On Monday, an undersea earthquake shook Indonesia's remote Mentawai Islands and triggered a 10-foot tsunami: It has killed at least 272 people, and left 412 missing. The first cargo plane with humanitarian supplies arrived today. Hundreds of miles away in eastern Java, the volcanic Mount Merapi erupted Tuesday and killed at least 30 people.

That's two disasters in less than 24 hours.

 Indonesia is no stranger to catastrophe. It is located along the Pacific Ring of Fire, which is one of the most seismically and volcanically volatile areas in the world. Its last sizeable earthquake and tsunami duo struck in December of 2004, killing more than 225,000 people in 14 countries.

But despite the death and destruction of the last 48 hours, Indonesian Foreign Minister Marty Natalegawa said today that he doesn't yet see a need for foreign aid or rescue assistance.
So far, only the Philippines and the United States have offered to help Indonesia. But Natalegawa's behavior seems counter-intuitive. In the face of disaster, why would any country preemptively say no to aid?

A look into Indonesia's history reveals latent political sensitivities that may have influenced Natalegawa's decision. Indonesia's first president, Sukarno, was a founding member of the Non-Aligned Movement, an organization of countries who are not aligned with or against any major world power.

Indonesia prides itself on its "independent and active" foreign policy, which was first developed by then Vice President Mohammad Hatta on September 2, 1948 in Central Java. "Do we, Indonesians, in the struggle for the freedom of our people and our country, only have to choose between Russia and America?" he asked. "Is not there any other stand that we can take in the pursuit of our ideals?"

The "other stand" became known as "mendayung antara dua karang" or "rowing between two reefs."

Indonesia doesn't want to appear incompetent, or weak, to outside governments, and may also be wary to accept aid for fear of undermining its national legitimacy.
 
In 2004, Indonesia's acceptance of aid had an arguably negative effect on its citizens. "Though the post-tsunami reconstruction efforts in Aceh were generally successful, the amount of aid did engender some resentment in Jakarta over whether the national government had lost control of the reconstruction, and also potentially altered the economy in Aceh," explains Josh Kurlantzick a fellow for southeast Asia at the Council on Foreign Relations. "So people remember that."

Donald Emmerson, the director of the Southeast Asia Forum at Stanford University's Shorenstein Asia-Pacific Research Center, cites several reasons for Natalegawa's response. First, he says, if the Indonesian government solicited foreign aid, it would be inundated with offers. Coordinating offers of assistance right now would be a severe burden on the government.
 
Then there's the question of scale: so far, the destruction seems manageable in comparison to the 2004 disaster. Still, it's unclear whether Indonesia will be able to adequately respond on its own. "Indonesia is a large country, and its infrastructure is overstretched," Emmerson says. "Its capacity to respond effectively to domestic disasters is not as good as it might be."

The United States and the ASEAN group of nations have further strengthened political, economic and security ties, after their second full-scale summit in New York.

President Barack Obama said the Association of Southeast Asian Nations, which groups ten countries, had the potential for true world leadership. President Obama also made it clear that he saw Asia as a vital plank of US foreign policy.

DR EMMERSON: In the run-up to the summit, there was a big question. Would the partnership be declared as being strategic in nature? That was a key word in the discussion and what happened was the leaders basically finessed the issue. It's not hard to suspect that they worried that if they declared a strategic partnership with the United States, this would cause alarm in Beijing. Because let's remember in the run-up to this summit, we've had a lot of activity - the split between China and Japan over the disputed islands, one could continue with some evidence of a more muscular Chinese foreign policy, its commitment to its claim to possess basically the entire South China Sea, escalating that to the level of a core interest, presumably equivalent to their interest in recovering Taiwan. I could go on, but in many case, it was understandable that the subtext of the meeting was what will China think? So basically what the summit did was to finesse the issue. They decided to pass on the question of raising the partnership to quote - a strategic level - unquote, to the ASEAN US Eminent Persons Group, presumably expert advisors that would be convened and would make recommendations down the road.

And one of the most remarkable things about the statement was how much ground it covered. I mean, among the topics and issues that the leaders committed themselves to do something about, were 14 as I count them, 14 different subjects. Human rights, educational change, trade and investment, science, technology, climate change, interfaith dialogue, disaster management, illicit trafficking, international terrorism, I could go on. So it is clear to me that one of the tasks that ASEAN and the US will have to face in the coming months, is to try to insert some sense of priority.

LAM: On that issue of priority, the US President, Barack Obama, of course, postponed a couple of visits to Indonesia due to pressing domestic demands. Did he in anyway express American commitment to the ASEAN region?

DR EMMERSON: Yes, this was particularly kind of, I suppose you could say, evident in the fact that the meeting occurred at all, finally it was organized. It lasted two hours. He was apparently quite engaged and engaging during that period of time. And I think there is no question that the United States under his administration is committed to South East Asia as a region, indeed has agreed with the leaders of ASEAN, that ASEAN should play a central role in the process of building regional cooperation in East Asia.

LAM: And, of course, one of the topics that came up as well was the South China Sea, that entire region, given the competing maritime and territorial claims vis-à-vis the Spratley and Paracel Island groups. Do you think China is watching the US relationship with ASEAN, this growing relationship - do you think Beijing might be watching it with unease?

DR EMMERSON: Yes, absolutely. I am confident that they are watching it with considerable unease and I note that the statement that the leaders made, made no reference whatsoever to the South China Sea, presumably because of sensitivity with regard to Beijing's possible reaction. The topic was implicitly mentioned, but not explicitly.

LAM: And what about within ASEAN, the grouping itself? The UN Secretary-General, Ban Ki-moon, on the weekend said that the ASEAN nations' credibility might suffer if they did not take a tougher line with Burma and this is in view of the upcoming elections in November. This is presumably directed at specifically China and India, but it could also be referenced to ASEAN could it not, because Burma is a member of ASEAN. Do you see that changing anytime soon with ASEAN, that ASEAN countries, leading members like Indonesia, Malaysia, Singapore, that they might take a stronger stand with the military junta in Rangoon?

DR EMMERSON: The election in Myanmar, if I can call it an election, since it will be highly compromised and manipulated will take place, at least is scheduled to take place November 7th. Indonesia does not take over the chairmanship of ASEAN until the 1st January. So the question is, since Indonesia is a democratic country, arguably, the most democratic of any country in South East Asia, will it use its opportunity to try to put pressure on Burma in the year 2011? My own view is that ASEAN will probably not fulfill Ban Ki-moon's hope, will not exercise significant pressure on the junta. Instead, we could get the opposite situation in which so long as there is not major violence associated with the election, it will essentially be received by ASEAN as a kind of minimally-acceptable basis for assuring the Burmese junta that ASEAN still treats them as a full member. In other words, it's quite possible that the junta may get away with what I take to be a kind of facade effort to legitimate their rule.

 I gained my definition of success through Stanford . . .

-Makoto Takeuchi, 2004-2005 Corporate Affiliates Program fellow

When Makoto Takeuchi came to the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) as a Corporate Affiliates Program fellow during the 2004-2005 academic year, he was working as a senior manager with the Business Development Group of Kansai Electric Power Company, located in Osaka, Japan. Osaka, part of Japan's Kansai region, is a bustling metropolis and an important economic and historical center of Japan. Kansai Electric Power Company is a large energy company that utilizes a combination of energy sources, including nuclear power, which makes up over 50 percent of its power supply, as well as thermal (oil, coal, and liquid natural gas) and hydropower.

Takeuchi found the environment of Stanford University, including its situation in Silicon Valley, stimulating. "I was excited by the diversity and speed of dynamic innovation in Silicon Valley, and the people who utilize their knowledge and skills in order to achieve their dreams," he said. Drawing from this, he carried out a research project exploring complementary strategies for sustainable corporate growth. He concluded that such sustainable growth comes from a balance of internal and external resources and short- and long-term gains, driven by innovation, integration, and interaction.

During his time at Shorenstein APARC, Takeuchi also developed his understanding of working as a part of a team on a project. "I learned that the success of projects requires orchestrating the talents and efforts of many people," he said. He now applies his knowledge of teamwork to the work that he does today, including the essential skill of communicating with colleagues from different cultural and professional backgrounds. Being sensitive to the values of others is crucial when it comes to collaboration, he learned.

Prior to coming to Stanford University, Takeuchi had not yet defined his own idea of "success." He now measures success by the positive impact that he has on society, which to him is evidenced by the "smiles on the faces of my customers, stakeholders, and family." Takeuchi has the opportunity to effect positive economic and energy development in his new position as a senior energy specialist with the World Bank's East Asia Sustainable Development Department. "When I considered how I could make the most of my skills . . . the answer was to provide clean energy through a sophisticated power system with renewable energy and to contribute to what people in the region really want," he explained. In his role with the World Bank, Takeuchi is working toward increasing access to cleaner energy and laying the foundation for sustainable growth in developing countries, and, of course, to gain smiles in the process.

For current and future Corporate Affiliates fellows, Takeuchi imparts the wisdom: "As soon as possible, you should discover the criteria for evaluating your own success. Then, you should just run toward it!"

How does a corrupt government stop corruption? What if that government is democratic, and must cultivate the support of political parties that are themselves corrupt? Is fostering reform in such a political economy the equivalent of trying to make snow in hell?

These questions may be overstated, but the dilemmas they convey are all too real. Witness the storm of concern triggered by the recent resignation of the highest-profile reformist in Indonesia, Sri Mulyani Indrawati, from her linchpin job as minister of finance in a country that was ranked the most corrupt and the most democratic in Southeast Asia in 2009.

Sri Mulyani waged unremitting war on graft. Under her stewardship of the finance ministry, more than 150 of its personnel were dishonorably discharged. Nearly 2,000 more were otherwise punished for infractions. She led a vigorous campaign against tax cheats. Among them were rich and influential people who had grown accustomed to absconding with funds they owed the government.

Euromoney named her ‘finance minister of the year’ in 2006—a post she had only taken up the year before. In 2008 and again in 2009 Forbes magazine admiringly listed her among ‘the 100 most powerful women in the world.’ Correspondingly, on the heels of her resignation on 5 May 2010, Indonesian stocks and rupiahs fell.

Indonesian president Susilo Bambang Yudhoyono (SBY) was directly elected to that office in 2004 and, for a second five-year term, in 2009. As president he has opposed corruption and championed reform. Fatefully, however, in 2004 he chose a wealthy businessman, Aburizal Bakrie, to join his government as coordinating minister for the economy.

In 2006 in East Java, a Bakrie-controlled company using an unprotected drill while probing for gas may have triggered a mud volcano that would swallow more than a dozen villages and render more than 15,000 people homeless. In 2010 the volcano continued to spew an estimated 100,000 tons of mud daily onto the surface. Bakrie’s reputation for probity was not enhanced when, reportedly against Mulyani’s advice, he insisted on denying responsibility for the disaster. Instead he blamed an undersea earthquake that had struck off the south coast of Java, some 250 kilometers away, two days before the mud erupted. Opinions remain divided as to what caused what.

An unambiguously man-made crisis in 2008, the global financial meltdown, shrank the Jakarta stock market, Bakrie’s holdings included. Trading on the exchange was temporarily suspended. Bakrie urged his fellow cabinet member Mulyani to extend the suspension. She refused. He was furious. Her relations with him worsened further when she slapped travel bans on certain Bakrie company executives accused of tax evasion.

In 2009 Bakrie became chair of the Golkar Party. Toward the end of that year he led a fierce campaign in the Indonesian legislature against both Mulyani and another nonpartisan technocrat, Indonesian vice-president Boediono, for malfeasance related to the government’s decision in 2008 to rescue an ailing financial institution, Bank Century. The bailout may have prevented a spiral of withdrawals, and thus helped Indonesia weather the global crisis, but the effort cost far more than expected, and some of the infusions apparently benefited key depositors more than the bank itself.

Legitimate financial questions were soon superseded, however, by a thoroughly political effort on the part of politicians and their supporters opposed to Mulyani and her reforms to oust not only her but the vice-president as well. Mulyani’s and Boediono’s opponents included, in addition to Bakrie, others whose circumstancial links to corruption she had uncovered.

An anti-Mulyani case in point is the Justice and Welfare Party (PKS). Despite priding itself on upholding Islamic ethics and opposing corruption, the PKS rejected allegations that one of its legislators, Muhammad Misbakhun, could have been implicated in a fictitious Bank Century letter of credit for US $22.5 million. When, at the end of April 2010, Misbakhun was arrested and detained on a warrant signed by the national police official in charge of economic and tax crimes, PKS leaders accused the police of having an ulterior motive. The party had by then, in effect, joined the anti-Mulyani chorus.

Subjected to intense and prolonged criticism by these politicians in the glare of the media, Mulyani had ample reason to quit the spotlight, resign, and leave Indonesia. (On 1 June 2010 she will become a managing director of the World Bank in Washington DC.) But her long record of nonpartisan tenacity in the struggle against corruption makes it hard to believe that she simply lost her will to fight. For the time being it is impossible to rule out that she was sacrificed for the sake of a restoration of political comity between SBY and his opponents.

The irony is that Golkar and the PKS had joined with SBY’s Democrat Party to form a ruling coalition, to which they continue to belong. SBY had built that coalition with the expectation that its members, having joined the government, would support it, including its campaign against corruption.

That inclusive or ‘rainbow’ strategy was a triple failure. First, cabinet posts that might have been held by competent and ethical nonpartisans motivated by a desire for public service were allocated instead to partisans whose skills and motives, shall we say, varied. Governance suffered. Second, coalition-party leaders who were given ministerial posts in return for ensuring broad legislative backing for the government in the legislature either would not or could not deliver that support. Cooptation failed. Third, some ruling-team politicians, who might have at least stood back from the fray, instead jumped in, seemingly hoping to blunt the government’s efforts to diminish corruption and improve governance while protecting themselves and furthering their own careers. Discipline frayed.

Mulyani has resigned. Has Bakrie won?

In a recent conversation, an off-the-record analyst anticipated ‘more stability, which, in Indonesia, correlates inversely with reform.’ He could be wrong. But it may not be coincidental that on 6 May 2010, one day after Mulyani announced her resignation, SBY met with ruling-coalition leaders. Or that the meeting launched a Coalition Parties Forum whose daily activities will be led by none other than the chair of the Golkar Party, Aburizal Bakrie. Or that Bakrie reported that SBY had agreed that the Forum would not try to bind the coalition to a common position. Or that, again according to Bakrie, whereas previously the coalition parties were only asked to help safeguard the government’s policies, henceforth they would be asked to help determine them as well. Much will depend on Mulyani’s replacement as minister of finance, and on whether he or she is told to stop rocking the boat.

If Mulyani’s remarkable legacy is indeed erased, illiberal circles in Singapore may think, ‘We thought so. Democracy does thwart reform.’ But my own judgment in hindsight will be less sweeping.

Indonesia’s Democrat Party is still basically an extension of the appealing personality of SBY. Over the six years since he was first elected president, more time, energy, and resources could have been invested in deepening the roots and popularity of the party itself. Had those assets been so spent, the Democrats might have been able, in the legislative elections of 2009, to enlarge their contingent of lawmakers enough to be able to rule, not by the dubious grace of Sri Mulyani’s antagonists, but in SBY’s and his party’s own right—subject to democracy’s checks and balances, yes, but freed of the need to cobble together a coalitional rainbow of colors that clash.

Donald K. Emmerson heads the Southeast Asia Forum at Stanford University and is also the editor of Hard Choices: Security, Democracy, and Regionalism in Southeast Asia. (Stanford/ISEAS, 2008/9)

A heartening number of analysts helpfully commented on an earlier draft of this essay.  While protecting their privacy by not naming them, I am grateful to them.  Complementing my focus here on the politics of Sri Mulyani’s exit is the economic context ably reviewed by Arianto A. Patunru and Christian von Luebke in their ‘Survey of Recent Developments’ in the Bulletin of Indonesian Economic Studies, 46: 1 (2010, 7-31.)