The Indonesia Lobby Meets

By Graeme Dobell

The influence or even existence of the Indonesia Lobby is one of the conspiracy theories that tweaks Canberra’s curiosity. The Lobby – and its real or imaginary work on behalf of Indonesia – is just one element of the East Timor argument that caused so much passion for decades. Over the years I have been accused of being a card-carrying member of the Lobby, just for writing about Indonesia. So of course I would downplay the Lobby’s role. Let the circular argument begin!
If there is a Lobby, then the Indonesia Update at the Australian National University is its annual conference. Now well into its third decade, the Update this year was the usual wonderful Indonesian meal – cash, corruption and conspiracy, politics and personalities. Just the conversation you could have at any normal Jakarta lunch.
The keynote speaker on Indonesian politics was Gerry van Klinken. This surely proves that the Lobby is such a broad church it even embraces the heretics. Particularly with his years of work on Inside Indonesia magazine, the van Klinken position has always been that Indonesia’s friends must speak with brutal honesty, not offer apologia.
The title of the van Klinken paper was Corruption and the Nature of Government, and he argued that, “In a way, corruption discourse today is what human rights discourse was during the New Order.” Democratic Indonesia, he said, is a hot destination for global conferences. So it was that the UN conference on corruption began its deliberations in Bali on the day that Suharto died. The conference had before it a list of the world’s top 10 embezzlers. Suharto was top of the list. “You had the delicious irony of the delegates standing for a minute’s silence to remember the great man.”
Dr van Klinken said the anti-corruption drive launched by the SBY presidency in 2004 has scored major successes and the chance of prosecution has altered official culture. The surveillance, stings and prosecutions by the special Anti-Corruption Court had shifted the rules of the game: “Politicians no longer carry enormous quantities of cash to lunch and they have adapted their mobile phone techniques.” The threatened Jakarta elites are pushing back against the corruption drive and next year’s presidential and legislative elections will change the political focus.
“It’s fair to say the best hope for real action against corruption still lies with SBY’s reelection. Nobody has ever suggested the president himself is corrupt,” van Klinken said. The same reading is not offered about many of SBY’s allies, from Vice President Kalla down. SBY does not have the personal foundations that Suharto used to bankroll his rule. To get reelected, SBY is going to need the money of his allies.
SBY is a technocrat who talks of “service delivery” and a lean, efficient state. Van Klinken: “The ideological subtext of an anti-corruption campaign – small government, free enterprise – does not resonate as much in Indonesia. It’s important to remember that anti-corruption was sponsored by foreigners. It was part of IMF conditionality…The anti-corruption campaign really is a middle class affair.”
And Indonesia’s middle class may be turning its attention to issues of financial contagion, not corruption. For Jakarta, the scars of the Asian financial crisis a decade ago are still sensitive to touch. Dr Ross McLeod, of the ANU’s Indonesia Project, said the crisis cost the Indonesian government AUS$50 billion. During the crisis, Jakarta gave a blanket guarantee to the safety of all banks, which meant “the government ended up the owner of dead banks.”
Those memories still resonate, according to Vincent Ashcroft, the Australian Treasury representative in Jakarta for the last three years and now the resident economist for the aid program, the Australia-Indonesia Partnership. “Indonesia carries a risk premium left over from the financial crisis because it was very much a foreign banking crisis. You talk to people in the banking sector in Jakarta, it’s like (the crisis) happened yesterday – they’re scarred by what happened.”
Ashcroft uttered the now dreaded line, that Indonesia’s “underlying fundamentals are sound.” And simplicity has its advantages. Ashcroft said that Indonesia’s financial market is so underdeveloped it has little exposure to the intricate instruments laying waste to Western economies. Indonesia’s capital inflow over the last couple years had been very strong, off a low base, Ashcroft said, but “Indonesia is still susceptible to a sudden reversal of capital flows should confidence disappear.”
At the end of more than three hours devoted to the Political Update and the Economic Update, I was struck by the complete absence of what was once a permanent and pervasive subject. There had not been one reference to the Indonesian military. No thought given to the military’s place in Indonesia’s politics and economy — that would never have happened during the first two decades of the Indonesia Update.

This article originally appeared on the Lowy Institute’s blog, The Interpreter (

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