[Indonesia] ANALYSIS - Poverty may disrupt Indonesia's young democracy

from Reuters India

By Gde Anugrah Arka

JAKARTA (Reuters) - Failure to cope with poverty and unemployment could strengthen radical movements in Indonesia, the world's fourth most populous country, threatening its young democracy and path toward economic liberalism, analysts say.

Indonesia's poverty rate is among Asia's worst, and looks set to remain grim for the foreseeable future on high unemployment and lack of strong political will to tackle the issues.

Adding to the problem, Southeast Asia's biggest economy continues to shift to less labour-intensive sectors.

The chronic poverty raises concerns about continued success for Indonesia's seven-year effort at democracy, the first since a failed attempt in the 1950s.

Many analysts say so far that effort has been impressive.

"Indonesia is now, arguably, the most democratic nation in Southeast Asia," said Ken Conboy, a security consultant in Jakarta who closely monitors radical groups.

Thailand has just undergone a military coup, Vietnam and Laos are one-party states, Myanmar is run by a junta, and most other countries in the region have policies that rights groups say leave their democracies flawed.

However, democracy alone may not be enough to keep Indonesians content.

"Economic problems definitely play into the hands of religious and political extremists. Extremists had a far more difficult time making inroads in Indonesia when the economy was booming," Conboy told Reuters.

Poverty by itself does not necessarily endanger democracy, as India shows.

But if it combines with radical ideologies that reject the current secular political system in the world's most populous Muslim country, Indonesia's democratic transition may be disrupted, analysts say.

"People get more and more desperate, and ideas and solutions they used to reject begin to sound more acceptable... This is already happening in Indonesia and a point will be reached when it cannot be reversed," said political and economic professor Jeffrey Winters of Northwestern University in the United States, who has followed Indonesia for many years.

That could be a matter of concern not just for those who see democracy as most likely to protect human rights, but for countries worried about Indonesia serving as a base for spreading militancy in the region, and its strategic position along the Malacca Strait waterway, one of the world's busiest.

Indonesia's latest poverty data, ending in March this year, showed that as of that month there was an increase of 11 percent since February 2005 due in part to fuel subsidy cuts in the budget that pushed up consumer prices.

The number of Indonesians below Indonesia's poverty line of about 60 U.S. cents-per-day hit around 40 million in March, almost one fifth of the population.

GRIST FOR EXTREMISTS

That could provide grist for the emergence of a strong political left as has recently happened in Latin America, and for militant religious movements.

"As more and more people get unemployed and fall into poverty, demand for changes including socialism such as in Latin America are likely to grow," said economist Helmi Arman of brokerage Bahana Sekuritas.

In the religious area Indonesia has already seen a series of deadly bombings in recent years, some carried out by Islamic militants mostly raised in poor villages.

"How do radicals attempt to exploit the situation? In some cases, they offer a utopian, non-secular vision of prosperity and piety. For the under-educated, such promises hold appeal," said Conboy.

"Religious radicalism can be a major threat to democracy; by definition, non-secular extremism undercuts tolerance," he said.

There has been increasing demand for a shift from Indonesia's secular traditions, with some regions implementing Islamic laws such as mandatory headscarves for Muslim women, and calls for greater media censorship. In one province caning for violations of religious rules has been imposed.

Political swings to the left in some Latin American countries are also attracting attention, with the respected leading Kompas daily often giving them prominent space.

Despite chronic poverty and an official unemployment rate hovering around 10 percent as of 2006, among the highest in Asia, with another 30 percent considered underemployed, some in the country's political elite have given low priority to the issues.

The nascent state of democracy and masses accustomed to following authority have thus far left room for politicians to escape accountability, but analysts say that situation cannot persist indefinitely.

"Indonesia has both components. It has a suffering and frustrated population plus extremist movements eager to organise the people's anger into a force that can fundamentally change the kind of country (it) has been since independence," Winters said.