Within a few days of the confirmation of Susilo Bambang Yodhoyono as the first democratically-elected President of Indonesia, a high-level private group of prominent leaders of civil society visited several European capitals to press the need to help “nurture “ the process of reform and reconstruction of the largest Southeast Asian country after years of transition and crisis.

Just after the inauguration ceremony, an EU Troika delegation, headed by Dutch Foreign Minister Bernard Bot, which included other Dutch, EU Commission and Council officials also visited the country on October 28-29. Bot said that the talks would cover economic and development issues, as well as political and human rights issues, including Aceh and Papua conflicts.

The election had been observed by a team of EU monitors who had found it to be free and fair despite the unprecedented massive scale of the undertaking. It was the third in same year following a previous poll for the parliament and a first round of presidential vote in which none of the 17 candidates won more than 50% as required by the new election law.

SBY, as he became popularly known, a former military officer and Minister for Security, based much of his presidential campaign and his first post-election remarks around the need to root out the country’s systemic culture of corruption. The theme had also captured the desire of much of the country and its new civil society, press and political forces to grapple with the corruption, cronyism and nepotism which had become a slogan of reform in the 1998 overthrow of the former military dictator President Suharto after 32 years.

Other priorities developed during the campaign and by the visiting delegation to Europe included the need to re-establish the economy and attract foreign investment, to develop the rule of law and an independent judiciary, control the military, improve the human rights situation and peacefully restore stability in the country’s regional conflicts in Aceh and Papua.

On October 1 a 550-strong Assemby and 153-strong Senate took office as part of the new transition to democracy. The first session was also marked by the pledge from the leader of the national armed forces (TNI) that the military would end its role in the parliament and in politics. On October 21, President SBY also inaugurated a Cabinet that included 36 Ministers.

"Corruption and injustice are everywhere. Our legal framework is very weak, law enforcement does not work well," said Susilo, just after taking office. "The result is that there is no investment in our country." Susilo said Indonesia was "being ridiculed" abroad because of its poor image, but gave no indication how he intended to solve the problems he listed.

Indonesia's new government was inaugurated after the landslide victory of retired general Susilo Bambang Yudhoyono and his running mate, Jusuf Kalla, in the run-off round of the presidential election a month earlier. The new president was described as a cautious reformer. As a senior military officer during the last years of the Suharto presidency, he led a group of reform-minded officers who prepared the ground for the abolition of the military's Dwifungsi doctrine, which justified its direct involvement in politics. Under both presidents Abdurrahman Wahid and Megawati he held the key post of Coordinating Minister for Political and Security Affairs, which allowed him to build an impressive public profile, that served him well in the presidential election campaign.

The new cabinet was a mixture of 'professionals' and party politicians. Although neither of the two strongest parties in the parliament is formally represented, several of the ministers have backgrounds in Golkar, including Vice President Jusuf Kalla, and the new Coordinating Minister for the Economy, Aburizal Bakrie, who is one of Indonesia's biggest indigenous businessmen and, although never prominent in the party organisation, had been one of the unsuccessful candidates for the Golkar presidential nomination.

Megawati's Foreign Minister, Hassan Wirayuda, was re-appointed and Juwono Sudarsono, a civilian, was called back from his ambassadorial post in London to return to the Defence Ministry which he had held under President Abdurrahman. Another key appointment was that of Supreme Court judge, Abdul Rahman Saleh, as Attorney General. Abdul Rahman began his career as a human rights lawyer and was in a minority of one when the Supreme Court upheld Golkar leader, Akbar Tanjung's appeal against a corruption conviction. Four retired military officers hold cabinet positions including the Coordinating Minister for Political, Legal and Security Affairs, and the Minister of Home Affairs. None, however, have 'hard-line' reputations.

A group of Indonesian NGOs, reacted critically and cautiously to the new government, remarking that the Cabinet “does not really reflect professionalism, integrity, acceptance, and capability as promised. It criticised the group as too large, with perhaps 80% placed in posts that were not appropriate.

One of the challenges that the new government will face is its lack of a majority in a parliament in which Golkar and PDI-P hold more than 40 % of the seats. This will require careful handling but need not be an insuperable obstacle. Party loyalties continue to be very fluid. Members of parliament in the past were often open to various 'inducements' to support government legislation, a situation that is likely to continue in the future.

While details remain sketchy, the newly unveiled 100-day national economic program has apparently met the expectations many people have, by showing that the government literally means business when it comes to improving the country's investment climate and economy.

Economist Pande Radja Silalahi of the Centre for Strategic and International Studies (CSIS) and Indonesian Employers Association (APINDO) chairman Sofyan Wanandi expressed their optimism that the program provided a sound basis for developing policies that could cure the country's economic ills.

"The direction is there, be it on tax reform, fiscal and macroeconomics consolidation, and others. There's still a long way to go, but at least (the program) shows clear signs as to where the new government and its policies are headed," Pande said on Oct. 31. Pande said in principle, the measures in the program reflected the business community's needs and requests, and thus indicated the government's commitment to improving the business climate and so boosting economic activities. APINDO chairman Sofyan, who also heads the powerful business lobby the National Economic Recovery Committee (KPEN), also hailed the planned revocation of rulings that discouraged business.

"Amending the decrees and bylaws alone would help solve 60 to 70 percent of the problems faced by businesses here, and would eventually attract investment," Sofyan said, adding that some parts of the economic program followed the recommendations made in the trade and investment road map prepared by the Indonesian Chamber of Commerce and Industry (Kadin) and the KPEN.

SBY's cabinet set five economic priorities: improving the agriculture and forestry sectors; formulating a better energy policy; developing strategic industries and infrastructure to create jobs; strengthening the domestic economy; and providing off-budget stimulus. In addition, the new government has promised not to rock the macro- economic boat, which has been sailing smoothly and which has provided the base for the country's current 4.5 per cent economic expansion.

The private Indonesian delegation of five persons, sponsored by the government but acting and expressing their own views, dwelt on all of these issues in their visit to the Netherlands, Sweden, the United Kingdom and Brussels, from November 1 to 9. The team was led by former Ambassador to France and Australia and currently fellow the Center for Strategic Wiryono Sastrohandoyo and International Studies; Fu’ad Jabali, lecturer at the State Islamic University; Shanti L. Poesposoetjipto, the CEO of Praweda Ciptakarsa Informatika and chair of an NGO Partnership for Governance Reform; and Yuli Ismartono, executive editor of TEMP magazine’s English language edition.

Wiryono, acting as spokesman for the group, remarked that the presidential elections were “transparent, democratic and fair” and that result was that “democracy had been restored or re-established, but needs further nurturing.” He noted that in 1959 had an elected parliament which had been later overtaken by various forms of authoritarianism and military dictatorships until 1999 when three presidents had succeeded each other in the space of a few years. But he now described the country as “the third largest democracy” in the world, with a turnout larger that in the US. He also noted that the EU had aided the process and was regarded as “a partner in democracy,” adding that he hoped the relationship would intensify.

But he and the others in the group also acknowledged major obstacles and challenges to the new government and the country. These included poverty, unemployment and underemployment; corruption, the need to establish the rule of law, human rights and attract foreign investment, control the military and bring long-running fighting in Aceh and Papua to peaceful conclusions. They spokes openly and frankly of their concerns about these issues standing in the way of progress by the new government on all fronts. But they were also hopeful that the mandate given the new President could overcome his minority status in the parliament and also underlined that the “people are relishing being able to play politics.”

The state of bilateral relations between Indonesia and the EU has shown steady increase. In the political sphere, Indonesia and EU has established bilateral consultation forum.In the economic sphere, the trade value between Indonesia and EU member countries in 2003 accounted for US$ 11.4 billion with a surplus for Indonesia. Indonesia’s exports to the EU in 2003 reached $7.9 billion which was a 0.29% increase compared to the 2002 figure of $7.8 billion and constituted 13.1% of the Indonesian total exports. Whilst Indonesia’s imports from the EU in 2003 was at $3.5 billion or 8.15% decrease from $3.8 billion in 2002. In the investment sector, EU is among the major investors in Indonesia.