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: 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: 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 »

Author: Jonas Parello-Plesner

China and India (Chindia) is on everybody’s lips when talking about rising Asia.

Then what is KIA? A car, most people would reply. Yet it could also be the new brand-name for Asia’s middle powers; (K)orea, (I)ndonesia, and (A)ustralia. They are Asia’s 4th, 5th, and 6th largest economies. All three are often dwarfed by the big power play between China, India and Japan and the region’s –and the world’s – superpower, the US.

Yet look at Indonesia’s population as the world’s third largest democracy, Korea’s economy, and Australia’s size – a continent in itself. They are solid middle powers. Relocate them to Europe and they would be large countries on most accounts. In Asia, they are too small to be big, but too large to be small.

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Author: Hadi Soesastro, CSIS, Jakarta

Climate change is perhaps the most controversial international issue today. The scientific debate on the need to limit GHGs (green house gases) that are responsible for global warming has not ended, but it is no longer the main issue at this point in time. The Declarations of both the G8 and the Major Economies Forum (MEF), held in L’Aquila (Italy) in July 2009, stated the leaders’ agreement [pdf] with ‘the scientific view that the increase in global average temperature above pre-industrial levels ought not to exceed 2 degrees celcius’.

The real issue is how this would be achieved. As of today, the planet is already 0.8 degrees celcius warmer than at pre-industrial time, and the rise in the world’s average temperature has continued to accelerate. Establishing an international climate regime is seen as necessary to deal with this global problem. This effort began with the agreement in 1992 of the UN Framework Convention on Climate Change (UNFCCC) that led to the adoption of the Kyoto Protocol in 1997 and its entry into force on 16 February 2005.

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Author: Jusuf Wanandi

On July 17, 2009, the Canberra-based Australian National University (ANU) conferred a Doctor Honoris Causa degree in economics on Hadi Soesastro. He is the third Indonesian to receive such a degree, following the conferrals many years ago to Dr. Masri Singarimbun, a demographer, and Dr. Thee Kian Wie, an economic historian.

Dr. Singarimbun was honored for his achievements in the field of demography, and for paving the way for Indonesian students to study at the ANU. Dr. Thee was honored for his long standing and extensive cooperation with the university.

The ANU honored Hadi for his achievements in promoting the idea of regionalism in East Asia and the Asia Pacific. He has tirelessly developed the idea and given it a conceptual framework through various Track Two processes since it was first proposed in the 1970s. He has been instrumental in developing the Pacific Economic Cooperation Council (PECC) into what it is today, and for the establishment of the Economic Institute for ASEAN and East Asia (ERIA). In addition, he is appreciated for his contribution to Indonesian-Australia relations, especially in economics.

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