Jakarta Drifts; Indonesia's president talks reform but is struggling to make good on his promises.

Byline: Joe Cochrane

During his military career, Indonesian President Susilo Bambang Yudhoyono was known as "the thinking general" for his intellectual approach. One can only wonder what was going through his mind last week, when monsoons caused floods that submerged three quarters of Jakarta, killing 46 people and displacing some 420,000. It was a replay of a similar disaster in the capital five years ago--leading angry citizens to wonder why a single canal hadn't been dug nor dam built since then. Yudhoyono's rivals pounced on the opportunity to take potshots at the increasingly beleaguered leader. "Local [Muslim] preachers asked their congregations to [deal with the floods by] asking for forgiveness from God," said Azyumardi Azra, rector of the State Islamic University in Jakarta. But among the political elites, he continued, the disaster was seen as a sign that even nature has turned against Yudhoyono.

So it goes for Indonesia's president as he approaches the midway point of his five-year term next month. Long gone are the heady days of 2004, when his huge popularity allowed him to win the country's first-ever direct presidential election with a whopping 62 percent. Tall and confident, he promised to provide Indonesians with a firm but gentle hand and to root out its endemic corruption and nepotism. Two-and-a-half years later, however, his reform program seems dead in the water, and last week's floods only symbolized how little he's accomplished. Local commentators now accuse SBY, as the president is known, of pandering to his vice president, Jusuf Kalla, whose ruling Golkar Party gives him political muscle in Parliament. Critics also accuse the president of ignoring his own reform mandate and kowtowing to cabinet members, smaller parties in Parliament, hard-line Islamic groups and even his political rivals. To make matters worse, Jusuf Wanandi, chairman of the Center for Strategic and International Studies in Jakarta, says Yudhoyono has developed the flaw of indecisiveness. "He's in angst if he has to decide," Wanandi says. "He talks nice, but it's tough to get him to decide anything."

As SBY waffles, his country is drifting. Last year Yudhoyono proved unable to push through much-needed tax, labor, civil service and other reforms. Indonesia is already paying the price: foreign direct investment, the key component of the president's job-creation strategy (more than 40 million of his constituents are unemployed), plummeted by 32 percent in 2006. The country possesses vast natural resources, but multinational corporations have grown wary of trying to exploit them due to the red tape and discrimination they are likely to face. During the 32-year regime of the dictator Suharto, foreign investors flocked to the country; despite the profound corruption, the rules of business were clear--grease the right palms and anything was possible. SBY's attempts to crack down on such practices have only paralyzed the country's bureaucracy. While he sends one message, meanwhile, other top officials send another.

The president has also failed to extend his writ outside Jakarta, thanks to a de-centralization process started in 1999 by President B.J. Habibie, which has empowered local players with their own agendas. "In Suharto's day, everybody knew the rules about payoffs and kickbacks," said one Western executive in Jakarta. The current situation, he said, "makes for uncertainty, and businesses don't like uncertainty."

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