Viewpoint: A Political Success Story

Indonesia used to be a reliable punch line for jokes about Third World ineptitude. Crippling corruption? Check. Homegrown terror movements? Check. Protectionist policies that dissuade foreign investment? Check. But in recent years, Indonesia's leadership has matured. In a region where one nation's political system is still reeling from a military coup (Thailand), another's top economic advisers are confounded by runaway inflation that's threatening much-vaunted growth (Vietnam) and the politics of a third is mired in racial recrimination (Malaysia), Indonesia — led by its first-ever directly elected President — has emerged as Southeast Asia's unlikely star.

The man who has helped democracy flourish in the world's most populous Muslim nation is Susilo Bambang Yudhoyono, a retired army general who, if early polls are an indication, could next year become the first Indonesian President to win re-election. Since coming to power in 2004, S.B.Y., as he is known, has presided with integrity, with fewer political scandals than normal to sully his rule. In the resource-rich territory of Aceh, S.B.Y. spearheaded a historic accord that has brought peace to a former civil-war battleground. Despite the fact that Indonesia gave birth to Jemaah Islamiah, an al-Qaeda-linked terrorist movement that twice targeted tourists on the resort island of Bali, the Indonesian government has waged one of the world's most successful wars on terror, with scores of militants arrested and terrorist cells infiltrated as part of S.B.Y.'s promise to rout Islamic extremism. At the same time, government-funded moderate Muslim operatives have reached out to youngsters who might be vulnerable to radical influences.

There is stability in Indonesia — and unlike in China or Vietnam, it isn't a side benefit of authoritarianism. Although S.B.Y. was reared in a brass-knuckles military environment, he has proven to be a capable civil administrator who's willing to delegate responsibility to technocrats within his administration. Meanwhile, he has started to deliver on the antigraft vows that got him elected. This month, a top prosecutor with the attorney general's office was sentenced to two decades in prison for accepting bribes. Even members of S.B.Y.'s inner circle are under scrutiny: two of his Cabinet members are being investigated for allegedly receiving payoffs, while another was sacked in May because of suspected links to another graft scandal. Indonesia is still deeply corrupt. But the perception that S.B.Y. is taking the problem seriously is boosting business confidence. From January to May this year, foreign direct investment in Indonesia grew by 164% year on year, to $9.78 billion.

Of course, the country still has more growing up to do. The administration has failed to safeguard minority religious rights. Although the economy has grown at around 5.5% annually over the past five years, millions of Indonesians struggle to feed themselves. Yet for a nation with more than 17,500 islands and hundreds of ethnicities, Indonesia is holding together just fine and has made the transition from dictatorship to viable democracy in less than a generation. Nothing funny about that.