Economic crisis threatens reign of Indonesia's Suharto More citizens suggest he should step down

March 08, 1998|By Frank Langfitt | Frank Langfitt,SUN FOREIGN STAFF

JAKARTA, Indonesia -- As Indonesia's President Suharto prepares for his reanointment this week at age 76, the question is whether he can stop the country from unraveling and keep his job.

The fourth most populous nation in the world and potentially the greatest casualty in Asia's financial meltdown, Indonesia faces its worst economic crisis in three decades -- one that could end Suharto's rule after 32 years and rattle financial markets from Tokyo to New York.

Many of the causes for the crisis -- corruption, cronyism, mismanagement and a refusal to share power -- have been laid at Suharto's doorstep. Only Friday, Suharto's rubber-stamp legislature drafted a new security law that gives the president "special powers" to clamp down.

But if the crisis here continues for another three to six months, Indonesians will turn on the government and the military will ask Suharto to change his policies or resign, says retired Maj. Gen. Rudini, who runs a think tank here and served as army chief of staff in the mid-1980s.

"I think when the time comes, when the military sees that all the people are against the government, the military will take the side of the people and will talk to the president and ask for change," Rudini says.

Since the crisis began in July, Indonesia's economy has steadily declined. The currency, the rupiah, has plummeted -- losing more than 70 percent of its value against the dollar. In recent weeks, the price of basic staples such as rice and sugar has soared while factories have closed and thousands have lost their jobs.

Indonesians have responded by staging food riots in more than 20 cities, looting dozens of stores -- many owned by ethnic Chinese. Thousands of university students have demonstrated for a reduction in prices and political reform of the authoritarian system.

If that weren't enough, forest fires have flared again in East Kalimantan on the island of Borneo. Last year, hundreds of fires cost Indonesia an estimated $1 billion and created a haze over much of Southeast Asia.

Disquiet grows

As Suharto awaits his presumed re-election Tuesday to a seventh five-year term by the People's Consultative Assembly -- whose members he has directly or indirectly chosen -- more and more ordinary Indonesians are quietly suggesting he step down.

"He's been in power too long and he's too old," says Benu, 40, who docks his wooden fishing skiff in the poor community of Pasar Ikan along the Java Sea.

"As soon as possible, the government must solve the problem. If the government does not do that, I'm afraid of civil war."

Indonesia, a nation of some 210 million people, appears far from civil war at the moment. But it is a sign of the times that citizens even suggest mass unrest in a country that until recently had served as a source of political stability in Southeast Asia.

Vacuum of power

Suharto continues to enjoy the support of the military -- an immensely powerful political force here -- and has stifled opposition so successfully over the years that no one sees any obvious, immediate successor.

"I don't know who else could step in and do the job," says Louis A. Clinton, president of the American Chamber of Commerce in Indonesia and a Suharto supporter. "In this crisis, do you want to switch to an untested man?"

While riots have flared around the country, Suharto still maintains a firm grip on Jakarta, the nation's sprawling capital of about 13 million. If the country descends into chaos, though, there could be serious consequences for Asia and the United States.

Instability in Indonesia could shake nearby markets at a time when some Asian economies are just beginning to show signs of recovery. Neighboring Singapore and Malaysia worry about a potential flood of refugees.

U.S. companies have invested more than $100 billion here since Suharto took power in 1966 after an abortive coup that was blamed on Communists and led to the slaughter of up to 400,000 people.

American officials also worry about Indonesia -- a chain of more than 17,000 islands that stretch from the Malaysian Peninsula to Northern Australia -- because of its strategic location. Indonesia's Malacca Strait is the quickest route for U.S. Navy ships traveling from the Pacific Ocean to the Persian Gulf.

"I worry about the stresses and strains on the government," Adm. Joseph Prueher, the commander of U.S. forces in the Pacific, was quoted as saying in a speech in London last month. "Even if all the good decisions are made, there is trouble ahead."

Nation of extremes

Jakarta lies about 6 degrees south of the equator -- a modern Asian capital straddling extremes of poverty and prosperity. High-rises and luxury hotels dot the smog-filled skyline overlooking white bungalows topped with red tile roofs. The domes of mosques and minarets -- most Indonesians are Muslim -- poke up out of the lush landscape.

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