The draft beer at the Obama Bar, nestled in Jakarta’s backpackers’ quarter of Jalan Jaksa, seemed a little less cold during the weekend. And the plaster statue of the US president sitting in a pedicab inside one of the city’s high-end malls had fewer people lining up to snap photos with their cell phones.
It’s safe to say that Jakarta, and likely the rest of the country too, is mildly disappointed that Barack Obama postponed a highly-anticipated state visit that was due to begin today because of a crucial final vote on healthcare reform back in the United States.
And they have some cause to be, after all: Obama spent nearly four years in Jakarta as a child in the late 1960s, giving Indonesia bragging rights over the then-schoolboy still often known here simply as ‘Barry.’
But the key word is mildly. Millions of Indonesians woke up and went to work as usual, the Jakarta Composite Index—Asia’s second-best performing index in 2009—opened as usual, as did some of the world’s largest gold, coal, and copper mines, palm oil plantations.
In short, life goes on for a country that’s going places. Indonesians are by nature gracious and hospitable, but even more than that they’re extremely patient.
‘It’s OK, it’s OK that’s he’s not coming yet,’ says Eko, a doorman at Obama Bar, a combination sports bar and pick-up joint that opened just over a week ago. ‘Obama is good.’
For sure, when Obama does finally make it here (the visit has been rescheduled for June), the trip promises to be a love fest, given his popularity here. It also promises to be high on symbolism and atmospherics. The Indonesian media has dubbed the visit a ‘pulang kampung,’ or a village homecoming. Local TV stations are salivating at the thought of filming Obama showing his daughters the neighbourhoods where he kicked footballs and chased chickens with his local friends.
But there’ll be more than just symbolism. Obama and Indonesian President Susilo Bambang Yudhoyono are set to sign a comprehensive partnership agreement between their countries covering security, education, trade and investment, climate change, health and numerous other issues. The agreement is one of the results of US Secretary of State Hillary Clinton’s highly successful trip to Indonesia and three other Asian nations shortly after assuming the post in January 2009.
‘The first thing to do is to separate the Obama visit from the partnership, even though they’re linked,’ says Donald K. Emmerson, an Indonesia expert from Stanford University in California. ‘Obama will announce it when he’s [in Jakarta], but the partnership will have a far greater impact than the visit.’
US presidents get around, though this will be the first time one has gone to a developing country where he lived as a child. But what’s important about Obama’s visit, at least to Indonesians, is that it will to them be affirmation of the country’s transformation from an authoritarian Asian backwater under the late dictator Suharto to a stable emerging democracy, all in just over a decade. Indonesia is also the largest Muslim-majority nation in the world, something frequently pointed out by the United States.
Think of it as Indonesia’s coming out party, hopefully with Obama as the Escort-in-Chief.
‘The Indonesian government sees the Obama visit as a way to elevate the country’s standing internationally—the democracy, the economy, the diversity,’ says Anies Baswedan, rector of Paramadina University in Jakarta and an adviser to Yudhoyono. ‘We’d like to see Obama address the world on Indonesia.’
And Obama will surely oblige. He had been scheduled to deliver a follow up to his Cairo speech last year, this time touting Indonesia as a role model for both mainstream Islam and democracy. It’s expected he’ll dust off that speech and deliver it during his visit in June.
It’ll be interesting to see how the world responds. Indonesia is not a well-understood nation, in the United States at least, and not in many eyes a poster child for democracy. This is partly because of its past human rights abuses and authoritarian government, partly because of its current low-key foreign policy, and partly because it is often portrayed in the international media as a dangerous Muslim country beset by terrorist attacks and earthquakes.
The reality is far different: Indonesia is a leading Asian proponent of human rights, is trying to take a leading international role on climate change (it has the world’s largest remaining rainforests), is a secular nation of 190 million mainstream Muslims, holds free and fair elections and has an open, vibrant media.
‘Now that it’s a young, vibrant democracy, it should play a bigger [international] role,’ says James Castle, president of CastleAsia, a Jakarta-based business advisory firm. ‘It’s a successful story.’
But it’s a story that needs to be repeatedly retold. Gita Wirjawan, the country’s investment czar and a member of Yudhoyono’s cabinet, is one of those who keeps doing so. He expends considerable energy meeting with foreign businessmen and the investment arms of other nations trying to convince them to invest in Indonesia. Yudhoyono has said that Indonesia needs an average of $216 billion a year in total investment if it wants economic growth to exceed 7 percent by 2014, so foreign players will be key.
‘It’s all about perception,’ Wirjawan says. ‘Indonesia has been known through the prism of the media—demonstrators throwing rocks on the streets, floods, earthquakes, tsunamis.’
Wirjawan says that unlike overseas Chinese or Indian communities, ‘there aren’t enough Indonesians in Washington, New York and London who know Indonesia.
‘Not enough Indonesian restaurants, not enough Indonesian taxi drivers in New York,’ he says. ‘It’s a soft power issue. Why are we under-hyping ourselves?’
It’s a good question. Take, for example, the country’s tourism industry, which is woefully underperforming. Part of this could be blamed on the fact that Indonesia’s tourism minister is a political appointee who doesn’t like to speak English, even though English is the language of international tourism.
It’s revealing that Indonesia, which is often (wrongly) perceived internationally as an intolerant Muslim state, received only around 6 million visitors in 2009, the majority of whom went to the resort island of Bali. Meanwhile, Indonesia’s neighbour, Malaysia, is by many analysts’ reckoning on its way to becoming a far less tolerant Muslim state, yet its catchy ‘Malaysia Truly Asia’ tourism campaign helped it attract more than 26 million visitors last year.
But Wirjawan also notes that while tourism is important, the big investment is Indonesia’s key industries, oil and gas, mining, palm oil and other agro-businesses.
‘China and India are lining up for natural resource investment. They both need coal; only Indonesia can provide it,’ he says.
Indonesia has positioned itself well among the larger Asian nations, and has vast opportunities as a key supplier for China and India’s energy and food needs. Indonesia’s growing economic clout, supported by sound macro-economic policy, helped it achieve membership of the G-20 last year.
But significant challenges remain. A recent political scandal and legislative investigation into the Yudhoyono administration’s decision to bail out an ailing private bank in 2008 showed there are Suharto-era business and political cronies bent on stopping Indonesia from pushing through free market reforms. Well-educated, internationally-respected reformers like Finance Minister Sri Mulyani, and newcomers such as Wirjawan appear to have the upper hand, but acknowledge that Indonesia hasn’t fully shaken the shackles of its crony capitalism past.
Kevin O’Rourke, the Harvard-educated editor of Jakarta-based Reformasi Weekly, has studied the rot that needs to be cleared out of Indonesia’s economy. He says one of many problems being tackled now is civil service reform, ‘which is a determent to investment, infrastructure development and anti-corruption reform.’
‘After a decade of institutional reforms, it’s just getting started,’ he says. ‘There’s a real affinity about [continued] state involvement in the economy, scepticism about capitalism, globalization, neo-liberalism, even foreign investment.’
Yudhoyono has managed to push his economic agenda forward because he remains extremely popular among Indonesia’s lower classes—who while not always understanding the intricacies of free market policies, do appreciate poverty alleviation and social services programs that the growing economy makes possible.
But Yudhoyono, and any successor (who will take office in 2014), must do far more. Douglas E. Ramage, democratic governance adviser for AusAid in Jakarta, says that Indonesia’s future international role will be inextricably linked to its ability to ‘get its domestic house in order.’
‘The development challenges are immense,’ he says, noting that more than 100 million Indonesians still live on $2 a day or less. ‘Some of its human development indicators … are equal to Sub-Saharan Africa.’
‘It’s these hard realities that Indonesia has to translate its growth and political stability into [improving],’ Ramage says. ‘It’s a political will issue, but also a capacity issue—institutional capacity is weak across the board.’
In many ways, the Obama visit won’t be a culmination of Indonesia’s achievements, but the starting line of a new race to overcome its many lingering problems.
Yet all this won’t stop Indonesians from taking pride in the US president’s visit, including Manuela, a Jakarta expatriate from Cameroon and owner of Obama Bar.
‘I really want him to come here for a drink. But how?’ she asks. Told that she could send an invitation to the nearby US Embassy, she smiles and says: ‘OK, I’ll do it’