Indonesia: troubled waters ahead

Stability is the mantra that the ruling class keeps repeating, but this hope of stability will quickly disappear. Today's economic and political situation - nationally and internationally - does not allow stability beyond short periods - but this is a fragile stability built on sand.

[The following document, outlines the analyses the general trends within Indonesian society and develops a perspective for the class struggle. It was passed at the congress of the Indonesian Marxists of Militan at their 4th National Conference on September 13-14, 2014.]

1.        Militan Indonesia’s Perspectives Document 2014

2.        After witnessing an explosive workers’ movement since 2012, with two national strikes and a wave of radical mass actions, the working class movement seems to have been interrupted by the “carnival” of bourgeois democracy. However, the euphoria surrounding this year’s presidential election cannot be seen as separate from the political developments that brought about the recent explosions in the workers’ movement. It is indeed its wider expression. It is the expression of the political and economic impasse of capitalism that is becoming deeper and more acute, especially since the 2008 financial crisis that refuses to end.

indonesia-elections3.        Even though the SBY government has kept a relatively high rate of economic growth, especially after the 2008 crisis, with an annual average GDP increase of close to 6%, this growth hasn’t brought any fundamental change to the economic position of the toiling masses. From 2005 to 2013, the Gini coefficient, that is the indicator of wealth inequality, increased from 0.36 to 0.41. The masses may not know the concept of Gini coefficient, but they feel the brunt of it in their daily life. The economy is growing – as they have read in the media and government’s statements, as they have seen in the luxurious items displayed in the malls – but they ask themselves: “why do I feel poorer?” This inequality is not only felt in Indonesia, but all over the world.

4.        As Marx has said, capitalism “establishes an accumulation of misery, corresponding with accumulation of capital,” and that capitalism will produce “accumulation of wealth at one pole ... [and] at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital produces.” In day-to-day language, as all working people will agree, “the rich are getting richer, the poor are getting poorer”.

5.        This capitalist reality becomes more gut wrenching when the capitalists are making record profits while the workers are being asked to tighten their belts and work harder. Stock indexes have recovered to their pre-crisis level and some have even gone beyond it, but the toiling masses are not feeling that their lives are getting any better or have recovered to the level they were at before the crisis hit them.

map6.        There is an atmosphere of uncertainty amongst the people, which they can feel but not – or not yet – fully understand. This feeling is a feeling of uncertainty about the future, not only amongst the poor but also increasingly amongst the “middle classes”, those layers of workers who have been enjoying a relatively better economic position. They see this uncertainty not only in the reality around them, but also in what has been happening around the world over the past decade. Social, political, and economic instability is sharpening, especially since 2008. Earth shattering events are piling up one after another and coming in waves at an increasing speed. Let us mention a few: the 2008 financial crisis, Obama’s election as the first black president with a euphoria that was immediately followed by disappointment; the 2011 Occupy movement; the 2011 Arab Revolution that spread and took down several dictatorships; civil war in Syria; chaos in Libya; EU economic bankruptcy; the breakup of Ukraine; scandals that are rocking Western countries one after another; the shutdown of the US government; the resignation of Pope Benedict, something that hasn’t happened since the 12th century; even the World Cup was not immune from political turmoil, with large demonstrations and strikes against its extravagance; etc. etc. The toiling masses might not know in detail about all these events and only get bits and pieces of news about them directly or indirectly. However their instinct rightly says that there is something different in this period, something that is rotten and the putrid smell of it is obvious to all. They do not know exactly what it is, but they are feeling it and starting to reject it. This is what Trotsky referred to as the molecular process of revolution.

7.        This feeling of uncertainty, and even despair, about a better future has been confirmed by many economic reports and the analysis of bourgeois economists. Paul Krugman, Nobel prize winner economist, wrote:

8.        “But what if the world we’ve been living in for the past five years is the new normal? What if depression-like conditions are on track to persist, not for another year or two, but for decades?

9.        “...Again, the evidence suggests that we have become an economy whose normal state is one of mild depression, whose brief episodes of prosperity occur only thanks to bubbles and unsustainable borrowing.”

10.    This dark economic perspective was again emphasized by the most recent OECD economic report (OECD. “Policy Challenges for the Next 50 Years,” July 2014) This report makes a forecast all the way to 2060, that is 50 years from now, that global economic growth will slow down from 3.6% (2014-2030) to 2.7% (2030-2060). This slowdown will be followed by an increase in economic inequality by 20-30%. Furthermore, even to reach this dismal growth the OECD warns that a “more flexible” labour market and “more integrated” world economy will be needed. A more flexible “labour market” really means that workers can be sacked more easily when they are not needed, there will be less job security, more flexible wages, less legal protection for the workers, etc. A more integrated world economy means that the bigger capitalist countries will draw the weaker economies further into its sphere of influence and domination.

11.    This is the background for the political events in Indonesia. The peculiarity of Indonesian economics and politics cannot be understood separately on its own, and can only be understood when put in its context within the international economic and political situation (Note: for a more complete international perspective, read the 2014 World Perspectives and past documents). The more serious bourgeois analysts clearly understand this, but not our “Left theoreticians” who are content with their own backyard.

12.    Indonesian Economy

Rupiah13.    The “Indonesian Economic Report 2013” by the Central Bank of Indonesia (CBI) opens with this warning:

14.    “The year 2013 is a year filled with change and challenge for Indonesian economy. Amidst many structural problems that have yet to be solved, the change in the global economic situation in 2013 threatens the macroeconomic stability and the sustainability of economic growth.” (Our Emphasis)

15.    It seems that the CBI economists are drawing similar conclusions to the Marxists, because the above lines could have been written by a Marxist. Indonesian economic growth has begun to slow down over the last year with the worsening of a number of indicators: an increase in trade deficits, the slowdown of foreign investments, the weakening of the Rupiah by almost 20%, and inflation of 8.4% which is far from the 4.5% target. All these are the results of the increasing uncertainty of the world economy.

16.    The economic achievements since the 2008 crisis are quickly unravelling themselves. This is because these achievements were not due to the competence or brilliance of the ruling regime, but due to global factors. The 6% growth was due to two main factors: 1) the increase in commodity prices due to high demand from the so-called “emerging markets”, mainly China and India; 2) the abundance of foreign investment as a result of the stimulus programs of many governments. In the past few years these two factors have been retreating, and thus a negative pressure is being exerted on the prospect of economic growth in Indonesia.

17.    After the 2008 financial crisis, the Chinese government unleashed the largest Keynesian program in the history of capitalism to prop up their economy. Tens of thousands of railways and highways were laid; mega-giant ports were built; modern and large airports sprung up like mushrooms; high-rise apartments were being raised at an increasing speed everywhere across China. China became the locomotive of world economic growth during the difficult period after 2008. Greedily China gobbled up energy and non-energy commodities from all over the world. Demands and prices of commodities shot up, and the beneficiaries of this were countries like Indonesia.

18.    However the recent slowdown in China and India is ending the era of high commodity prices. Indonesian exports have been hit, and this has resulted in a large trade deficit in 2013. The trade deficit reached US$ 4.06 billion in 2013. Compared to last year, this is an increase of 140% (2012 trade deficit, US$ 1.7 billion). In 2011, there was a trade surplus of US$26 billion. This means that in 2 years the trade balance collapses by 30 billion USD, and this is mainly due to diminishing exports.

19.    At the same time the US government is beginning to give signals that it will start tapering off its stimulus program. Since the 2008 crisis, the US government has pumped 85 billion USD into the economy every month to prevent the collapse of not only its own economy but also the whole capitalist system. Other advanced capitalist countries have also been implementing similar “cheap money” policies. This cheap money is then used by banks and financial institutions to invest in countries like Indonesia that can promise a higher rate of return. The US cannot continue printing “cheap money” because its debt has reached $17.2 trillion which means that each US citizen, from the newborns to those who are on their death beds, owes 54 thousand dollars. It is clear that this “cheap money” policy cannot be continued without creating social turmoil.

20.    It is therefore not surprising that the Indonesian economy was severely affected in mid-2013 when there was talk of the US government cutting back on its QE program. Investors immediately drew back their investments from emerging economies like Indonesia in anticipation of the ending of “cheap money”. The Central Bank report also echoes this warning that “the reduction of [US] monetary stimulus ... reduces the liquidity supply to emerging markets, including Indonesia.” Plans to taper off US monetary stimulus has created global uncertainty, which also has negative consequences regarding the prospect of Indonesian economic growth.

21.    In the last analysis, this shows that the Indonesian economy is tied hand and foot to the world economy. All the factors that led to its growth – which are “cheap money” policies and stimulus in China, US and other countries – are now turning into their opposite. The deficit crisis in the US and Europe has created an acute economic contradiction, and in the political sphere has led to unprecedented social turmoil. Meanwhile the growth in China is slowing down because China is also having problems continuing its stimulus programs. All the measures taken by the world capitalists are only postponing what has become inevitable, and even threaten to exacerbate it in the future.

22.    What are the solutions offered by the Central Bank? “Reduction in the fuel subsidy” and “an improvement in investment climate”. We know that a better investment climate means poorer working conditions for the workers to ensure a higher return for the capitalists. In other words, there will be further attacks on workers’ standard of living. This difficult economic situation now has to be dealt by either a Jokowi or Prabowo government. The coming government will not have much room to maneuver and will be forced by the logic of capitalism to implement the above measures. As Standard Chartered economist, Fauzi Ichsan, said: “Whoever the president is, the price of fuel will increase.”

23.    The Workers Movement

24.    In our past political documents, we have described in detail and quite comprehensively the process of radicalization taking place in the workers movement over the past two years. (Read Indonesia Perspectives: 2013) Comrades are encouraged to re-read these documents and other articles about the workers movement we have published over the past two years.

25.    In general, we have seen the awakening of Indonesian workers as a class. After being crushed in 1965, physically and ideologically, the Indonesian working class are re-entering the political arena and beginning to find its lost revolutionary traditions. However, the workers movement is not something that moves in a straight line in a perpetual ascending manner. For every two steps forward that it takes, it could take a step back or sideways. This is especially true when the workers’ leaders do not have a correct revolutionary perspective.

26.    After the magnificent step that the workers took over the last two years, their leaders have quickly – but not without difficulties – tried to put a brake on the movement. The reformist and conservative leaders of the trade unions turn themselves into an obstacle for the development of workers’ consciousness even further. The election also temporarily distracted the workers’ movement from the industrial front with the parliamentary front. However, instead of using this period of the election to emphasize the need for the workers to have their own political party, these reformist leaders channeled the workers’ political aspirations through the bourgeois parties. During the legislative election they sent workers’ candidates into various bourgeois parties, and during the presidential election they supported Jokowi (KSPSI and SBSI unions) and Prabowo (KSPI).

27.    This legislative election tactic produced a disappointing result. From 32 candidates the FSPMI-KSPI put forward through these bourgeois parties, only two were elected in Bekasi, the center of the workers’ movement for the past two years. Even those two who were elected achieved votes which were much smaller than the number of workers in their electorates. Workers' enthusiasm in the legislative election, even though they had been mobilized by their leaders to support their own candidates through the bourgeois parties, was pale compared to their enthusiasm during the general strikes and wave of actions in 2012-2013. This is not surprising. Their instinct was to reject these parties that they rightly see as corrupt, rotten, and incompetent.

buruh-bekasi-siap-mogok28.    In this presidential election, the vanguard of the workers' movement - the metal workers of FSPSMI - found themselves supporting the ex-general Prabowo. While, KSPSI and SBSI who came out against the 2013 General Strike were giving their support to Jokowi, who is in general more populist. This might appear like a confusing paradox to many people, where the layer of workers who were acting as the vanguard for the past two years were supporting a candidate who is more reactionary, and not Jokowi who is more populist and able to arouse more enthusiasm. However, if we look closer, things are not that simple.

29.    While acting as the governor of Jakarta, Jokowi displayed an indifferent attitude toward the workers’ movement that swept Jakarta and the neighbouring industrial areas. Not only that, the workers' victory in the 2012 general strike was immediately challenged when he signed a moratorium to exempt hundreds of companies from minimum wage regulation. Then in the 2013 general strike, Jokowi dismissed workers' demands for 30% wage increase as irrational and instead signed a 10% increase. Because of these actions, he earned the nickname "Father of the Cheap Wage" by the workers.

30.    Not only this, in this election the big capitalists lined up in his camp, particularly Sofjan Wanandi, the chief of the Indonesian Employers’ Association, who is hated by the workers. The metal workers of FSPMI, who felt betrayed by the leaders of KSPSI and SBSI during the 2013 general strike last year, also saw these leaders in Jokowi's camp. Everyone that had been obstacles to the labour movement over the past two years could be found in Jokowi's camp. With all this, is it surprising that the FSPMI workers found it difficult to support Jokowi?

31.    The argument that Prabowo represents the New Order is cynically dismissed by these workers. Isn't Jusuf Kalla, the past chief of Golkar and the patron of the paramilitary Pancasila Youth, also in Jokowi's camp and running as Jokowi's vice presidential candidate? Aren't there also New Order generals and human right violators in Jokowi's camp? So, what is the difference? The Lefts who are supporting Jokowi can only scream "human rights violator, human rights violator! New Order, New Order!" and look down upon workers who do not have the same Jokowi euphoria as them. While in fact, it is exactly the actions of Jokowi and the "democrats" in his camp that repelled the workers.

32.    So why did many FSPMI workers throw their support behind Prabowo who is also clearly part of the capitalist camp? This is because the FSPMI workers are still tied to their leaders, while their leaders are tied to the bourgeois. It cannot be denied that the reformist leaders of FSPMI still command a large authority over the workers. The experience of sharp struggles during the past two years has tied the workers close to their leaders. We Marxists understand clearly that the reformism, conservatism, and bureaucraticism of these leaders will turn into the largest obstacles for the workers movement and that implicit in reformism is betrayal. But this understanding is not there for many of the workers. It is here that our task is to patiently explain, with mild manner and bold content.

33.    In our agitation to win over workers to our side, we do not just hurl insults at the leaders that these workers still trust. This will not gain their ears, and instead push them into a defensive position. We also do not begin by dismissing them or attacking them: "You have been tricked by your leaders", "Prabowo is a human rights violator, so are you supporting human rights violation too?" We always begin with positive demands, without launching an attack but clearly expressing our political disagreements. We emphasize to the workers that their class independence that they have been fighting for over the past two years, with methods of mass action, should not be placed into the hands of the bourgeois politicians during this election; that workers with their national strikes have proved that they have the ability to build their own political party; and that the coming regime, because of the logic of capitalism will be attacking the workers and that they now have to ready themselves. In short, we have to always begin with this attitude: the workers - and all the toiling masses and youth - who find themselves supporting Prabowo or Jokowi are not enemies to be attacked and crushed, but comrades to be won over to our side.

general-strike-poster34.    The class struggle that had been sharpening over the past two years has been temporarily interrupted by this election. The reformist leaders of the trade unions have successfully channeled workers' political aspirations into one or other of the bourgeois camps. However, the workers will quickly learn that neither of these can fulfill their demands. This will be a political lesson for the workers, that they cannot surrender their fate to the bourgeois parties, just like they do not surrender their fate to the bosses in the industrial struggle. It is here that the call for the formation of a workers’ party becomes important, and this slogan has to be pushed forward in a consistent and determined manner. This will accelerate the political tutoring of the workers, so that they can reach the correct conclusion: only the independence of the working class can show the way forward for the workers and the whole of the oppressed masses.

35.    Internal crisis is waiting around the corner for these trade unions when their tactics of "riding the bourgeois parties" are proved to be impotent. The workers will not just sit in silence. They will respond to the mistakes made by their leaders, and there could be changes in these trade unions. The reformist leadership will begin to be discredited and find themselves challenged by their members. There will be clashes and frictions in these unions.

36.    After going en masse to the election booth, the workers will once again turn to the streets. As long as the questions of wages and standards of living have not been solved, and the coming regime will not be able to solve these questions especially during this world economic crisis, then workers will return to the ABCs of class struggle. But this time they will have learned a lot, from the past two years’ experiences and from this election, and the coming struggle will be on a higher plane than before. The next general strike will not be a repetition of the previous ones.

37.    Crisis of Legitimacy

38.    The election and the political events surrounding it can provide us with a picture of class balance of forces and the current political situation. While it is not a complete picture, but only partial, when looked at in the overarching political and economic context (national and international economic situations, the workers movement, etc., as we have done above) the election process and result can complement our perspective, make it clearer and sharper.

39.    The emergence of a populist figure like Jokowi is an expression of the collapse of the legitimacy of the Indonesian political system in the eyes of the public. None of the old political elites have credibility any more, thus the bourgeois need someone who is seen as being far from the corridors of power so that they could excite the masses during this once-in-five-year "carnival of democracy". Not only that, these politicians are also compelled to revive the old ghost of Soekarno, albeit in a vulgar form. This is why during this year's presidential election both of the candidates used the image of Soekarno. Suddenly all of our politicians have become Soekarno-ist.

40.    The result of the legislative election clearly exposes the crisis of Indonesian politics. Not one of the parties could claim that it emerged as a victor. PDI-P gained the most votes, with 19%. In the 2009 election the three largest parties (Democrat, Golkar, and PDI-P) claimed a total share of 49% of the vote, this year the three largest parties (PDI-P, Golkar, and Gerindra) only claimed 45%. This is even worse than in 1999 (68%) and 2004 (50%). Even though the SBY and Democrat regime was so unpopular, none of the parties could use this opportunity to come out as an opposition and claim victory. PDI-P tried to use their ace card, Jokowi, but their parliamentary election result was no better than in 2004.

41.    The difficulty that all the parties had in forming coalitions and choosing vice presidential candidates is also an indication of crisis amongst the different layers of the ruling class. Only at the last minute were the two coalitions and candidates finally determined. All the populist and Soekarno-ist rhetoric – people this and people that, Berdikari this and Berdikari that (Berdikari means national independence) - collapsed when both Jokowi and Prabowo chose running mates who have been central in the pro-capital and pro-imperialist policies of the SBY regime over the past 10 years: Jusuf Kalla who was SBY's vice president in his first term and Hatta Rajasa, the minister of the economy for SBY in his second term.

42.    Even the presidential election coalitions cracked as soon as they were formed. The formal coalitions did not prevent party members from giving their support to other candidates. Golkar de facto split into two, when a considerable number of their leading cadres switched sides to Jokowi, starting with its former chief Jusuf Kalla who became Jokowi's running mate, Luhut Pandjaitan, Fahmi Idris, Gumiwang Kartasasmita, Andi Hartanto, and many others.

43.    What did the Golkar leadership do to these members who openly went against the party’s decision? "It is best to discuss with them," said the chief of the Central Committee Priyo Budi Santoso. In other words, there was nothing that they could do. Expelling these rogue members would mean pushing this party into an internal crisis, which was something they do not want. After seeing what happened to the PPP when its leaders stubbornly tried to instill party discipline, they could foresee their own fate if they tried to do the same thing.

44.    Meanwhile, other parties like Hanura also suffered a split. Even though formally this party supports Jokowi, one of their main leaders, Hary Tanoe, chose to support Prabowo. Rachmawati Soekarnoputri, another daughter of Soekarno, the chief of Advisory Council of Nasdem Party, switched sides and gave her support to Prabowo. The Nasdem Party couldn't do anything, with the excuse that this was a personal political stand of Rachmawati.

45.    The splits in the ruling class were not because there were layers which were more "pro-people" and others that were more "anti-people". These thieves were fighting amongst themselves about how to best manage the increasingly difficult political and economic situation, so that it doesn’t explode and endanger the whole capitalist system. In relation to this presidential election, the question is: which candidate is better at fostering illusions in the system? Which one amongst the two could better implement the capitalist program without causing excessive social turmoil? Who can bring stability to the market, Jokowi or Prabowo? This is the common worry amongst them.

46.    A Regime of Crisis

47.    Stability is the mantra that the ruling class keeps repeating, but this hope of stability will quickly disappear. As we have outlined above, today's economic and political situation - nationally and internationally - does not allow any stability. This doesn't mean that there will be turmoil every day, or that revolution is just around the corner. In short periods there might be stability, but this is a fragile stability built on sand.

48.    The coming government will not only be determined by the elected president, but also by the results of the parliamentary election that gave way to a weak and fractious parliament. If SBY and the Democratic Party have had difficulties maintaining their parliamentary coalition, then the coming government will face even more difficulties especially since it will rule under a more challenging economic situation. The big hope that the masses have for these two candidates, that they will be more competent than the previous regime in solving the nation's problems, will be the cause for their undoing.

49.    This year’s election has uncovered many things. The Jokowi-Kalla pair, who were initially predicted to win overwhelmingly, with Jokowi in a number of polls before his official nomination leading by as much as 30 points ahead of Prabowo, could only win by 6% in the actual election. Even Susilo Bambang Yudhoyono, the president of the previous two terms, was able to win by 20% in 2004 and 34% [!] in 2009. This Jokowi euphoria, which has been inflated artificially by the media on one hand and by some “Lefts” on the other hand, has proven to be shallower than expected. The Jokowi team was hoping that they could keep riding on his “ndeso” (simple), honest and clean image all the way to power without seriously putting forward a clear and decisive program to tackle the problems of the toiling masses. There was no fundamental difference between Jokowi’s and Prabowo’s program. Both of them were using Soekarno’s rhetoric in a vulgar manner. The Economist also expressed this fact when it wrote that “in truth their platforms are not radically different.” Prabowo’s black and negative campaigns could only have an effect because Jokowi’s abstract program could not capture the imagination of the working masses. As a consequence, right up until the last minute before the announcement of the result, it was not clear who would win this election.

50.    On the other hand, the Red-White coalition of Prabowo-Hatta very quickly evaporated once it became clear that Prabowo would not step into the presidential palace. His running mate Hatta was nowhere to be found when Prabowo held a press conference announcing that he rejected the result of the election and would seek to challenge it in the court of law. Mahfud MD, the chief of the Prabowo-Hatta campaign team, immediately “resigned”. PPP and Golkar, the two main parties of the coalition, went through internal crises after Prabowo’s defeat, with many of their cadres demanding that their parties break away from the coalition. Father and son of the PAN political dynasty were also found to be in conflict, when Hanafi Rais sent his congratulation to Jokowi while his father Amien Rais, the head of PAN, was adamant in rejecting the election result. SBY and the Democratic Party were quick to send their warm greetings and congratulations to the newly-elected Jokowi.

51.    Prabowo’s attempt to challenge the election result in the Constitutional Court became a running joke that was no longer funny throughout the country after practically everyone had left him. Prabowo was like a King who thought that he was wearing his finest ceremonial robe, but in reality there was not a single thread covering his body and there was no one left by his side to tell him just that.   

52.    Objectively we can say that the ruling class is in a weak position. They do not know how to end this crisis. However, they appear strong only because of the absence of a subjective factor or the leadership of working class. Only the weakness of the Left - and especially that of Marxism – has propped up this bourgeois class that is about to collapse. From time to time the class independence of the workers is traded by their leaders to gain short-term results, either in the name of "political realism", "pragmatism", or "stopping fascism in its tracks by supporting a more progressive bourgeois." There are always 1001 reasons not to pursue the independence of the workers. This is done not only by the reformist trade union leaders, but also by those Lefts who claim to be "Marxist", "radical", and "revolutionary".

53.    Once this festival of “democracy” is over and the blinding lights have been taken down, the workers will quickly realize what they have bought. The coming government will find itself quickly running out of room to maneuver. The crushing pressure of the crisis that has yet to end will force Jokowi’s regime to attack the workers more ferociously. Class struggle will intensify once again, and this time on a higher level as the workers will have learned from their own experience to trust only their own strength.

54.    However, there is nothing automatic in all of this. There is a need for a subjective factor, i.e. revolutionaries who understand the dialectical movement of history and class struggle, who are steeled in revolutionary Marxism, and who are united in a party. Without this subjective factor, without this revolutionary leadership, then the explosive energy of the workers will just dissipate. A party is like a piston box that concentrates workers’ energy into a force that can knock down the whole edifice of capitalism and build on its ruins a new society, socialism.

55.    The barrier to human progress today is capitalism, or to be more precise: an economic system which is based on private ownership of the means of production and run by a “free” market mechanism. Not only does it stunt the development of human civilization, capitalism also threatens its continued existence. As long as capitalism is left standing and not overthrown in a conscious and revolutionary manner, then it will drag the whole of humanity into barbarism. Even today almost half of world population is living under barbaric conditions, which cannot be considered “living” at all. Wresting all economic power from the hands of capitalists, turning it into collective property and running it under a democratically planned economy remains the historical task of the working class, the only revolutionary class that can open the way toward socialism.