INDONESIA: TOWARDS A BETTER CONSOLIDATED DEMOCRATIC STATE IN SOUTH EAST ASIA

September 11, 2007 We have been through a dynamically democratic process in last seven year- period in the on going implementation of modern democratic state in the worlds largest Muslim population !adies and gentlemen, "irstly, than# you very much for your warmest acceptance $t will be honorably addressing a presentation about the $ndonesias recent political development and upcoming challenges -in the midst of our national grievances of the impact of the most deadly %sunami catastrophe ever happened in our beloved &ceh and 'orth Sumatrabefore prominent people $d li#e to than# very much on behalf of $ndonesian people to Singapore people and government on the dearest concern, sympathy and assistance over our people in &ceh May those be strengthening our near future friendship and fruitful relationship between $ndonesia and Singapore We have been through a dynamically democratic process in last seven year- period in the on going implementation of modern democratic state in the worlds largest Muslim population %hese are some pointers $ would address( )emocrati*ation +rocess for the !ast Seven ,ear-+eriod( - "our &mendments to the $ndonesian -onstitution were made in the last 7 years to guarantee human rights, free and direct election, freedom of speech, freedom of political organi*ation, freedom of press, chec#s and balances, independency of .udiciary, restructuring of the state institutions, good governance, regional autonomy, establishment of the regional representative council, demilitari*ation of the parliament, e/ecutive and .udiciary, and others -%he principles of the &mendments have been translated into more detailed new and amended laws and regulations -2 general parliamentary and presidential elections in 1000 and 2001 were said to be the most democratic general elections which have ever been held in $ndonesia, and even in the world -"reedom to establish political parties and organi*ations has been e/ercised2 thousands of political parties, '34s, foundations and associations have been established nationally2 the 2001 general election was participated by 21 eligible political parties -"reedom of press has been e/ercised, no press censorship is applied2 freedom of e/pression is also guaranteed nationally -Military has been replaced into its original constitutional role and function as the guardian of the constitution2 no more military in the parliament, e/ecutive or .udiciary -ontinuation of 5eform &genda

- -onstitutional reform is continued2 the -onstitutional -ommission was established to align the form and wording of the -onstitution and its &mendments %he -onstitutional -ourt was established to basically do .udicial review, dispute among state institutions, and decide whether or not the +resident may be impeached - 6conomic reform is also underway to comply with the consensus agreed by the $ndonesian government and the international donors which include reform in the following areas( ban#ing and finance, anti money laundry, ta/es, foreign direct investment, capital mar#ets, company law, ban#ruptcy law, anti competition law, consumer protection, regional autonomy, agrarian law and others - !aw reform has been initiated and started which includes( law reform in many areas of laws, institutional reform of the police, attorney general, courts and legal profession %he most phenomenal achievement in this regard is the ta#eover of the .ustice administration by the Supreme -ourt from the )epartment of 7ustice, the improvement of the -ommercial -ourts, the establishment of the -orruption 6radication -ommission and the establishment of the &nti -orruption -ourts - 8ureaucracy reform that includes improvement of recruitment systems, splitting budget with regional governments, and application of good governance principles including merit-based systems - 8an#ing reform that includes the restructuring of the ban#s, ta#eover and reorgani*ation of private ban#s that failed to repay the central ban# li9uidity loans2 sale of the assets and shares of the ban#s - +rivati*ation of state-owned enterprises to focus on strengthening and revitali*ing those assets to better serve the public particularly in public utility fields - 5e9uiring the private sectors to apply corporate governance principles by tightening the reporting re9uirements, disclosures and protection of minority and labor forces through series of rules and regulations - 5e9uiring and educating the ban#ing and finance sectors to comply with anti money laundry principles &nti -orruption 6fforts - $ndonesia is perceived as one of the most corrupt country in the world pursuant to the 2001 perception inde/ of corruption issued by the %ransparency $nternational $n the efforts to prevent and eradicate corruption, several actions have been ta#en( - &mendment to the old anti corruption laws - $ssuance of the !aw on the -orruption 6radication -ommission, and establishment of the powerful and independent -orruption 6radication -ommission with powers to investigate and prosecute certain corruption cases - 6stablishment of the &nti -orruption -ourts - $ssuance of the &nti Money !aundry !aw, and imposing the reporting on certain financial activities - &mending the prevailing laws to strengthen the powers of the -orruption 6radication -ommission - Signing the :nited 'ations &nti -orruption -onvention - %ough +erpu &nti -orruption which classify corruption as e/tra ordinary crime ;e g terrorism<

 $slam and the "uture of $ndonesia as Modern State - Simple calculation( the absolute ma.ority of $ndonesians is Moslems, so if $ndonesians can successfully e/ecute the democrati*ation process it means Moslems in $ndonesia are the biggest and strongest supporters of democracy2 the same calculation wor#s for efforts to reform in multi dimensional sectors - "ollowing the recent earth9ua#e and tsunami that devastated &ceh and some parts of the 'orthern Sumatera, billions of :S= were and will be poured by foreign states and private parties2 this indicates not only a trust to the democratically-elected government, but also to the civil society and the people of $ndonesia, mostly Moslems, who are able to wor# hand-in-hand to rebuild the devastated areas - $slamic political parties using $slamic platforms e/clusively have never won any general election in $ndonesia %he 7ustice and +rosperous +arty ;+>S< had won the general election in certain regions, and improved significantly the number of parliament members elected in the last general election %his success can be attributed to the platform chosen by +>S, which is based on a clean government that cares, which in substance ta#es the form of a campaign that focuses on anti corruption and the improvement of the welfare of the people - %here is an ob.ective possibility that the success of +>S may be significantly increased in the first direct election of the head of local governments, which will be held soon ;governors, regents and mayors<, and also in the ne/t general election in 2000, provided +>S will consistently campaign and implement the platform most needed by and acceptable to the people %his #ind of society has become +>S dream to sustain in $ndonesia, a society where the ma.ority of Moslems protects, preserves and promotes the rights, interests and welfare of minority non-Moslems, and moreover, involve them as active and participative members of the society - $slam was one of the first religions that went global in the early years of development $slam in $ndonesia is not anti globali*ation Similar to other developing countries wherever they are, $slam in $ndonesia e/pects to develop a more balanced and mutually beneficial relation with developed, developing and under developed countries - &s a political party that supports the administration of +resident Susilo 8ambang ,udhoyono, +>S will remain a strategic and critical partner of the administration %he ta#eover of the 3ol#ar partys leadership by ?ice +resident 7usuf >alla will give 3ol#ar the chance to reform its leadership, political vision and mission, and +>S will watch closely and e/pect to cooperate with the reformed 3ol#ar to energi*e the political environment in $ndonesia, ensuring that the administration will be able to wor# efficiently and effectively to achieve its development goals 4pportunities and 8enefits to $nvest in $ndonesia - $nvestment rules are being improved to develop a more investor-friendly environment2 almost all of fields of investments are open for foreign investors, even to 100@ foreign shareholding, e/cept for strategic fields such as those related to national security, or sectors reserved for small and traditional businesses -5egional autonomy is one of many concerns raised by foreign investors %he direct election of local authorities would assure that only 9ualified people will have the chance

to win the posts %his would further assure that regional government will be more professional, investor friendly, and obliged to apply good governance principles %he government and parliament have amended to the 5egional &utonomy !aw that would balance the interests of the regions and central government - 8an#ing, capital mar#ets, ta/, labor and corporate laws are also being improved to produce rules generally available in modern and freer mar#ets - %he parliament and government have issued the oil and gas law, commonly termed by liberali*ation of oil and gas sector which affects foreign investors may invest not only in upstream industry but also in downstream industry - %he most recent infrastructure summit held in 7a#arta indicates the seriousness and focus of the government to develop infrastructures re9uired to improve investment climate and facilities - 'atural resources, infrastructure, and privati*ed pro.ects will be the focus and will need the participation of foreign investors $ndonesias democrati*ation process and improved regional autonomy will assure a stabili*ed political environment, and will eventually guarantee a better investment climate - !aw enforcement is also one of the most problematic issues for foreign investors !aw and institutional reform need focus, time, funds, and political will %he process is underway to improve legal systems, institutions, and the people involved %hrough the application of good governance, pressure from parliament members ;especially from +>S<, internal institutional reforms, and support from '34s, law enforcement should improve significantly in the years to come Summary - $ndonesia is turning into the third biggest democratic country in the world, and this democrati*ation process is underway to reach all facets of life in $ndonesia - $slam and Moslems in $ndonesia are living proof of the biggest supporters of democracy - %he rema#ing of $ndonesia indicates a strong hope that this democratic nation will be able to develop standards of sustainable political, economic, legal, and social systems comparable to international standards - $ndonesia e/pects friendly states, the international community, including investors to bear with the on going democrati*ation process in $ndonesia, and together rema#e $ndonesia into a new $ndonesia, a trustworthy partner to develop a better and peaceful world $m sincerely convinced that commitments and responses of international community are truly being awaited "inally as our close remar#, let me say now( were loo#ing forward to having international support in sustaining our ongoing consolidated democrati*ation process in $ndonesia %han# you