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In the summer of 1998, the NRM2 team learned that their program was likely to be cut. The expatriate staff had been evacuated to Washington, D.C. and the Indonesians involved with the program were keeping the programs afloat in Jakarta. Indonesia was in turmoil. After enduring months of economic instability due to the Asian financial crisis, Indonesia's citizens took to the streets and succeeded in forcing the resignation of their repressive leader for the past 32 years, President Suharto. Suharto's preferred candidate for succession, B.J. Habibie, was elected by the MPR (the super-parliament). He initiated the reformasi process with promises for fiscal reforms, decentralization, new elections and a transition to democracy. USAID leadership were keen to show support for these reforms and proposed a major shift in strategic priorities for USAID's Indonesia Country Strategy. They reversed earlier plans to "graduate" Indonesia from USAID assistance and expressed interest in wiping the slate clean of any programs associated with the Suharto era, including NRM2.
Beginning in the mid-1990s, USAID had been taking steps to "graduate" its Indonesia program by 2000. The US Government had provided nearly 50 years of commodities and technical assistance to Indonesia and the permanent USAID mission had been established in 1966. The decision to graduate Indonesia was related to its strong economic showing during the 1990s and also its political intractability under President Suharto. The government appeared to lack the political will for serious sectoral reform.
Accordingly, by 1998, the mission had fewer staff and the nature of its programming had changed. There were fewer expatriate staff and there were 50 percent fewer local hires (Foreign Service Nationals). The mission had reduced bilateral assistance to the Government of Indonesia ministries. There was increased support for civil society capacity building through "off-shore" mechanisms.1 In addition, the mission had a reduced number of strategic objectives from earlier periods.
When President Suharto stepped down in May 1998, after 32 years of repressive rule, he cleared the way for a new era of reformasi. The economy had been in free fall for months and conditions were very difficult for Indonesia's citizens. Agreements with the International Monetary Fund for a financial bailout were inadequate and popular protests began. University students, with support from a broader spectrum of citizens and NGOs, mobilized in increasing numbers and clashed with the military. Suharto resigned and the Peoples' Consultative Assembly (MPR) elected his temporary successor, B.J. Habibie. The new President took the initial steps needed to achieve economic and political stability. Habibie passed laws related to fiscal autonomy and decentralization. He organized a new parliamentary election for president. By October 1999, Abdurrahman Wahid had been elected as president and Megawati Sukarnoputro (the daughter of Indonesia's first president, Sukarno) became vice-president.
From 1949-1998, Indonesia's two post-independence presidents instituted many repressive measures and left behind a legacy of corrupt governance. Suharto, and his predecessor, Sukarno, took many steps to dampen political and civic freedoms. There were few checks and balances on presidential power. Sukarno dissolved the Constituent Assembly in 1959. Under Indonesia's constitution, the 1000-member MPR was set up to meet every five years to pick a president and vice-president and to draw up state policy guidelines. The president was supposed to be nominally accountable to this body. In 1967, under Suharto, the government gave itself the right to appoint one-third of the representatives to the MPR and more than one-fifth of the sitting parliament (known as the DPR). The 500 members of the DPR form half of the MPR and Suharto, the military, regional bodies and the political parties selected the other 500 members (Schwarz 1994).
The government instituted numerous restrictions. They restricted the press. Beginning in the 1950s, the government harassed and banned opposition political parties and leaders. Voters were disenfranchised. Local elections were prohibited below the district level, as was political activity between elections. In the 1960s, Sukarno and Suharto launched a campaign of intimidation to blunt grassroots opposition. Thousands of public servants were branded as Communist sympathizers. Some were dismissed and others suffered more dire consequences.
The government encouraged communities to be suspicious of outside organizations such as NGOs.3 Villagers were often suspicious of participatory approaches in donor-funded and other government projects because the government often used the military or local officials to coerce villager labor contributions for infrastructure and other rural development projects.4 Under the state ideology, pancasila, citizens were encouraged to join state-sponsored local organizations rather than forming their own associations. Local government leaders were upwardly accountable and often controlled by the military. The work of NGOs was also made more difficult when the government began to set up its own corrupt foundations (under the same legal status as NGOs). These Suharto foundations coerced and siphoned off large contributions from economically powerful tycoons and government agencies for the benefit of the Suharto family and cronies. As a result, many Indonesians negatively associate the notion of philanthropy with these activities. Philanthropy in Indonesia is also associated with a long tradition of religious contributions and this pattern may have reduced the amount of private secular giving in Indonesia (e.g., environment donations). In addition, secret police monitored the community-level and other work of NGOs and tried to intimidate NGO activists and their families with death threats.
Despite this repression, Indonesia's civil society has functioned over the last century. Beginning in the early part of the twentieth century, a variety of religious-based, political and educational organizations formed. They came together as a mass movement to fight for Indonesia's independence from The Netherlands. Political parties operated, despite restrictions and raids. Beginning in the late 1970s, NGOs and church groups initiated community-based environmental/social justice programs. Other national-level organizations worked on advocacy and governance reform activities. However, it was unusual for any of these NGOs to have a membership base, particularly at the national level.
There has often been a disconnect between local grassroots groups and the national groups that claim to represent them. National groups have not generally had a solid base of constituents and have not always been accountable to local communities. In addition, there has been a growing antipathy between the center and the Outer Islands,5 even among civil society organizations.
In the recent past, many stakeholders have struggled over Indonesia's unique biological resources. For the international and national environmental specialists, Indonesia is one of the most important ecological locations in the world. Second only to Brazil, Indonesia has more endemic species than any other country and it possesses the largest amount of tropical rainforest, coral reefs and coastline in Asia. For at least 80 million Indonesians (approximately 35-40 percent of Indonesia's population), Indonesia's renewable natural resources provide a primary source of livelihood,7 and the majority of Indonesians benefit from the products and environmental services from watershed forests, mines and coastal zones. However, most farmers and indigenous groups have lacked ownership or secure access to land. For former President Suharto, corrupt management of natural resources was another means to enrich his family members and cronies, secure his elite and military political base and fund "off-budget" development expenditures (e.g., a 1994 US$ 174 million interest-free loan from the reforestation fund to the state aircraft industry) (Ascher 1999).
By the mid-1990s, it was evident that the Suharto government was not serious about protecting natural resources and biodiversity. In 1995, USAID documents estimated that deforestation rates were 600,000-800,000 hectares per year and only 27 percent of the original coral reef was not degraded. Seventy-five percent of Indonesia's total land area or 144 million hectares is currently legally designated as "forest estate" and is owned and managed by the State. However, much of it has no forest at all.8
Environmental degradation was due to demographic pressures, as well as inadequate policies and law enforcement, mismanagement, corruption and a lack of political will. Many artisanal fishing areas were destroyed through destructive fishing practices by non-local fishers and fishing fleets. In forestry, there were problems related to the forest products industry, unmonitored forest concessions, harvesting regulations, reforestation funds, the ban on log exports, irregular land classification and plantation subsidies (Ascher 1999). In addition, the Suharto family and their cronies were heavily involved in natural resources corruption. Suharto had set up corrupt forest concession, revenue and plantation fund practices in the 1970s and the scale of corruption greatly expanded in the 1990s. He had also redirected US$ 174 million from the reforestation fund to the state nascent aircraft industry (Ascher 1999).
As a result, ENV issues have proven to be fertile ground for civil society organizing in Indonesia. The large profits generated by natural resources seldom reached local communities or governments. The negative consequences of degraded natural resources or pollution were borne by local people. Some of these consequences have included health impacts, reduced soil fertility, loss of livelihood, loss of ancestral lands and violation of human and indigenous rights.
There was an expansion of ENV organizing by civil society organizations in the 1980s. Ten Jakarta-based environmental, consumer and human rights organizations formed the umbrella environmental NGO, WALHI, in 1980. WALHI and others advocated for Indonesia's Basic Environmental Law, which was passed in 1982. This law recognized legitimate and legal roles for NGOs working on environmental issues. The NGOs used these rights during the 1980s and early 1990s to "break the silence" via environmental lawsuits.9 NGOs expanded their political dissent in the early 1990s when the Suharto government allowed greater freedom of the press. Also, NGOs had input into the United Nations Conference on Environment and Development in 1992. By the time that NRM2 began its capacity building work with civil society organizations in 1996, there were a number of very strong environmental NGOs working in Bogor and Jakarta and also an array of different types of NGOs working on environmental issues at the regional and local level.