distrust will only intensify. For foreign investors, it will be distrust in Indonesia as a place to do business. And for Indonesians - particularly those who voted for Mr Yudhoyono - it will be distrust in democracy.

The writer is a Jakarta-based columnist. His writings can be read at www.thangthecolumnist.blogspot.com

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