Question: Politicians, experts and the public differ on how they view Indonesia's achievements in the reform process. Your comment? Answer: Most prominent have been the political reforms: Four constitutional amendments, decentralization, laws on elections, and so on. But how will these work out in practice? That is still unclear. Economic reforms, by comparison, have lagged. And what about corruption? Perhaps the least progress has been made on that front. What are key areas that governments after Soeharto have yet to deal with in the transition process? One could make a list. But another response would be to note the gap between the laws already on the books and their implementation. It will not be easy. But doing so will be crucial for success in the transition process. How would the results of next year's elections affect the process of reform? Optimistically, one can picture a healthy concentration of legitimacy at the top of the system, enabling decisive remedial policies. Pessimistically, one can picture a struggle between a popularly mandated presidency and a popularly mandated legislature to the detriment of effective policies. I slant toward optimism. I doubt that the next president and the next DPR (legislature) will be eager to repeat the circumstances in which president Abdurrahman Wahid was removed from office. Whatever happens, 2004 will be a "Year of Voting Frequently" -- at least two elections (April, July) and possibly three (if a second-round presidential vote in September becomes necessary). Let's hope for the best. What are the basic conditions for Indonesia to succeed with reform and to bring the country of 220 million people out of the current crises? When I was in Jakarta in August, the answer I heard most often from Indonesians was: Leadership. Could there be a whiff of nostalgia for Soeharto's leadership in that response? Among the multiple conditions for success in overcoming the current difficulties, one of the most important will be the actual performance of democratically chosen governments, including the one scheduled to emerge from next year's elections. It is, unfortunately, possible that democracy as a method can succeed but wind up discredited by the failure of resulting governments to provide security, ensure justice, reduce poverty, and so on. And there is a sense in which the competitive electoral process itself tends to raise public expectations as to what can and should be done by government. But I am hopeful. Experience of governmental transition often suggests two options, either success and an emergence of democracy, or failure and a return to a militaristic regime. How do you see this? There are not "always two options" in such transitions. Within the category "democracy" alone there are many types and gradations. As for militarism, it is striking how much the image and therefore potential leverage of the military has changed from the immediate post-Soeharto period. Could it be that by not intervening blatantly, army leaders have built up enough credit to allow for subtler forms of influence? Not to mention the more security-conscious atmosphere since Sept. 11, 2001 and Oct. 12, 2002 (terrorist attacks in the U.S. and in Bali respectively). Interesting, too, is the increasing mention of men with army backgrounds as possible presidential candidates next year. But just as democracy is internally diverse, so should we avoid putting everyone who has had an army career in a single box labeled "militarist." I live in California. The voters of my state just fired one governor and hired another. I may be naive, but I hope that as governor, Arnold Schwarzenegger will not treat complex and intractable socioeconomic problems in the same way that the Terminator treated enemy robots! In any case, it is far too early to predict the outcome of any of next year's national elections in either Indonesia or the U.S. Whatever the result, let's hope it's for the better in both countries.

JAKARTA, Indonesia - Even here in Indonesia, where there is a strong tradition of tolerance, there is a war going on between radicals and moderates for Muslim hearts and minds. You can see that war in the police armed with automatic rifles, manning anti-vehicle barriers in front of my hotel and every other large Western-linked building in Jakarta. In August, Islamist terrorists blew up a suicide bomb in front of the Marriott Hotel here and are threatening to hit a long list of targets that includes schools attended by Western children. These are the same bombers who killed more than 200 people in Bali last November. The war is being fought on Indonesia's campuses, particularly secular universities where students are intrigued by radical Islam. Activists from Indonesia's liberal Islamic movement disdainfully call them "born-again Muslims'' and hold provocative campus forums with titles like ``There is no such thing as an Islamic state.'' At a religious boarding school in Yogjakarta, one of tens of thousands of pesantran spread across this vast country, they teach that the Koran is to be understood, not just rotely chanted in Arabic. "We are not frozen in those Koranic verses,'' director Tabiq Ali said. ``Interpretation depends on our own thinking.'' You can even see the war in a steamy best-seller about a Muslim woman whose faith was shattered by the hypocrisy of Islamic radicals who preached righteousness while sleeping with her. The subject of the book, a Yogjakarta university student, now fears retribution. This is a war we cannot afford to see lost. Indonesia is not only the largest Muslim nation in the world, but it could also become a base for radical Islam to spread throughout Southeast Asia. Alternately, Indonesia's struggling democracy could set an example for others in the Muslim world. "You have all the ingredients that could make this place the first Muslim majority democracy that works,'' says Sidney Jones, a leading expert on Islamic terrorism in Southeast Asia. ``And you have all the dark forces eager to push Indonesia in the opposite direction. The question is where does it come out.'' What can the United States do in this war? So far our efforts have focused almost entirely on aiding the pursuit of Jemaah Islamiyah, a Southeast Asian terrorist group linked to al-Qaida. Initially, the government denied it had a home-grown problem and was wary of seeming to follow American dictates. But after the shock of the Bali and Marriott bombings, the authorities have captured many of the terrorists and successfully prosecuted them. Ultimately, however, Indonesia needs to build a modern society. While the rest of Asia, from India to Vietnam, vibrates with the energy brought by the information technology revolution, Indonesia feels like a stagnant backwater. Its economy limps along, plagued by poverty and corruption. The key is a woefully underfunded educational system. Unlike Pakistan's madrassah system, the religious schools are integrated into the state system, and many offer a secular curriculum along with religious teaching. But in the pesantran that I visited, one in a city center and the other in the countryside, I found classrooms that offered little more than whitewashed walls and wooden desks. Computers are few in number and science labs primitive, if even existing. State schools are better equipped but still backward. Why not wire every school to the Internet, build science labs and, most importantly, train teachers? A recent report on U.S.-Indonesia relations by the U.S.-Indonesia Society and Stanford University's Asia-Pacific Research Center urged a significant effort to fund education. President Bush picked up on that idea, announcing a U.S. educational aid program during his October stopover here. But he alarmed Indonesians by tying the initiative to the war on terror. The U.S. ambassador had to make the rounds assuring Indonesians that the U.S. was not out to dictate curriculum in its religious schools. More troubling is the pathetic amount of money he offered -- most of it funds shifted from existing programs -- only $157 million over 6 years. Says former Ambassador Paul Cleveland, who heads the U.S.-Indonesia Society: "You would get more democracy out of $1 billion spent in Indonesia than $20 billion spent in Iraq.''

For months now, it's been popular in the United States to whack China for its trade and currency policies. But India could soon become the next political whipping boy because it has been snaring U.S. hi-tech jobs. Recently unemployed computer professionals, labour unions and politicians have become alarmed that U.S. companies are moving growing numbers of information-technology jobs to India.

The Politics of Unemployment

Joblessness among tech workers in the U.S. is stubbornly high. Meanwhile, U.S. firms are exporting tech jobs to low-cost India. As an election nears, American politicians see votes in complaining about offshore outsourcing. In mid-September, technology workers staged a protest at a San Francisco conference promoting offshore outsourcing of service jobs to countries like India. The protesters were backed by a unit of one of America's most powerful unions, the Communications Workers of America. The unit, called the Washington Alliance of Technology Workers, or WashTech, was set up to fight the exodus of jobs overseas. The protesters carried such signs as "Chip in, don't chip out." A new group of unemployed computer specialists calling itself the Organization for the Rights of American Workers, or Toraw, protested at a similar job outsourcing conference in New York in July.

These sentiments were bolstered in mid-October when Intel Chairman Andy Grove warned at a software conference that a huge number of IT jobs could move from America to countries like India and China in the next decade. The hi-tech pioneer added that his California-based semiconductor manufacturing firm had "no choice" but to continue sending work offshore because of rising costs and the pressure to increase productivity.

It would be one thing if the protests and dire warnings stayed confined to angst-ridden words, but now American legislators are getting involved. Faced with an election next year, many smell a populist, potentially vote-attracting issue. On October 20, the House of Representatives' small-business committee held a hearing on the exodus of white-collar jobs. "At what point will we send so many jobs overseas that we won't have any jobs here to buy the products, regardless of where they're made?" asked the committee's chairman, Donald Manzullo of Illinois.

One of those who testified was California engineer Natasha Humphries, who was laid off in August by hand-held computing-device provider Palm Inc. several months after she was sent to India to train Indian engineers to perform her job. Humphries, who joined TechsUnited.org, a group created to protest against the departure of U.S. hi-tech jobs, believes that "offshoring has created a devastating economic climate."

There is an irony in Humphries' words that goes beyond her travelling to India to train the people who may have taken her job. Only a few years ago, American technology companies were accused of stealing some of the best and brightest engineering and scientific minds from India to meet a severe talent shortage. But now that the global economy has struggled for many months, technology unemployment in the U.S. is high and the jobs are moving to India.

Some industry insiders blame at least part of the unemployment problem on the U.S. programme of granting temporary work visas to hi-tech workers from India. Ron Hira of the Institute of Electrical and Electronics Engineers told the October 20 hearing that many of those who come to the U.S. under this visa scheme go home to set up or work for companies that compete with American companies. He called the visas for these workers "a subsidy promoting the movement of American jobs overseas."

This concern has prompted legislators in at least nine states to join the fight to slow job migration. New Jersey took the lead in drafting legislation after lawmakers learned that a company hired to help welfare recipients had moved its help-centre jobs to Mumbai. Legislation requiring state government contractors to use U.S.-based employees is still stuck in various committees. But the threat of the new law was enough to persuade the welfare-help contractor, eFunds Corp., to move the jobs back to New Jersey.

A flurry of comparable bills in several states has prompted India's National Association of Software and Service Companies, an umbrella grouping of some 850 companies, to hire high-powered lobbying firm Hill & Knowlton. "India is being made to look like the enemy in some parts of the media," says Nasscom's president, Kiran Karnik. "The popular mood is reinforced by politicians, and those statements make customers wary. They're concerned, as are we."

So far, none of the state-level bills have become law. If they did, however, "purely on a business plane, it wouldn't matter at all," says Karnik, since the bulk of India's outsourcing comes from private-sector customers, not from government contracts.

Cheap, Tech-Savvy Workers

Seeking to cut costs, U.S. multinationals such as General Electric, Honeywell and Citigroup have for years moved jobs to India, seeking to capitalize on the country's inexpensive but technology-savvy, English-speaking workforce. Nasscom estimates that job outsourcing to India saved U.S. companies $10 billion-11 billion in 2001 and was accompanied by a $3 billion increase in American exports to India that year.

The migration of these jobs wasn't a big issue when the U.S. economy was roaring and companies had a hard time filling job openings. But that attitude changed abruptly with the dotcom bust in 2000 and subsequent recession in the industry. Today, despite a tentative recovery, U.S. technology jobs remain scarce.

The exact number of jobs that have moved to India isn't known. The Communications Workers of America estimates that 400,000 white-collar jobs have already been lost, particularly to India, and projects that a good proportion of 3 million more expected to migrate offshore by 2012 will go to India as well. "This is not about protectionism," says Marcus Courtney of WashTech, the union affiliate that organized the San Francisco protest. "We have to find a way to engage in globalization so that it doesn't come at the expense of our best workers."

More of Courtney's anger is directed at U.S. companies than at India. "This is an issue about how companies want to increase profits at the expense of highly-skilled American employees," he says.

Others believe the figures cited by labour unions are exaggerated. Economist Rafiq Dossani of Stanford University cites Nasscom statistics estimating that India had 171,500 "business processes" jobs by March 2003, up from 106,000 a year earlier. And that number is expected to grow annually by about 45% over the next five years to be nearly 1 million by 2008. But even that heady growth is substantially less alarmist than what labour unions warn will be India's job-grab from America.

"Am I concerned that the U.S. information-technology industry will end up in India over the next year?" asks Harris Miller, who heads the Information Technology Association of America that includes America's leading multinationals. "That's rubbish. Only about 6%-8% of the all information-technology outsourcing will move offshore. Now it's only 2%."

Miller argues that the best way to protect U.S. jobs is to promote free trade. He believes that there are steps the U.S. government could take to bolster job growth, including such measures as establishing a tax credit for companies that engage in research and development. Miller also says that the current surplus of hi-tech workers in the U.S. will dissipate as the baby-boomer generation retires.

Others add that sending work offshore leads to important benefits to the U.S. John Chen, who heads Sybase, the software giant, argues that "when we spend $1 in India and China, 65 cents comes back" in the form of orders for hi-tech equipment.

Still, the new breed of hi-tech activists can boast of at least one recent success. They helped persuade a majority in the U.S. Congress to let lapse on September 30 a measure that had temporarily tripled the number of foreign professional workers, many from India, admitted to work in the U.S.--to 195,000 a year up from the usual 65,000.

But this victory may be short-lived. Utah Senator Orrin Hatch, the influential chairman of the Senate Judiciary Committee, is in the early stages of floating a proposal that would introduce a variety of exemptions that would effectively circumvent the 65,000-visa limit. If the proposal succeeds--and that's not assured--the number of hi-tech workers admitted into the U.S., many from India, could again top 100,000 a year.

Any moves to expand the number of visas for foreign hi-tech workers will likely be opposed by groups such as Toraw, the one founded last December by recently unemployed information-technology workers. These are people like John Bauman, a computer expert who lost his job in Connecticut a year ago. Toraw is lobbying Connecticut and other state governments to pass legislation making it illegal for a company in the U.S. to bring in a foreign worker and lay off an American employee within six months. "We'd like to see tax incentives for companies that don't offshore work and tax penalties for every job offshored," says Bauman. "I'm going to tell my kids to go into [car] repair so they can't be offshored," he adds.

If tech jobs in the U.S. remain scarce, the biggest uncertainty as to whether the U.S. ultimately takes action on the issue of outsourced jobs is the U.S. election coming up in November 2004. "It's anyone's guess as to which way the political roulette wheel will spin," says Vivek Paul, vice-chairman of Wipro, one of India's largest software firms. "We will definitely see more posturing, but the question is: Will we see regulatory action?"

Still, even if outsourcing opponents are big election winners, analysts doubt that India will face the strident critiques that China is likely to experience in the months ahead.

"There's no constituency for bashing India," says James Steinberg, a foreign-policy analyst in the Brookings Institution think-tank. Steinberg, who served as No. 2 in the Clinton administration's National Security Council, points out that it's politically easier in the U.S. to attack Beijing's communist government than the world's largest democracy. On top of that, American politicians raise a lot of money from Indian Americans. Says Steinberg: "There are only two countries that get an applause line when they're bashed [in the U.S.]: China and France."

APARC Professor Donald K. Emmerson, together with IIS Director Coit D. Blacker and Hoover Institution Fellow Larry Diamond (both of CDDRL), discussed "Democracy vs. Liberty" on the television program "Uncommon Knowledge."

Is democracy - that is, free elections - to be desired at all times for all nations? Or are nations more successful when they establish the rule of law, property rights, and other constitutional liberties first? For the United States, this is no longer an academic question. America is deeply involved in nation-building in Afghanistan and Iraq. Should the establishment of democracy in these countries be the first priority for the United States, or is securing public order and the rule of law more important?