Saturday, June 13, 1998

Habibie's fate sealed by imploding economy

The Nation (Bangkok)
 Editorial & Opinion

With the economy falling into an abyss and the government on its knees, only new elections can restore credibility, writes Andreas Harsono.

WHEN dozens of people broke into a spacious house in Gunung Sahari Street at the height of the May riots in Jakarta, they knew well that the highly-fenced, dimly-lit building belonged to Indonesia's number one tycoon, Liem Sioe Liong alias Sudono Salim. ''The dog of Suharto,'' brayed one of the uninvited visitors.

The mob entered the house, ransacked the building and took a larger-than-life portrait of Salim out to the street, where they mocked the China-born Indonesian, an old friend of then-President Suharto. Elsewhere throughout Jakarta, Salim's Bank Central Asia, the biggest bank in Indonesia, saw 122 of its 400 branches pillaged. More than 110 automatic teller machines were reportedly damaged by the vandals and stripped of cash.

The message was clear. Massive price hikes, rising unemployment, endemic corruption, rampant cronyism, runaway 
 inflation and repressive government have cumulatively moved the poor to rebel, especially after the slayings of four 
 Indonesian students on May 12.

On May 14-16, thousands of Jakarta's workers, unemployed youths and even children vandalised and set on fire some 
 119 shopping centres, 13 traditional markets, and thousands of houses and cars. A disciplined, student-led movement 
 however later occupied the Indonesian parliament building which eventually forced Suharto to step down on May 21.

A glorious victory?

Not quite, say many observers. The dictator is gone but his corrupt regime remains. Worse still, he left behind a country on the brink of bankruptcy.

Mari Pangestu of the Centre for Strategic and International Studies estimated that unemployment will rise to more than 15 
 million this year, or nearly 20 per cent of the workforce. With food prices rising sharply, this means that as many as 58 million people will soon be in poverty, far above the 22.5 million in January.

''We aren't going to see any investment coming in for a while,'' Pangestu said. ''The more you look at the numbers, the gloomier it gets.''

According to Indonesia watcher A R T Kemasang of the University of Bradford, the ongoing economic crisis might even led to 
 a radicalisation of the masses in the world's fourth most populous country. Without a democratic and popular government, 
 proper economic management, and a fresh injection of funds, Indonesia will face a long season of political instability and economic uncertainty. As the popular credo goes, ''Hungry people are angry people.''

A few hours after Suharto's resignation, hundreds of farmers established bamboo fences and reclaimed hectares of land on 
 the outskirts of Jakarta which belonged to the Suhartos. The villagers said Suharto and his children had unfairly appropriated 
 their land years ago.

Unfortunately Vice President B J Habibie, who took over the top job, is widely known as a Suharto protege. Suharto's hand-picked parliament approved Habibie as vice-president in March despite the disapproval of the military, ruling Golkar 
 party executives, key Muslim organisations and minority groups --especially Christians from the eastern part of Indonesia -- all of whom mostly see him as a sectarian figure, a big spender and an unqualified leader.

Kemasang predicted that four political players must be involved in the process of change -- the Indonesian army, the backward-looking Muslim groups, the intelligentsia, including students, and the peasants.

''The moderate Muslims are more sensible. They are influential because of their size and are probably willing to cooperate for the good of the country,'' said Kemasang.

But Habibie has not, as perhaps the Suhartos had expected, remained silent. In an apparent bid to win public support, 
 Habibie immediately released several political prisoners, met with the riot-hit Chinese traders, allowed the establishment 
 of political parties and promised to hold a general election next year. Opposition leaders, however, who had earlier 
 demanded an election this year, charged that Habibie is only playing for time while trying to consolidate his new regime. 
 Meanwhile, Habibie's economic team demonstrated little support for the eccentric president.

''It's going to be chaotic. Only strongmen, semi-criminals and irrational figures could establish some sort of stability. These warlords will appear everywhere,'' said Rahman Tolleng, a co-founder of the Forum for Democracy, a loosely-organised forum for Jakarta intellectuals and dissidents.

Rahman, a former editor-in-chief of the Suara Karya daily, said without stable political institutions, it is very likely that the May 14 looting will be repeated. People are hungry, the economic situation is deteriorating and the government is very weak.

''I have little confidence in Habibie. That's why he has to step down,'' said Rahman. But the key problem is that anyone holding the top job in Indonesia, whether Habibie, or opposition figures like Muslim leader Amien Rais or nationalist figure Megawati Sukarnoputri, will find it hard to do more for the suffering masses under the present International Monetary Fund austerity measures. They have no choice but to cooperate with the IMF, said to have given Indonesia the ''wrong medicine''.

Rahman said a coalition, involving Amien and Megawati, is the only way out of the political impasse. A new election should be organised to restore public confidence in the government, he said.

Perhaps, said an American diplomat, the worst scenario in Indonesia is not the worsening of the economic crisis, but the political consequences of economic hardship. ''The world cannot afford to have 200 million radical Muslims,'' the diplomat lamented.

Andreas Harsono is The Nation's Jakarta correspondent

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