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Indonesia received an upward trend arrow due to the holding of three free and fair elections during the year.
Indonesia consolidated its position as the world's third largest democracy in 2004 with three separate free and fair elections. In April, Indonesia held what some have called the world's most complicated one-day elections in which over 100 million Indonesians went to the polls and completed highly complicated ballots to elect the parliament. The first round of Indonesia's first-ever direct presidential election, followed in July and was carried out peacefully, although some administrative problems with the distribution and layout of ballots persisted. In the September run-off, Susilo Bambang Yudhoyono, commonly known as SBY, defeated incumbent Megawati Sukarnoputri by a wide margin. SBY and his cabinet were sworn in on October 20 with promises of reform, including pledges to tackle some of Indonesia's long-standing problems, such as rebellions in Aceh and Papua, corruption, and legal reform. Some analysts believe that SBY has the political will to tackle these problems, but whether he will have the capability to overcome entrenched interests remains to be seen.
Indonesia won full independence in 1949 following a four-year, intermittent war against its Dutch colonial rulers. After several parliamentary governments collapsed, the republic's first president, Sukarno, took on authoritarian powers in 1959 under a system that he called "Guided Democracy." Sukarno retained his political supremacy by balancing the country's two most powerful groups, the conservative military (TNI) and the Communist Party of Indonesia (PKI), against one another. This unstable political triad came apart in 1965, when the army, led by General Suharto, crushed an apparent coup attempt that it blamed on the PKI. In the aftermath, the TNI and its conservative Muslim allies engaged in mass acts of violence against suspected PKI members that ultimately left an estimated 500,000 dead. With the backing of the TNI, Suharto eased aside the populist Sukarno and formally became president in 1968.
Having eliminated the PKI, Suharto's "New Order" regime engineered both the merger of the "old order" political parties into two unwieldy ones and also the creation of Golkar, a pro-government political party based on bureaucratic and military interests. In the elections Suharto held every five years, restrictions on civil liberties and the coercive power of the state ensured that Golkar always won with impressive margins. During his 32 years in power, Suharto created a patrimonial political system that rewarded supporters, including his family and close friends, and punished his opponents.
In part to sustain his power, Suharto embarked on an economic development program that led the Indonesian economy to grow by an annual average of 7 percent for three decades, helping to lift millions of Indonesians out of poverty. In the 1990s, Suharto's children and cronies were the major beneficiaries of state privatization schemes and also often ran large business monopolies that operated with little oversight. When Indonesia was hit by the Asian financial crisis, which devalued the currency by more than 5,000 percent over six months, Suharto agreed to a $43 billion IMF bailout in October 1997. In 1998, the country's economy shrank by 13.8 percent; it was the largest single-year contraction for any country since the Great Depression.
Soaring prices and rising unemployment led many Indonesians to demonstrate against the corruption, collusion, and nepotism of the Suharto regime that they blamed for the crisis. In the midst of devastating urban riots in May 1998, Suharto resigned and was succeeded by Vice President B. J. Habibie, a long-time Suharto loyalist. Habibie responded to the reformasi movement that had helped topple Suharto by freeing the press, labor unions, and political parties in an attempt to shore up his political legitimacy.
In June 1999, Indonesia held its first free parliamentary elections since 1955. The Indonesian Democratic Party - Struggle (PDI-P), led by Sukarno's daughter Megawati, won 154 of the 462 contested seats. Golkar won 120 seats, and smaller parties the remainder. In October 1999, the People's Consultative Assembly (MPR), a body that then consisted of the Parliament (DPR), plus another 195 appointed members held its first competitive vote and elected Muslim leader Abdurrahman Wahid president and Megawati vice president.
Hopes that this team of two reformist leaders - representing moderate Islam and Indonesian nationalism, respectively - would have the political credibility to tackle many of Indonesia's deep-seated political, economic, and social issues went unfulfilled. Wahid's credentials as a democratic reformer and champion of religious freedom gave him the moral authority to call for an end to the insurgency in Aceh and the deadly ethnic and sectarian violence raging in the Moluccas, Sulawesi, and Kalimantan, but he chose not to do so. Moreover, Wahid did little to revive the economy, and his administration was dogged by corruption allegations. Facing impeachment charges, Wahid made a mockery of his initial attempts to exert civilian control over the TNI when he called upon the armed forces to declare a state of emergency in an effort to prevent his political demise. The TNI refused, Wahid was impeached, and Megawati become president in July 2001.
Megawati generally is credited with stabilizing Indonesia's volatile post-1997 economy, which only returned to pre-crisis per capita income levels in 2004. However, critics charge that she has largely failed to rein in what is widely seen as a corrupt elite whose unchecked self-interest has sapped the economy and stunted political development. Many observers say that corruption has increased since Megawati took office, in part because of both the recent decentralization of government - which has expanded the power of local officials without improving their oversight - and a lack of enforcement.
Investors remain wary of sinking capital into Indonesia because of government corruption as well as fickle courts, inadequate laws, and a poor regulatory environment. Economists say that Indonesia's recent economic growth rate is only about half that needed to keep pace with new entrants in the labor market and to substantially reduce poverty. Investors made no secret of their preference for SBY in the presidential election, and many are hoping that he will address these obstacles to growth.
Megawati took a tough line against Jemaah Islamiyah, a network of Islamic militants in Southeast Asia allegedly linked to al-Qaeda, the terrorist network. Although she was initially reluctant to tackle home-grown Islamic militancy for fear of offending powerful Muslim constituencies, her government arrested scores of suspected terrorists following the 2002 bombing on the resort island of Bali that killed 202 people.
However, Megawati's hard-line approach to the insurgencies in Aceh and Papua did not lead to peace. In May 2004, the government lifted the martial law decree it had issued a year earlier in Aceh, an oil-rich province of 4.6 million people in northern Sumatra. Nevertheless, the military continued to launch fresh offensives against separatist rebels. Voters punished Megawati for these perceived failures by giving the PDI-P less support in the April parliamentary elections. The big surprise was the strong showing for Partai Demokrat (PD), the electoral vehicle for SBY, who resigned from Megawati's cabinet as coordinating minister for political and security affairs in March.
On September 20, SBY won 61 percent of the vote and claimed a mandate for change. However, to implement his agenda, SBY will need the cooperation of parliament, and the standoff between the president and parliament that followed his October 20 inauguration illustrates how difficult that task may be. SBY's PD holds only 55 out of 550 seats, while the two other parties that formally support SBY can muster 111 votes. The People's Coalition, which will probably support the president most of the time, commands 233 seats, but it is opposed by the Nationhood coalition that supported Megawati and includes parliament's two largest parties, Golkar and PDI-P.
Golkar former chairman Akbar Tandjung has made no secret of his desire to bring down the SBY government within two years. However, Tandjung, whose 2002 corruption conviction was overturned, faces a fierce challenge for the Golkar chairmanship in December 2004 and some of the candidates favor a closer working relationship with SBY's administration.
Courts have convicted several suspects in the 2002 Bali bombing, though a court in September acquitted Muslim cleric Abu Bakar Bashir, 65, of being the spiritual head of Jemaah Islamiyah. Though the cleric was jailed for four years on other charges pending appeal, the acquittal was seen as a setback for Indonesia's antiterror campaign. Regardless of Bashir's fate, many analysts say that the government must take the sensitive step of investigating the handful of Islamic boarding schools allegedly linked to Jemaah Islamiyah and further professionalize the gathering and sharing of intelligence in order to better curb terrorism.
Citizens of Indonesia can change their government democratically. In 2004, Indonesians directly elected their president and all of the members to parliament, DPR, as well as representatives to a new legislative body, the Regional Representatives Council (DPD). The DPD is tasked with proposing, discussing and monitoring laws related to regional autonomy. Together with the DPR, it will form the reconstituted MPR. All elections were free, fair, and remarkably peaceful. New parties, such as SBY's electoral vehicle, the PD, and the rise in support of the Prosperous Justice Party (PKS), indicate the ability of new parities to capture seats. However, some of the new electoral rules favor larger, more established parties and may reduce access to new parties. For example, independent candidates cannot contest elections - they must be nominated by political parties - and voters choose parties, not candidates, in the voting booth. Parties, in turn, must prove they have a nationwide network of members and offices before they can make nominations. Parties that fail to win 3 percent of the vote will not be allowed to contest future elections. Although the president will continue to be directly elected, beginning in 2009 the presidential candidate must be nominated by at least 15 percent of the members of parliament. Similarly, when direct elections for provincial governors and regents begin in 2005, candidates will need 15 percent of the vote in local assemblies to secure a nomination.
The military formally withdrew from politics when it lost its 38 appointed seats in the MPR in 2004. However, the army also maintains a "territorial network" of soldiers in every district and village, which gives it influence at the local level. Discussions to disband the territorial structure were on the agenda early in the reformasi era, when the military was discredited because of its shooting of pro-democracy advocates and its links to Suharto. The military's stock in the eyes of the public increased, however, as a result of its decision to remain impartial during the Wahid impeachment process, and because of the legitimacy Megawati bestowed upon it. The appointment to the post of defense minister of Juwono Sudarsono, a respected civilian who served in this position during the Wahid administration, is a positive sign. Juwono has proposed a major reorganization that would fold the TNI into the civilian-led Ministry of Defense and the police into the Interior Ministry, but whether Parliament approves the reorganization remains to be seen. A key obstacle to civilian control over the military has long been the fact that the TNI receives only 30 percent of its funding from the state budget and has relied on military-run charities and businesses for the bulk of its financing. In an effort to rein in these activities and enhance civilian control, Juwono had proposed disbanding all military-run charities and bringing the military businesses into the state apparatus. Whether he is able to accomplish these objectives remains to be seen, as the military still wields considerable influence in politics and business.
Corruption is endemic in Indonesia, including throughout the judiciary. The government acknowledged the judicial system's inability to police itself when it created the Corruption Eradication Commission, a group of special prosecutors with the power to investigate any suspected misconduct involving government officials who are believed to have cost the state more than one billion rupiah, approximately $10,500. The government has no formal right to intervene with the work of this body. To date, the commission has completed only two investigations, a fact many attribute to the Megawati administration's foot-dragging over the nomination of judges to a special anticorruption court that will hear the commission's cases. The Megawati administration also ignored the commission's order to suspend an official under investigation. Indonesia was ranked 133 out of 146 countries surveyed in Transparency International's 2004 Corruption Perceptions Index.
Press freedom eroded sharply in Indonesia during Megawati's tenure: the country dropped from its 57th place ranking in the Reporters Sans Frontieres 2002 global survey of press freedom to a 117th place ranking in 2004. The sharp drop is a function of attacks on and the killing of journalists, the use of criminal defamation charges to prosecute journalists, and the effective closure of strife-torn Aceh to independent media. In October, one of Indonesia's most respect journalists, Bambang Harymurti, editor of Tempo, was sentenced to a year in jail for suggesting that a businessman with ties to the Megawati administration might have committed arson.
Indonesians of all faiths can generally worship freely in this predominantly Muslim nation, although officials monitor and have outlawed some extremist Islamic groups. Indonesia officially recognizes five faiths - Islam, Protestantism, Catholicism, Hinduism, and Buddhism - and although Islamic holidays predominate, holy days such as Good Friday, Waisak (a Buddhist holiday), and Nyepi (a Balinese/Hindi festival) are public holidays. Animists, Confucians, Baha'is, and others whose faith is not among Indonesia's five officially recognized religions have difficulty obtaining national identity cards, which are needed to register births, marriages, and divorces.
Indonesia has many effective, outspoken human rights groups, including Imparsial, Humanika and the Indonesian Legal Aid Foundation, that aid victims and vigorously promote rights. However, they face "monitoring, abuse, and interference by the government," the U.S. State Department report said. At least 39 Indonesians have been detained or jailed for peacefully criticizing the government since Megawati took office in 2001, the human rights group Amnesty International reported in July. They include independence activists in Aceh, Papua, and Malaku and labor and political activists in Java and Sulawesi. Many were charged under colonial-era defamation laws. In September, Munir, one of Indonesia's most prominent rights activists, died from arsenic poisoning while on a flight to Amsterdam. Indonesia has launched an investigation and SBY received Munir's widow. Whether Munir's killing was related to his human rights advocacy or a corruption case he was investigating is unclear. However, the way in which this case is investigated and prosecuted will send a strong signal regarding the new government's commitment to civil rights.
Indonesian workers can join independent unions, bargain collectively, and, except for civil servants, stage strikes. Government enforcement of minimum-wage and other labor laws is weak, however, and there are credible reports of employers dismissing or otherwise exacting retribution from union organizers. Moreover, unions allege that factory managers at times use youth gangs or plainclothes security forces - often off-duty soldiers and police - to intimidate workers or break strikes. Roughly 10 to 15 percent of Indonesia's 80 million industrial workers are unionized.
SBY has made legal reform a key objective of his new government and has appointed well-known reformers to the positions of attorney general and chief justice of the Supreme Court. Indonesia's judicial system, according to its new attorney general, Abdul Rahman Saleh, is mired in corruption so that justice typically is awarded to the highest bidder. Bribes influence prosecution, conviction, and sentencing in countless civil and criminal cases. Courts often limit defendants' access to counsel and allow forced confessions to be used as evidence in criminal cases. Saleh attributes the problem in part to extremely low salaries for judicial officials as well as to the traditional lack of punishment for illegal activity. Over the past year, a number of steps have been taken to rectify this problem. In July, the DPR passed a law creating a Judicial Appointments Commission to nominate candidates for the Supreme Court (subject to DPR approval) and monitor the conduct of all judges. The current chief justice of the Supreme Court successfully lobbied parliament for the power to appoint non-career judges, who are considered less corrupt. At the same time, the Supreme Court has been disciplining judges in an unprecedented manner, with five dismissed in the second half of 2004 alone.
The new Constitutional Court, only a year old, has infuriated some in the government and in other countries with its ruling that the government's attempt to apply new antiterrorist laws retroactively were unconstitutional. Hailed as the correct decision by legal authorities, it nevertheless caused consternation in many quarters.
The judiciary's weakness has helped perpetuate human rights abuses by the security forces. In Aceh, the army has been implicated in summary killings, "disappearances," rapes, illegal detentions, and other abuses against suspected GAM guerrillas or sympathizers, according to Amnesty International and the New York - based Human Rights Watch. For their part, GAM forces have routinely summarily killed both soldiers and civilians, while intimidating and extorting money from ordinary Acehnese, these groups say. Army abuses also continue in Papua, and questions remain about whether the military and Kopassus, the intelligence service, were involved in a 2002 ambush in the province that killed two Americans. The government denies any official involvement in the deaths.
Indonesian forces also enjoy near impunity in encounters with ordinary criminal suspects. Meanwhile, Amnesty International said in an October report that it continued to receive reports of torture by soldiers and police not only of suspects in conflict zones but also of criminal suspects, peaceful political activists, and Indonesians involved in land and other disputes with authorities. In addition, guards routinely mistreat and extort money from inmates in the country's overcrowded prisons.
Efforts to curb military impunity were dealt a setback by the acquittals or relatively short jail terms handed down in the recent trials of 18 suspects, including senior army officials, in the 1999 violence in East Timor that killed more than 1,000 civilians. In a series of trials that ended in August 2004, a Jakarta court acquitted 12 defendants and handed down jail terms of between three and ten years to 6 found guilty. Amnesty International said that prosecutors failed to present credible cases and gave a sanitized version of the 1999 violence.
Ethnic Chinese continue to face some harassment and violence, though far less than in the late 1990s, when violent attacks killed hundreds and destroyed many Chinese-owned shops and churches. Unlike other Indonesians, ethnic Chinese must show a citizenship card to obtain a passport, credit card, or business license or to enroll a child in school, a requirement that makes them vulnerable to extortion by bureaucrats. Ethnic Chinese make up less than 3 percent of the nation's population, but are resented by some Indonesians for holding the lion's share of private wealth. A few ethnic Chinese have amassed huge fortunes in business, though most are ordinary traders or merchants.
Ethnic Dayaks in Kalimantan and other members of Indonesia's tiny indigenous minority face considerable discrimination. The government at times fails to stop mining and logging companies from encroaching on indigenous land in Kalimantan and other areas - often in collusion with local military and police - and appropriates land claimed by indigenous Indonesians for development projects without fair compensation.
In a positive development, peace is slowly returning to areas of the archipelago that recently have been torn by violence along ethnic or sectarian lines, including the Moluccas, central Sulawesi, and Kalimantan. But setbacks continue to occur. On April 25, 2004, the anniversary of a short-lived Republic of the South Moluccas supported by the local Christian organization Front for Moluccan Sovereignty, snipers killed dozens of people in orchestrated attacks. Despite poor police preparations, the killings did not trigger the wisespread violence the snipers apparently sought to ignite. In Kalimantan and other areas, many disputes between ethnic groups are said to be linked in part to the government's decades-old policy of resettling tens of thousands of Indonesians to remote parts of the archipelago from overcrowded areas such as Java.
Indonesian women face considerable discrimination. They are often steered by factory employers into low-level, low-paying jobs, and female university graduates reportedly receive salaries that are 25 percent lower, on average, than those paid to their male counterparts. Female household servants at times are forced to work without pay, for extremely low wages, or in situations of debt bondage. Female genital mutilation is reportedly still practiced in some areas, although the more extreme forms of the practice apparently are becoming less common. Trafficking of women for prostitution, forced labor, and debt bondage reportedly continues unabated, often with the complicity or involvement of police, soldiers, and officials, despite the recent passage of a child-trafficking bill and of stiffer provisions against trafficking of women.