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A make-believe nation

Will Indonesia—and its turtles— thrive despite its government?

by Elizabeth Pisani / May 24, 2012 / prospectmagazine.co.uk

Halmahera, part of the Maluku Islands, Indonesia

Weda Bay is not a place you’ve ever heard of, so don’t pretend.

It was not a place I’d ever heard of until a couple of months ago, either, and I’ve been trailing around the outer reaches of Indonesia’s 17,000 islands on and off for over 20 years. I tripped into Weda at the start of this year, attracted by tales of phenomenal economic growth, galloping corruption and parties, lots of parties. In the seven years since I last lived in Indonesia full-time, the country has gone through a frenzy of democratisation.

Travelling around this enormous nation, you see the clash  between this new world and the old traditions, such as whale-hunting, eating the eggs of now-endangered turtles, or the funeral ritual of taking tea alongside the body of the deceased. Though Indonesia’s government keeps a low profile, the economy is booming, partly thanks to its abundant resources—a point not lost on China. As the world’s largest Muslim-majority country, it could prove a model for others, if democracy can tame the more radical strains of Islam here. But government is splintering and shattering into local fragments, in a way that makes future success hard to take for granted.

This summer has seen a bit of hand-wringing because growth in the first quarter of 2012 slowed to 6.3 per cent—but the country is still growing nearly eight times faster than Britain. So what is the Indonesian government doing right? Actually, very little. But Indonesia continues to thrive, despite its leaders; the question is whether it can keep it up.

Weda Bay is in Halmahera, a misshapen octopus of an island top and right in the Indonesian chain that sprawls from just east of Malaysia to just north of Australia. It’s a neglected child of the Moluccas, the spice islands whose cloves and nutmegs first drew European adventurers to this part of the world in the 16th century. When I was last in Halmahera in 1989, there were no proper roads, no public transport. I hitched a ride through the jungle in an open-top army jeep (perhaps a relic of General Douglas MacArthur’s 1944 campaign to wrest the Pacific back from Japanese control). There was no electricity anywhere: fireflies twinkled in the jungle like Christmas fairy lights.

Now, as I arrive at the scrubby dock that forms Halmahera’s main port, I’m faced with dozens of flash new SUVs—they speed passengers across the island on smooth blacktop roads while on their plasma screens pop singers gyrate and bemoan their broken hearts. Their drivers steer with one hand; the other is reserved for Blackberry messaging.

Is this the kind of consumer David Cameron was thinking of when he visited Indonesia in April, talking of fantastic opportunities for British exports? Perhaps. But this new wealth is the upside of two things: a commodities boom and the decentralisation of political control. The downside is a new, grasping feudalism, a culture of personal patronage that is fertile soil for both corruption and conflict.

Corruption and conflict tend to undermine wealth. If they are to prevent that, the leaders of this kaleidoscope nation need to reshape a coherent Indonesian identity out of the country’s multicoloured and increasingly disparate fragments.

***

Indonesia is essentially a make-believe nation. It was brought into notional existence in 1945 with a declaration of independence of unsurpassed vagueness. It reads, in its totality:

“We the people of Indonesia hereby declare the independence of Indonesia. Matters which concern the transfer of power etc will be executed carefully and in the shortest possible time.”

There’s a lot wrapped up in that “etc”—not least some consensus about what constitutes “Indonesia.” Sukarno, the visionary demagogue who blurted out the declaration of independence after the defeat of Japan in the second world war and became the new country’s first president, took it to mean the remains of the former Dutch colony, the Dutch East Indies. But that colony itself was a shape-shifting beast without cultural, linguistic, religious or even geographical coherence, its only raison d’être the fattening of purses in Amsterdam and Rotterdam.

Resisting attempts to nudge the country towards federalism, Sukarno—and later and much more effectively, his successor Suharto (who assumed office in 1968)—turned Indonesia into a republic whose quest seemed to be the fattening of purses in the capital Jakarta. Foreign companies were licensed to suck oil and minerals out of the resource-rich extremes of the country, Aceh in the far west, for example, and Papua, over 3,000 miles to the east. The limbs got some roads, a few primary schools, a hospital or two. But most of the cash flowed in to the Javanese heartland that takes up seven per cent of Indonesia’s land and squashes in 62 per cent of its population. Nice for the Javanese. Not so nice for the people whose wealth was being slurped and scratched out from under them. If they protested, Suharto simply stamped on them. For people in the less productive outer islands, places like Halmahera, independence simply meant being neglected by the Javanese rather than by the Dutch.

When Suharto was finally ushered out of power following the Asian financial crisis in 1998, Indonesia was administratively one of the most centralised states in the world. Politically, however, the regions were roiling: Suharto’s successor Vice President BJ Habibie, an aeronautical engineer with little political experience, reacted by allowing East Timor, a former Portuguese colony that was only “integrated” into Indonesia in 1976, to hold a referendum on independence in 1999. No one but Habibie was surprised when the territory broke loose, with a definitive 79 per cent favouring independence. Now Jakarta worried that if it gave other provinces more power, the rest might follow. So the chimerical Habibie handed power not to the country’s 26 provinces but to its districts. At that time there were 293 of them—a trifle compared to today’s 497, perhaps, but a daunting number to become the primary unit of government.

The legislation underpinning this colossal transformation was cobbled together in just a few months; many, many “etceteras” were left hanging. It became effective in 2001, when I was working as an epidemiologist for the Indonesian ministry of health, studying the country’s HIV epidemic. Suddenly, we had no idea who was responsible for what. Overnight, brand new districts were supposed to be running health services but had no competent staff; provinces were supposed to be providing training and oversight but had no budget. At the centre, we carried on writing national guidelines for everything from syphilis screening to tuberculosis treatment, with no clue how those guidelines might make it to the rock-face of the districts, with whom we were no longer allowed to communicate directly.

Despite a couple of mop-up laws that have tried to “clarify” roles and responsibilities, in far-flung places such as Weda the power of the elected district head, or Bupati, is near absolute. The very word Bupati is derived from upeti: someone who collects tributes. It’s often translated as “Regent,” nicely reflecting the imperious nature of the beast. The amoeba-like splitting of districts, the result of lobbying by the rich and locally influential, continues to create yet more thrones from which self-serving kings (and, very rarely, queens) can reign supreme.

Weda is the throne room for Central Halmahera, a district that is home to all of 30,000 souls. The most comprehensive travel website for Maluku dismisses it as “a scruffy village with muddy roads.” But what I find is a little island of asphalt laid out in divided highways, with brand new Legoland housing, a boxy two-storey hotel, and electricity 24 hours a day—all sure signs of progress in Indonesia.

Capping it all, up on the hill, three palatial buildings: the Bupati’s office, the district parliament and the ministry of public works (that’s the office that the current Bupati used to work in before he ascended the throne). Next to the Bupati’s office is the state guest house. A project information board outside the guest house helpfully tells us how much it cost: £73,300, “Paid for with money collected from your taxes.” You could build a school for that. Oh wait, that’s the budget not for the guest house, but for the wall around the guest house.

The Bupati is from Weda; he moved the district capital to his home town at the beginning of his current five year term. Now it’s re-election year, and he’s kicking it off with four days of parties. Friday is the wedding of his eldest daughter. On Saturday, his second daughter will get married. This allows them to double up on the decorations around the hotel they’ve taken over: the larger than life-sized photo-hoardings, for example. Daughter One posing in front of metropolitan skyline. Daughter Two, dreamy in satin robe. Mum and Dad on holiday in exotic foreign location. Dad in his official uniform, under the banner headline “Proven!” with a list of his achievements while in office.

Presumably this is intended to impress the 7,000 guests invited to the weddings, among them the provincial governor, the head of the provincial police, and some assistant minister types from Jakarta. It’s a lavish gesture, given that a Bupati’s official salary is about £400 a month.

The demarcation between what one does for the electorate, and what one does for one’s political party can seem small. On Sunday, with all the wedding guests still in town, we celebrate the “birthday” of the PDIP political party, to which the Bupati belongs. Hundreds of red silk flags flutter in the sea breeze, thousands of people in newly-acquired red T-shirts declaring “I’m a Big Fan” throng behind marching bands. The Bupati’s face adorns the silicone chests of the local transgenders, who bump and grind from a carnival float. I join this frenzy of democracy and march past the man himself. There he stands outside his house, flunkies on either side, gripping, grinning, greeting, and generally behaving like a royal.

On Monday another birthday, this time the 12th anniversary of the creation of the district and the 4th anniversary of its move to Weda. It’s a three-line whip for the civil servants—that’s most of the town’s adult population. They watch ceremonial dances, tap their feet to more drum majorettes—in gold lamé this time—and listen to a lot of speeches praising the Bupati, a man who, it would seem, is much loved by all.

Until, that is, you move a few kilometres out of the centre of his fiefdom, up to the dreary one-rat town of Lelilef. Then you are in nickel territory, the mineral that made this little local eruption of wealth possible. Long ago, just before his demise, Suharto awarded a big nickel exploration and mining contract in Central Halmahera to Weda Bay Nickel, now a French-Japanese joint venture that threw a bone of 10 per cent of its shares to the Indonesian state mining company.

Then came decentralisation, and with it huge uncertainty about who had the right to issue contracts for exploitation of local resources. The local government thinks it, not Jakarta, should get the royalties from the mine. An environmental NGO is challenging the licence, saying it is at odds with environmental regulations. The local population has thrown in its two cents both for and against the mine.

“All the good jobs are going to outsiders. For us, it’s just jobs like security guards, where you have to wear a uniform and go to work every day,” says a teenager with betel-nut-stained teeth and alcohol on his breath. He tells me proudly that he torched a company speedboat last month, then zooms off on a new motorbike, bought with money his father made by selling land to Weda Bay Nickel. (Later that night, with even more alcohol on his breath, he drives the bike into the sea.)

Local elders, on the other hand, have tried to counter the bonfires with pro-mine demonstrations. “Those kids can’t even make it to school every day. What do they want, jobs as engineers?” says a grey-haired man who is investing his own Weda Bay windfall in a fishery business.

Local political machinations, repeated over and over again in each of Indonesia’s fiefdoms, do not foster rapid returns on investment. It has been 14 years since the Weda Bay Nickel licence was first signed, and the company is just beginning to break ground. Jakarta is hardly helping investors feel secure. In March, out of nowhere, the government unleashed a new thunderbolt: foreign investment in mining will be limited to 49 per cent after ten years of production (the figure used to be 80 per cent).

There’s another little drama playing out in Weda Bay. Knowing how to get a rise out of the corporate social responsibility department, environmental NGOs have lazily targeted Weda Bay Nickel, which has elaborate and expensive plans to minimise damage to the local environment. The NGOs have not squeaked about the real villain of the piece, a Chinese company that is shovelling nickel out of the ground (and sediment on to the stunning corals) before a ban on raw metal exports comes into effect in 2014. I ask one activist why no one targets the company that threatens marine life and long-term eco-tourism revenue. He shrugs. “Chinese companies, they are all shits, what’s the point?”

***

Democracy is inherently inimical to long-term investment. That’s especially true in Indonesia, where individual candidates chop and change their political affiliations with every election and where there’s no longer-term political incentives to protect. Delivering long-term benefits at one remove—invest now to protect the environment so that in the future we can build up a tourism business that will put rice on your table and a motorbike under your bum—that’s just too hard to sell right now. Or so I found in Pulau Banyak (“Many Islands”), a small group of, well, many islands off the southwest coast of Aceh, the region that was flattened by the tsunami in 2004.

Under moonlight on an otherwise deserted beach, I watched a giant sea turtle plop her ping-pong-ball eggs into a nest that she had diligently scrabbled out of the sand. With staff from a conservation NGO, we measured her up and left her in peace to drag herself back down the beach, leaving great tractor marks in the sand behind her.

It’s not hard to spot a new turtle nest. In the daylight the next morning, we see it quickly enough. And we spot three men digging at the nest with hunks of wood, loading the eggs into a sack.

We start purposefully down the beach towards them; I have no idea what we’re going to do when we get there. Turtle eggs are protected by international and indeed Indonesian law. The NGO I’m with has a memorandum of understanding with the environment ministry in Jakarta to run this research and conservation project. The district government, including the recently deceased Bupati and the chief of police, have signed a local ordinance forbidding the collection of all turtle eggs, in accordance with the convention on international trade in endangered species (CITES) to which Indonesia is a signatory.

This local ordinance has been in force quite successfully for six years. But there’s been a recent splitting of sub-districts, and a senior official of one sub-district likes turtle eggs for his tea. He’s let people in “his” area know that, and now they are robbing nests with impunity. What authority do staff from an NGO headquartered in another, now enemy, sub-district have in confronting turtle-egg thieves working with the approval of their local chieftain? They can wave a memorandum from Jakarta for all they are worth. Jakarta is a very long way away. As it happens, the egg-snatchers scarper before we reach them and the “mine’s bigger than yours” test of authority never takes place.

***

The turtle-egg incident highlights another question that taxes Indonesian leaders: to what extent should the government try to impose modern, nationally standardised laws on this impossibly diverse nation? Lots of people in Aceh like turtle eggs for their tea. Along with ganja sauce, they are a staple of the local cuisine. The goody-two-shoes western-influenced environmentalists who would seek to ban their sale are an affront to Acehnese dignity. (That may sound trivial, but combined affronts to Acehnese dignity led to a gruesome 30-year war against the Dutch in the late 19th century, and a nearly 30-year war against the Indonesian state a century later.)

The most common response to the national modernity versus local tradition dilemma is to legislate at the central level, then ignore at the local. The government signed the CITES convention in 1978, protecting many of Indonesia’s favourite foodstuffs. But in the main market in Banda Aceh, the provincial capital, turtle eggs are sold openly: 20,000 rupiah (about £1.30) for a pyramid of seven eggs.

Several thousand miles to the east in Lamalera, where I spend a day bobbing about in a smallish wooden canoe hunting whales with harpoons, locals went further to protect their traditions. Just before I arrived, they threatened to burn down the Bupati’s office if he enforced a ban on whale-hunting. He issued a local regulation giving the hunt a green light; they promptly went out and speared six sperm whales. When I get to Lamalera, throughout the whole village great, dripping hunks of whale meat hang, drying in the sun. A shrivelled offering from an earlier catch is served to me for tea. It makes turtles eggs, which I’ve always thought of as fishy snot-bombs, seem positively palatable.

The fragmentation of government is an asset in preserving weird and wonderful traditions, as I see roughly 150 miles to the south, on the island of Sumba. Though there are doubtless health and safety regulations relating to dead bodies in a drawer in some ministry in Jakarta, in Sumba I am casually invited to tea with an old biddy who died a week earlier (pictured above, left). She sits serenely in her house, receiving guests. Following an old ritual, every day for a week preceding the funeral, hundreds of people troop in to pay their respects, giving her presents of cloth, daggers, rice. I lay betel nut in her lap; she is unmoved. Guests cluster around the corpse, drinking tea, chatting.

Fluttering around in the background, vaguely triumphant, is Dead Granny’s junior wife. “They’re dying in order,” explains my friend Lakabobo. “Number One died three years ago. This is Number Two,” she indicates her dead sister-in-law. “That’s Number Three,”: a wizened bundle with a betel-red scar for a mouth grins a toothless acknowledgement of her fate. Number Four, much younger, mingles triumphantly. Her time has not yet come. Eight or nine pigs will be slaughtered for each day that the corpse receives her guests, over 40 in total. On burial day, I watch seven buffalo, one cow (for the Muslim guests) and one horse spurt their life-blood into the dirt in front of Granny’s house. A local regulation, aiming to reduce the destruction of wealth that these traditions demand, has set a limit of five dead beasts per ceremony. As I’m handed a dripping clump of buffalo-meat to take home, it doesn’t seem polite to ask about it.

The atomisation of the nation also functions as a job-creation scheme. Every one of the country’s 497 districts has its own parliament with at least 20 elected members, each with their own flash SUV. Every government department has an office in each district. The civil service nationally has swollen by over a quarter in the last five years alone: there are 4.6m civil servants on the books, more and more of them hired from any given Bupati’s “Tim Sukses”—his election campaign supporters. It’s not surprising that the civil service board in Jakarta estimates that only about 20 per cent of them are competent in their jobs.

Is the splintering of Indonesia good for business, and thus the economy, and thus, eventually, people’s welfare? Most would say no. Indonesia’s infrastructure is shockingly poor; that needs fixing before all else. I have met Indonesian fishermen who would rather take their two-man canoes across 17 hours of open sea to sell their tuna fish in the Philippines. There, cold storage and a runway will get tuna to market in Tokyo at A-grade prices. If they sell their fish back home, it will sit in a polystyrene box surrounded by penny-bags of ice until the next slow ferry to a major port; it could be five days until it gets to market.

Poor infrastructure rots the price of fish. But government in Indonesia is now divided into such small units that it is hard to make large investments with public funds. And private firms don’t even know who they should be bribing any more. A green light from Jakarta can lead in to a swamp at the district level. A local yes can turn out to be a provincial no.

As Indonesia shatters administratively, it becomes less efficient, more corrupt, more prone to local conflict, and less likely to implement standardised regulations. But, paradoxically, it also becomes richer: the country grew at a cracking 6.4 per cent last year, and not only because it is overly blessed with increasingly valuable commodities.

More localised corruption is less efficient overall, but it trickles money into more pairs of hands than the previous “centre-takes-it-all” model. Some of the country’s 237m people are using that money to tap the country’s extraordinary natural wealth in small but personally productive ways: turning an unproductive piece of farmland into a SUV taxi service via sale to a nickel mine, for instance, or tripling the price of a tuna catch with a 17-hour run to the Philippines.

As David Cameron said, Indonesia is a country with extraordinary potential. If it realises that potential, it is likely to be despite its government, not because of it.


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