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Balancing growth, political freedom

LOOKS like the bad old days of the pre-democratic era in Indonesia are back with some vengeance.

Violent clashes between the police and unruly groups of students and labour unionists have erupted in Jakarta and major cities across the archipelago for two weeks now.

The proximate trigger for the clashes had been the passing of the so-called Omnibus Law on Job Creation, an ambitious "big bang" economic reform package, as an opinion piece in The Jakarta Post described it.

It has the imprimatur of Indonesian President Joko Widodo, who, into his second term, is clearly frustrated that his efforts to attract greater foreign investments have not borne expected fruits. The fate of this legislation may make or break the Joko presidency.

It is ironic that a law designed to bring in greater investments and therefore more jobs has attracted such violent opposition from groups representing workers. Foreign investors have, for some time, been leery of growing Indonesian labour militancy, which has been responsible for some of the most short-sighted and stringent labour laws in the region.

The investor community has long complained about the laborious processes which have rendered the firing of workers near-impossible. Rather than securing workers rights, such labour protection rights in reality cause employers to hire workers largely on a contractual basis.

The lost opportunity costs in terms of jobs not created as investors stay away may be far steeper if less quantifiable. In this regard, Indonesia has followed in the unfortunate footsteps of the Philippines, where similar "pro-worker" legislations have meant that many workers are hired on short-term contracts instead.

Foreign investors have long shunned the Philippines as they do Indonesia now for more investor-friendly countries, such as Vietnam, even as they now hunt for alternative locations outside China for labour-intensive manufacturing plants.

The greater irony perhaps is how foreign investors prefer communist party-run China and Vietnam with more flexible labour laws to set up factories, rather than democratic Indonesia and the Philippines, which similarly have large pools of workers on tap.

The latter two countries have their work cut out in making themselves more hospitable to foreign investors and businesses generally. Are democratic freedoms enjoyed today by Indonesia and the Philippines in reality working to stymie the true liberation of the majority of the two-hundred-million-plus Indonesians and hundred-million-plus Filipinos?

The examples posed by these two of our Asean neighbours go back to the almost classic chicken-or-egg-first question of what must come first, high and widespread economic growth rates as the first order of business, or unbridled political freedoms.

On current trajectories experienced by both countries, these two equally desirable traits appear to be mutually exclusive and, therefore, the holy grail of a solidly middle-class populace enjoying full democratic freedoms looks to be mostly unattainable.

Thus, more than a generation after democratic freedoms were restored in the Philippines, the majority of Filipinos seem to have had enough of politics as usual and elected (and consistently still rates highly) a president who upends what passes for democratic politics.

Indonesia's Joko, an ex-mayor like Philippine President Rodrigo Duterte, came into office relatively earlier on the country's democratic trajectory than the Philippines. But, his political legitimacy appears almost as immaterial as that of all his predecessors, given how the contentious Omnibus Law hangs by a thread.

What happens today in Indonesia will, unfortunately, be held up by autocrats everywhere — and most especially in China — as further reaffirmation of their "correct" paths towards national progress. But that misses the mark.

A reasoned argument may be made for developing countries to abhor instant political and economic gratification and for political liberalisation to kick in only once a particular country is on the path to sustained economic prosperity.

The worrying part about China's trajectory, in particular, today is how its leaders appear to be tightening the political screws even as the country is on course to become the top global economic power.

As developed countries, particularly in the West, seek out ways to counter the growing persuasive power of China's development model, they will need to recognise that the promotion of simultaneous political and economic freedoms may well end with neither.

The writer views developments in the nation, region and wider world from his vantage point in Kuching, Sarawak


The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times

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