The bombings of the JW Marriott and Ritz-Carlton hotels in Jakarta on July 17 come after Indonesian President Susilo Bambang Yudhoyono’s re-election on July 8. The attacks come at an unexpected time and are intended to rattle the country after the most trouble-free election Indonesia has ever seen. By attacking five star hotels in the capital, the perpetrators have reminded the international business community of Indonesia’s inherent security concerns.. The twin bombings of the JW Marriott and Ritz-Carlton hotels in Jakarta on July 17 come after the re-election of incumbent Indonesian President Susilo Bambang Yudhoyono on July 8, raising significant questions about the political and geopolitical ramifications of the attacks.
Yudhoyono is a widely popular president. He won over 62 percent of the vote, according to preliminary counts, precluding the need for a head-to-head runoff with his top rival — Megawati Sukarnoputri, who received 28 percent. His victory appeared predestined after his Democratic Party won 20 percent of the vote in National Assembly elections in April, a sweeping increase from the party’s modest 7.5 percent vote in 2004, when Yudhoyono was initially elected. Yudhoyono’s resounding victory over his opponents signaled that he maintained broad public support after five years of reforms centered on reducing threats posed by militant groups and attracting foreign investment.
Since Yudhoyono’s initial election in 2004, the country has achieved a degree of stability not seen throughout most of its tumultuous history. Yudhoyono, a former army general, gained popularity by leading the country’s anti-terror operations after the devastating Bali bombings in Oct. 2002, resulting in the capture or execution of the country’s leading militant figures and decimating the international linkages that gave Indonesian militants access to training and finances. As president, Yudhoyono led reforms to reduce the size of the bureaucracy, reign in the military’s monopolistic grip on businesses, improve public finances, deregulate the economy and attract foreign investors. With the security situation improving and the economy booming, Yudhoyono symbolized Indonesia’s transition into a coherent modern state.
These changes did not give rise to sudden or radical political change, but rather led to a balancing among the political establishment. When the 2009 elections rolled around, Yudhoyono’s chief opponents were thoroughly establishment figures — he ran his campaign against Megawati, president from 2001-2003, and Jusuf Kallah, his former vice-president.
Notably, Yudhoyono’s term in office also coincided with the increasing popularity of moderate Islamist parties, with whom his Democratic Party has formed coalitions, and the gradual diminishing of popularity for fundamentalist Islamist parties. These latter parties performed worse in the 2009 polls than they had in previous Indonesian elections — including in the national assembly, where they had the highest potential.
Therefore, the July 17 bombings come at an unexpected time — especially because of the timing. The election process in Indonesia is often marred by violence, so attacks before elections to sway voters’ opinions were never out of the question. But few were expecting them more than a week after the election’s conclusion. Had the election results been close enough to require a second runoff in September, however, these attacks could have affected the outcome. Regardless, they have succeeded in rattling the country after false hopes generated by the most seamless election season Indonesia has ever seen. The bombings reverse the appearance of calm. They show that Indonesia is still Indonesia — a particularly violence prone and insecure country. Jakarta is still subject to bomb attacks as it has been throughout its history, and militant groups still maintain a presence and have the ability to strike to prove it.
The attacks will therefore force Yudhoyono to make important decisions about how to maintain security and soothe the fears of foreign investors. Given that he has already made his reputation as a terrorism fighter, and has already committed to boosting funding for national security, the president is likely to respond forcefully and robustly to the security challenges that these attacks present. He certainly has the popular mandate and political capital to respond in the way he sees fit.
There is also a geopolitical angle to these attacks, as they intersect with the current condition of the global economy. Strengthening Indonesia’s economy was ultimately Yudhoyono’s strongest campaign item — as symbolized by his choice of the country’s central bank governor as his running mate. Having recovered strongly from the Asian Financial Crisis of 1997-1998, Indonesia has been one of the best situated countries in Asia throughout the 2008-2009 crisis. With about $55 billion in currency reserves, a large domestic consumer market, and an economy that is only 20 percent dependent on exports (much less than its neighbors), Indonesia has maintained sound growth throughout the global recession. The downturn even benefited the incumbent government by reversing high inflation on food and fuel prices of 2007-2008 that were taking a toll on households and businesses.
But the July 17 attacks strike at one of the chief pillars of Yudhoyono’s economic policy: attracting foreign investment. This aspect of Yudhoyono’s policy has already come under fire in remote Papua province in the far west, where a prominent gold mine operated by a U.S. company has seen a string of shootings since the July 8 election — but Papua is an exception, and events there would not have an effect on the nation’s attractiveness to investors in general.
However, by attacking five star hotels in the capital, the perpetrators of the events have reminded the international business community about the state of security in Indonesia as a whole. World investors are already reluctant to make risky moves in the unpredictable economic environment, and militant violence will only heighten their fears. This is why the government has little choice but to respond vigorously to these attacks — otherwise it risks losing the gains of the past five years.
Thanks to Strafor
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