Australia-Indonesia relations: Democracy is the winner

Campaigning is now in full swing for Indonesia's two-step democratic process, first to elect members of the House of Representatives in early April and then to vote directly for a new president later this year. Indonesia's vibrant free press has declared open season on the candidates, its reporting rife with claims, counter-claims, denials and promises. Pundits are busy predicting winners and losers. Horse-trading to cobble together viable coalitions is reaching fever pitch. Deals are being brokered, favours called in and muck raked.

In short, the world's third largest democracy is functioning just as it should.

Like all general elections, the trouble with Indonesia 2014 is the focus on the outcome, distracting attention from the miracle of the process. Indonesia is just 15 years into a transformation from authoritarian leadership and single-party rule to pluralist democracy featuring a centrifugal model of devolved regional autonomy.

In October, for the first time in Indonesia's history, a peaceful and stable transfer of power from one president to a new president will occur, in accordance with the popular will. This should be as much a breathtaking 'wow!' moment for Australia as for the behemoth next door.

Before a single ballot is cast in 2014, regardless of who occupies Jakarta's Presidential Palace, this milestone in the consolidation of Indonesian democracy will deliver a great result for Australia. The rest will be mere hard work.

All polling indicates the rise and rise of Jakarta Governor Joko Widodo ('Jokowi') will continue and he will occupy the nation's highest office by year-end. His choice of running mate will likely stymie criticism that he lacks the track record for such a mammoth task, and what he lacks in experience he will no doubt make up in charisma.

A President Jokowi, representing Megawati's Democratic Party of Struggle, would be a good result for Australia, though it is not as important as the next Indonesian president's picks for cabinet, particularly in some key portfolios for Australia. [fold]

Bilateral trade and investment have been undercooked and statistics reflect this, with each nation ranking disappointingly below the other's top ten trading partners. The nationalist and protectionist rhetoric percolating throughout Indonesia's trade narrative these days, particularly in the mining, banking and manufacturing sectors, doesn't help matters. The new government in Jakarta will need to arrest this trend – as much for Indonesia itself, which will depend on foreign investment to remedy emerging signs of sputtering growth.

If the new Indonesian president is allowed to form a cabinet of clean, capable, technocratic ministers, able to implement sensible fiscal and economic policy, the stake of Australian business in Indonesia's future looks promising.

But that's a big 'if'.

Indonesia has an ability to disappoint both optimists and pessimists. The more likely scenario is that any captain's pick by President Jokowi will be hamstrung by power brokers in the Democratic Party of Struggle bent on rewarding party stalwarts and squaring up other loyalists who have kept faith with Megawati over the last decade of Yudhoyono administrations.

In many respects, who presides over ministries like trade, finance, minerals, agriculture and education will be more important to Australia than who becomes president. And that will only become apparent once the presidential race is won. If connections trump competence in allocating ministries, the crying need for legal and policy certainty in the business sector could be thwarted. And that won't help Australia's efforts to increase trade and investment opportunities with Indonesia.

Apart from the overarching function of consolidating Indonesia's democratic institutions, there are other aspects to the 2014 general election worth watching. According to recent Nielsen research, 15% of the world's Twitter users are in Indonesia. Indonesia is the world's fourth biggest user of Facebook and 94% of Indonesia's middle class is connected by social networks. With a disproportionate percentage of the politically aware and active connected to social media, Indonesia will hopefully prove that political parties can harness the power of these technologies without prompting the kind of overreaction we are seeing in fellow secular Muslim state Turkey.

Indonesia 2014 should witness the continuing decline in popularity of Indonesia's Islam-based parties, mainly due to a series of high-profile graft and corruption scandals surrounding parties like the Prosperous Justice Party. How such parties fare will provide a telling bellwether for how Indonesians view themselves and for the impressive strength and sustainability of the secular state in an overwhelmingly Muslim society.

This year's general election should also see another stage in the steady withdrawal of the armed forces from Indonesian politics. While retired general and former Suharto family member Prabowo Subianto is among the front-runners for president, the Jokowi juggernaut is expected to eclipse the populist appeal of Prabowo's Great Indonesia Movement Party. This year should also be the last gasp of those old guard generals actively involved in national politics, like Wiranto and Sutiyoso.

Former armed forces and army chiefs like Djoko Suyanto, Djoko Santoso and Pramono Edhie Wibowo will play an important role in various party campaigns. However, their profile and presence on the hustings is unlikely to have the same game-changing role as that played by Susilo Bambang Yudhoyono in 2004, despite the lingering appeal of the 'strong man' for those elements of the electorate nostalgic for the Suharto years.

Moreover, the serving military continues to recuse itself from voting, a self-imposed practice begun in 1999 under General Wiranto and formalised, though not legislated, under General Endriartono Sutarto.

Some within the leadership of Indonesia's armed forces undoubtedly believe the military can and should act if called upon by the people to replace dysfunctional government and restore order. However, the circumstances under which a coup might occur are less imaginable with each passing year of Indonesian demokratisasi. The stakes for all involved, including powerful business interests, would be great. The coup which did not eventuate during the chaos of 1997 and 1998 is equally unlikely to occur in 21st century Indonesia.

Indonesia's five-yearly festival of democracy has begun. This is great news for Australia, regardless of the outcome. Current events in Thailand are a salutary reminder that democratic institutions are not a natural fit in some Asian societies. South Korea has successfully managed its 1987 transition to democracy from the regime of General Chun Doo-hwan, though not without its problems.

The consolidation of Indonesian democracy is a modern day miracle. Its perpetuation is no lay down misere. Backsliding, as with Pakistan, is always on the cards, given the wrong circumstances. For now, though, let's support this next phase of Indonesian political transition and enjoy living next door to a largely functioning democracy.

Gary Hogan