More Than Freedom

Indonesian President Susilo Bambang Yudhoyono leads the world's newest major democracy and its largest Muslim state. In the decade since the fall of the dictator Suharto, Indonesia has avoided disintegration, weathered a crippling financial crisis and built an impressive, if imperfect, new political system with a robust economy. SBY, as he is known, met recently with NEWSWEEK's George Wehrfritz and Solenn Honorine to discuss his record, Indonesia's future and the global economy. Excerpts:

NEWSWEEK: How worried are you that the financial crisis in the United States could hurt Indonesia?
YUDHOYONO: We are actively monitoring the troubles. I don't believe we will return to the crisis of 1997 because our fundamentals are good.

Ten years ago, Indonesia ' s high levels of debt exacerbated the impact of the Asian financial crisis. Is there a similar danger today?
When I assumed office, we faced four big issues. Our growth had fallen from 6 percent to as low as minus 13 percent. Poverty had risen dramatically. Unemployment also rose, and our foreign debt got worse. Four years ago [government debt] was 54 percent of GDP. Now it is 33, one of Asia's lowest. We also [re]paid our $7 billion in IMF loans four years ahead of schedule.

Indonesia is the world ' s third-largest democracy. What does it shares with its two larger cousins, India and the United States?
There is no single model of democracy. In Indonesia, we [ended] the authoritarian era only ten years ago; what [followed] is a form of democracy whereby freedom and harmony can advance together in a sustainable way. Indonesia can be very adaptive. We live in a nation where Islam, democracy and modernity exist side by side. We are creating a multiethnic, multiparty democracy with consensus building that has roots in Indonesian culture.

What would you like to strengthen?
Openness must be coupled with the rule of law. Freedom for the sake of freedom is not enough. We must develop constitutionalism, have clear rules of the game, advance ethics in politics and [encourage] greater participation. We also need [better] checks and balances.

Do you believe that democracies necessarily grow slower than nondemocracies?
Not really. As democracy grows it creates greater accountability, including on economic affairs. There is no reason that Indonesia's economy cannot progress more rapidly, even compared to China.