Author: Hal Hill, ANU

When Prime Minister Rudd talks with President Yudhoyono this week, they will be able to reflect on what a fickle, mean and unpredictable business politics is.

Four months ago, the mood in Indonesia was extremely positive: Susilo Bambang Yudhoyono (universally known as SBY) had been installed for a historic second term. He had chosen Dr Boediono, the country’s most respected technocrat, as his vice president. His Democrat Party had emerged as a major force in the DPR, the country’s parliament. Read the rest of this entry »

Author: Ross McLeod, ANU

The visit of Indonesian President, Susilo Bambang Yudhoyono (SBY) to Australia, five months into his second five-year term, provides an opportune moment to take stock of Indonesia’s progress over the last few years. Like Australia, Indonesia has performed remarkably well in the face of the global financial crisis. Its annual economic growth rate fell from about 6 to 4 per cent, but has already accelerated again to well above 5 per cent. Inflation is only about 3 per cent, and the currency is strong. The budget deficit is small and well under control, as is public debt.

A number of factors have contributed to this good performance. Read the rest of this entry »

Author: Peter Drsydale

The flurry of leaders’ visits — by Indonesia’s President Susilo Bambang Yudhoyono to Canberra this week and American President Barack Obama to Canberra and Jakarta a little over a week later — signals an elevation in the triangular relationship between the United States, Indonesia and Australia, not merely the growing depth of their bilateral relations. Indonesia is one of the world’s newest democracies, a secular state with a predominantly Muslim population, of immense importance to Australia and America in securing Southeast Asian stability and openness. Indonesia and Australia are members of the new G20 group and have deep and common interests in working with America to entrench the G20 as the pre-eminent and enduring forum for global economic governance. Indonesia, with its pivotal role in ASEAN, and Australia, an anchor in trans-Pacific security, are close confidants on America’s re-engagement with Asia under the Obama administration.

American conceptions of security in Asia and the Pacific do not routinely comprehend Southeast Asia. Read the rest of this entry »

Author: Andrew MacIntyre, ANU

Barack Obama’s upcoming visit to Indonesia and Australia is likely to be one of the less difficult and more gratifying international missions he undertakes this year. But along with the surges of goodwill that will greet him in both countries, there will also be opportunities– in partnership with Susilo Bambang Yudhoyono and Kevin Rudd – to advance significant common causes in the region and globally. And Yudhoyono’s separate bilateral visit to Canberra the week before gives added weight to the moment.

With climate change sliding down the agenda in all three countries for now, the big issue on which the three leaders will find common cause is the G20. Read the rest of this entry »

Author: Matthew Zagor, ANU

For several weeks in October and early November, Australian politics was dominated not by the economy or climate change, but by the conduct and fate of 78 Sri Lankan asylum-seekers aboard an Australian customs vessel, Oceanic Viking, outside the port of Tanjung Pinang in Indonesia. The incident exposed some of the fissures in international refugee law, as well as Australia’s uneasy relationship with those who arrive by boat.

Rescued in Indonesian waters by an Australian vessel at the request of the Indonesian authorities, the asylum-seekers refused to disembark until certain demands were met concerning their conditions of detention and expedited resettlement. Coming on top of a spike in boat arrivals in Australia, the incident presented a test of the Prime Minister’s stated policy of being ‘tough but humane’. Read the rest of this entry »

Author: Frank Jotzo, ANU and Salim Mazouz, Ecoperspectives

With the climate negotiations getting to the pointy end, there is attention not just on headline commitments, but on what countries might in fact do at home to reign in their greenhouse gas emissions.

Indonesia is in Copenhagen with an announced target of reducing emissions by between 26 per cent and 41 per cent at 2020, compared to a business-as-usual scenario. Behind the scenes, serious work is going on to identify policy approaches that can deliver on this goal.

Indonesia’s Ministry of Finance this week released a Green Paper on Economic and Fiscal Policy Strategies for Climate Change Mitigation in Indonesia. Read the rest of this entry »

Author: Rizal Sukma, CSIS

There is debate about whether the 2009 elections in Indonesia suggest a further decline of Islam in Indonesia’s politics. Many believe that Islam has become less significant in Indonesia’s politics.

Susilo Bambang Yudhoyono’s (SBY) Administration faces many challenges, but despite all the issues that confront the country, Indonesia’s democracy has displayed a degree of resilience. Read the rest of this entry »

Guest Author: Milan Zavadjil, IMF Indonesia

By now it is well known that Indonesia is weathering the global financial crisis (GFC) better than most countries. This is usually explained by lower dependence on exports, as well as the stimulus provided through fiscal and monetary policies.

Nonetheless, there is another reason behind Indonesia’s strong performance. Cautious policies by Indonesia’s government, banks, corporations and households over the past decade have resulted in low debt levels and limited refinancing needs. This served the country especially well in late 2008 and early 2009, when liquidity tightened around the world. Read the rest of this entry »

Author: Hal Hill and Chris Manning, ANU

President Susilo Bambang Yudhoyono (universally known as SBY) announced the cabinet for his second five-year term shortly after his inauguration on October 20. Its composition and quality provide one of the best indications of the president’s policy priorities, as well as his political strategy.

SBY’s Democrat Party emerged as the major, though minority, party at the April parliamentary polls, while he had a resounding victory in the July presidential election. He is therefore in a much stronger position than in 2004. In May, he made a surprising choice of Dr Boediono as his vice presidential running mate, a ‘non-politician’, a respected economic policy maker (and also an Australian graduate). Read the rest of this entry »

Author: Peter Drysdale

With last Tuesday’s inauguration of President Susilo Bambang Yudhoyono (SBY), this week we celebrate the achievements of Indonesian democracy with an assessment of its progress by Larry Diamond from the Centre on Democracy, Development, and the Rule of Law at Stanford University and an analysis of SBY’s new cabinet line-up by Sunny Tanuwidjaja of CSIS, Jakarta. The Australian Prime Minister joined ASEAN and other regional leaders in Jakarta for the celebrations last week. This is one of many symbols of the strength and depth of the relationship that has developed between Indonesia and Australia as Indonesia’s democracy has become entrenched, especially under the leadership of SBY. Read the rest of this entry »

Author: Larry Diamond, Stanford

Since the mid 1990s, the proportion of countries in the world that are democracies – countries that meet the standard of at least electoral democracies in the sense that they can choose their leaders and replace them in free and fair elections – has stagnated, at around 60 and 62.5 per cent.

The world is experiencing a democratic recession. There are three dimensions of this. Read the rest of this entry »

Author: Sunny Tanuwidjaja, CSIS, Jakarta

The newly formed cabinet under the leadership of the popularly elected Susilo Bambang Yudhoyono (SBY) has been dubbed a ‘return the favour’ cabinet (kabinet balas budi), a cabinet of political mates (kabinet perkoncoan), a rainbow cabinet (kabinet pelangi), and a power/cake sharing cabinet (kabinet bagi-bagi kekuasaan atau kue).

The idioms used to describe the new cabinet convey the three big concerns about the structure of the cabinet. Read the rest of this entry »

Author: Frank Jotzo, ANU

At the Pittsburgh G20 meeting, Indonesia’s President Yudhoyono (SBY) reportedly said that Indonesia had decided on a national climate change action plan ‘that will reduce our emissions by 26 per cent by 2020 from BAU (Business As Usual)’, and by up to 41 per cent with international support.

This would be a substantial reduction, including in global terms.

Read the rest of this entry »

Author: Sherry Tao Kong, ANU & Palmira Bachtiar, SMERU

Since its first stored opened in central Jakarta in 1998, Carrefour has quickly expanded to 37 stores across Indonesia, reaching annual sales of 627 million Euros by 2006. However, the rise of Carrefour has not been seamless. In 2005, Carrefour paid a Rp1.5 billion (US$148,515) fine due to its behavior deemed as abuse of its dominant market position which damaged wholesalers through ‘minus margin’. The French-owned retail giant is now once again in troubled waters.

This time, the problem started with a recent acquisition in January by Carrefour of a local supermarket operator, PT Alfa Retailindo (Alfa). Thanks to this Rp 674 billion (US$58.6 million) transaction, Carrefour acquired a 75 per cent share of Alfa, which has 29 supermarkets in Indonesia, with annual sales reaching Rp 3.6 trillion (US$310 million) in 2006.

Read the rest of this entry »

Author: Hal Hill

One of the most durable and important elements in the Australia-Indonesia relationship is the large number of Indonesians who have studied in our universities. In Indonesia, Australia offers the largest number of graduate-level scholarships for study abroad, and it also hosts the largest number of private Indonesian university students studying abroad.

More so than almost any other country in Southeast Asia, these graduates now increasingly occupy senior positions in government, business, universities and civil society. It is no exaggeration to say that it is probably the single most important dynamic in the bilateral relationship. At elite levels in Indonesia, we are probably now better understood than any other western nation. And there is momentum in that many of the earlier Australian graduates send their children here to study.

Read the rest of this entry »