Jim Castle is a friend of mine. I have known him since we were graduate students in Indonesia in the late 1960s. While I labored in academe he went on to found and grow CastleAsia into what is arguably the most highly regarded private-sector consultancy for informing and interfacing expatriate and domestic investors and managers in Indonesia. Friday mornings he hosts a breakfast gathering of business executives at his favorite hotel, the JW Marriott in the Kuningan district of Jakarta.

Or he did, until the morning of July 17, 2009. On that Friday, shortly before 8am, a man pulling a suitcase on wheels strolled into the Marriott's Lobby Lounge, where Jim and his colleagues were meeting, and detonated the contents of his luggage. We know that the bomber was at least outwardly calm from the surveillance videotape of his relaxed walk across the lobby to the restaurant.

He wore a business suit, presumably to deflect attention before he blew himself up. Almost simultaneously, in the Airlangga restaurant at the Ritz Carlton hotel across the street, a confederate destroyed himself, killing or wounding a second set of victims. As of this writing, the toll stands at nine dead (including the killers) and more than 50 injured.

On learning that Jim had been at the meeting in the Marriott, I became frantic to find out if he were still alive. A mere 16 hours later, to my immense relief, he answered my e-mail. He was out of hospital, having sustained what he called "trivial injuries", including a temporary loss of hearing. Of the nearly 20 people at the roundtable meeting, however, four died and others were badly hurt. Jim's number two at CastleAsia lost part of a leg.

The same Marriott had been bombed before, in 2003. That explosion killed 12 people. Eight of them were Indonesian citizens, who also made up the great majority of the roughly 150 people wounded in that attack - and most of these Indonesian victims were Muslims. This distribution undercut the claim of the country's small jihadi fringe to be defending Islam's local adherents against foreign infidels.

But if last Friday's killers hoped to gain the sympathy of Indonesians this time around by attacking Jim and his expatriate colleagues and thereby lowering the proportion of domestic casualties, they failed. Of the 37 victims whose names and nationalities were known as of Monday, 60% were Indonesians, and that figure was almost certain to rise as more bodies were identified. The selective public acceptance of slaughter to which the targeting of infidel foreigners might have catered is, of course, grotesquely inhumane.

Since Susilo Bambang Yudhoyono was first elected president in 2004, Indonesia's real gross domestic product has averaged around 6% annual growth. In 2008 only four of East Asia's 19 economies achieved rates higher than Indonesia's 6.1% (Vietnam, Mongolia, China and Macau). In the first quarter of 2009, measured year-on-year, while the recession-hit economies of Malaysia, Singapore and Thailand all shrank, Indonesia's grew 4.4%. In the first half of 2009, the Jakarta Stock Exchange soared.

The economy is hardly all roses. Poverty and corruption remain pervasive. Unemployment and underemployment persist. The country's infrastructure badly needs repair. And the economy's performance in attracting foreign direct investment (FDI) has been sub-par: The US$2 billion in FDI that went to Indonesia in 2008 was less than a third of the $7 billion inflow enjoyed by Thailand's far smaller economy, notwithstanding Indonesia's far more stable politics.

Nevertheless, all things considered, the macro-economy in Yudhoyono's first term did reasonably well. We may never know whether the killer at the Marriott aimed to maximize economic harm. According to another expat consultant in Jakarta, Kevin O'Rourke, the day's victims included 10 of the top 50 business leaders in the city. "It could have been a coincidence," he said, or the bombers could have "known just what they were doing".

Imputing rationality to savagery is tricky business. But the attackers probably did hope to damage the Indonesian economy, notably foreign tourism and investment. In that context, the American provenance and patronage of the two hotels would have heightened their appeal as targets. Although the terrorists may not have known these details, the Ritz-Carlton Hotel Company is an independently operated division of Marriott International, Inc, which owns the JW Marriott brand, and both firms are headquartered on the outskirts of Washington DC.

Second-round revenge against the Marriott may also have played a role - assaulting a place that had rebuilt and recovered so quickly after being attacked in 2003. Spiteful retribution may have influenced the decision to re-attack the Kuta tourist area in Bali in 2005 after that neighborhood's recovery from the bomb carnage of 2002. Arguable, too, is the notion that 9/11 in 2001 was meant to finish the job started with the first bombing of the Twin Towers in 1993. And in all of these instances, the economy - Indonesian or American - suffered the consequences.

Panic buttons are not being pushed, however. Indonesian stock analyst Haryajid Ramelan's expectation seems plausible: that confidence in the economy will return if those who plotted the blasts are soon found and punished, and if investors can be convinced that these were "purely terrorist attacks" unrelated to domestic politics.

Sympathy for terrorism in Indonesia is far too sparse for Friday's explosions to destabilize the country. But they occurred merely nine days after Yudhoyono's landslide re-election as president on July 8, with three months still to go before the anticipated inauguration of his new administration on October 20. That timing ensured that some would speculate that the killers wanted to deprive the president of his second five-year term.

The president himself fed this speculation at his press conference on July 18, the day after the attacks. He brandished photographs of unnamed shooters with handguns using his picture for target practice. He reported the discovery of a plan to seize the headquarters of the election commission and thereby prevent his democratic victory from being announced. "There was a statement that there would be a revolution if SBY wins," he said, referring to himself by his initials.

"This is an intelligence report," he continued, "not rumors, nor gossip. Other statements said they wished to turn Indonesia into [a country like] Iran. And the last statement said that no matter what, SBY should not and would not be inaugurated." Barring information to the contrary, one may assume that these reports of threats were real, whether or not the threats themselves were. But why share them with the public?

Perhaps the president was defending his decision not to inspect the bomb damage in person - a gesture that would have shown sympathy for the victims while reassuring the population. He had wanted to go, he said, "But the chief of police and others suggested I should wait, since the area was not yet secure. And danger could come at any time, especially with all of the threats I have shown you. Physical threats."

Had Yudhoyono lost the election, or had he won it by only a thin and hotly contested margin, his remarks might have been read as an effort to garner sympathy and deflect attention from his unpopularity. The presidential candidates who lost to his landslide, Megawati Sukarnoputri and Jusuf Kalla, have indeed criticized how the July 8 polling was handled. And there were shortcomings. But even without them, Yudhoyono would still have won. In this context, speaking as he did from a position of personal popularity and political strength, the net effect of his comments was probably to encourage public support for stopping terrorism.

One may also note the calculated vagueness of his references to those - "they” - who wished him and the country harm. Not once in his speech did he refer to Jemaah Islamiyah, the network that is the culprit of choice for most analysts of the twin hotel attacks. Had he directly fingered that violently jihadi group, ambitious Islamist politicians such as Din Syamsuddin - head of Muhammadiyah, the country's second-largest Muslim organization - would have charged him with defaming Islam because Jemaah Islamiyah literally means "the Islamic group" or "the Islamic community".

One may hope that Din's ability to turn his Islamist supporters against jihadi terrorism and in favor of religious freedom and liberal democracy will someday catch up to his energy in policing language. Yet Yudhoyono was right not to mention Jemaah Islamiyah. Doing so would have complicated unnecessarily the president's relations with Muslim politicians whose support he may need when it comes to getting the legislature to turn his proposals into laws. Nor is it even clear that Jemaah Islamiyah is still an entity coherent enough to have, in fact, masterminded last Friday's attacks.

Peering into the future, one may reasonably conclude that the bombings' repercussions will neither annul Yudhoyono's landslide victory nor derail the inauguration of his next administration. Nor will they do more than temporary damage to the Indonesian economy. As for the personal aspect of what happened Friday, while mourning the dead, I am grateful that Jim and others, foreign and Indonesian, are still alive.

Donald K Emmerson heads the Southeast Asia Forum at Stanford University. He is a co-author of Islamism: Contested Perspectives on Political Islam (Stanford University Press, November 2009) and Hard Choices: Security, Democracy, and Regionalism in Southeast Asia (Stanford/ISEAS, 2008).

Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved.

The 2008-09 academic year was a busy time for the Southeast Asia Forum (SEAF).  A dozen on-campus lectures by Southeast Asianists from Australia, Germany, Malaysia, Thailand, and the United States ranged from country-specific topics such as labor resistance in Vietnam, political opposition in Malaysia, and the 2009 elections in Indonesia, to broader-brush treatments of Southeast Asian identities and modernities, regional repercussions of the global economic slowdown, and the wellsprings of “late democratization” across East Asia.

The lecture on “late democratization” was delivered to a capacity audience by the 2008-09 National University of Singapore-Stanford University Lee Kong Chian (LKC) Distinguished Fellow, Mark Thompson.  Mark is a political science professor in Germany at the University of Erlangen-Nuremberg.  He and another 08-09 SEAF speaker, Australian National University Prof. Ed Aspinall, jointly with State University of New York-Albany Prof. Meredith Weiss, will lead a 28-30 August 2009 workshop in Singapore under the auspices of the NUS-Stanford Initiative (NSI).  The workshop will review and analyze the record and prospects of student movements in Asia.  Attendees will include authors of chapters of a book-in-progress stemming from the research and writing on democratization done by Thompson during his fellowship at Stanford.

A second NSI awardee this past academic year was the 2008 NUS-Stanford LKC Distinguished Lecturer Joel Kahn, professor of anthropology emeritus at La Trobe University, Melbourne, who gave three talks at SEAF this year: 

• Science and Secularity: Rethinking Religous Reform
• Dynamics of Identity: Empires, States & Groups
• Comparing Modernities: Is Southeast Asia Unique?
   

His insightful interpretations of identity and modernity in Southeast Asia may be heard via the relevant audio icons at the links above.

Off-campus lectures involving SEAF included three panel discussions convened to launch Hard Choices: Security, Democracy, and Regionalism in Southeast Asia (introductory chapter and information on ordering the title are available), published by Stanford’s Shorenstein APARC and the Institute of Southeast Asian Studies (ISEAS), Singapore, in 2008-09.  The book was edited by SEAF Director Donald K. Emmerson.  

Hosting these launches in their respective cities were ISEAS in Singapore, the Asia Society in New York, and Johns Hopkins University’s School of Advanced International Studies in Washington, D.C.  Panelists at these events included Ellen Frost (Peterson Institute for International Economics), Mike Green (Georgetown University School of Foreign Service), Alan Chong Chia Siong (NUS), and Joern Dosch (Leeds University).  

Another panelist was John Ciorciari, a Shorenstein Fellow at Shorenstein APARC in 2007-08 and a National Fellow at the Hoover Institution in 2008-09.  In 2009, despite the U.S. recession and a correspondingly competitive academic marketplace, he published several Southeast Asia-related pieces, completed and submitted to a university press the manuscript he had worked on at APARC, and won a tenure-track assistant professorship at the University of Michigan’s School of Public Policy starting in September 2009.  Congratulations, John! 

Apart from speaking at the launches of Hard Choices, Don Emmerson gave papers on Indonesian foreign policies and Asia Pacific regionalism in Jakarta and Manila, and discussed these and other topics at events in Chicago and Los Angeles among other venues.  At two conferences in Washington,D.C. on a proposed U.S.-Indonesian “comprehensive partnership,” he addressed what such a relationship could and should entail.  In Spring 2009 at Stanford, he served as faculty sponsor and lecturer in a student-initiated course on Thailand.  His interviewers during the year included the BBC, Radio Australia, The New York Times, and various Indonesian media.

SEAF organized its final on-campus event of the 2008-09 academic year in June 2009 — an invitation-only roundtable co-sponsored with the U.S.-ASEAN Business Council.  Nine scholars met with three current American ambassadors to Southeast Asian countries for off-the-record conversations on seven topics of mutual interest regarding the region and its relations with the United States.

None of the above could have happened without the talent, friendliness, and all-round indispensability of SEAF’s administrative associate, Lisa Lee.  Thank you, Lisa!

Prospect:  2009-2010

As of June 2009, SEAF anticipated hosting, directly or indirectly, these scholars of Southeast Asia during academic year 2008-09:

• Sudarno Sumarto is the director of the SMERU Research Institute, Jakarta.  He will be at Stanford for the full academic year as the 2009-10 Shorenstein APARC-Asia Foundation Visiting Fellow. While on campus, Sudarno will do research and write on the political economy of development in Indonesia.  He is likely to focus within that field on the economic consequences of violent conflict, policy lessons to be drawn from the record of cash-transfer welfare programs, and whether and how such aid has affected its recipients’ voting behavior. 
• James Hoesterey will spend academic year 2009-10 at APARC as the year’s Shorenstein Fellow.  He will revise for publication his University of Wisconsin-Madison doctoral dissertation in anthropology on “Sufis and Self-help Gurus:  Postcolonial Psychology, Religious Authority, and Muslim Subjectivity in Indonesia.” Jim researched this topic in Indonesia over two years of fieldwork focused on the outlook and activities of a popular, charismatic, media-savvy Muslim preacher, Abdullah Gymnastiar.  Jim’s aim is to understand and interpret how a new generation of Muslim preachers and trainers in Indonesia has found a marketable niche and acquired personal and religious authority by combining piety with practical advice. 
• Thitinan Pongsudhirak is an associate professor in international relations at Chulalongkorn University, Bangkok, where he also heads the Institute of Security and International Studies.  He will be at Stanford in Spring 2010, one of four visiting experts from overseas in a new joint effort by the Stanford Humanities Center and the Freeman Spogli Institute for International Studies to bring “high-profile international scholars into the intellectual life of Stanford.” 

Together with SEAF, the Center for East Asian Studies and the Center for Democracy, Development, and the Rule of Law will co-host Thitinan during his stay.  While at Stanford he will lecture and write on Thai politics and foreign policy, among other possible topics.  His op ed in the 18 April 2009 New York Times, “Why Thais Are Angry,” may be accessed at the New York Times.

Christian von Luebke, a 2008-09 Shorenstein Fellow, will remain at Stanford in 2009-2010 as a visiting scholar on a German Science Foundation fellowship.

He will enlarge, for publication, the focus of his doctoral dissertation, on the political economy of subnational policy reform in Indonesia, to encompass the Philippines and China as well.  To that end, he did preparatory fieldwork in Manila in Summer 2009.

SEAF is happy to congratulate all four of these 2009-2010 scholars for winning these intensely competitive awards!  

In addition to sponsoring the lectures these scholars are expected to give, SEAF will host a full roster of occasional speakers from the United States and other countries in AY 2009-2010.  These speakers will analyze and assess, for example, the (in)efficacy of ex-Prime Minister Thaksin Shinawatra’s welfare programs in Thailand, the role of intra-military tensions in propelling Asian transitions from authoritarian to democratic rule, and aspects of Japan’s occupation of Southeast Asia during World War II that need reconsideration.

As for the 2009-10 iteration of the NUS-Stanford Initiative and its fellowship and lectureship awards, as of June 2009 this prospect was on hold pending clarification of NSI’s financial base, which has been affected by the global economic downturn.  Whatever the status of NSI in 2009-10, SEAF’s speakers, whether resident on campus or invited for one-time talks, should make up in quality for the modest shortfall in quantity—not filling one slot for a visitor—that the possible absence of an NSI-funded scholar would imply.

Controversy:  “Islamism” and Its Discontents

SEAF expects to learn in 2009-10 of the publication of one or more books written wholly or partly at Stanford under its auspices.  One of these titles is Islamism: Contested Perspectives on Political Islam.  It is set to appear by November 2009 and can be ordered now from Stanford University Press at http://www.sup.org/book.cgi?id=11926.  

In this volume, SEAF’s director debates a friend and colleague, Middle Eastern and Islamic studies expert and Hofstra University anthropologist Dan Varisco.  They disagree over the meaning of the term “Islamism” and the (un)desirability of its use in discourse about Muslims and their faith.  Of particular sensitivity in this context is the (mis)use of “Islamism” to describe or interpret instances of violence that have been or may be committed by Muslims in the name of Islam.  A dozen other experts on Islam, mostly Muslims, contribute shorter comments on “Islamism” and on the positions taken by Emmerson and Varisco.  If one early reviewer turns out to be right, “this lively work will be a great help for anyone concerned with current debates between Islamic nations and the West.” 

At Stanford in February 2009, Don Emmerson conveyed his and Dan Varisco’s views to a standing-room-only lecture and discussion hosted by the Abbasi Program in Islamic Studies entitled “Debating Islamism: Pro, Semi-pro, Con, and Why Bother?” (audio recording available).  One listener later commented anonymously on the talk.  Also relevant, in the context of larger questions regarding how best to convey Muslims’ lives and religion to non-Muslims, is Jonathan Gelbart's article "Who Speaks For Islam? Not John Esposito".

Don does not know the authors of these posts; ran across their comments by chance while cyber-surfing; and does not necessarily endorse their views, let alone views to be found in the sources to which these comments may be electronically linked.  But the blog and the article do contribute to a debate whose importance was illustrated at the very end of Stanford’s 2008-09 academic year by Barack Obama’s own treatment of Islam and Muslims in the unprecedented speech that he gave at Cairo University on 4 June 2009.  After he spoke, in conversation with an Indonesian journalist, Obama promised to visit—actually, to revisit—Jakarta on his next trip to Asia.  That stop is most likely to take place before or after he attends the Asia Pacific Economic Cooperation forum in nearby Singapore in November 2009.  Viewers interested in a commentary can also read Don's Obama's Trifecta: So Far, So Good.

First, it opened daylight between the US and Israel. Israeli settlements on the West Bank are impediments to a two-state solution and a stable peace with Palestine. Obama did not split hairs. He did not distinguish between increments to existing settler populations by birth versus immigration with or without adding a room to an existing house. The United States, he said, does not accept the legitimacy of continued Israeli settlements. Period.

The American Israel Political Affairs Committee, which advertises itself as America’s pro-Israel lobby, cannot have been pleased to hear that sentence. But without some semblance of independence from Israel, the US cannot be a credible broker between the two sides. It is not necessary to treat the actions of Israeli and Palestinian protagonists as morally equivalent in order to understand that they share responsibility for decades of deadlock. New settlements and the expansion of existing ones merely feed Palestinian suspicions that Israel intends permanently to occupy the West Bank. Nor did Obama’s criticism of Israeli settlements prevent him from also stating: Palestinians must abandon violence. Period.

Second, alongside his candor, he showed respect. The most effective discourse on controversial topics involving Islam and Muslims is both sensitive to feelings and frank about facts, as I argue in a forthcoming book (Islamism: Contested Perspectives on Political Islam). Inter-faith dialogues that rely on mutual self-censorship–an agreed refusal to raise divisive topics or speak hard truths – resemble sand castles. Empathy based on denial is unlikely to survive the next incoming tide of reality. Respect without candor, in my view, is closer to fawning than to friendship.

As Obama put it in Cairo, ‘In order to move forward, we must say openly to each other the things we hold in our hearts and that too often are said only behind closed doors. As the Holy Quran tells us, ‘Be conscious of God and speak always the truth.” His listeners applauded – most of them, perhaps, because he had cited their preferred Book, but some at least because he had defended accuracy regardless of what this or that Book might avow.

In the partnership that Obama offered his audience, sources of tensions were not to be ignored. On the contrary, we must face these tensions squarely. He then followed his own advice by noting that extremists acting in the name of Islam had in fact killed more adherents of their own religion than they had Christians, Jews, or the followers of any other faith. In the same candid vein, he noted with disapproval the propensity of some Muslims to repeat vile stereotypes about Jews, the opposition of Muslim extremists to educating women, and the fact of discrimination against Christian Copts in Egypt, the very country in which he spoke.

Third, his speech was notable for what it did not contain. The word ‘terrorism’,’ a fixture of the Manichean rhetoric of George W. Bush, did not occur once. Back in Washington, in his 26 January televised interview with Al Arabiya, Obama had used the phrase Muslim world 11 times in 44 minutes – an average of once every four minutes. In the run-up to his Cairo speech, the White House had repeatedly hyped it as an address to ‘the Muslim world.’ Yet in the 55 minutes it took him to deliver the oration, the words ‘Muslim world’ were never spoken. He must have been advised to delete the reference from an earlier draft of his text.

I believe the excision strengthened the result, but not because a ‘Muslim world’ does not exist. Admittedly, one can argue that 1.4 billion Muslims have too little in common to justify speaking of such a world at all. But the already vast and implicitly varied compass of any ‘world’ diminishes the risk of homogenization. One can easily refer to ‘the Muslim world’ while stressing its diversity. Many Muslims and non-Muslims already use the phrase without stereotyping its members. No, the reasons why Obama avoided the phrase were less definitional than they were political in nature.

Had Obama explicitly addressed the Muslim world in Cairo, he would have risked implying that his host represented that Muslim world, as if Egypt were especially authentic–quintessentially Muslim–in that sphere. That would have been poorly received in many of the other Muslim-majority societies that diversely span the planet from Morocco to Mindanao.

Several years ago a professor from Cairo’s Al-Azhar University, which co-sponsored Obama’s appearance, told me in all seriousness that Indonesian Muslims, because they did not speak Arabic, were not Muslims at all. Obama did not wish to be read by the followers of ostensibly universalist Islam as endorsing such a parochially Arabo-centric conceit.

The US president could, of course, have mentioned the Muslim world and in the next breath denied that it was represented by Egypt, a country under an authoritarian regime with a reputation for corruption of near-Nigerian proportions. But it was far smarter and more effective for Obama to have shunned the phrase altogether, thereby avoiding the need to clarify it and risk implying that his hosts were somehow less than central to Islam, less than paradigmatically Muslim. Such a candid but insensitive move would have triggered nationalist and Islamist anger not only in his Egyptian audience, but in other Muslim-majority countries as well. Indonesian Muslims, for example, would have wondered with some apprehension whether to expect comparably rude behavior were he to visit their own country later this year.

Obama’s listeners at Cairo University were, instead, subjected to twin eloquences of absence and silence: Egyptian President Hosni Mubarak’s not being present, and Obama’s not mentioning him at all. Eloquent, too, was the absence of Israel from his itinerary. This omission was not a sign of hostility toward Tel Aviv, however. He termed the US-Israel bond ‘unbreakable.’ Not visiting Israel merely signaled that Washington on his watch would not limit its foreign-policy horizon to what any one country would allow.

Obama mispronounced the Arabic term for the head covering worn by some Muslim women. The word is hijab not hajib. But that small slip was trivial compared with the brilliance and timeliness of what he had to say. Rhetoric is one thing, of course; realities are quite another. The tasks of resolving the Israeli-Palestinian conundrum and improving relations with the heterogeneous Muslim world are more easily discussed than done. Illustrating that Muslim world’s extraordinary diversity are the many and marked differences between Turkey, where Obama spoke on 6 April on his first overseas trip, his Egyptian venue two months later, and Indonesia, which he is likely to visit before the end of 2009.

Before his choice of Cairo was announced, several commentators advised him to give his Muslim world speech in June in the Indonesian capital, Jakarta. Rather than risk legitimating Mubarak’s autocracy, they argued, he should celebrate Indonesia’s success in combining moderate Islam with liberal democracy.

Following their advice would have been a mistake. Not only did speaking in Cairo enable Obama boldly to address the Israeli-Palestinian conflict from a podium close to its Middle Eastern epicenter. Had he traveled to Indonesia instead, his visit would have been tainted by an appearance of American intervention in the domestic politics of that country, whose President Susilo Bambang Yudhoyono is up for re-election on 8 July.

Earlier in his career, Yudhoyono completed military training programs in the US, at Fort Benning and Fort Leavenworth, and earned a master’s in management from Webster University in St. Louis. No previous Indonesian head of state has had a closer prior association with the United States. Yudhoyono’s rivals for the presidency are already berating him and his running mate as neo-liberals who have pawned Indonesia’s economy to the capitalist West. Obama could feel comfortable keeping the autocrat Mubarak at arm’s length in Cairo, but in campaign-season Indonesia the US president would have been torn between behaving ungraciously toward his democratically chosen host and appearing to back him in his race for re-election.

Yudhoyono’s popularity ratings among Indonesians are even better than Obama’s are among Americans. The July election is Yudhoyono’s to lose. But the winner’s new government will not be in place until October. The US president was wise to postpone visiting Indonesia until after its electoral dust has cleared and the next administration in Jakarta has taken shape. A gathering of leaders of the Asia Pacific Economic Cooperation forum, which Obama is expected to attend, is conveniently scheduled for mid-November in Singapore. He could easily visit Indonesia en route to or from that event.

An Indonesian journalist in Cairo interviewed Obama shortly after his speech. The president virtually confirmed this November itinerary by saying that his next trip to Asia would include Indonesia. He said he looked forward to revisiting the neighborhood in Jakarta where he had lived as a child, and to eating again his favorite Indonesian foods – fried rice, bakso soup, and rambutan fruit among them.

A trifecta happens when a gambler correctly predicts the first three finishers of a race in the correct order. Obama appears to have bet his skills in public diplomacy on this sequence: Ankara first, then Cairo, then Jakarta.

One can ask whether his actions will match his words, and whether the US Congress will go along with his prescriptions. But with two destinations down and one to go, Obama is well on his way to completing a trifecta in the race for hearts and minds in the Muslim world.

A version of this essay appeared in AsiaTimes Online on 6 June 2009.

At first sight, political turmoil in Thailand and the Philippines—repeated violent protests, impeachment battles, and military coups—gives the impression that democracy in Southeast Asia is on a downward spiral. One country in the region, however, has sustained a stable pluralistic democracy: the Republic of Indonesia.

In 1999, after thirty years of Suharto’s centralistic, authoritarian rule, Indonesia embraced far-reaching decentralization and election reforms. Within a brief period of two years, the Indonesian government reshaped its administrative architecture, including the devolution of local tax and service responsibilities to more than 400 district governments. In view of its deep-seated authoritarian traditions, beginning with Javanese kingdoms and sultanates, moving through Dutch colonialism (1619–1942), and ending with Suharto’s New Order (1965–98), Indonesia’s rapid shift toward democratic decentralization stands out as one of the most remarkable political transitions in recent history.

Particularly notable is the peaceful and competitive conduct of Indonesian elections. Over the last decade, local citizens have elected more than 30,000 local councilors and over 400 mayors, regents, and governors, with little violence or intimidation. High voter turnouts (around 70 percent) and high replacement rates of incumbent executives (roughly 40 percent) bear witness to rising electoral competition in local polities. While subnational elections display considerable flux, the upcoming presidential elections in July 2009 suggest continuity. The latest national polls, for example, predict a comfortable lead for President Susilo Bambang Yudhoyono (49 percent) over his main competitor, Megawati Soekarnoputri (36 percent).

The institutionalization of democracy and decentralization, however, has yet to translate into substantive public sector reforms. Indonesia continues to score low in global governance assessments. According to Transparency International and the World Bank, Indonesia’s government ranks 126th (out of 180) in terms of corruption, and 129th (out of 181) in terms of administrative efficiency for business start-ups. With the introduction of regional autonomy, these governance problems have, to a considerable extent, been decentralized to hundreds of districts. Yet, despite formally uniform institutional settings, local governments exhibit vast differences in regulatory quality, administrative efficiency, and anticorruption measures.

What motivates some local governments to perform better than others? Implicit in this question, which stands at the center of my research, is the idea that local democracy is not only an end in itself, but also a means for improving government outcomes. The pronounced policy differences that arise in Indonesia’s district polities provide a good opportunity to examine the workings of Indonesian local democracy or, to use a different terminology, the political economy of local decision-making.

The findings from controlled case comparisons and subnational datasets suggest that policy variations are best explained by differences in government leadership. Good policy environments emerge primarily in cases where local regents and mayors, whose career aspirations are tested by direct elections, skillfully use their office powers to forge reform coalitions and supervise bureaucratic practices. Societal reform pressures that arise from local parliaments, business chambers, and nongovernmental organizations, in comparison, tend to be less significant drivers of good governance. While broad-based interest groups continue to struggle with collective-action problems, district council members seem more concerned with provincial/national party elites (and their party list positions) than with representing local constituencies. Thus, in Indonesia’s early stage of democratic transition, where societal pressures are yet to fully unfold, much seems to depend on leadership efforts to initiate, facilitate, and oversee government improvements.

Under what conditions, then, are local leaders likely to act in the public interest, rather for private gain? While direct elections provide basic incentives, the direction and strength of these incentives also hinge upon existing socioeconomic structures. Government leaders need to accommodate interests of powerful economic groups in order to secure support for campaign funding and co-investments in public goods. Whether these interest alignments result in unproductive rent-seeking and corruption, or in constructive government reforms, depends on the constellation and transparency of economic powers.  The more economic powers become concentrated in specific sectors, groups, and firms, and the less public-private interactions are monitored by local media, the greater the likelihood that leaders will pursue self-preferential and collusive strategies.

As a result, it is plausible to assume that a moderate economic concentration and strong media presence are conducive to better governance. At this point, only some districts fall into this category. But as globalization and communication technologies progress, local polities are bound to become more economically diverse and politically informed. With growing political awareness and increased incentives for better leadership, it is likely that Indonesia, over time, will see more public-private symbioses for reform and, thus, bridge the gap between well-functioning elections on the one hand and poor governance
on the other.

As the world’s most dynamic and rapidly advancing region, the Asia-Pacific has commanded global attention. Business and policy leaders alike have been focused on the rise of China, tensions on the Korean peninsula, Japan’s economic recovery and political assertiveness, globalization and the outsourcing of jobs to South Asia, Indonesia’s multiple transitions, competing forces of nationalism vs. regionalism, and the future of U.S.-Asia relations.

What is the near-term outlook for change in the region? How might developments in the economic, political, or security sphere affect Asia’s expected trajectory? And how will a changing Asia impact the United States? These were among the complex and challenging issues addressed by a faculty panel from the Shorenstein Asia-Pacific Research Center (Shorenstein APARC) and the Eurasia Group at the Asia Society in New York on January 23, 2006.

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Q. COIT BLACKER: WHAT IS THE MOST DIFFICULT, CHALLENGING ISSUE YOU SEE?

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A. HARRY HARDING:

In China, we are seeing a darker side of the Chinese success story. Millions of people have been lifted out of poverty, China's role in international affairs is on the rise, and China is an increasingly responsible stakeholder in an open, liberal global economy. Yet, the world is now seeing the problems China's reform program has failed to resolve. China's new five-year plan seeks to address a number of these issues, providing a plan for sustainable economic development that is environmentally
responsible and addresses chronic pollution problems, for a harmonious society that
addresses inequalities and inadequacies in the provision of medical care, insurance
and pension systems, and for continuing technological innovation, as part of China's
quest to become an exporter of capital and technology.

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The world should be deeply concerned about developments on the Korean peninsula. Two pressing issues are U.S. relations with South Korea and the nuclear crisis with the North. It is not clear when or whether we will see a solution. Time may be against the United States on the issue. China and South Korea are not necessarily willing to follow the U.S. approach; without their cooperation, it is difficult to secure a successful solution. The younger generation emerging in South Korea does not see North Korea as a threat. Our own relations with South Korea are strained and we are viewed as preoccupied with Iraq and Iran, as North Korea continues to develop nuclear weapons.

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In Southeast Asia, a key problem is uneven development, both in and between the political and economic spheres. Potentially volatile contrasts are seen throughout the region. Vietnam is growing at 8 percent per year, but will it become a democracy? It has not yet. Indonesia has shifted to democracy, but absent faster economic growth, that political gain could erode. Indonesia's media are among the freest in the region;
multiple peaceful elections have been held--a remarkable achievement--and nearly all Islamists shun terrorism. Older Indonesians remember, however, that the economy
performed well without democracy under President Suharto. Nowadays, corruption
scandals break out almost daily, nationalist and Islamist feelings are strong, and the
climate is not especially favorable to foreign investment. While Burma's economy
lags, its repressive polity embarrasses the Association of Southeast Asian Nations
(ASEAN). How long can the generals in Rangoon hold on? Disparities are also
international: dire poverty marks Laos and Cambodia, for example, while the
Malaysian and Thai economies have done well.

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Japan is a "good news/bad news" story. The good news is that Japan has found a new security niche since the end of the Cold War. Previously, when a security problem loomed "over the horizon," they expected us to take care of it while, if prodded, they increased their financial support for U.S. troops stationed in Japan. During the first post-Cold War conflict in the Persian Gulf, Japan had neither the political consensus nor the legal framework to permit a sharing of the risks, as well as the costs, and this cost them politically. Since then, they have passed legislation that permits them to participate in U.N. peacekeeping activities, contribute noncombat, logistic, and other services to "coalition of the willing" operations, and even dispatch troops to join reconstruction activities in Iraq. Clearly, their more ambitious role is helping to make the U.S.-Japan alliance more balanced and more global.The bad news is a reemergence of stronger nationalist sentiment in Japan and more generally in Northeast Asia. In part this is attributable to the collapse of the Left in Japanese politics since the mid-1990s. This has left the Conservatives more dominant, and they are less apologetic about Japanese conduct in the 1930s and 1940s, more inclined to regard North Korea and China as potential threats, more assertive with respect to territorial issues, less sensitive to their neighbors’ reactions to Prime Ministerial visits to Yasukuni Shrine, and more eager to be regarded as a “normal” nation. Many Asians see the United States as pushing Japan to take on a more active security role and, in the context of rising Japanese nationalism, are less inclined to view the U.S.-Japan alliance as a source of reassurance.

Q. COIT BLACKER: WHAT ARE THE COMPETING AND CONFLICTING TENSIONS BETWEEN REGIONALISM AND NATIONALISM?

A. HARRY HARDING:

In China, there has been a resurgence of nationalism over the past 10 to 15 years. Since the end of the Maoist era and the beginning of the reform movement, the leadership has embraced nationalism as a source of legitimacy, but this is a double-edged sword. It places demands on the government to stand up for China’s face, rights, and prestige in international affairs, especially vis-à-vis Japan, the United States, and Taiwan, at times pushing Beijing in directions it does not wish to go.

A. DONALD EMMERSON:

In Indonesia, it is important to distinguish between inward and outward nationalism. Outward nationalism was manifest in Sukarno’s policy of confrontation with Malaysia. ASEAN is predicated on inward nationalism and outward cooperation. Nationalist feelings can be used inwardly to motivate reform and spur development. But there are potential drawbacks. Take the aftermath of the conflict in Aceh. The former rebels want their own political party. Hard-line nationalists in the Indonesian parliament, however, are loath to go along, and that could jeopardize stability in a province already exhausted by civil war and damaged by the 2004 tsunami.

A. GI-WOOK SHIN:

Korea is a nation of some 70 million people, large by European standards, but small in comparison to the giants of Asia, especially China, India, and Russia, making Korea very concerned about what other countries are doing and saying. Korea is currently undergoing an identity crisis. Until the 1980s, the United States was seen as a “savior” from Communism and avid supporter of modernization. Since then, many Koreans have come to challenge this view, arguing that the United States supported Korean dictatorship. Koreans are also rethinking their attitudes toward North Korea, seeing Koreans as belonging to one nation. This shift has contributed to negative attitudes toward both the United States and Japan

Q. COIT BLACKER: GENERATIONAL CHANGE IS ALSO A MAJOR ISSUE IN CHINA, THE DPRK, AND JAPAN. WHAT DOES IT BODE FOR POLITICAL CHANGE?

A. MICHAEL ARMACOST:

Japan has had a “one and a half party system” for more than half a century. Yet the Liberal Democratic Party has proven to be remarkably adaptive, cleverly co-opting many issues that might have been exploited by the opposition parties. It is clearly a democratic country, but its politics have not been as competitive as many other democracies. As for the United States, we have promoted lively democracies throughout the region. But we should not suppose that more democratic regimes will necessarily define their national interests in ways that are invariably compatible with ours. In both Taiwan and South Korea, to the contrary, democratic leaderships have emerged which pursue security policies that display less sensitivity to Washington’s concerns, and certainly exhibit little deference to U.S. leadership.

A. GI-WOOK SHIN:

In both North and South Korea, a marked evolution is under way. In the South, many new members of the parliament have little knowledge of the United States. Promoting mutual understanding is urgently needed on both sides. In the North, the big question is who will succeed Kim Jong Il—an issue with enormous implications for the United States.

A. DONALD EMMERSON:

Indonesians have a noisy, brawling democracy. What they don’t have is the rule of law. Judges can be bought, and laws are inconsistently applied. The Philippines enjoyed democracy for most of the 20th century, but poverty and underdevelopment remain rife, leading many Filipinos to ask just where democracy has taken their nation.

A. HARRY HARDING:

China has seen a significant increase in rural protests. There has been an increase in both the number of incidents and the level of violence. People are being killed, not just in rural areas, but also in major cities like Chengdu. We are seeing a new wave of political participation by professional groups, such as lawyers and journalists, galvanizing public support on such issues as environmental protection, failure to pay pensions, confiscation of land, and corruption. A new generation has been exposed to the Internet, the outside world, and greater choice, but it is not yet clear at what point they will demand greater choice in their own political life.

WHAT WOULD YOU ADVISE THE PRESIDENT ON U.S. POLICY TOWARDS ASIA?

In the lively question-and-answer session, panelists were asked, "Given the chance to talk to the U.S. President about change and improvement in U.S.-Asia policy, what would you say?"

MICHAEL ARMACOST: I am struck by a mismatch between our interests and our strategy in Asia. In some respects our Asia policy has become something of an adjunct of our policy toward the Middle East-where we confront perhaps more urgent, if not more consequential, concerns. Asia is still the most dynamic economic zone in the world; it is the region in which the most significant new powers are emerging; and it is where the interests of the Great Powers intersect most directly. Also, it is an area where profound change is taking place swiftly. We are adapting our policies in Asia to accommodate current preoccupations in the Muslim world, rather than with an eye to preserving our power and relevance in Asia.

HARRY HARDING: It is striking how much Asian nations still want us around- as an offshore balancer and a source of economic growth. Yet they want us to understand the priorities on their agenda as well as our own. We are seen as obsessed with terrorism and China. We should exhibit more support for Asian institution building, as we have with the European Union. We also need to get our own economic act together-promoting education, stimulating scientific research and technological innovation, and reducing our budget deficits-and quit resting on past laurels. Requiring Japan to accept U.S. beef exports and then sending them meat that did not meet the agreed-upon standards has been a setback for our relations, since the Japanese public regards the safety of its food supply as critically important.

DONALD EMMERSON: Most opinion-makers in Southeast Asia are tired of Washington's preoccupation with terrorism. To be effective in the region, we must deal-and appear to be dealing-with a wider array of economic, social, and political issues, and not just bilaterally. The United States is absent at the creation of East Asian regionalism. For various reasons, we were not invited to participate in the recent East Asia Summit. Meanwhile, China's "smile diplomacy" has yielded 27 different frameworks of cooperation between that country and ASEAN. We need to be more, and more broadly, engaged.

MICHAEL ARMACOST: The establishment of today's European community began with the historic reconciliation between France and Germany. I doubt that a viable Asian community can be created without a comparable accommodation between China and Japan. Some observers believe that current tensions between Tokyo and Beijing are advantageous insofar as they facilitate closer defense cooperation between the United States and Japan. I do not share that view. A drift toward Sino-Japanese strategic rivalry would complicate our choices as well as theirs, and I hope we can find ways of attenuating current tensions.