Sunday, March 15, 1998

The Man in Suharto's Shadow

Andreas Harsono
The Nation

There is no guarantee that Indonesia's new vice-president, BJ Habibie, will eventually succeed Suharto. Despite being elected in a carefully-scripted vice presidential election, many believe that BJ Habibie may not succeed President Suharto although Habibie's supporters, who are mostly members of the influential Association of Indonesian Muslim Intellectuals (ICMI), vow they will do their utmost to champion the 61-year-old engineer.

Lt Gen Yunus Yosfiah, the chief of socio-political affairs of the Indonesian military, has openly displayed the military's support for Habibie.

"It's a big mistake if the nation does not take advantage of one of its best sons who has an excellent mastery of science and technology," he said.

Yosfiah, who led a delegation of officers to meet Suharto to discus Habibie's nomination, said, "He [Suharto] also underlined that Habibie has a vision on national and international affairs."

But many others doubt whether Habibie has the quality to be the No 1 man in the world's fourth most populous country. Retired general Hasnan Habib said in an interview with German magazine Der Spiegel that Habibie is a "100 per cent yes man".

Television host and political commentator Wimar Witoelar added that the power of President Suharto is "so absolute" that whoever is the vice president will be "overshadowed", adding that Habibie is not a political factor to be considered seriously. He believed Habibie will have difficulties in getting the support of the powerful Indonesian military should Suharto be incapacitated some day.

Suharto, however, is among those who favours and speaks highly about Habibie. He once said that Habibie is a "great blessing" to Indonesia.

Born in a remote village near the southern Sulawesi town of Pare-pare, Habibie won a scholarship from the Indonesian government in 1954 to study aircraft construction engineering in Aachen, Germany. After obtaining a doctorate in 1965, he joined the Hamburg-based Messerschmitt Boelkow Blohm (MBB) aircraft manufacturer.

In 1974, Suharto, who had known Habibie since the energetic engineer was a teenager in the southern Sulawesi capital of Ujungpandang, asked him to return home to help develop Indonesia's hi-tech industries. With Suharto's support, Habibie set out to build costly "strategic industries" ranging from steel plants to biotechnology in 1978. His pet project was the IPTN aircraft-manufacturing company, which is building a turboprop commuter plane and developing a US$2 billion national passenger jet.

But it wasn't until 1991 that Habibie's role in politics skyrocketed when he was elected ICMI chairman. Critics said the influential Muslim group was created to balance the Indonesian army which has shown growing opposition to Suharto's rule.

He soon became the busiest cabinet member in Indonesia, holding 26 different positions, from the Islamic organisation to Golkar's ruling party, from hi-tech firms to the honorary chairman of a cancer hospital. However, most of his projects, including the PAL ship-building company and IPTN, became a massive drain of state resources, resulting in an ocean of red ink.

"All of his projects have failed," said Witoelar, adding that he "cannot see what Habibie can do after Suharto passes from the scene".

And Habibie has other problems. Indonesian academician-cum-dissident George J Aditjondro, who conducts a special project to monitor corrupt officials in Indonesia, alleged recently that Habibie's wife, sons and siblings had used Habibie's influence to win tenders in projects under Habibie's patronage.

Muslim columnist Adi Sasono, a close associate of Habibie who looks after the day-to-day affairs of ICMI, conceded that such an allegation did exist but said he had once asked Habibie about it.

"Only two per cent of the contracts are going to his family," said Adi.

Both Adi and Muslim leader Ahmad Sumargono, an ardent supporter of Habibie, also admitted that Suharto's children had initially opposed their father's choice, saying that the influential children, who have the ear of their father, doubted whether Habibie could protect their interests in the post-Suharto period.

Sumargono said it is normal that Habibie spends a lot of money for his projects. He said these projects - from the development of Batam Island to the construction of the airplanes - are huge in nature.

"IPTN has recently won tenders to sell its planes in the US," boasted Sumargono, adding that there were only two countries in the world which could penetrate the US airplane market - Israel and Indonesia.

Thursday, March 12, 1998

Protesters mark Suharto 're-election'

The Nation

JAKARTA, Thursday 12 March 1998 -- A few hours after being sworn-in to his seventh five-year term in office, Indonesian President Suharto, Asia's longest-serving ruler, held a thanksgiving party and gave a rare unexpected interview with state-

Suharto, who has never conducted a press conference or allowed reporters to interview him since the 1970s, stopped and talked for a while with two TVRI reporters in front of his spacious house on Cendana street in the posh Menteng area of Jakarta yesterday.

''I would like to express my gratitude to the Almighty One and to the people of Indonesia, who had trust in me, through their representatives at the People's Consultative Assembly, to lead the nation once again,'' the 77- year-old leader said.

''This is a very heavy duty, especially that we are now having various crises but I believe that the Indonesian people will not leave me struggling alone. I believe that they will support me to overcome the crisis,'' he chuckled.He called on the people to start doing their ''topo broto'' -- a Javanese idiom which translates as doing something ascetic such as fasting or working hard in order to fulfil a wish. The idiom can also mean to live with concern.

Not all Indonesians share his idea. Students and intellectuals reacted angrily with his carefully-scripted re-election, saying the Assembly is nothing but a rubber-stamp institution whose members were mostly hand- picked by Suharto himself.

They held protests in their campuses nationwide, from Jakarta to Yogyakarta to Bandung, the hotbeds of student movements, and even in smaller cities like Padang and Lampung on the west coast of Sumatra.

''Down with Suharto, down with Suharto,'' cheered students at the prestigious Indonesia University in Jakarta. ''Our pattern is going up and up. The other day we had only hundreds. We moved again and had thousands. Today we will mobilise 10,000 students,'' said student leader Amril Chaniago.

The 1,000-strong assembly also officially elected a close aide to Suharto, the 61-year-old BJ Habibie, Indonesia's technology tsar, as the new vice-president, replacing the outgoing Try Sutrisno.

Critics here and abroad frequently said the carefully-scripted presidential and vice-presidential elections are merely to show the outside world that Indonesia has a legal and democratic mechanism to run the country.

In fact, Suharto has the legal power to appoint around 80 per cent of the assembly members and has installed most of his sons, daughters and cousins, as well as close aides. Habibie is also his hand-picked deputy.

Assembly Speaker Harmoko, another Suharto associate and the chairman of Suharto's Golkar party, led the swearing-in ceremonies himself for both Suharto and Habibie.Many believe yesterday's ceremony is likely to mark Suharto's last election. Indonesia is on the brink of a serious economic collapse as its currency has lost almost 75 per cent of its value to the American dollar. The International Monetary Fund last week decided to delay the disbursement of its US$43 billion package to bail out the ailing economy.

On the Indonesian Christian University campus in Jakarta, around 100 students put on a play with students clad in mummy-like dresses. Each wore a letter which read ''Demokrasi'' as if trying to send a message that democracy is dead in the country.

Although in his swearing-in speech, Suharto rhetorically pledged that he would like to seek support as well as criticism from the public, whether it is delivered politely or bluntly, the Jakarta police, did their business as usual.

A human rights worker told The Nation yesterday that the police had officially charged nine activists with the notorious subversion law whose maximum penalty is death. The nine, who include Indonesian film director Ratna Sarumpaet, tried on Tuesday to hold a meeting in a Jakarta restaurant but only managed to talk for five minutes before officers raided the place and took them away.

Sarumpaet is the coordinator of a loosely-organised alliance between opposition leader Megawati Sukarnoputri and Muslim figure Amien Rais, established earlier this year to challenge the re-election of Suharto.

In Yogyakarta, around 17,000 students staged a four-hour protest, shouting anti-Suharto slogans and parading around the huge campus of Gajah Mada University in the heart of the city, which is around 500 kilometres east of Jakarta.

Amien Rais and noted lecturer Teuku Jakob joined the protest and delivered their speeches. Amien, who has openly stated that he is prepared to run for the presidency, said he will give Suharto six months to overcome the crisis.

He said Suharto had gained a fortune of around $40 billion while in power since 1965. ''It's not something special if he uses his own money to bail out the Indonesian ailing economy,'' thundered Amien.

Students also burned a huge picture of Suharto. Most of them wore the red-and-white headband, the colours of Indonesia's flag. ''Decrease prices and down with Suharto,'' they repeatedly chanted. Some students also painted their faces and held street plays, depicting corrupt officials who dragged their country into suffering.

Wednesday, March 11, 1998

IMF bailout under cloud

The Nation

JAKARTA, 11 March 1998 -- The US$43-billion economic bailout for Indonesia was shrouded in greater uncertainties Tuesday after President Suharto was appointed to a seventh five-year term amid angry street protests and an intensified attack by people close to him on the International Monetary Fund.

A leading economist and a high-ranking source predicted that termination of the IMF package was ''more likely than ever'' now that Suharto has fully consolidated his position. Tuesday, he formally told the People's Consultative Assembly (MPR) that a trusted aide, Research and Technology Minister Jusuf Habibie, was his choice for vice-president.

Kwik Kian Gie, one of Indonesia's best-known economists, who had almost single-handedly warned about the current economist crisis since 1989, told The Nation that President Suharto had given ''clear hints'' on how he would deal with the IMF since Sunday.

Suharto told some parliament members that the IMF's requirement of reforms was based on liberal economic principles, and not in tune with Indonesia's much-revered Constitution which cherishes economy built upon family principles.

''Reading between the lines, he will terminate the cooperation as it is against the Constitution,'' said Kwik, predicting that Suharto might wait for some days, at least until the establishment of his new cabinet, before taking such a bold step.

But a highly placed source predicted Suharto might even move sooner than that. He said Suharto was probably ''angered'' with the IMF decision to delay the second US$3 billion disbursement of bailout fund. IMF officials suggested that they are going to wait until early April to see political developments and whether its proposed reforms are taking place.

Television host Wimar Witoelar, meanwhile, claimed ''scapegoating politics'' is the name of the game the Suharto government has been playing. Witoelar warned against the practice of ''very extremely narrow nationalism'' that has turned Indonesians' fingers toward the Chinese minority, the United States andthe IMF.

The 1,000-member MPR rose to its feet clapping and cheering when it unanimously re-elected the 76-year-old retired army general, Asia's longest serving leader, who has ruled for 32 years.

In Washington, IMF chief Michel Camdessus warned on Monday that Asia's economic recovery could unravel unless Indonesia carried out reforms agreed to under a $43-billion economic bailout deal.

No formal vote was taken by the MPR after all five factions within the grouping nominated only him. Instead delegates elected him by acclamation, shouting ''agree, agree'' when the assembly speaker asked if they wanted Suharto to stay in power.

Some raised their hands as the group celebrated with a standing ovation that echoed through Jakarta's national Parliament building.

Suharto stood for election unopposed after all rivals were shut out of the race by a tightly controlled political system. Many among the government appointees and legislators in the assembly are Suharto's relatives, friends and military officials.

Suharto, who assumed power in 1966, will be sworn in Wednesday.

Security forces have banned demonstrations for several weeks while the assembly convenes. Tens of thousands of security personnel have been placed on alert.

At least 10 people were arrested after police jostled and kicked protesters at one demonstration in a Jakarta park.

''What we saw was a peaceful demonstration of people exercising democratic rights,'' said Edmund McWilliams, political counsellor at the US Embassy, who attended the protest as an observer.

It was ''broken up in a rather vigorous, forceful, physical way'', he said.

Thousands of students staged pro-democracy rallies across the country Tuesday.

More than 1,000 students also rallied peacefully in front of the library building of the state Teachers University, a witness said.

In the East Java province capital of Surabaya, some 1,000 students rallied at the state Airlangga University campus, a resident who witnessed the event said. In the West Sumatra province capital of Padang, more than 1,000 Bung Hatta University students rallied for about two hours, demanding reforms and protesting against Suharto's reappointment.

More than 1,000 students of the Islamic University of Bandung and the University of Pasundan joined forces in the West Java province capital of Bandung and rallied against Suharto.

Worried by the potential for further unrest, the MPR on Monday extended Suharto's already ample authority by granting him wide emergency powers.

Meanwhile, a rift with the IMF deepened as assembly delegates accused the Washington-based lending agency of trampling on Indonesia's sovereignty and Suharto's family blistered the Fund in a series of local newspaper reports.

Four of Suharto's children conceded that the IMF funds were important, but not if they entailed the surrendering of the nation's control over its economic policies. They voiced particular displeasure with the IMF's refusal to support Indonesia's controversial plan to implement a currency board system.

''The rupiah may crumble, but our dignity must not,'' said one MPR delegate, Jusuf Kalla.

The comments echoed a statement on Sunday by Suharto, who proclaimed that the IMF reforms were ''not in line with the spirit'' of Indonesia's Constitution.

The president Tuesday was formally approached by political faction leaders of the assembly to ascertain his choice for vice-president.

''He says we need Habibie in order to prepare ourselves for the industrialisation era,'' Lt Gen Yunus Yosfiah, head of the military faction in the MPR, said after meeting Suharto.

Habibie, whose endorsement as vice-president became assured last month after he emerged as the only candidate for the post, is to be formally elected by the MPR Wednesday after Suharto's inauguration.

Tuesday, March 03, 1998

Parents Fear For Their Children's Milk

by Andreas Harsono

JAKARTA, 3 March 1998 -- Journalists are not immune from the crisis which is now hitting Indonesia. On a recent Sunday, my wife and I went to a big wholesaler looking for Enfrapro baby milk powder for our one-year old son Norman. Enfrapro is a brand name milk produced by PT Sugizindo here under a licensing agreement with the U.S.-based Mead Johnson corporation.

But we couldn't find any. The huge Macro wholesaler, a subsidiary of the Dutch firm Macro which operates warehouse-like supermarkets in Indonesia, also displayed empty shelves. Not only baby milk, but also other items such as cooking oil, sugar, fruit juices and other brands of baby milk were nowhere to be found.

Other shoppers brought large carriages and carried off whatever was left in the store. We didn't, deciding instead to look for the milk at a nearby Hero supermarket. It is a smaller, middle-to-upper class chain supermarket located close to our house. But once again no Enfapro. Hero had more empty shelves.

We went to the WalMart on Tuesday, a huge supermarket operated by American managers, as well as the Mega M department store. But again we could not find Enfapro in either supermarket, both of which are controlled by tycoon James Riadi, the scion of the Lippo business group.

A manager at one of the supermarkets told us that not only Mead Johnson but also Nestle, Unilever and Procter & Gamble, three multinational corporations producing canned foods, shampoo and soaps, had already stopped supplying his store.

"They cannot keep operating, as some of their materials are imported, such as the foil on the can," he said, adding that the expatriate supervisors and consultants, also paid in U.S. dollars, have already been sent home.

Mine is not the only family frightened by the sudden shortage of staple items in Indonesia. The Asian economic crisis has reduced the value of the rupiah by 300 percent against the American dollar since July, and many corporations have halted production. Mass dismissals maeant that more than 10 million workers have lost their jobs -- about five percent of the total population.

Dramatic scenes of people searching for staple foods and products are seen everywhere. Panicked housewives are spotted in supermarkets and traditional markets. Men drive across the vast metropolitan area just to help their wives to get the most-needed stocks. One senior editor has even ordered his servants to plant cassava, a popular vegetable, in his garden. "It's like the Japanese occupation period," he smiled.

Rumors are circulating that the anti-Chinese sentiment is being deliberately fanned to divert public anger away from President Suharto

Worse than that, in more than two dozen small towns across Indonesia, villagers protested against and attacked Chinese-owned shops because of price hikes. I went to Pasuruan, a small town about 500 kilometers east of Jakarta, for three days and interviewed dozens of villagers after one attack. The straightforward villagers simply said that they could not afford the price hikes and blamed the Chinese traders.

"We watched television and the government said the prices are fixed and the stocks are enough. But why have these Chinese shop owners increased the prices?" said Muhammad Jamil, a 37-year-old farmer. "Our income stays the same, but prices keep going up. If the prices come down, the problems will be solved. That's the solution. Just bring down the prices."

But bringing down the prices is not an easy solution. It is an extremely complicated matter. Unpaid foreign loans, rising exchange rates, less confidence toward the government, rivalry among government officials, and an aging president without an apparent heir are only a few of the complexities.

A merchant selling imported goods, for instance, who paid the U.S. equivalent of $1 for a product last June, today has to pay $3 or more for the same goods, if he can get them (some distributors will not accept any amount of rupiah for products because of the great uncertainty about its value). If he sells what stocks he has at the June prices, he will not earn enough to replace them and will probably go bankrupt.

Rumors are also circulating that the anti-Chinese sentiment is being deliberately fanned by the military to divert public anger away from President Suharto and his family. It is widely known that the Suhartos have used their power to accumulate vast wealth reliably estimated at $16 billion.

But in a crisis like today's, even President Suharto, who has been in power since 1965 and is considered the most powerful man in Indonesia, doesn't have a solution. He has tried many different tactics to deal with the crisis and the market has always responded negatively. Critics of the government say Suharto is part of the problem instead of the solution. One prominent exile even says that Suharto is the most corrupt head of state in the world.

But compared with those villagers, my small family should be considered fortunate. We still have some money. I can still write and sometimes some foreign news organizations ask me to write and pay me in foreign currencies. But Muhammad Jamil, the farmer in Pasuruan, can only get 2,500 rupiah -- about $0.35 cents -- for a day's work in the fields under the scorching sun.

My wife also bought a two-month stock of Enfapro in December when its price increased from 12,000 rupiah per can to between 17,000 and 18,000. Our son Norman usually consumes two 400-gram cans of Enfapro every week. And we still have eight more cans at home. Perhaps, after Norman finishes the eight cans, we should change his milk.

Now, like other Indonesians, we are just trying to ensure our own survival. My wife has decided to use less cooking oil. We mostly boil our food. We also dimmed the light in some of our rooms. I have already asked our service station to give my car a tune-up to save gasoline. For a while there'll be no more shopping at the glittering Lippo Supermal, where Wal Mart and Mega M are located, no more sipping a superb Chinese tea in a corner of the shopping mall.

Nobody knows what will happen in Indonesia. It is again the year of living dangerously.

Albion Monitor March 3, 1998 (