Vice President Boediono said that the political fallout from the House of Representatives’ inquiry into the Bank Century bailout has for now made the Cabinet less effective.
“The effectiveness of the coalition is being tested,” he said at the high-profile Indonesia Summit held by Economist Conference, a division of the Economist Intelligence Unit (EIU), in Jakarta on Thursday.
However, the Vice President said he believed in democracy and the effectiveness of the coalition in the Cabinet would improve over time.
“Polls show that the President’s popularity remains high. This popularity reflects sustained positive economic momentum. In my view, it is also a testament to the fact that government programs targeting the people are working,” he added.
Boediono did not elaborate on how he expects the coalition to improve, yet he remains optimistic this process is only part of democracy.
The negative fallout began when the Golkar Party and the Prosperous Justice Party (PKS) broke ranks with Yudhoyono’s coalition government during the House inquiry into the bailout. Golkar lawmakers sought to blame Boediono and Finance Minister Sri Mulyani Indrawati for irregularities arising from the Rp 6.76 trillion (US$716 million) controversial bailout, while opposing the policy decision to authorize it.
The bickering reached its peak when the House made a 325-212 vote on March 4 against the Century bailout on the grounds that it involved legal violations in its implementation as well as representing, in their view, an incorrect policy decision. Some lawmakers said Boediono and Mulyani should leave their posts.
Golkar and the PKS were among the parties that voted against the government position, with Democratic Party lawmakers calling them “traitors”.
Yudhoyono responded to their defection by supporting Boediono and Mulyani in a prominent speech on the vote.
In the past few weeks, top officials from the opposition party, the Indonesian Democratic Party of Struggle (PDI-P), have expressed interest in possibly joining the coalition in the event Yudhoyono might end the relationship with Golkar and the PKS.
The EIU spokesman commented that the Democratic Party may not be able to rely on the Islamic-based parties, which formed a coalition with it to control 56 percent of seats.
The Democratic Party needs support in the House from the second-largest party, the Golkar Party, to support some policies, but Golkar, now led by powerful businessman Aburizal Bakrie, often caused obstacles to reforms during Yudhoyono’s first term, according to the EIU.
“As a result, policy-making frustration could be almost as persistent in the President’s second term as in his first despite the Democratic Party’s electoral success,” it said.
Economist Corporate Network director Ross O’Brien said people thought the key factor in determining Indonesia’s future success was support for reform. Most chose reform as a priority rather than fiscal or political stability, he said.
The Corporate Network is related to the London-based Economist Group, including the EIU and The Economist weekly.
