Country Governance Assessment Report: Indonesia

Abstract

Indonesia is in transition from authoritarian political and economic systems toward democracy and the market economy. The parliamentary elections in the first half of 2004 proved that basic democratic institutions are taking root. However, Indonesia is still far from having a fully developed democracy with an administration and judiciary ruled by law and with a market economy based on open and fair competition. Indonesia’s governance system previously operated under a regime in which state institutions neglected good governance and the rule of law, where the state managed essential parts of the corporate sector, and where corruption was allowed to rule over common interests. These same institutions should now secure democracy, support a market economy, and provide good governance. The experience of other countries in such a transition shows that this transformation needs time, strong commitment, persistent efforts, and determined leadership.