| Home > South-East Asia >> Indonesia | |
ASIET NetNews Number 10 - March 16-22, 1998
Political/economic crisisBloody Lampung: scores arrested & hurt Student protest in Indonesia turns violent Continue to raise the banner of the people's struggle
Human rights/lawGovernment's delay to blame for woes Surge in Indonesian migrants US adopts 'wait-and-see' policy
Arms/armed forcesThree PRD leaders arrested in Jakarta Three students face subversion charges American ctivist ordered out Arrested playwright, activists sue police
PoliticsQuestions over unity in the military US training of Indonesia troops goes on
MiscellaneousSecret report damns Indonesia Trade Minister snubs IMF bid over reforms Amien Rais on Suharto and other issues Stand-Off In Jakarta Soeharto digs in with his all-crony Cabinet Cronyism hangs heavy over cabinet
Ministers' benefits 'bigger than salaries'
| Democratic struggle |
[The following is an abridged translation of a chronology of an action by the Concerned People's Committee (Aksi Komete Peduli Rakyat). Please note that this was the second day of protest at the Unila university. 120 were arrested on the first day and released after protests and lobbying. Eight people suffered broken bones, 55 are unaccounted for and two are suspected to have been killed - Max Lane, ASIET.]
Once again, an action rejecting Suharto was held at the Unila university campus. The battle between students and youth resulted in a number of students being wounded and around 60 people arrested.
The action by students from the Committee of Concerned people, began just before 9.30am to the sounds of a megaphone siren and a drum in front of the Sociology and Politics Faculty building at the Unila University. The marshal ordered the participants to sing the song "Indonesia Raya".
The action demanded political and economic reforms. Posters at the action read "The people will surely win", "Elections must be honest and fair", "Join the demo - who is afraid", "Suharto is impotent, step down" and "Stop nepotism".
At 9.45am, the marshal announced that one hundred student demonstrators from the Muhamadiyan Metro University (UMM) had been arrested by security forces near Bundaran Rajabasa. One of the participants gave political speech along with shouts of "Viva the People, Viva Democracy" and "Overthrow Suharto". He explained that the aim of the action was to demand political and economic change.
Just before 10am, more students arrived bringing the number of demonstrators from UBL, UNILA and UTB, along with high-school students and youth, to around 60. "Reject Suharto", "Hang Suharto" they shouted. The rally became more enthusiastic when students from UMM arrived bringing the total demonstrators to 200. They also brought banners which read "Reform or death", "Reduce prices" and "The three demands: political reform, reject Suharto, reduce prices".
At 10.30am, the rally had grown to 250 demonstrators. The atmosphere became more heated when a student read the Proclamation IV followed by a poem read by a women which demanded the dictator [Suharto] step down. Shouts echoed across the campus. A number of students came forward wearing anti-riot gear made from cardboard which read "Soldiers like riots". The "Soldier Clowns" marched to the sound of a drum.
The action became even more heated when the marshal invited Intelligence agents to give a speech about the political situation. Unsure of themselves, they ran away from the demonstration.
Just before 11am, they formed into a column to begin a "long march". Now 600 strong, the rally was escorted by the students wearing cardboard anti-riot gear who "protected" the action and yelled "the people together will not be defeated".
They moved off a few minutes later -- the numbers of demonstrators now in the thousands -- towards the exit to the Unila campus, stopping to sing "Hello-Hello Bandung". Around 20 intelligence agents followed the march.
When they reached the campus gates it was blocked by four large anti-riot trucks and 20 military vehicles from the Bandar Lampung Kodim (Komando Dearah Militer, District Military Command). The road from the Rajabasa bus terminal had already been closed of by police. The students continued to move toward the military blockade, trying to force their way through. Two more trucks arrived loaded with fully equipped troops with tear-gas.
By 11.30, the thousands of students had became very heated because they were prevented from going out into the streets. Yelling "Overthrow Suharto', a number of demonstrators began throwing rocks at the military blockade in front of the gates. Political speeches were given rejecting the New Order regime. Again they tried to forced their way through the blockade yelling "Reform or death" and abusing the soldiers, calling them the "dogs of the New Order"
At 12.15pm, two more truck loads of anti-riot troops arrived boosting their numbers to around 500.
As scores more students arrived from STM Negeri, a fire truck suddenly attacked the students as the march was going to return the campus, and from behind, the military began throwing stones at the demonstrators. Demonstrators at the front responded by forming a blockade, while those at the rear were surprised by the rock throwing. Some of the demonstrators threw rocks back at the troops. The marshals instructed them to stay calm and not be provoked,
The military began attacking with tear-gas. Although the rally became disorganised, those at the front were ready to intercept it, while those in the rear tightened their ranks and looked for stones. When those at the front withdrew, they were replaced by others. Students and troops continued to pelt each other with stones.
The military then moved in to break up the action, hitting demonstrators, dragging others away. One student who was badly beaten, dragged of and arrested, was a women student from STM. Seeing this, local people began screaming with women shouting "God is great" [an Islamic call to battle], "The military are brutal, stop the beating". Some of the women wanted to join in the action but were prevented by the military who threatened them with pistols.
Just before 12.30pm the action was closed with the reading of a statement and a prayer. But the security personal again showed the arrogance of the New Order dictatorship. In front of local people they continued to beat demonstrators indiscriminately and even more women were arrested and beaten. At 12.45pm, a women who had been hit in the head collapsed unconscious in front of the Al-Was'i Mosque.
At 1.30pm, two demonstrators returning home on their motorbike were stopped at the Unila campus gates and arrested. They were taken away in a military vehicle and their whereabouts are still unknown. Fifteen minutes later, around 50 demonstrators were taken away and a number of others who had been wounded were taken to several hospitals around Bandar Lampung. Their condition is still unknown.
At 2pm, the demonstration still continued with students and military pelting each other with stones. At the same time, two police who were negotiating with university staff came out of the rector's office and were grabbed by demonstrators. It was announced that "We will hold the two police officers until 5.30pm, because our comrades are being held so now we will detain them, until our comrades are released we will not let these two police officers go".
At 4.30pm, two members of Mapla, Ridwan and Firman were dragged from their motorbikes and trodden on. 36 students being held on the campus have also begun a hunger strike.
[Translated by James Balowski]
Jakarta -- Indonesian police and students clashed in the West Java city of Bandung as security forces sought to prevent campus protests against the government spilling onto the streets, the Kompas newspaper reported on Thursday.
About 100 students from the Indonesian Cooperatives Institute (Ikopin) at Jatinangor were beaten back by around 150 riot police as they tried to leave the campus grounds during a protest on Wednesday, the report said.
The students had earlier tried to negotiate with security forces to march off campus, it said.
"More than 10 students received bruises on their hands and backs as a result of being hit and trodden on, however none were treated in hospital," the report said.
The paper also reported that one student was hurt by security forces in a protest at the University of March 11th (UNS) in the Central Java town of Solo on Tuesday was still in hospital.
Brief clashes have also taken place in the national capital Jakarta and the city of Surabaya in East Java as students tried to leave their campuses in protest rallies.
A 25-day ban on street protest imposed around the People's Consultative Assembly (MPR) session expired on Wednesday and students from a number of universities on Java were planning more protests on Thursday.
The MPR session ended last week after electing President Suharto to a seventh five-year term.
Many of the protests have been anti-government in tone calling for political and economic reform, including an end to Suharto's 32-year rule.
Armed forces commander General Wiranto said last week the military supported dialogue with the students but did not want unruly and disruptive street protests.
"The armed forces (ABRI) have opened the door and made the invitation. We are now designing an effective way to have a dialogue with the students," Kompas quoted Wiranto as saying on Wednesday.
Jakarta -- Police used tear gas, clubs and high-pressure water hoses to subdue thousands of stone-throwing student protesters today. At least 60 people were detained in the most violent of the anti-government demonstrations that began erupting on campuses weeks ago.
Organizers of the demonstration at Lampung University in Bandarlampung on Sumatra island said police also fired warning shots at the protesters. Authorities disputed that account, saying shots were fired but not by officers.
The protest turned violent when some of the several thousand students began throwing stones. As in the many other campus protests around Indonesia in recent weeks, the students were demanding the resignation of President Suharto, whom they hold responsible for the collapse of the Indonesian currency, which has caused prices to soar.
Hundreds of anti-riot police stormed the campus, firing at least two warning shots and three volleys of tear gas, said Mahendra Utama, a law student.
Officers with sticks beat dozens of protesters, many of them women, Utama said. Fire trucks were used to turn high-pressure water hoses on the protesters.
Police Col. Gendro Budi Santoso said 60 people were detained for questioning. Police are investigating reports that shots were fired, he told The Associated Press by telephone from Bandarlampung, 220 miles northwest of Jakarta.
Several thousand students staged peaceful anti-government rallies today on at least three campuses in Jakarta and at a university in the city of Bandung, 75 miles east of the capital.
On Bali Island, a total of 1,300 students demonstrated at two universities against Suharto's new Cabinet, which includes a close business partner and his eldest daughter.
To all of the Indonesian people who are patriots and continue to struggle from the Central Leadership Committee of the People's Democratic Party (PRD) -- February 20, 1998.
The national situation
The Suharto regime, which represents the capitalist interests of the Suharto family and relatives, is the cause of the destruction of the people's economy. Since taking power, Suharto has succeeded in exploiting the wealth of the people for the interests of his family and relatives. The destruction of the Indonesian economy has also been caused by the contradictions of the economic and political interests of imperialism in Indonesia.
The Suharto government which is corrupt and ridden with manipulation, has given birth to a capitalist system which is decayed and inefficient. The private debt (owed by the Suharto family) can no longer be tolerated by the interests of international capitalism (imperialism), which in this instance is represented by the International Monetary Fund and the World Bank. The solution offered by the IMF and the World Bank is in the interests of imperialism (the US and Europe). While the Currency Board System, CBS, (1) represents the interests of the Suharto family, relatives and domestic capitalists.
Both of these solutions are far from the economic interests of the people, who will certainly suffer more from the destruction of their economy. International capitalism (imperialism), represented by the IMF and the World Bank, certainly want economic and political change in Indonesia. Imperialism want's a new regime which can guarantee the efficient running of international capitalism in Indonesia and which can fully control the Indonesian economy. Thus the wishes of imperialism, in this case the IMF and the World Bank, are inconsistent, because there is no opposition which is truly able to replace Suharto and safeguard imperialism's interests in Indonesia.
A CBS which is regulated by the state/government, and which is still being considered by the Suharto regime, is in the interests of restoring the economic power of Suharto's family and relatives. It is clear that Suharto's family and relatives want to be able to rebuild [their economic power] through overseas loans. But the [payment of] the debt will left to the people, in this case the state, and is the [same kind of] greed which has been going on for more than 30 years and which has milked the people and the country. The People's Consultative Assembly, MPR (2), has already been set up to again choose Suharto as president and Habibie as vice- president. The MPR is a puppet of Suharto, paid to ensure that he stays in power. The MPR is a grave dug by Suharto himself and for himself and the political system of the New Order which he created, because the people will continue to rise up to resist the dictatorship until the final bloody moment.
The worsening economic and political situation will result in total bankruptcy. Indonesia is not a safe place to invest capital as long as Suharto is in power. There is no other choice for the international community other than supporting the people's struggle to overthrow Suharto and helping the people to build a more democratic economic and political system.
Opposition figure such as Megawati Sukarnoputri, Amien Rais, Emil Salim, Sri Bintang Pamungkas and Budiman Sudjatmiko, have become more self-confident because there is an increasingly strong peoples movement to overthrow Suharto. However, these opposition figures will only get the support of the people if they are consistent and ready [to fight alongside] the people's struggle for the people's sovereignty, have the courage to face the risks, to unite and be together with the people in overthrowing the Suharto dictatorship.
In the course of the emerging mass-people's struggle, the people have paid little attention to the opposition figures which have emerged. Although there are many opposition figures, there are also many who are not ready [to do this] because they are afraid of Suharto's threats. Meanwhile the people's suffering worsens. They are getting hungrier, prices are rising and human rights are being trampled upon. The people do not only want to replace the Suharto dictatorship, but they also want to reorganise the economic and political system and replace it with a system which is pro-people and is better able to guarantee the people's sovereignty, social justice and democracy.
The people now believe that the only solution for the Indonesian nation is to overthrow the Suharto dictatorship. If a constitutional path cannot be followed because it has been corrupted and become anti-people, the people will move with the law of revolution. That is a people's uprising to replace the Suharto dictatorship, the government and all of the institutions which are vile and decayed, with a sovereign people's government which is just and democratic. Only in this way can political and economic democracy be built by the people.
The puppet MPR/DPR (3) which has been bribed by Suharto must be replaced by the people. An independent and sovereign People's Council (Dewan Rakyat) must be established to replace the function of the puppet DPR/MPR. It must be establish at all levels: the hamlet, village, sub-district, city, regency, province and nationally. People's councils must also be established on campuses, schools, factories and offices.
What must be done - the pressing tasks of the people
1. Establish an Independent People's Council (DRM) in all regions, places of work and study.
All of those people struggling for democracy must build the DRM. Those who will sit on the council should be all of the local representatives and representatives of the functional groups, representatives of all of the [economic] sectors and professions, [political] parties and independent mass organisations which wish to struggle with the people for democracy. This council will be the highest instrument of the people's struggle, because it will be established on the people's initiative. The first task of the council is to select the leaders of the people which are virtuous, courageous and ready [to struggle for the people].
2. Continue to take the people's demands to those in power!
Use all means to struggle to carry the central demands [of the people] on the government. The central demands of the people are:
3. Launch protests and strikes!Reject the results of the 1997 general election and abolish the puppet DPR/MPR; Reject the 1998 session of the MPR and the appointment of Suharto as president; Reduce prices; Arrest and try Suharto, his family and relatives as the cause of the people's suffering; Withdraw the five repressive political laws (4); Nationalise all of the economic asses of Suharto and his family and relatives; Establish an independent people's council.
The people must continue to resist with strikes everywhere: on campus, in factories, offices and schools. To seize, occupy and control all of these places. End all productive work, transportation and education which is anti-people. Launch general strikes at the city, provisional and national level, and in all [economic] sectors. The demands of all sectors, professions and regions must be taken up together with the central demands of the people.
4. End conflicts between the people and unite to overthrow Suharto!
End conflicts and hatred between religious groups, ethnic groups and non-Chinese and Chinese. These conflicts are politically engineered by the Suharto regime to play one side off against the other. The aim of this manipulation is to cover up the fact that Suharto is the cause of the problems and the suffering of the people, and to save Suharto himself [from being the target]. The people must unite to resist Suharto because he is the cause of all of the people's suffering. The people must understand that Suharto's wealth is as much as $US 40 billion. Suharto is the third richest person [in the world] after Bill Gates (US) and the Sultan of Brunei. All of this wealth is owned by the people and must be returned to the hungry people.
Instructions to all PRD cadre
To all PRD cadre throughout the country. Our task at the moment is to:
Continue to be firm and ready to join with the people's struggle until the people win and are fully in power. All that we have suffered, the deaths, jailings, abuse and insults, are not as great as the suffering the people. Our blood and tears will increase and broaden the flames of the people's struggle to bring down the Suharto dictatorship and establish a genuine democracy.Help the people to build a genuine people's council at all regional levels and places of work and study; Help the people in demanding their rights to fulfill their economic needs (stomachs), that is in retaking the productive sectors with the benefits of production to be used by the people in a just manner; Help the people to launch a mass struggle though strikes, protest actions and so on as the tool of the people's struggle.
[In the name of the Central Leadership of the PRD (KPP- PRD), Mirah Mahardhika]
Translator's notes:
[Translated by James Balowski]In January/February, the government proposed setting up a currency board to peg the Rupiah at 5,000 to the US dollar. The plan has been widely criticised by the IMF. the World Bank and the US. MPR: Mejalis Permusyawaratan Rakyat, People's Consultative Assembly. The highest legislative body in the country with 1,000 members, 425 of whom are elected with the remainder being appointed by the president. It meets once every five years (usually around a year after the general elections) to hear an outgoing report from the president, enact the Broad Outlines of State Policy (Garis Besar Haluan Negara, GBHN) and to vote on nominations for the president and vice-president. DPR: Dewan Perwakilan Rakyat, Peoples Representative Assembly (Parliament). Consisting of 500 members, 425 elected from the three officially recognised political parties during the general elections: Golkar (the state party), the United Development Party and the Indonesian Democratic Party. The remaining 75 members are appointed by the president from the military (who are not allowed to vote). The five repressive political laws were passed in 1985. They allow only three recognised political parties; ban party activity from villages and small towns; allow for the government appointment of 575 non-elected members (75 representing the military) to the MPR; impose a single state-defined ideology on all social, political and cultural organisations; and gives the state the right to intervene in the internal affairs of organisations.
| Political/economic crisis |
Jakarta -- Indonesia's economic woes should be blamed on the government's failure to implement reforms, not on deficiencies in the International Monetary Fund's programme for the country, the agency's chief, Mr Michel Camdessus, told Time magazine in an interview.
His comments came as President Suharto's new Cabinet held its first meeting, and investors watched to see if Indonesia would soften its stance towards the IMF or take an increasingly nationalistic position.
The IMF has postponed a decision on the release of a second tranche of US$3 billion (S$4.9 billion) from its more than US$40 billion bail-out package for the country, and the government has been seen as slow to implement reforms agreed to.
Indonesia has said that it would not bow to outside interference in national affairs, and advisers of President Suharto have said they were frustrated with the failure of the IMF to stem the rupiah's slide.
Mr Suharto has also been considering pegging the rupiah to the US dollar -- a move vigorously opposed by the IMF as premature.
"The programme has not delivered all its potential because it has been either not implemented fully or was circumvented," Mr Camdessus said in the interview, to be published in the next issue of Time.
He also reiterated a warning that the agency would stop the bail-out package for Indonesia if Jakarta failed to implement the economic reforms tied to it.
"We have never hesitated to interrupt our financing when a country doesn't fulfill its commitment," he said when asked what would happen if Mr Suharto did not implement the reforms.
Asked whether not disbursing funds would worsen the crisis in Indonesia, he replied: "I would be taking more risks for the world if I were to ignore an agreement signed with a country."
A default by Indonesia "would be extremely serious, not only for the world but for the country itself... to renounce this now would be to renounce an undertaking seen by the entire world as the best course for the country", he added.
Mr Camdessus said the most important lesson from the Asian financial crisis was that the turmoil "is a formidable impetus for us to continue our efforts to achieve good governance, to make institutional changes, to fight against corruption". In a separate development, Thomson Bankwatch said in a report that it was cutting Indonesia's sovereign rating to "B-" from "B+".
"We remain concerned over the diminishing prospects for future reform efforts, particularly in light of Mr Suharto's recent Cabinet selections," Ms Betty Starkey, director of sovereign risk for the firm said.
She said the "government's continued evasion of economic reforms" had led to a "critical delay in the disbursement of multilateral assistance", thereby worsening Indonesia's solvency and liquidity problems.
Murray Hiebert with S. Jayasankaran in Kuala Lumpur -- A late- afternoon telephone call alarmed the retired Malaysian civil servant. In a frightened voice, a woman told him she had just arrived by boat from Indonesia, and was calling from outside his Kuala Lumpur apartment complex. His address was the only one she knew in Malaysia: A maid had given it to her after finding it in the house of a friend the official had visited in Jakarta. She had only the clothes on her back, she said, pleading for a job as his maid.
"I was flabbergasted," the man says. "I did a humanitarian act and gave her some money for food, but I made it clear I wasn't looking for help." The official says he hopes he won't receive any more calls from recently arrived Indonesians.
His wish may be in vain. Malaysian officials worry that mounting economic hardship, unemployment and drought in neighbouring Indonesia could turn a decades-long trickle of illegal immigrants into an uncontrollable flood of job-hunters. Confronting an economic downturn of their own, Malaysians fear that an onslaught of migrants could strain the country's social services, create a surge in crime and heighten social tensions.
The first wave has already started: Between February 9 and March 1, Malaysian police tracked 332 boat landings and detained 3,971 illegal immigrants, according to Yusof Mohamad Said, deputy director of internal security and public order. That's equal to three-quarters of the number of illegal immigrants in all of last year, when police detected 444 landings and arrested 5,432 people. Thousands of others are assumed to have entered the country without being discovered. Indonesians typically account for almost all illegal aliens that arrive in Malaysia by boat.
And more are expected. Inspector-General of Police Rahim Noor says he has reports indicating that another 5,000 Indonesians are waiting for boats at various islands off the coast of Sumatra, across the Strait of Malacca from Peninsular Malaysia. "We expect the problem to get more serious as the economic situation in Indonesia gets worse," Rahim says.
Many of the recent arrivals talk of unemployment and drought back home. Those arrested said "it was better to eat rice in our jails, rather than survive on sweet potatoes or tapioca back in their villages," says Yusof. "They have the impression that there are still a lot of jobs in Malaysia," adds a local journalist who interviewed detained Indonesians. "The timing is bad," warns Abdul Razak Baginda, head of the Malaysian Strategic Research Centre. "If we have to monitor the illegals, catch them, register them and send them back home, this is an increased expense Malaysia can ill-afford." Razak refers to a government decision late last year to slash its budget by 18% in an attempt to tackle the economic crisis.
"The social problems could be tremendous," adds Mak Joon Num, research director at the Malaysian Institute of Maritime Affairs, a think-tank. "Officials fear crime will go up. The illegals could bring a lot of disease. They'll create an underground economy that will be hard to keep track of. We could see competition for jobs between legal Indonesians and illegals."
Indeed, many Malaysians blame illegal aliens for an upsurge in burglaries and other crimes. Yet while crime rose 38% in 1997, compared with 1996, police say these migrants committed only 1.3% of crimes reported last year.
Police officials told the REVIEW that all of the detained refugees are pribumi, or indigenous Indonesians. None are from Indonesia's Chinese minority, whose businessmen control about 70% of the country's corporate wealth. Observers assume that the ethnic Chinese would prefer to go to Singapore, the only Southeast Asian state that has a Chinese majority.
Although recent data on the number of Indonesian illegal immigrants to Singapore were not available, the island state is clearly concerned. Singapore police say they've stepped up sea patrols to stop would-be refugees, and the Ministry of Home Affairs made a point of reiterating in March that punishment for illegal immigrants is imprisonment of up to six months and three strokes of the cane, followed by repatriation.
Most of those who arrive in Malaysia come on one of the many small ferry boats carrying 20-50 passengers that regularly ply the Strait of Malacca. Travelling at night, they usually come ashore in sparsely populated parts of southern and central Peninsular Malaysia. Not all of them make it. Indonesian and Malaysian papers have reported several cases of boats overcrowded with migrant workers sinking.
Meanwhile, marine police have bolstered their patrols along Malaysia's 2,000-kilometre coastline in recent weeks in an attempt to deter new arrivals. Soldiers and police mount frequent night raids on squatter villages looking for undocumented residents. Yusof said that by early March, the country's 10 detention centres held 11,000 illegal immigrants and had room for only 1,000 more.
The government has authorized police to use the Internal Security Act against people caught helping illegals. This allows officials to detain without trial anyone believed to pose a threat to national security. Yusof has called on the public to use the power of citizen's arrest to deter illegal immigrants and proposed that the government introduce caning to make them think twice before coming.
Even prior to the refugee crisis, Malaysia had about 1.2 million legal foreign workers, a hefty number for a country with a population of 21 million. Another 800,000 workers are thought to be in Malaysia illegally. About three-quarters of both groups come from Indonesia.
For Indonesia's part, Payaman Simanjuntak, a senior Manpower Ministry official, says Jakarta is trying to stem the exodus by tightening border security and monitoring agents who recruit workers to go abroad. But that doesn't address the underlying problem: At least 8.5 million Indonesians are unemployed and that number is expected to swell.
Malaysian Prime Minister Mahathir Mohamad says that Kuala Lumpur will expel those arrested, even though they come from a fellow Asean country. He says that other Asean governments recently "agreed that it is Malaysia's right to repatriate the illegals."
But not all analysts are convinced that harsh measures will stem the flow. "Instead of focusing on negative measures, we need to think with Indonesia, regional countries and the international community about what to do if Indonesia can't handle this crisis," warns Mak of the Institute of Maritime Affairs.
Leon Hadar -- The Clinton Administration, frustrated over its inability to persuade President Suharto to embrace economic and political reforms, has decided to adopt a "wait-and-see" policy towards Jakarta, sources say.
Washington plans to begin distancing itself from the Suharto regime and to work with the International Monetary Fund (IMF), the European Union (EU), Japan and other trade and military allies in East Asia to encourage economic and political changes inside Indonesia.
But the US will refrain from taking any unilateral steps to force change in Jakarta -- such as cutting military and economic aid or worse, supporting a military coup against the Indonesian leader, the sources add.
Recent developments have convinced most experts in the US government that Mr Suharto has decided to pursue a more confrontational policy towards the US. This includes the re- election of Mr Suharto for a seventh five-year term on Tuesday, the election of B J Habibie as Vice-President, and the expected naming of a new cabinet dominated by old-fashioned economic nationalists over some of the country's leading economic reformers.
The fear is that Mr Suharto's strategy is to ignite anti-Western and nationalist sentiment in the country by blaming the US and the IMF for his country's economic problems.
"We are not going to play into Suharto's hands by telling the world that we can't or don't want to work with him," explained one US official. "But, at the same time, we need to send him a strong message that our patience with him is starting to run out." US officials say they have begun a process of "reassessment" of its bilateral relations with Indonesia, following the clear signals from Jakarta that President Suharto is backtracking on his commitments to implement the reforms in the IMF's stabilisation programme.
The officials were also less than enthusiastic about reports that Mr Suharto was sending a top-level team of Indonesian officials for talks with the US and the IMF.
They say they had made it clear to Mr Suharto and his aides that Washington was not willing to be pressured to renegotiate the terms of the US$43 billion (S$69.7 billion) IMF programme, and that the issue should be resolved in direct talks between Indonesia and IMF officials.
"It's possible that President Suharto is forgetting that we are not in the midst of the Cold War, that there is no great sympathy among either Republicans or Democrats towards him and his policies, and that there are no major concerns here that the collapse of his regime would produce a 'Who-lost-Indonesia' debate in Washington," said one US official.
While Washington is not planning to play an active role in supporting a military coup or a Philippine-style "people power" revolt against Mr Suharto, Clinton administration officials say they would be willing to support any move towards a change in the country that would enjoy domestic and regional backing, not unlike the process that led to the fall of the Marcos regime in the Philippines.
President Clinton sent former vice-president Walter Mondale to Jakarta earlier this month to try to impress on Mr Suharto the need to implement the IMF reforms, to embrace a series of political changes, and to refrain from adopting the currency board system as part of an effort to strengthen the rupiah to an acceptable level.
But US officials acknowledge that the meeting did not produce any results and reflected what some observers in Washington believe to be the poker-game-style diplomacy the Indonesian leader is pursuing.
Some US officials speculate that Mr Suharto may be under the impression that the Clinton administration and the IMF are so desperate to win congressional support for new US funds for the institution that they would be willing to make any concession to Indonesia -- including accepting the currency board plan -- so as to prove to Congress that the US$43 billion emergency bailout programme is working.
US officials note that, if anything, Mr Suharto's bargaining power in Washington has weakened in recent weeks. Top officials in the Clinton administration and members of Congress have indicated that they would not approve the disbursement of the next US$3 billion in IMF money unless Jakarta gives a clear commitment to continue with the economic and political reform process.
| Human rights/law |
On Friday March 13, three leaders of the Peoples Democratic Party (PRD) of Indonesia were captured in a flat in Jakarta. The three leaders are Mugianto, Nesar Patria and Aan Rusdianto. According to military and police spokespersons they are to be charged under the 1962 subversion law, which provides for a maximum penalty of death, as well as under another law pertaining to conspiracy to commit banned activities.
Police and military spokespersons have been quoted in the daily newspaper Kompas, on March 19, as stating that the three were guilty of "putting forward demands and carrying out mass actions opposed to the government" and of carrying out "political actions such as meetings, political discussions and organising the masses." They were also accused of having "communistic" literature in their possession.
They were also accused of being members of a banned organisation. The PRD was formally banned by decree in 1997. It has been under a de facto ban since July, 1996 when Armed Forces headquarters issued an order for the arrest of all PRD personnel. However, the PRD has continued top organise and be at the forefront of the struggle against the Suharto dictatorship.
Petrus Haryanto
The International Office of the PRD has received information that Secretary-general of the PRD, Petrus Haryanto, currently in Cipinang prison is suffering deteriorating health. He has asked to be hospitalised in a hospital that had adequate medical facilities. As yet his request has not been responded to by the prison authorities.
Jenny Grant, Jakarta -- Three Indonesian students will be charged with subversion after police allegedly found "communist material" in their apartment, in the latest round of charges against political activists.
Jakarta police chief Major-General Hamami Nata alleged the three also belonged to the student wing of the outlawed People's Democracy Party whose leaders have been jailed for up to 13 years.
"They are activists of a banned organisation and they are liable to prosecution. They will be charged with subversion," said General Nata. Subversion carries the death penalty.
The three men have been identified only as MY, 25, AR, 24 and NP, 28. Military officers arrested the trio in their east Jakarta flat on Friday.
They were originally arrested in connection with a bomb plot, but that charge has been dropped.
General Nata claimed the three students were linked with other students arrested in January for making bombs.
Police claim they found books containing articles on communism and documents on the small left-wing pro-democracy group.
"The suspects sought to garner mass support to subvert the Government," General Nata said.
Authorities raise the spectre of communism at times of political unrest or economic trouble.
The Government blamed a coup attempt in 1965 on the Indonesian Communist Party. President Suharto banned the party in 1966.
Authorities cracked down on activists at the time of the presidential elections last month with a large number of arrests and detentions.
Eight lawyers, actresses and activists are still being interrogated after police arrested them at a People's Congress in North Jakarta last week. Two have been charged with holding a political meeting without a police permit.
Meanwhile, in a fresh round of student protests, 25 students were hurt when they clashed with police in the Central Java town of Solo on Tuesday, the Kompas daily reported.
Hundreds of students at the March 11 University tried to move their anti-government demonstration off the campus.
Riot police responded by firing tear-gas to push the crowd back on to university grounds.
Solo police chief Colonel Riswahyono said students "provoked" his troops by throwing stones.
Jakarta -- Indonesia had ordered an American human rights activist, who accused the United States military of "directly supporting" repression in Indonesia, to leave the country, a source said yesterday.
A member of the security forces told Mr Allan Nairn, a journalist and activist, he would be expelled, the source said.
Mr Nairn, a member of the association Justice For All and an active campaigner against the Indonesian occupation of East Timor, told a news conference yesterday that the US Defence Department was still training the Indonesian military, contrary to an order by the US Congress. He produced what he said was a Pentagon list of dozens of training operations conducted in Indonesia over the past six years.
US authorities defended the program, saying it did not conflict with a military aid ban against Indonesia.
Mr Nairn's documents showed training in urban combat, psychological warfare, individual close-contact combat and target shooting.
He was one of two journalists present at the Dili massacre on 12 November 1991 when the Indonesian army opened fire at a procession killing - the Timorese resistance says - 271 people. The Indonesian authorities said about 50 died. The massacre prompted the US Congress the following year to suspend military aid to the country.
US officials said yesterday the training program was a legal form of cooperation rather than aid, saying it did nothing to boost Indonesia's military capabilities. The Pentagon acknowledged it trained various Indonesian military units, including the elite Kopassus force, from 1992 to 1997.
"These exercises of are a purely military nature and are unrelated to crowd control," a State Department spokesman said, adding that the Clinton administration "in no way attempted to mislead Congress".
But lawmakers and human rights activists said Washington was in effect supporting repressive tactics of President Soeharto.
Jakarta -- The Indonesian Legal Aid and Human Rights Association (PBHI) has filed a pre-trial lawsuit against the police over the arrest of the playwright Ratna Sarumpaet and eight other activists last Tuesday.
PBHI's executive director Hendardi told journalists here yesterday that the suit was filed against the North Jakarta Police Chief and the City Police Chief for allegedly detaining the nine for a period in excess of the 24 hours permitted without an arrest warrant last week.
"We filed the pre-trial suits at the North Jakarta District Court," Hendardi said.
The nine were arrested during a Tuesday morning raid on a seaside bungalow in the Ancol recreational park in North Jakarta where they had planned to hold a "People's Summit" involving government critics and pro-democracy leaders.
Hendardi claimed that the necessary arrest warrant was issued more than eight hours after the 24 hour legal deadline had expired.
According to Hendardi, Sarumpaet has also been accused of insulting and spreading hatred and enmity against the government, a charge that can carry up to seven years in jail.
The other eight detainees, who include Ratna's daughter Fathom Saulina and PBHI lawyer Alexius Surya Tjahaya Tomu, each face up to one year in jail.
Hendardi asserted his firm objection to the charges, saying that the 1963 law restricting political activities on which the charges are based was a product of the Old Order government which proceeded Soeharto's New Order. "It is ironic that ... the New Order is keen to use legal products of the Old Order," he remarked.
"The government must revoke the law and replace it with one that guarantees freedom of expression."
Security authorities banned all mass gatherings and street rallies one week before and after the 11-day General Session of the People's Consultative Assembly (MPR) that returned Soeharto to his seventh consecutive term in office on Wednesday.
Ratna is an activist in Siaga, a pro-democracy group which supported the two prominent figures who nominated themselves as presidential candidates.
However, both candidates, Amien Rais, the
outspoken leader of the 28-million strong Muhammadiyah Moslem organization
and Megawati Soekarnoputri, the ousted leader of the Indonesian Democratic
Party, failed to gain any support from the Assembly.
| Arms/armed forces |
Sangwon Suh -- To many observers, Maj.-gen. Agum Gumelar's proposal was a confirmation of their suspicions. When the South Sulawesi regional commander called for an oath of loyalty to Gen. Wiranto on Feb. 20, shortly after the latter was sworn in as the new armed forces chief, it was seen as further evidence that there was a rift in the military. After all, if the officers' loyalty to Wiranto was unquestioned, there would be no need to require them to make an oath.
Specifically, Gumelar's suggestion was seen as an effort to rein in Lt.-Gen. Prabowo Subianto, the fast-rising former head of the elite paramilitary force Kopassus, who is rumored to be at odds with Wiranto. Later, a reporter questioned the brass over the need for such an oath, hinting at the military's purported split. Prabowo's response was swift and sharp. "How dare you ask such a question?" he demanded. "ABRI [the armed forces] is solid!" Prabowo's outburst was quickly followed up by Gumelar's quiet insistence that swearing allegiance to the armed forces commander was quite normal.
Such an outward show of unity, of course, had little effect on the rumor mills. A son-in-law of President Suharto, Prabowo, 46, is seen as a man of ambition who would not be content to be under the command of 50-year-old Wiranto, himself a rising star who once served as adjutant to the president. Some even envision Prabowo plotting his way to the presidency by making strategic alliances and stirring up unrest.
According to an ABRI intelligence operative, Prabowo is part of a faction that includes Wiranto's predecessor, Gen. Feisal Tanjung, and Vice President B.J. Habibie. Other likely allies include Jakarta commander Syafrie Syamsudin and former comrades at Kopassus. Prabowo has also been meeting with Muslim leader Amien Rais, a vocal government critic and a self-proclaimed candidate for the presidency.
Prabowo was promoted to chief of the army strategic reserve (Kostrad) at the same time as Wiranto's appointment, but he has not yet been sworn in to his new command. The speculation is that the powers that be, wary of Prabowo's military clout, do not want him to take charge of the 25,000 troops stationed in the capital -- not at this critical juncture anyway.
Not everyone is a follower of this kind of conspiracy theory. Some argue that Prabowo will be sworn in at Kostrad in due course when a host of other senior staff changes are made. Military analyst Salim Said dismisses the rumors of a deep split. "If you say there is a difference of opinion within ABRI, that's not unusual," he says. "You take any two people you meet and you are bound to find differences of opinion."
Another analyst, however, is not so sure all is well in the military. A split would not be very surprising, he says, since that is Suharto's old-established way of making sure that no one is strong enough to challenge him. Which would go to show that, for all the setbacks in recent months, the president still has a few tricks up his sleeve.
Tim Weiner, Washington -- The Pentagon has been training Indonesian military forces since 1992, despite a congressional ban intended to curb human rights abuses by those soldiers, Defense Department documents show.
The Indonesian forces trained by the Pentagon include a special- forces commando unit called Kopassus, which human rights groups say has tortured and killed civilians. The unit has received training from U.S. special-operations soldiers in skills like psychological warfare and reconnaissance missions.
Pentagon officials said the training program was entirely legal, since it took place under a program different from the one curtailed by Congress. Deputy Secretary of Defense John J. Hamre said in a letter to a member of Congress last month that the training "enhances rather than diminishes our ability to positively influence Indonesia's human rights policies and behavior."
Some members of Congress question that. Rep. Christopher H. Smith, a R-N.J., said the training program "appears to be a dramatic end run around the rules that Congress has carefully prescribed for military training and education of Indonesian forces."
Indonesia is undergoing its greatest political and economic crisis since President Suharto took power in 1965. Last week the newly appointed minister of defense, Gen. Wiranto, warned that the government would crack down hard on demonstrators protesting repression and corruption.
The troops trained by the Pentagon over the past five years include Kopassus, whose Red Berets have been deployed this year against street demonstrators in Jakarta; an army strategic command group called Kostrad that helps control the center of Java and Suharto's presidential guard. General Wiranto did not specify what troops would be used in such a crackdown.
Hamre's argument and the documents detailing the training were contained in a letter sent last month to Rep. Lane Evans of Illinois, a Democrat. The letter and the documents were made public Monday by the East Timor Action Network, which is a human rights group, and by a reporter and activist, Allan Nairn [see previous ASIET NetNews - JB]. Nairn, who was beaten severely, arrested and permanently banned from Indonesia in November 1991 after witnessing a massacre of more than 270 civilians by Indonesian troops on the island of East Timor, published an article in The Nation Monday describing the training.
In 1992 Congress banned Indonesia from receiving Pentagon training in the arts of war under the program most commonly used for such courses, known as International Military Education and Training, or IMET.
The Pentagon kept up its training -- but under a different program, known as Joint Combined Exchange and Training, or J-Cet. This was a legal way to avoid the congressional ban, since the joint program was financed through "a different pot of money" than was IMET, and thus was unaffected by the ban, a Pentagon official said.
Evans conceded that the training was legal, but called it "the Pentagon's loophole to the ban." He said he was "curious to know why U.S. taxpayer dollars are being wasted on aiding and abetting a ruthless military organization."
The training "is certainly not within the spirit" of the law, said Rep. Nancy Pelosi, a D-Calif. "It raises serious questions about a violation of congressional intent. It is clear that it is a circumvention of Congress."
Grover Joseph Rees, an aide to Smith, said: "We have all these restrictions on IMET and they just get around it by using J-Cet." He added: "They did the same thing in Rwanda -- they give marksmanship training to people who may be participating in massacres." The J-Cet program provided training in psychological operations and marksmanship to the Rwandan Patriotic Army, which has been accused of the massacre of civilians in eastern Zaire.
The Pentagon was unable to say Monday how much the J-Cet training program for Indonesia cost, how many troops were trained or which military office ran the program.
A Defense Department official, who would not be quoted by name, said the program was no secret to well-informed members of Congress. She said it was "better to train and engage and interact and gain influence with successive generations of Indonesia officers" than to stop the training. She could cite no evidence that the training improved those officers' respect for human rights.
Congress partially restored financing for training in Indonesia in 1995, under an "expanded" Imet program theoretically limited to training in human rights, civilian control and accountability. But under the program, Indonesia was able to buy at least one course in military training directly from the Pentagon, which was another legal way around the legislation, Pentagon officials said.
| Politics |
Geoffrey Barker -- Indonesia is on the brink of hyperinflation and is committing major breaches of its economic reform agreement with the International Monetary Fund, a confidential Department of Foreign Affairs report has warned the Federal Government.
The report -- which details for the first time advice being provided to the Howard Government on the Indonesian crisis -- identifies a series of "expensive family and crony projects" that are to go ahead in defiance of the IMF.
It has emerged as the Minister for Foreign Affairs, Mr Alexander Downer, embarks on talks in Washington with the US Government, the IMF and World Bank leaders in a bid to obtain more flexible treatment for Indonesia under the IMF program.
The report also describes as "quite alarming" Bank Indonesia's "injection of massive liquidity support (akin to printing money)" for the country's crippled banking system amounting to as much as 20 per cent of Indonesia's GDP.
The 13-page briefing, prepared by the Australian Embassy in Jakarta, has been obtained by The Australian Financial Review.
The damning report sets out in detail how the Indonesian Government has responded to the IMF reform package. It gives frank assessments of promised reforms not implemented and moves to ensure that the financial interests of the family and close associates of Indonesia's President Soeharto are not damaged.
Despite claims by Mr Downer that Indonesia deserves credit for its compliance with the IMF program, the report reveals deep concern and scepticism within DFAT about the intentions of President Soeharto. The disclosures will make it difficult for Mr Downer to argue his case in Washington for a more flexible approach based on the extent of Indonesian compliance with the IMF program.
The report explicitly identifies President Soeharto's oldest daughter, Tutut, as "the major beneficiary" of a triple-decker transportation project that is slated to go ahead, and notes special tax exemptions for the Timor car project run by Mr Soeharto's youngest son, Tommy.
It says monopoly control over the marketing of plywood and cloves seemed likely to continue despite apparent government moves to comply with IMF trade deregulation requirements.
The report says the newly appointed Indonesian Minister for Trade and Industry, Mr Bob Hasan -- identified as "a close business associate of the president" -- had imposed a new fee on plywood exports. It also says that although the clove monopoly, controlled by Tommy Soeharto, would be dismantled, "a similar trading arrangement for cloves" would be established.
It condemns the "apparent unwillingness" of newly appointed Indonesian Vice-President, Mr B.J. Habibie, to privatise the Agency for Strategic Industries as required by the IMF and notes Jakarta rumours that he will "find new means to impose restrictions on imports of foreign ships" which the IMF has demanded be removed.
The report suggests that the Indonesian Government's inflation target of 20 per cent is unrealistic.
"The economy appears on the brink of hyperinflation. Month to month inflation rose 12.76 per cent in February," it says. Hyperinflation occurs when the pace of price rises runs out of control, severely damaging the capacity of the economy to function.
The report also questions Indonesian compliance with IMF requirements that the country reduce its Budget deficit to 1 per cent of GDP.
It acknowledges the revised draft budget of January 23 "better meets the revised IMF requirements", but says the base assumptions of the Budget are "not entirely realistic given continuing developments".
It notes that despite the IMF requirement that Indonesia incorporate all off-Budget funds into the Budget within five years, the crucial investment and reafforestation funds were still not on budget in the January 23 draft Budget.
The report says 12 major infrastructure projects were postponed in line with IMF requirements, but adds: ". . . there are also contradictory signals that some expensive family and crony projects are to go ahead [in some cases, contrary to the program]".
The report reflects deep Australian concerns over the Indonesian banking industry, describing the banking system as "very weak".
It says government efforts to close 16 insolvent banks faced "difficulty caused by first family members, whose interests in particular banks were affected, who attempted to prevent closures through the courts . . . one family bank, Bank Andromeda, effectively revived as Bank Alfa".
It says many banks are in "dire straits" and that the replaced head of the Indonesian Banking Restructuring Agency, Bambang Subianto, "had been doing a good job" before being sacked.
Noting compliance with IMF requirements for the merger of state banks, the report says:"Rumours have close family associates with high chance of gaining directorships."
Jenny Grant, Jakarta -- Only hours after President Suharto swore in his new Cabinet, his golfing partner, who is now also his trade minister, showed where his loyalties lay, putting the Government in a worrying light.
And it did not bode well for demands by the International Monetary Fund (IMF) to see economic reform before continuing its rescue package.
During a simple ceremony in the great hall of the presidential palace, the 36 Cabinet ministers, including Mr Suharto's daughter Siti Hardiyanti Rukmana, swore to serve loyally according to the regulations.
Then, in his first statement as Trade and Industry Minister, Mohammad "Bob" Hasan defended monopolies the IMF has been trying to abolish.
"Monopolies are OK. As long as the monopoly is for the importance of all people, it's OK... and as long as it is in line with the constitution," said the timber tycoon. The 1945 constitution states that Indonesia's natural resources belong to the nation and should be developed for the good of the people.
Mr Hasan, who lost his lucrative plywood cartel under the IMF rescue plan, fended off a barrage of questions on his personal wealth.
"Some expatriates may say I'm a rich man, but I'm not. All the dividends do not go into my pockets but are returned to the people," he said.
Mr Hasan revealed he would step down as commissioner of car maker Astra International and other state-owned firms to commit himself to the industry portfolio.
He added he would not withdraw from the Dharmais Foundation or the Supersemar Foundation, charitable organisations set up by the Suharto family in the 1970s.
Mr Suharto has chosen a highly loyal Cabinet, but with a combined economic experience of only half the previous Cabinet.
And he has completely ignored calls from thousands of university students for a clean and professional team of chief ministers.
About 75 National University students clashed with baton-wielding police yesterday when they tried in vain to march out of their Jakarta campus demanding reforms.
There were no serious injuries, although one photographer was trampled as she was caught between the protesters, some of whom were throwing rocks, and riot police.
In Surabaya, the capital of the East Java province, 500 students staged a rally under tight security on their campus to demand political reform.
Analysts have been left with the impression that the military and the palace used the limited campus demonstrations as a safety valve to prevent a broader eruption of social discontent.
Military authorities have arrested three members of the banned People's Democratic Party who are alleged to be linked to a January bomb blast in Jakarta, reports said yesterday.
Amien Rais has many personas. He is professor of political science at Gadjah Mada University in Jogjakarta in Central Java. He heads the Muhammadiyah, a 28-million-strong conservative Muslim organization focusing on social and educational activities. He nominated himself to be Indonesia's president, allied himself with opposition politician Megawati Sukarnoputri (daughter of founding president Sukarno) and threatened to call his supporters onto the streets to protest Suharto's rule. Then he seemed to back down. Some say he got scared, others that he got smart. But he hasn't gone quiet. Rais, 53, talked with Senior Writer Susan Berfield about protests, the military and leadership.
What is your message to the students?
To be a little more patient. I urged them to have bigger demonstrations. I told the student leaders to push further every day, but to stay on campus. The rules of the game are to stay on campus; otherwise there could be a crackdown. We will obey the rules for now. I understand that the students want to see quick change; they want to see the monetary crisis overcome. But I said, let us give Suharto one last chance to overcome the crisis he has himself made. He must be held responsible. We can give him one more chance since he insisted on continuing his presidency for another five years. But if after one semester he fails to deliver, then we need a new solution: people power that is non- violent and peaceful. Suharto is not the solution to the problem. He is the problem.
Will the students continue to play by the "rules"?
The demonstrations can go either way. If the students don't do things that the military [known as ABRI by its Indonesian initials] interprets as a challenge, they will be okay. If the students have good relations with ABRI, they can continue. But if there is mutual distrust, then the situation could be terrible. I still have faith in ABRI. Some [officers] don't believe in democracy, [and] are corrupt. But the majority hold to the doctrine of loyalty to the people and the state, not necessarily to the government. If the government is considered corrupt and doesn't fulfill its constitutional tasks, then ABRI can take a different position. It happened in 1966 [when pressure was placed on Sukarno to eventually relinquish power]. We have the same Constitution as we had then. Sukarno was the supreme commander, but he was considered to be deviating from the Constitution, colluding with communism. The people's interests were at stake. ABRI withdrew its support. History may repeat itself. What leads you to believe that one day the military may not support Suharto?
Within ABRI there are many officers, many leaders who share the aspirations of the people, who believe in democracy, who want to see social justice, who don't believe in collusion, nepotism, or corruption. There are some progressive groups. And there have been some signals. Gen. Feisal Tanjung [who just retired as ABRI chief] said that the bottom line is that ABRI goes with the people. Others say the same thing, with different nuances. I met a general the other day who told me it is unthinkable for ABRI to shoot its own people. I asked one of the most important generals why there were 25,000 troops in Jakarta during the national assembly session. He said, "I know what you mean. We want to see a succession. Suharto is no longer needed, but we are instructed to maintain law and order. We have to follow orders." So there may be some conflicts of conscience for soldiers who know what the people are asking. But if they have to choose between Suharto and the people, they will choose the people. . . Change must come peacefully and without violence. Some in the military can share my perception. The only thing that will force Suharto out is further and complete economic deterioration. There is no moral courage to force him to step down. There could only be a monetary coup d'itat against him.
What is your impression of Vice President Habibie's economic ideas?
I know Habibie rather closely. He told me he believes that technology must be the locomotive of economic development. He said if we succeed in having high-tech then almost automatically we will be also knowledgeable in mid-tech and, of course, low- tech too. That is why he is dreaming that Indonesia will become some day a strong country, economically and technologically. I can understand too that many technocrats and economists disagree with him. They say it is not wise for a country like Indonesia to waste money developing aircraft, missiles, even submarines. I want to be fair: Maybe there are some negative sides of Habibie, but I can see the positive sides too. It will be good for Indonesia to have a harmonious and proper combination of the ideas of Habibie and the ideas of the technocrats. If they have mutual trust, it will be much better. But if they have mutually exclusive ideas, it will be counterproductive.
Can you conceive of a situation fairly soon where Suharto steps down and Habibie takes over?
I don't buy this assumption. Suharto will never ever step down. He will die in office. He learned very well the lesson of Sukarno. When Sukarno died he was not in office, and he was buried in a very simple way. He was not given a solemn and official funeral. Suharto does not want to repeat Sukarno's mistake.
Salil Tripathi, Jakarta -- If it sounds too good to be true, it probably is. Perhaps International Monetary Fund chief Michel Camdessus should have kept that investment axiom in mind before committing $33 billion to Indonesia--where President Suharto personally signed off on a wrenching reform package in January without a peep of protest.
Eight weeks later, Suharto is sending very different signals, and the IMF is clamping the money tap. The 76-year-old leader, who was re-elected on March 10 to a seventh term, declared that the reforms do not accord with Indonesia's constitution. What's more, he continues to flirt with the idea of creating a currency board to peg the rupiah to the U.S. dollar. Economists warn that Indonesia lacks the reserves--and probably the resolve--to make it work.
What kind of game is Southeast Asia's grand old man playing? Some say political poker, bluffing the IMF to rake in support at home. But increasingly, it is beginning to look like more than that. Suharto may be convinced that his enterprise--Indonesia--is simply too big and too important for the world to allow it to fail.
"It wouldn't be surprising if he thinks like that," says a U.S. official. "After all, we've been saying that Indonesia is an anchor stone in Southeast Asia. But that misses an important nuance: How do you actually go about preventing failure?"
The stakes in this game are high. With its credibility increasingly under question, the IMF can't afford to step down and give Jakarta money without hard evidence of reform. That leaves Indonesia, where prices and unemployment are rising sharply, in the middle of a dangerous stand-off between its gunslinging president and the IMF sheriff.
To show that it meant business, the IMF postponed a review of the rescue package until April. Only after that, the Fund said, could it disburse the next sorely needed tranche of $3 billion. But Suharto's gambit puts the Fund and its biggest backer, the United States, between a rock and a hard place. They can cut off Indonesia, possibly tipping the world's largest Muslim state into an ocean of civil unrest. Or they can succumb and bail out Suharto on his terms, which may prompt the U.S. Congress to withhold a requested $18 billion in additional funds.
Suharto's strategy seems to be working, at least partly. Leaders from Malaysia, the Philippines, Thailand and Australia have urged the IMF to go easy on Indonesia. And the IMF's first deputy managing director, Stanley Fischer, has said the Fund was prepared to be "flexible"--and that it would weigh humanitarian issues in deciding when it would release the funds.
But on the other side of the street, the IMF is still getting political support from the G-7 countries, as well as from the World Bank and the Asian Development Bank, which have suspended funding. The U.S. and Germany have sent high-level envoys--former Vice-President Walter Mondale and Finance Minister Theo Waigel, respectively--urging Suharto to stick to the IMF deal. But their visits may have served only to convince Suharto that he is a major leader in whose personal survival the world has a serious interest.
Suharto takes great pride in being known as Bapak Pembangunan (father of development). But the onset of the economic crisis has made a mockery of his regime's singular achievement: In nominal terms, Indonesia's per-capita income has fallen by three-quarters since last July, and Jardine Fleming expects to revise its forecast of economic contraction from 10% to 15% in 1998.
Indonesia's leader has reasons to cling to the old order, which has also enriched his family and friends. Despite the IMF's call to dismantle them, family- and crony-run monopolies are still in place, and new ones are being created. What's more, the central bank continues to provide liquidity to dozens of near-insolvent banks. Implementing IMF reforms would restore confidence, but it would also destroy the Suharto family's economic empire.
Suharto is keen to find a quick fix that will allow him to maintain both his family dynasty and his leadership. Notes Andrew MacIntyre, an Indonesia expert at the University of California in San Diego: "Suharto has been fighting for his political survival. He cannot survive if the economy does not recover. The economy cannot recover until the rupiah can stabilize. And investors will not return until there is increased political confidence."
The president seems to be adopting a two-pronged solution. First, he won approval for emergency powers that authorize him to curb social unrest and subversive acts. This strengthens his position while allowing his successor wide powers in the event of a transition during his five-year term. Second, he still seems to be preparing to set up a currency board, to peg the free-falling rupiah to the U.S. dollar. Currency-board specialist Steven Hanke, a professor at Baltimore's Johns Hopkins University, has returned to Jakarta.
Markets fear the controversial rate-fixing mechanism may be in place soon, even though the IMF has warned that such a measure would oblige it to suspend aid. Meanwhile, a paper Hanke prepared that essentially absolves Suharto of blame for the crisis circulates widely among Jakarta's business elite. The substance of the 50-point IMF programme, it reads, "undermined the current establishment just in a period when political stability was needed the most." Some accuse the IMF of not understanding this political reality. But the Fund is successful because it is apolitical and recommends sound economics. Indonesia is not the first to implement an austerity drive at the IMF's insistence. Brazil, Mexico, Poland, Russia and Argentina have all undergone gut-wrenching reforms.
For its part, the IMF is perplexed that Indonesia would renege so quickly on its promise to implement reforms. Says Simon Ogus, chief economist at SBC Warburg in Hong Kong: "You can't admit yourself to Betty Ford's [alcoholism] clinic and then request a case of Scotch." If the patient persists, the doctor can only pack up and leave, as the IMF has said it would.
An Asean diplomat explains why the president agreed to the deal: "You can't expect Suharto to behave like a Western-educated leader. He signed the agreement because he didn't want Camdessus to go home empty-handed; he never meant to implement it."
Still, Suharto hasn't burned his bridges with the IMF. His respected economic adviser, Widjojo Nitisastro, is leading a delegation to Washington this month. Notes Max Corden, an Australian economist at Johns Hopkins: "Suharto has been wise in listening and accepting excellent advice from professor Widjojo and others in the past." Perhaps Suharto will surprise the world and fold, accepting the IMF's terms.
Rajeev Malik, senior economist at Jardine Fleming in Singapore, agrees there could be a turnabout, but also warns of the worst- case scenario. "Indonesia may recede into a cocoon, close its capital account, nationalize the export-oriented commodity- producing private sector, or default on its official government debt," Malik says. "That shouldn't happen, but in these times, one can't rule out Indonesia turning isolationist."
David Jenkins -- What is one to make of the new Indonesian Cabinet, unveiled by a weary-looking President Soeharto as his nation grapples with its worst economic crisis in 30 years?
The incoming Minister for Social Welfare is the President's eldest daughter, Ms Siti Hardijanti Rukmana (Tutut), 49, a millionaire businesswoman who presides over a vast web of family business ventures.
The Minister for Trade and Industry is Mohammad "Bob" Hasan, 67, an ethnic Chinese timber tycoon and presidential "golfing buddy" who heads a plywood cartel that is supposed to be broken up under a sweeping International Monetary Fund (IMF) reform package.
The all-important Minister for Finance, Fuad Bawazier, 49, forged close ties with Soeharto's business-minded children during his tenure as director general for taxes, in one case approving lucrative exemptions to the "national car" project of the President's youngest son, Hutomo "Tommy" Mandala Putra.
The politically powerful Minister for Home Affairs, General Hartono, is a close friend of Tutut's. The Minister for Defence, General Wiranto, who already commands the 465,000-strong Armed Forces (ABRI), is a former Soeharto adjutant.
The Minister for Religious Affairs, Mohammad Quraish Shihab, is a close friend of the President and is sometimes depicted as his personal chaplain.
Major new powers have been conferred on the civilian Vice- President, Dr B.J. Habibie, the diminutive German-trained engineer whose palace ties are so strong that he has been dubbed Soeharto's seventh child.
The Minister for Food, Horticulture and Medicine is Haryanto Dhanutirto, a Habibie loyalist. As Transport Minister, he sacked the head of Merpati Airlines when he refused to lease planes made by Habibie from a company involving Tommy Soeharto.
Then there is the incoming Minister for Agriculture, Professor Yustika Sjarifudin Baharsjah. She is the wife of the outgoing Minister for Agriculture.
It looks, in short, like the Cabinet of a man who is pulling the wagons into a tight circle.
As he fights to redeem his reputation as the "Father of Development", Soeharto is placing his faith in his family, his friends and his long-time business associates, rewarding loyalists and brushing aside charges of cronyism and nepotism.
At a time when Indonesia faces Herculean challenges, it finds itself with what might be called a Caligulean Cabinet.
To the dismay of many, Soeharto has completed the purge of the United States-educated economists who pulled Indonesia back from the economic brink in the mid-1960s and set it on the road to 30 years of spectacular economic growth.
The new 36-member Cabinet, due to be sworn in today, will do nothing to reassure the money markets. It will do nothing to reassure the IMF or the World Bank. It will dismay the finance ministers of a dozen countries, including the US, Japan and Australia, whose goodwill is important to Indonesia.
Nor is it doing much for the President's standing at home.
"How can it be possible that a father is President and his daughter is a Cabinet minister?" asks Amien Rais, the increasingly outspoken leader of Muhammadiyah, a 28-million member association of Islamic modernists.
Tutut's appointment, he told the Associated Press, was a clear symptom of nepotism. "There are thousands who are more capable," he said. "Tutut is just average."
One of those who have done well is Habibie, who is given the job of dealing with international organisations, including the United Nations, the Non-Aligned Movement, ASEAN and APEC.
This suggests that he may travel frequently on behalf of Soeharto, who fell ill during an overseas trip late last year.
That could lead to some erosion in the position of Ali Alatas, who returns for a record third term as Foreign Minister. However, Alatas, a professional diplomat, should be able to handle that well enough.
Nor has Habibie fared too badly in Cabinet.
The Minister for Transport, Giri Suseno Hadi Harjono, is a Habibie man. So is the Minister for Research and Technology, Rahardi Ramelan. So, of course, is Food Minister Haryanto. The Co-ordinating Minister for Political and Security Affairs, General Faisal Tanjung, also has ties to Habibie.
As in the past, however, Soeharto has maintained a shrewd balance within the Cabinet, allowing no one group to predominate.
The new State Secretary, Saadilah Mursjid, who has in recent years become a close confidant of the President, is the director of a company which maintains tight control over the funding of a US$2 billion 130-seat Indonesian passenger jet, to be built by the national aircraft company.
It is widely believed that Habibie was hoping to gain direct control of this funding.
At a time when Indonesia has had outbreaks of anti-Chinese violence, it may seem a plus that Soeharto has appointed his first ethnic Chinese minister in 30 years. That may not follow.
Bob Hasan, who began as a driver, converted to Islam many years ago and has always played down his ethnic origins. Interestingly, there are three Indonesians of Arabic descent in the Cabinet - Alatas, Quraish and Fuad Bawazier.
For the Australian Government, the Cabinet will bring little joy.
Canberra may have made it clear that it wants the IMF to water down some of its more rigorous demands, particularly those involving the abolition of food and fuel subsidies, measures which directly affect the lives of the poor.
But it has insisted that Indonesia stand by the promises it made to the IMF in return for a $US43 billion rescue package.
There are not many friends of the IMF in the new Cabinet.
The Howard Government will need to keep an eye on an electorate which seems increasingly sceptical and disillusioned about developments in Indonesia.
There has been a noticeable change in public attitudes. Indonesian figures are treated increasingly as objects of mirth and derision in this country.
Newspaper columnists and cartoonists are making damaging attacks, almost on a daily basis. Criticism of corruption and nepotism in Jakarta has become a staple of popular culture, with jibes on programs like Good News Week bringing knowing, but sometimes uneasy, laughter.
This is not doing the bilateral relationship any good.
Indonesia has a leader who has achieved an extraordinary amount in 30 years and who wields immense power. Members of his new Cabinet may be able to hammer out an acceptable compromise agreement with the IMF, which has temporarily suspended aid because of its concerns that Soeharto is backtracking on reforms that affect his family and friends.
But the crisis is growing worse by the day. Time is running out.
Louise Williams, Jakarta -- President Soeharto's new Cabinet signals a retreat to personalised politics with the appointment to key portfolios of his powerful daughter, Siti "Tutut" Hardiyanti Rukmana, his golfing mate, timber baron Mohamad "Bob" Hasan, and the return of several ministers linked to recent corruption scandals.
The new cabinet, to be sworn in today, is likely to cause further dismay among international investors at a time when Indonesia is facing demands from the International Monetary Fund to prove its commitment to economic reforms or risk the $US43 billion ($63 billion) bailout package for its ailing economy.
But the new line-up, strong on economic nationalists and vested interests, sends confusing signals about the Government's commitment to economic reforms which threaten the personal business interests of the president's entrepreneurial children and the political elite.
Mr Hasan, a former driver who ranked recently by Fortune magazine as the world's 107th richest man with assets of about $US3 billion, has been handed the key trade and industry portfolio. The president's daughter is Social Affairs Minister.
Much of Mr Hasan's fortune has been made in the protected timber industry. His control over the Apkindo plywood export cartel allowed him to collect fees for all transactions in a multi- billion dollar industry. Apkindo was abolished in February under the IMF package, but then plywood producers were instructed to pay millions of dollars to fund a "statistics service". The fees were dropped following international publicity.
Mr Hasan, who changed his name from The Kian Seng after converting to Islam, is the first ethnic Chinese to be appointed to Cabinet. Some commentators said the move could be used to diffuse resentment of the wealthy Chinese minority. But Mr Hasan, who regularly plays golf and goes deep-sea fishing with the President, could just as easily be viewed as a Soeharto "crony".
Gone meanwhile are the US-educated "technocrats" who engineered Indonesia's high economic growth of the past 30 years. The key portfolio of Finance has gone to Mr Fuad Bawazier, a well- qualified economist but known to be close to the first family.
"The Cabinet will be challenged to do a lot of economic restructuring, and the key question is can they do it?" said economist Mr Mari Pangestu. "Can they do it for the national interest, rather than self-interest or the interest of the few?
"We have a changing of the guard in terms of the exit of the long-term technocrats and they have been replaced a group who are academically qualified but are untested as to whether they can function without a conflict of interest."
Political scientist Ms Dewi Fortuna Anwar said both Mrs Rukmana and Mr Hasan may be challenged immediately to prove their commitment to reforms, even those which touch their own businesses, as the IMF team assessed progress ahead of a decision on releasing the next $US3 billion of the bailout fund. "People will be suspicious of Tutut and Hasan, so their appointment is a brave move, and they will be put on the spot straightaway because people will be quick to point the finger," she said.
Economist Mr Didik Rachbini characterised the line-up as a "retreat" by the leader. "President Soeharto is now talking about self-reliance and we are not yet sure if this means economic nationalism, which could set us back decades in terms of political culture."
Mr Soeharto has surrounded himself with loyalists in key security portfolios: General Feisal Tanjung as Co-ordinating Minister for Defence and Security, armed forces chief General Wiranto as Defence Minister, and retired General Hartono, a close friend of Mrs Rukmana, as Home Affairs Minister. Mr Ali Alatas remains as Foreign Minister.
The Japanese Prime Minister, Mr Ryutaro Hashimoto, who spent 2 hours in talks with Mr Soeharto yesterday, said later that Indonesia needed to take "courageous decisions" to resolve its economic crisis, and he was convinced Mr Soeharto would. Neither side gave details of the talks.
| Miscellaneous |
Jakarta -- New Minister of Home Affairs R. Hartono scoffed at a suggestion that President Soeharto's proposal for ministers to donate their first year's salaries to the poor would open the door to corruption.
He pointed out yesterday that ministers receive allowances and fringe benefits which amount to even more than their basic salaries. The move will therefore not cause any hardship at all.
Besides, Soeharto's request has been calculated to give ministers no reason to tolerate sloppy performance or corruption in their respective offices, he pointed out.
"The ministers' allowances are greater than their basic salaries... they can cover family expenditure with their benefits... no problem," he told reporters after taking over office from his predecessor Moch. Yogie S.M.
In the first meeting of the new cabinet on Tuesday, Soeharto asked ministers to donate their first year's salaries to the poor, declare their personal wealth and pay serious attention to the public's demand for clean and credible governance.
Soeharto himself has decided to donate his entire presidential salary and allowances to the poor, saying he could live comfortably on his soldier's pension.
The President and Vice President's monthly salaries are Rp 15 million (US$1,500) and Rp 10 million respectively. Cabinet ministers, the speaker of the House of Representatives, the chairman of the Supreme Court and the chairman of the Supreme Audit Agency each receive a basic monthly salary of Rp 2.5 million (US$250).
Separately, Jakarta Governor Sutiyoso said he, his deputies and mayors will follow Soeharto's example and donate one year's salary to poverty alleviation programs yesterday.
"For me to donate my salary would be no problem. I have other sources of income because I'm also a director of several companies," Sutiyoso said.
Sutiyoso declined to say how much his salary was. "It is my wife who takes care of it, I never bring money with me and I don't want to be bothered by money problems".