Two Cheers for the Thinking General

It was hard not to be cheered by the results of Indonesia's election last week. Only 10 years after the country emerged from a dictatorship, some 176 million voters went to the polls in free and fair elections and handed the incumbent President Susilo Bambang Yudhoyono a resounding victory of about 60 percent. SBY, as he is known, amply earned his second term. When he first took office five years ago, violent separatists threatened Indonesia's integrity, homegrown terrorists sowed chaos, piracy thrived in the Strait of Malacca, and the economy was still reeling from the devastating 1998 Asian crisis. Today, Indonesia is the most vibrant and stable democracy in the region and one of the few economies predicted to grow by more than 4 percent in 2009. As stock markets elsewhere were tumbling this year, Jakarta's soared by 50 percent, and Morgan Stanley called for Indonesia to be included in the BRIC group alongside developing-world heavyweights Brazil, Russia, India, and China.

Yet SBY's victory, though merited, wasn't quite as inspiring as it might seem. More a candidate of safety than soaring hope, Yudhoyono won in part due to the weakness of his two rivals, Megawati Sukarnoputri—his lackluster predecessor—and his former vice president, Jusuf Kalla, who is seen as shortsighted in policy terms. SBY also profited from the global slump in oil and food prices, which made life easier for Indonesian citizens, and by offering a few timely handouts to the poor. Thus Indonesian voters were all too happy to overlook one key flaw: SBY, like all the other main candidates, cut his teeth under the late dictator Suharto, and has shown too little willingness to break decisively with certain crippling features of the old regime.

To be fair, in his first term SBY did a great deal to consolidate the radical, decade-old transformation of Indonesia from autocracy to a thriving, decentralized democracy with a vibrant free press. But in some ways the country has failed to achieve the transformation promised by the anti-dictatorship Reformasi movement of the 1990s. In 1998, Indonesians rose up against Suharto to free themselves from the shackles of what was known in the national language as "KKN": corruption, collusion, and nepotism. Ten years later, Indonesia still ranks 126th out of 180 countries on Transparency International's corruption list, and its old oligarchy has shown a tremendous capacity to adapt to the new rules of the game: Suharto cronies remain the most powerful economic players, and the military, though largely excluded from politics, controls vast swaths of business. Perhaps most important, few new faces have reached the top rung of politics. "There is no sense of urgency in thrusting Indonesia forward because the elite has arrived," says Indonesia specialist Jeffrey Winters of Northwestern University. This suggests that Indonesia may not truly boom—become the next India, as many predicted—until the post-Suharto generation finally takes over, which probably won't happen till the next election in 2014.

For the time being, New Order–era actors still dominate. Besides SBY himself, who was an Army general under Suharto, there's Kalla, who was a successful businessman under Suharto's patronage and who picked as his running mate another ex-general, Wiranto, a man accused of widespread human-rights violations during East Timor's fight for independence. As for Megawati, she is the daughter of Indonesia's first president, Sukarno, and though she made her name in the 1990s as a leader of the anti-dictatorship movement, she did little to reform the state as leader and chose as her running mate this year Prabowo Subianto—Suharto's former son-in-law and another ex--general with a bleak human-rights record.

SBY is also a former military officer, yet oddly enough, he is no man of action. This is both good and bad: his cerebral nature earned him the nickname "The Thinking General" and means he spent his career in uniform drafting strategy, not leading men in battle—one reason he is largely untainted by links to past abuses. SBY's passive, -consensus-building style has also helped him negotiate some dangerous waters in this young democracy, allowing him, for example, to sharply reduce the Army's pernicious role in the economy—a huge accomplishment, which he managed by holding an inquiry into the military's many, previously unexposed business interests. When the inquiry found that a great deal of the military's holdings were on the verge of bankruptcy, it became much easier for SBY to ease officers' hands off the reins.

But if SBY is going to boost growth and do for Indonesia what Deng Xiaoping did for China or Manmohan Singh did for India, he'll need to make radical changes in his second term that can't be achieved without at least some conflict—especially with the Suharto-era establishment. And so far, SBY has seemed a bit too cautious for that. During the recent campaign, he reiterated his 2004 promise that Indonesia would reach an annual 7 percent growth rate. But during his first term, growth hovered between 5.5 percent and 6.3 percent annually—not bad, but well below India (7 to 9 percent) and China (nearly 10 percent). More problematic, this is also well short of the 6.7 percent target economists say is necessary to create enough jobs for the young, or to significantly reduce severe poverty, which has dropped by only 2 points under SBY and still hovers at 14 percent.