SINGAPORE, Nov. 1 (UPI) -- When do you start counting 100 days? From the date of the president being sworn in or from the date of appointment of her Cabinet? Does it matter? Well, yes: In this case, two weeks could make a big deference.
Indonesian President Megawati Sukarnoputri came to power on a wind of change, assembled a respected economic Cabinet and obtained the backing of the International Monetary Fund. Then came Sept. 11, and everything changed for the leader of the largest Muslim country in the world.
After 100 days in power, the presidency of Megawati has disappointed, many analysts said. But wait. As she took two weeks to form her "dream team" of an economic Cabinet, one should give her another two weeks, and in this case it matters because the government will have an all-important meeting with the consultative donor group CGI on Nov. 7 - 8, as well as hold debt negotiations with the Paris Club on Nov. 10 - 11.
The outcome of both meetings could help the cash-strapped country. The CGI, Indonesia's official creditor group, is anticipated to provide $4 billion in project and program loans ($2.9 billion and 1.1 billion, respectively).
The government is also seeking approval from the Paris Club to reschedule $3 billion due in 2002, including $800 million in interest. Over the weekend, Senior Economic Minister Dorodjatun Kuntjorojakti was quoted saying the upcoming Paris Club negotiation would be "a tough one."
On Thursday, Megawati, who came to power in July after Abdurrahman Wahid was dismissed by the People's Consultative Assembly, delivered her first progress report to the top legislature.
In a frank statement, she started by saying, "With profound concerns, I humbly and frankly admit that there is not much good news that I can report during this occasion."
Speaking in a televised address, Megawati warned the country's ability to repay its huge debt burden was reaching a "dangerous limit", adding the government's already thin spending might have to be cut further. But she sought to reassure Indonesia's donors saying the government would honour all its foreign debt obligations.
She added privatization had to proceed "very carefully," signaling more delays could be likely in the government's already stalled campaign to sell off state assets as part of attempts to finance the 2001 budget deficit.
"In this uneasy situation it is not impossible that we will be forced to cut our spending again," Megawati said, hinting at a revision of the 2002 budget that was only recently approved by parliament.
Analysts have said that while Megawati has articulated what needs to be done to restore Indonesia's economic growth, her government has not pushed through vested interest groups opposed to reform. It failed to deliver concrete progress on the legal reforms as well as on the privatisation front, partly due to opposition from MPs and local groups.
Whether it's Bank of Asia or Gresik Cement, the sales, if any, are unlikely to be completed by the end of the year
Earlier this week, the state minister in charge of state companies, Laksamana Sukardi, admitted that the government was unlikely to meet its target of $650 million for state company privatization, which could affect the implementation of the state budget.
Megawati acknowledged to the MPR that asset sales under the auspices of the Indonesian Bank Restructuring Agency have been slow, and she also expressed concerned about the lack of new investment in the country due to security concerns.
"We have to restore our country's image that it's not a highly risky place in terms of politics, economy, and security," she said.
The fallout of the Sept. 11 events on Megawati's presidency have been important.
Heading a population of 220 million Muslims, she has had to react prudently to the U.S.-led military offensive against Afghanistan, having to grapple with a much tougher internal political situation. While trying to continue getting the economic backing of the United States, she has also had to placate Muslim sentiments for her own political survival.
Growing anti-U.S. sentiment, evident by the number of anti-American street protests by radical Muslims, have created new jitters among foreign investors. And without willing investors, the economic recovery will be further delayed.
Observers of the situation in Indonesia believe Megawati is likely to survive until the 2004 election, partly because she has the support of the military.
Mochtar Pabottingg, senior fellow at the Indonesian Institute of Sciences, said, "There is no credible or possible challenger to Megawati. So I see no reason why she can't stay until 2004, the end of her mandate.
"She carries with her the political capital of being accepted by the military," Mochtar added.
Speaking at a conference Thursday in Singapore organized by the Institute of South East Asia Studies on the first 100 days of the presidency, Mochtar echoed other commentators by saying that Megawati's reaction to the U.S.-led attack on Afghanistan had been "poor."
"She delegates to her minister the response, and for three to four weeks the anti-U.S. demonstrations had free rein, being captured almost daily on CNN," Mochtar said.
As a result, the tourism industry has suffered greatly, on a perception that radical Islam was on the rise in Indonesia.
But those demonstrations did not reflect the majority of moderate Muslims, and were as much aimed at the United States as at destabilizing the government, political observers said, although radical Muslims find it difficult to accept that a woman is leading the country.
Professor Azyumardi Azra, president of the State University for Islamic Studies, said, "It is clear that the hard-line kind of political Islam has very little prospects in Indonesia. By the same token, it is very doubtful that the hard-line Muslim groups will be able to pose a real threat to President Megawati's government."
He pointed out that hard-line groups are only splinter groups among the great majority of the Muslim mainstream, which continues to support Megawati.
"I believe President Megawati will survive the challenges posed by Muslim hard-liner groups. But at the same time, she could be made busy by their continued threatening activities, which in the end could affect her ability to lead Indonesia into political stability and economic recovery," Azra said.
Speaking in Parliament, Megawati called for a cease-fire in Afghanistan and warned that prolonged military action could weaken global support for a war on terror.
