Why Did Things Go So Wrong?

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DENNIS DE TRAYI arrived in Indonesia five years ago, an economist sure of his principles and eager to take on the challenges of development. This month I leave a very different Indonesia as a very different person. The country I saw on arrival is gone, swept away in a surge of history and emotion. Many strengths remain--there is far less poverty than a generation ago and a much better foundation for growth. But the proliferation of political parties, the unrest and violence, and the rise of a new and vocal civil society are signs of a country remaking itself quickly and chaotically.Nonetheless, things are far rosier than they seemed on Jan. 8 last year, when disaster appeared imminent. I feared for Indonesia's future on that day, as Jakarta panicked and the rupiah collapsed, as shelves were ransacked and stores emptied. I sensed then that Indonesia's erupting crisis might just overwhelm us all. In my heart I was beginning to believe that no matter how good the reform and support efforts of the World Bank and the international community were, they might not work, so profound was the societal shift taking place. Indonesia's crisis was no longer an economic one. In their deeply mystical way, Indonesians seemed to have accepted that the time for a change of leadership was at hand.

Late April and early May were a blur as Indonesia moved toward a precipice. Images of 1965, when the last presidential transition cost hundreds of thousands of lives, were on everyone's minds. This was now a battle for Indonesia's soul. On May 14, I watched from my office as Jakarta burned, and I listened to reports of a city gone mad. I can remember having to fight off waves of emotion and practically having to force myself to breathe. I could not tear myself away from the window, though I could hardly bear what I saw.

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The World Bank's Indonesia staff, several of them ethnic Chinese women, organized the evacuation of our expatriate families while listening over cell phones as their husbands described how mobs were moving in on their neighborhoods. My secretary's children escaped home on the back of a rented motorcycle. We ushered our expatriate staff to safety, though I stayed behind. We set up a safe house for mothers and children from badly hit neighborhoods. I would not have left our Indonesian staff if God himself had ordered it. May 20 was a pivotal day in the battle to unseat Suharto. Only six days before, not a policeman or soldier was to be seen. But on this day troops sealed Jakarta so tightly you could have taken a nap in the middle of Jalan Sudirman, the main thoroughfare in the business district. On the following day the impossible happened: Suharto resigned. Twenty-four hours later I did something for which I probably would have fired members of my staff: I walked to the Parliament to see for myself what was happening. I encountered a surprising acceptance, good wishes and questions like, How are you going to help us fix things? It was an extraordinary moment; the old regime had gone and people, particularly the students, were already peering into the future with hope and relief.

As the week ended I sat alone in my house, overwhelmed. The kindness of Indonesia once again intervened. What you need is a change of scenery, a friend said. We began the new week by walking and talking in the green fields of a tea estate outside Jakarta. Experiencing such calm amid the chaos I realized that all was not lost. As Indonesia started to revive, so did I.

With my time in Jakarta winding down, I often look back and search for answers as to why things went so terribly wrong here. The World Bank made mistakes, and we are learning from them still. One error we have not made and will not make is to turn on Indonesia in its moment of vulnerability. Our relationship with the country and its people will transcend not only this crisis, but also governments and World Bank country directors.

Indonesia has taught me more in the past two years than I have learned elsewhere during the length of my career. I have seen how crisis brings out the best and the worst in people. I have experienced the joy and pain of being deeply involved in a cause. As an economist, I learned a truth often overlooked by people of my ilk: improving people's lives takes more than good economics. It takes a foundation of strong institutions that can embrace change, a message not lost on the World Bank.

We can see this change in Indonesia. The crisis has shown the people of this country that maintaining the progress they achieved before the upheaval requires democracy, respect for human rights, a free press, transparency, intolerance of corruption and the engagement of civil society. These are basic ingredients of a country run for the benefit of all its people, the foundation of truly sustainable and equitable growth. When I arrived in Jakarta, none of this seemed possible. As I leave, all of it is in play, all of it is attainable. So it is with hope, not despair, that I say to my adopted country, sampai bertemu lagi--until we meet again.

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