Indonesian democracy is one of the Asia-Pacific’s most remarkable recent accomplishments. The turn this giant country made from autocracy under Suharto to a system of ‘one person, one vote’ is truly breathtaking. Indonesia has been transformed.
At the same time, Jakarta is well aware that stable democracy is not an easily-won goal; the country cannot rest on its laurels. Indeed, Indonesians can learn an important lesson from their colleagues in Thailand; strengthen the institutions of democracy when you have the opportunity, and don’t wait until crisis comes knocking.
During the Cold War, Southeast Asia was led by a handful of autocratic strong leaders – Suharto, Mahathir, Marcos, Lee Kuan Yew, and arguably the
King of Thailand. For the cold war powers, as long as these leaders could control their polity, society and economy, their Machiavellian nature was of no consequence. Supported by the cold war architecture, these men transformed their countries from post-colonial commodity based economies into today’s ‘tigers’ of Asia. Foreign investment poured in, infrastructure was built and countries were brought into the modern era.
Unfortunately, for the most part, these men failed to develop of institutions that would underpin the inevitable evolution to democracy. Such institutions as did exist were undercut or subjugated to support autocratic rule. As the region’s strongmen left the stage in different ways, more political space was created, and democratic reforms put into place. Thailand pulled the military out of direct involvement in politics in the early1990′s (not without some serious violence and strife), and instituted a new constitution.
But as the horrifying events in Bangkok earlier this year proved, Thailand’s institutions, such as the courts and the electoral commission, were not sufficiently developed to resolve violent conflict and crisis. These institutions had not earned the independence and trust of the Thai people.
The Philippines remains similarly precarious. According to pre-polling for the Philippines 2010 election, candidate Aquino had what appeared to be an insurmountable lead. Luckily, the pre-polling was correct. But had a hundred or more of the new automated voting machines used in the May elections failed to function, and had candidate Aquino not won by a definable margin, his supporters had in place a detailed plan to take to the streets. That this plan even existed is enough to demonstrate continuing Filipino mistrust of their electoral process.
Fast forward to the next Indonesian elections in 2014. What if the candidates competing for President run a very close and disputed race? Are Indonesia’s courts and electoral bodies prepared for that situation? And what if, at the time of the 2014 election, certain candidates have access to sources of hard power, either via the military or via private business?
These are serious questions that demand consideration by Indonesian leaders and civil society.
Now is the right time to invest in strengthening key democratic institutions in Indonesia, and indeed around the region. Strengthening institutions would secure Indonesia’s nascent democracy and the rights of its deserving citizens. Indonesia will do well to learn the hard lessons of Thailand.
Author: Ernest Z. Bower, CSIS
Ernest Z. Bower is Senior Adviser and Director of the Southeast Asia Program, Center for Strategic and International Studies, Washington
- Indonesia’s growing economic power
- Thailand’s Songkran crisis of 2009
- Thailand’s political crisis has broader ramifications
The Indonesia-Singapore Bilateral Investment Treaty Comes into Effect
Through the upgraded DTAA, the tax rate on branch profits was reduced from 15 to 10 percent, and the tax rate on royalties for copyrighted works of literature, arts, and film, and eight percent for the use of industrial, scientific, or commercial equipment was lowered from 15 to 10 percent.
Will South-east Asia’s tech giants turn to SPACs to boost post-pandemic growth?
– SPACs have become a hot-button topic in global finance
– The vehicle is widely used to help tech start-ups go public
– Both Singapore’s and Indonesia’s exchanges are set to allow SPACs
– Several South-east Asian tech unicorns may use SPACs to list publicly
South-east Asia is seeing a wave of interest in special purpose acquisition companies, or SPACs, with various major tech players considering them as a means to fast-track public listings. In parallel to this, several exchanges in the region are moving to allow SPAC listings, with a view to boosting post-coronavirus growth.
SPACs are shell companies set up by investors and then listed on a given stock exchange. Their sole function is to acquire a private company, enabling it to go public without having to go through a traditional initial public offering (IPO).
A SPAC does nothing beyond its essential function – it neither produces nor sells anything, and a SPAC’s only assets are the funds raised from its own IPO.
Crucially, people who buy into a SPAC do not know what its eventual acquisition target or targets will be. This is why SPACs are often referred to as “blank cheque companies”: they give the founders a free rein to back their choice of private company. A key feature of SPACs is that they are often headed by big-name business executives or fund managers, who trade on past successes to inspire trust in investors.
While they are far from a novel phenomenon, SPACs have become a hot button topic in recent times: SPAC initial offerings quadrupled last year, with the vehicles raising a record $80bn.
Merging with a SPAC enables a company to go public and raise capital more quickly and painlessly than with a traditional IPO, circumventing some of the volatility that Covid-19 unleashed on global markets. At the same time, they function rather like venture capital, helping investors to buy into high-growth start-ups on the ground floor.
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