9 - REFORM IN UNPROMISING CIRCUMSTANCES

Summary

The collapse of an authoritarian regime opens wide the prospect of political reform. As Grindle and Thomas point out, “many reforms emerge and are considered in which policy elites believe that a crisis exists and that they must ‘do something’ about the situation or they will face grave consequences”. But “doing something” does not guarantee that political reforms will be implemented. A crisis can force elites to take action but it doesn't determine the exact nature of that action. Even when the fall of an authoritarian regime leads to a “democratic transition”, new or revived democratic institutions are not necessarily able to implement effective reforms. This study has focused on six institutional areas where reform has been attempted with varying degrees of success or failure. The starting point for Indonesia's crisis was the Asian Monetary Crisis that originated in Thailand in mid-1997 and quickly spread to several other Asian countries. Although five countries suffered severely, none was hurt as badly as Indonesia. Several Asian heads of government lost office in the wake of the crisis, but it was only in Indonesia that the political system itself was fundamentally changed. Many civil society organizations and even members of the Soeharto regime had been pressing for gradual political change before the upheaval in May 1998 but it was only after the lifting of New Order political controls following the demise of the regime that far-reaching political reform suddenly appeared possible.

Circumstances, however, were not especially propitious. The massive economic collapse that precipitated the fall of Soeharto's authoritarian regime led to a breakdown in order through much of the country. Huge anti-government protests continued in Jakarta and many regional capitals, rioting and ethnic violence became common, and the economic decline continued as investors and businesspeople withdrew capital from Indonesia. But there was no cohesive alternative elite ready to take over power. Although the fallen president and his hard-core supporters were removed, the initial post-authoritarian government was headed by Soeharto's hand-picked vice president and consisted largely of Golkar hold-overs from the previous cabinet while the bureaucracy and the military remained intact.