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ASIET NetNews Number 4 - February 2-8, 1998
Political/economic crisisTimorese refugees in Spanish Embassy
PoliticsFor Indonesian laborers, bad news Indonesian mob burn shops in food riots Jobless millions turn up heat on Jakarta Bulog not to release price controls Suharto is both Indonesia's lock and key We were wrong, bank chief admits Rais blasts Suharto kids and cronies Megawati calls for calm Imported-medicine shortage Violent protests erupt in Indonesia Is a time bomb ticking? Fishermen in Indonesia riot How Suharto Inc. plundered Indonesia
MiscellaneousIndonesia's next vice-president ABRI's trust in Soeharto Suharto on the counter-offensive?
Child malnutrition mars anti-poverty record
| East Timor |
Lisbon -- The eight East Timorese who have sought shelter one week ago at the Spanish embassy in Jakarta left to Portugal on Thursday, a source at the diplomatic mission told Lusa.
The youth, with ages ranging from 18 to 29, are expected to arrive in Lisbon on Friday.
The International Red Cross Committee organised the trip to Portugal. In the last two years, more than 140 Timorese travelled to Portugal after seeking refuge at foreign embassies in the Indonesian capital.
| Political/economic crisis |
Seth Mydans, Surabaya -- At precisely 3 p.m. on Thursday, the heavy blue gate of the Gunawan steel plant slid open and hundreds of young men poured through to hear an announcement they dreaded. Would their factory reopen in the morning, and would all of them still have jobs if it did?
As they parked their motorbikes, they faced an intimidating sight: dozens of police officers, soldiers and plainclothes security men, watching them carefully along with the local army commander and the city's police chief.
The announcement in the factory's courtyard on Thursday, in the words of another worker, was: "Good but also bad."
Gunawan steel will reopen for now, reversing a plan to close its gates permanently. But when they arrive for work on Friday morning, 90 of the plant's 650 workers will be told they have no jobs.
The men in the courtyard, squatting on the ground and hugging one another as they listened, received the announcement in silence. When it was over, they boarded their motorbikes and quickly disappeared.
It was a moment of truth for both the workers and the security forces, who have geared up around the country for a violent reaction as millions of Indonesians lose their jobs in Indonesia's deepening recession.
And it was a moment that is due to be repeated hundreds of times in the days ahead as workers return from an extended Muslim holiday to factories whose business is contracting sharply as their costs and their debts expand to crippling levels.
In the capital city of Jakarta on Thursday, 400 miles to the west, government officials raised their estimate of the country's unemployed by one- third, to 8.5 million. This fast- rising number, together with steep rises in prices for many basic commodities, have fueled concern that widespread unrest could threaten the stability of the world's fourth- largest nation.
As Indonesia prepares for the confirmation of President Suharto next month to a seventh five-year term, economic pressures have mingled with political tensions to produce the country's severest crisis in decades.
The crucial question, as one long-time foreign resident here put it, is: "Can you translate 'I don't have any bread' into 'Damn the Government'? If a factory closes, who does the worker get mad at? Does he curse the government or does he curse his employer?"
The answer among the workers at the Gunawan steel plant suggested that Suharto's longtime policy of depoliticizing Indonesia has been bearing fruit. During his 32 years in power, the president has co-opted opposition parties, banned grass roots political activity and persuaded most of the country's 200 million people to leave the governing to him.
The grumbling of the men who waited by their motorbikes on Thursday were aimed not at the government but at their employer, whom they accused of using the economic crisis as a cover for squeezing their pay and benefits.
When asked whether the government was to blame for their hardships, one angry worker grew suddenly quiet. "I don't want to talk about that," he said, and he insisted that his name not be printed. "I don't dare talk about the government."
The man, who wore a dirty red Ralph Lauren sweatshirt, said social unrest was a real possibility as unemployment rises. More certainly, he said, jobless workers were likely to turn to crime to feed their families.
"It's a matter of the stomach," he said. "Stomachs are very sensitive."
The announcement itself was a powerful performance by the factory owners and local security forces. Five men took their turns at a microphone: a company representative, a pro-government union leader, an official of the government's Ministry of Manpower and the army and police commanders.
Bambang, a member of the company's board of directors -- who like many Indonesians uses only one name -- took the occasion to blame some of the company's troubles on agitators who had led a recent slowdown to demand bigger annual bonuses.
"The management tried to keep our ship from sinking," he said, "but unfortunately the efforts of the company did not get the support of all of you."
The army commander, Lt. Col. Kadri Kusuman, put it another way. "Those of you who lose your jobs, don't ask the ones who still have work to join a boycott," he said. "I warn you: If you do not do your jobs properly, the company will suffer."
And in case any of the workers had missed the message, the police chief, Lt. Col. Sumaryono, repeated it. "We from the police will take firm measures against all people who take such actions," he said. "We call on you to stop provocations, stop preventing others from working. After the company reopens tomorrow, we will continue monitoring you."
Then he added the fervent hope of authorities in factory towns around the country: "Those of you who lose your jobs, please go home to your villages."
Only one statement Thursday drew applause -- the only statement to offer a bleak suggestion of hope. "From the seeds of suffering," the union representative said, "we can grow a better future."
Jakarta -- At least two shops were burned and seven others damaged in an eastern Indonesian town on Saturday during a protest against price hikes triggered by the currency crisis, the official Antara news agency reported.
It quoted military officials in Bima town on the island of Sumbawa, east of the island resort of Bali, as saying about 100 people attacked shops during the morning protest.
"There are seven shops whose windows have broken and two shops which are burned by the protesters," said Colonel Soekotjo, head of the local military command.
He said the incident took place when the protesters marched to the local parliament building to protest against price hikes.
Soekotjo denied rumours that 60 shops had been attacked during the incident, the latest in a wave of riots to hit Indonesia in the past few weeks.
Antara did not say if the military made any arrests, adding that the situation had returned to normal in Bima.
Riots over spiralling price increases have rocked several towns in East Java and also in Ujung Pandang, capital of South Sulawesi province.
Political observers say the situation in the eastern areas remains volatile as Indonesia's economic crisis bites home. But they noted no deaths and few injuries have been reported.
President Suharto and government members have expressed concern over the potential for violence as the economic crisis sends prices and unemployment soaring.
Louise Williams, Jakarta -- Unemployment in Indonesia has jumped by more than five million due to the economic crisis, it was revealed yesterday as the armed forces staged a show of force across Jakarta following rural food riots earlier this week.
The Manpower Minister, Mr Abdul Latief, said unemployment had risen to eight million, from only 2.5 million in mid-1997, as factories closed and construction sites laid off millions of casual day labourers.
It is the first time the Government has acknowledged the extent of the potentially explosive social crisis.
The armed forces staged exercises in the central business district and suburbs, with convoys of trucks of fully-armed riot troops fanning out into the traffic and displays by quick- response riot teams in parks and parking lots.
Rioting over rising food prices have hit 10 towns in Java and Sulawesi over the past week and small demonstrations have been staged almost daily in front of the Parliament building in Jakarta.
The armed forces promised to maintain order as retailers warned that prices would jump again by the middle of next week and the Government released figures which put price rises at a 25-year high.
The official unemployment figures are widely believed to understate the problem because people are deemed to be employed if they work for as little as one hour a week.
The Government-approved Federation of All Indonesian Workers Union warned recently that "disguised unemployment" - which it defines as having less work than needed to provide basic needs - might reach 40 million this year, or 45 per cent of the workforce.
Economists estimate that at least 4 per cent growth is needed to absorb the three million new job seekers coming onto the market every year, but the official growth estimate for 1998 is set at zero.
Mr Latief said 1.8 trillion rupiah ($A270 million) would be set aside for an emergency job creation scheme to cushion the crisis, which threatens to provoke social unrest.
The announcement followed the visit of the president of the World Bank, Mr James Wolfensohn, who pledged funding for 75 million man-days of low-wage jobs for the rest of this year.
Mr Wolfensohn visited a crowded north Jakarta slum where residents said just 5 per cent of the population had work and sufficient money to cover their daily needs.
A 51-year-old former meatball seller, Mr Pak Hendro, said he had to give up his business three weeks ago when he could no longer afford to pay the inflated prices of meat.
Now he is cleaning the filthy canals along Jakarta Bay on a Government work program, earning $1.50 a shift. "As long as I have work it is okay with me."
Danuri, an unemployed father of three, said: "We are suffering very much. My children are still at school but I haven't paid the fees; now we can hardly afford to eat."
Residents said the price of rice has increased by 50 per cent and other basics like cooking oil by even more.
Jakarta -- Indonesia's State Logistics Agency, Bulog, won't be releasing in February price controls it maintains over nine basic goods, including sugar, cooking oil, and wheat flour, Bulog President Beddu Amang said Monday.
As part of the revised terms of Indonesia's $43 billion assistance package from the International Monetary Fund, Bulog was supposed to stop subsidizing these commodities, as well as certain types of fuel oils.
Amang stated Monday, however, that surging inflation in Indonesia currently, coupled with a menacing drought, has made such a freeing up of prices impossible. He added that the IMF was informed of the decision and understood it.
"It is impossible for us to let these prices all go up at once, and we have to keep the prices within the people's ability to buy," Amang said. "The IMF understands our problem."
Under the revised IMF terms, Indonesia was supposed to have done away with price controls on all nine basic goods, excluding rice, on Feb. 1.
Raphael Pura, Jakarta -- Asia's crumbling financial markets have plunged Indonesia into deep trouble. But domestic politics could keep it there.
Southeast Asian nations are suffering from many of the same economic ills, but Indonesia stands alone in one critical way: More than any other major Asian nation, it is effectively run by one man.
That man is 76-year-old President Suharto, assisted by a beholden cadre of bureaucrats and military officers. And despite a mounting clamor for change, he appears determined to stay in power -- and has groomed no heir-apparent. As a result, the world's fourth-largest country must cope with its nastiest economic crisis in 32 years, and growing popular discontent, led by an aging, autocratic leader at the controls of an unresponsive political system.
"There's no obvious successor, and if Suharto were to go, what makes you think any successor would be any better?" sighs historian Harold Crouch, an Indonesia specialist at Australian National University, noting the shallow talent pool left by Mr. Suharto's long monopoly on power. "The more I look at it, it's almost insoluble."
To gauge the extent of the political obstacles to Indonesia's rebound, consider: In both South Korea and Thailand, the International Monetary Fund's bailout plans coincided with clean-cut changes in political leadership. In both cases, elections opened the door to broad acceptance of radical economic overhauls.
In Indonesia, however, Mr. Suharto decided last month to seek a seventh five-year term, to begin in March. This means Indonesia must pursue IMF-imposed reforms while being led by the man who for years has resisted the very measures the IMF is mandating -- the elimination of monopolies, projects and other privileges that have benefited the president's family and business cronies. Yet the fear that there won't be an orderly succession -- and the lack even of strong potential successors -- leaves observers equally nervous about a post-Suharto era.
Mr. Suharto, who fashioned himself as the country's "Father of Development," has watched millions of Indonesians slip rapidly back toward poverty. The economy has stalled: credit-starved factories and businesses are idling or closing, mistrust of the currency and banking system is widespread, and hopes that a $33 billion International Monetary Fund rescue program will save the day are fragile.
That fragility is partly due to the murky political outlook. Many Indonesians -- as well as some foreign investors and creditors -- fear that Mr. Suharto, insulated in the paternalistic political structure that he created, and irritated by foreign pressure on his government, may not act forcefully and urgently enough in carrying out the plan.
Indonesia's political stalemate stems from the concentration of authority in Mr. Suharto's hands over three decades. Since his accession to power in 1966, all other national institutions -- from parliament and political parties to the bureaucracy and the armed forces -- have been subordinated to his desires and decisions. That, say critics, has stunted the modernization of state institutions, which have struggled to cope with pressures produced by rapid social and economic change.
That didn't used to matter as much, at least to foreign companies eager to do business in Indonesia. Mr. Suharto's tolerance of costly state monopolies, endemic corruption, cronyism and nepotism in government and business didn't seem to impede expansion or deter international investors and bankers from flinging money into the country; the economy averaged 7% annual growth over the last decade.
But these days some foreign investors -- and many Indonesians -- increasingly see Mr. Suharto, and the system of government he has fostered, as the problem. "It's hard to see any major systemic change taking place," says Bruce Gale, Singapore-based general manager of Political and Economic Risk Consultancy Ltd. "What's happened, especially in the last five years or so, has been the ossification of the public process. And you don't have a national opposition waiting to take over."
Indeed, some believe the president's biggest miscue has been his failure to recognize his own mortality. "The old man is convinced he's the only one who can save the nation," says economist and former cabinet minister Mohammad Sadli. "The only alternative is to try to get rid of him and face a period of instability. ... That's our dilemma."
That has kept confidence in the IMF bailout plan and other home- grown reform proposals low. "The market is worried that with the same president in charge, there will be no follow-through on reforms," says Dewi Fortuna Anwar, a political scientist at the Indonesian Institute of Sciences. "But the market would also be worried if some unknown came in, who may not have the power or experience to make reforms stick. Even when the coffers are full, it's still a major challenge to try to balance all the groups in Indonesian society."
That view leads some analysts to contend that Mr. Suharto, thanks to his dominance of the armed forces and bureaucracy, may be the only figure able to enforce the tough measures needed to right the economy and maintain order. It is "important to have a very strong center as part of the overall reform policy," maintains Juwono Sudarsono, vice-governor of National Defense Institute, who sees Mr. Suharto staying on for at least two years. "He won't step down in times of adversity, he'll only step down when a recovery is on. The critical part is persuading him without seeming to push him."
The succession issue has taken on urgency because Mr. Suharto must choose his next vice president by early March, when the People's Consultative Assembly sits to re- elect him. Mr. Suharto's advanced age and his bouts of ill health in recent years have made the vice presidency -- long a figurehead post -- far more important. If the president dies or steps down during his term, the vice president automatically succeeds him.
More than a half-dozen Indonesians -- including military officers, cabinet ministers and Mr. Suharto's eldest daughter -- are considered potential candidates. Mr. Suharto has customarily refrained from indicating his choice until the last moment. Last month, however, he created a stir by hinting that he might select Research and Technology Minister B.J. Habibie as his deputy.
Mr. Habibie, a close confidant of Mr. Suharto for more than 20 years, has support among some Muslim army officers and Islamic intellectuals, who advocate a brand of economic nationalism that worries Indonesia's ethnic-Chinese business community. Mr. Habibie's love of state-backed high-technology projects, and his lack of political experience, dismay financial markets and some Indonesians, who question his credentials to take command of the country.
Whoever he selects, however, Mr. Suharto himself will have to bear the burden of facing the immediate economic onslaught. And he will do so with diminished popular support from an abruptly impoverished and resentful population, which is largely powerless to influence government policy.
Mr. Suharto's mandate to rule -- like that of other authoritarian Asian leaders -- was based largely on a tacit pact with his people: He would deliver steady improvements in living standards, while the people accepted a late 20th century version of monarchical rule.
That mandate is evaporating. Indonesians have seen buying power accumulated over three decades wiped out within weeks by an 80% depreciation of the rupiah against the U.S. dollar since July. Two to three million workers have lost jobs or are expected to lose them by the end of this year.
Ordinary Indonesians' woes stand in stark contrast with the wealth amassed by Mr. Suharto's family and business cronies. Long tolerated by Indonesians, their excesses increasingly elicit anger at the perceived greed and hypocrisy of the privileged class. Goenawan Mohamad, an influential intellectual and former editor of now-banned Tempo magazine, talks of a economic gap between what he calls "two Indonesias, one belonging to 200 people and the other to 200 million, [which] are like distant neighbors who hardly care for each other." The convergence of rapid economic deterioration and a loss of confidence in the political system has a sobering precedent in Indonesia. In the turbulent final years of President Sukarno's regime, economic chaos helped reveal the social, ethnic, regional and religious divisions in a country, which sprawls for 3,000 miles across more than 13,000 islands.
Influences embedded in the political culture after 350 years of Dutch colonial rule and a protracted independence struggle bubbled to the surface. Among them: an aggressive strain of nationalism, and an enduring mistrust of business and capitalism -- embodied by the foreign and ethnic-Chinese domination of Indonesian commerce and industry. Chinese, who make up about 4% of the population, have historically borne the brunt of social unrest in hard times.
Amid hyperinflation and social unrest, the pot boiled over in September 1965. Then- General Suharto and Indonesia's army intervened, effectively deposing Mr. Sukarno. Hundreds of thousands of Indonesians died in the aftermath, and tens of thousands were imprisoned, before the country found its new course.
Mr. Suharto saw political order as a prerequisite for restarting Indonesia's economic engine then, a principle that has guided his strategic thinking ever since. In 1971, Mr. Suharto and the armed forces introduced a revamped political structure -- dubbed the New Order -- predicated on eliminating the competitive and ideology-based party politics that made the Sukarno era so chaotic. The changes effectively ensured that the president and the military, combined, would always be able to nominate a majority of members in the People's Consultative Assembly, the body which elects Indonesia's president.
To replace traditional political parties, Mr. Suharto used a state-backed agglomeration of so-called functional groups -- the civil service, army and labor unions -- under the name Golangan Karya, or Golkar, to act as the government's de facto political arm. Muslim and secular-nationalist elements in Indonesia's political spectrum were compacted into two other officially recognized parties: the United Development Party and the Indonesian Democratic Party, respectively. Any "political" activity outside the controlled arena of official politics was deemed destabilizing.
The problem is, say some analysts, that politics have been so thoroughly constrained that the system has petrified and become fundamentally a decorative prop to governance that's concentrated in the presidency. Thus, the ability to influence decision-making is confined to Mr. Suharto's bureaucratic chieftains, military commanders and a narrowly based business elite, many of them ethnic-Chinese Indonesians who have forged commercial relationships with Suharto's family members or other government insiders.
The result: There is little room for expression of public opposition, except through ostensibly "nonpolitical" groups or through sporadic outbreaks of street protest.
Among the former are social or religious organizations with large followings, and two Muslim groups are particularly important wild cards. One is the 30-million-member Nahdlatul Ulama, a socially conservative group led by widely respected but ailing cleric Abdurrahman Wahid. A second is the Muhammadiyah group, which has a tradition of social activism. It is led by Amien Rais, a charismatic advocate of egalitarian economic policies and greater public participation in the political arena.
Other foes of Mr. Suharto have coalesced around former President Sukarno's eldest daughter, Megawati Sukarnoputri, who once headed the Indonesian Democratic Party. Ms. Megawati -- who espouses no clear-cut ideology beyond the goal of opening Indonesia's political arena -- is backed by a mix of middle-class liberals, urban blue- collar workers, student activists and others drawn to the aura of the Sukarno name.
Individually, however, none of these elements has the organizational structure, mass following or national stature to do more than voice protests.
The ad hoc nature of the opposition makes the prospect of a Philippine-like "People's Power" uprising in Jakarta an unlikely scenario, according to most analysts. The middle class represents less than 10% of the population, and many are civil servants, soldiers or others with ties to government payrolls or privileges. They have much to lose from protests that could spin off into violent antigovernment demonstrations.
The opposition groups are "united only in opposing Suharto," says Mr. Crouch, the Australian Indonesia specialist. He fears that any "people-power movement would quickly become an anti-Chinese movement and a rioting movement." Already, he and other analysts note, violent incidents with anti-Chinese and anti-Christian overtones have become more frequent in the past two years.
The real prospect that Indonesia's economic and political problems will provoke violent social unrest has focused fresh attention on the armed forces, the one institution perceived as essential to Mr. Suharto's survival. The military's current leadership is generally considered loyal to Mr. Suharto, who carries the rank of a five-star general. But the armed forces have a long tradition of playing a political as well as a security role.
That mandate -- known as dwifungsi, or dual functions -- justifies military intervention in social and economic affairs in the national interest.
The military abhors disorder and is unenthusiastic about allowing broader political rights. "The last thing armed forces wants is the South Korean model, where you have a democracy catharsis leading to chaos," says the Defense Institute's Mr. Juwono. But neither do many officers want the armed forces to be seen as the brutal suppresser of an already impoverished population. That puts the military in a tight corner. Some analysts believe that the armed forces -- with or without Mr. Suharto's concurrence -- would feel compelled to act if incidents of popular unrest threatened to mutate into widespread chaos. But there's no consensus on who would make that assessment or whether military intervention would necessarily lead to an abrupt change of leadership.
Another fundamental security concern worries some analysts. Indonesia has just one policeman for every 10,000 citizens. And while Indonesia's armed forces are 500,000 strong, fewer than 10,000 troops are trained and available to put down trouble, several military analysts say. Should riots break out in multiple locations across the archipelago, the armed forces would be hard pressed to bring the situation under control.
Against this backdrop, the final chapter of Indonesian 20th Century history will be played out. The drama could last weeks, months or even years. But the chances of a smooth and benign transition to a new economic and political era are likely to diminish the longer the question of future leadership remains unsettled.
Louise Williams, Jakarta -- The president of the World Bank, Mr James Wolfensohn, has conceded that the bank "got it wrong" in Indonesia, failing to predict the country's economic collapse and to prevent the growth of monopolies and corrupt practices.
Indonesian economists and community representatives confronted Mr Wolfensohn at his five-star hotel in Jakarta yesterday, accusing the World Bank of concealing the weaknesses in the Indonesian economy, manipulating poverty figures and tolerating the "routine" misappropriation of bank funds.
In a heated meeting, a group of independent economists blamed the World Bank for encouraging overconfidence by foreign and domestic investors, and challenged Mr Wolfensohn to acknowledge the bank's role in perpetuating the economic policies which contributed to the crisis.
"There is no doubt we got it wrong; the current changes have taken us surprise," Mr Wolfensohn said, before leaving for a tour of slum areas to demonstrate his support for the millions of Indonesians who have lost their jobs.
"The issue is now human, it is life and death," he said.
His visit came as one of Indonesia's largest wholesalers warned that the price of basic commodities such as rice and cooking oil would increase by 10 to 15 per cent next week, detergent and soap prices would jump by 75 per cent and imported groceries by as much as 300 per cent.
Mr Richardo Gelael, head of the Goro Batara Sakti group, said major food chains had agreed to keep prices stable for 10 days to cover the recent holiday marking the end of the Muslim fasting month. But when the period expired next Wednesday, prices would "definitely jump".
Ten towns in Java and Sulawesi have been hit by riots over the past week as angry mobs attacked shops in protest over price rises.
Mr Wolfensohn rejected claims by the economists and critics of the Soeharto Government that they had warned about growing problems in Indonesia, such as the gap between the rich and poor, corruption and monopolies.
"We were caught up in the enthusiasm of Indonesia. I am not alone in thinking that 12 months ago Indonesia was on a very good path," he said. "One thing we should have done was to try to suppress the monopolies and unfair practices."
One of the economists, Mr Rizal Ramli, accused the World Bank of manipulating poverty figures in 1990 to present favourable statistics, and of continuing to lend money to Indonesia for sub-standard development projects in which misappropriation of funds "is routine".
Forty community groups presented a statement saying the economic crisis had pushed per capita income down from $US1,100 ($1,640) in 1996 to $US600 in 1997, and the sharp currency depreciation last month meant income levels could fall to $US300 this year. The number of people living in poverty would increase by 60 to 90 per cent, close to the level of 30 years ago.
Mr Wolfensohn refused to discuss Indonesia's political system, saying he was here to examine the economy alone: "I think there is an unease you will all have to sort out that is exacerbating the problem."
But he said the 80 per cent devaluation in the rupiah, and the depreciation of shares to about 15 to 20 per cent of their pre- crisis worth was overdone.
The rupiah made gains yesterday on news that the Singapore Government would assist Indonesian banks in guaranteeing credits, but shares suffered early losses.
Singapore - A top Indonesian Muslim leader has accused President Suharto's children and associates of primary responsibilty for the country's debt crisis and likened their business operations to organised crime.
"They have made the greatest contribution to the present crisis," Amien Rais said in an interview aired by Singapore-based satellite broadcaster CNBC Asia Business News.
Rais, 53, heads the Muhammadiyah, a moderate Islamic group which claims 28 million members.
"Of course, there are many, many more reasons why we have come to the present crisis, but I will say with confidence that maybe around 50 per cent of the cause is the fact that the children of Suharto and their cronies have played a very, very irrational and irresponsible game in our economy," he said.
On the debt problems of the local banks and corporations, the Muslim leader cited monopolies granted to Suharto's children and associates, which he blamed for obstrcuting market mechanisms. He said Suharto's children "use the political leverage of the father to just take a lot of money from our banks and all the debts, I think, became bad debts."
"And I think they've made a kind of organised crime in our banking system, to our market, to our free competition... So we have to stop them right now, If we don't the crisis will be deteriorating and I dont know what will happen," he said.
Asked about the president's reelection bid, Rais said: "I'm afraid that the monetary crisis, and social and economic crisis in my country will not go away because I do believe that Mr Suharto is the problem and not the answer or solution to the crisis."
Asked if the IMF rescue package was enough to change the situation in Indonesia, Rais said: "Without political reform, the economic reform will go nowhere. Now it is very strange and rather irrational because it seems that President Suharto will carry out economic reform as prescribed by the IMF but at the same time he will stick to the old political system," he said.
Opposition figure Megawati Sukarnoputri Wednesday called on her supporters not to take part in violent protests against the government despite an ongoing economic crisis. "Please avoid violent acts in any form", she said in a statement.
Her plea follows an outbreak of social unrest in several parts of the islands of Java and Sulawasi in recent days.
Police have said the trouble was the result of rising prices for food and fuel. Mobs in several towns and villages have attacked stores primarily owned by Indonesia's ethnic Chinese minority, who dominate commerce.
She also called on her supporters to live modestly during the economic crisis and not flaunt their wealth in ways that would trigger "jealousy and social unrest".
In her statement Megawati called on her followers not to be provoked by those "who would deliberately disgrace your sacred mission and struggle for truth, justice and democracy in the archipelago".
Several small and peaceful pro-Megawati demonstrations have been staged outside the national Parliament in Jakarta since she put herself forward as a (presidential) candidate.
By Jay Solomon and Kate Linebaugh
Jakarta -- The world's fourth-most-populous country is running out of medicines.
As with all imports here that must be paid for in dollars, Western drugs and pharmaceutical raw materials have become so expensive in local-currency terms that many types of medicines are simply disappearing from the market, health professionals say. Unless remedial action is taken soon, says Wisnu Katim, director general of Indonesia's Drug and Food Control Authority, the nation will run out of many medicines by as early as April.
"Lives are being put at risk because many people can't afford the 300% to 400% increase in [health] costs," says Steven Batts, an executive with pharmaceutical company PT Prima Adiahusada.
Dialysis problem
Already, on the island of Bali, four people have died after discontinuing kidney dialysis because of the escalating costs, Indonesian newspapers reported. Though Indonesia's currency, the rupiah, has plunged 76% against the dollar since July, the cost of kidney dialysis has soared nearly 400% because of the treatment's heavy dependence on imported equipment, supplies and fluids.
"You can start digging graves for [many more] dialysis patients in the next several weeks," says one Western doctor practicing here.
The crux of the problem is that Indonesia, despite its immense natural wealth, has done little to develop an indigenous pharmaceutical industry. Instead, the country has paid out some $900 million a year for medical imports, including heavy payments for foreign-drug patents and raw materials for Indonesia's drug factories. In all, 80% of every Indonesian-made medicine is imported.
"The real problem is government policy," says Azrul Azwar, president of the World Medical Association and a member of Indonesia's parliament. "We have never taken seriously suggestions that we need to produce raw materials [for medicines] domestically. With the rupiah lower now, we're suffering."
Search for a vaccine
A young father named Made is heartbroken after searching for days for some hepatitis-B vaccine for his one-month-old daughter. The pharmacist at one of Jakarta's best medical clinics told him it had run out weeks ago. "If you find any," the pharmacist said, "let me know." Finally, Made asked a friend in Singapore to fly in with the injection on ice.
Jakarta pharmacists and hospitals report shortages of some of the most common drugs, such as amoxycillin and paracetamol, used to cure everything from the common cold to respiratory infections. Even medical staples such as disposable syringes and X- ray developing solutions are scarce, they say. Indonesians are buying much larger quantities of locally made generic drugs these days, they add. But drug-industry executives worry that local manufacturers can't survive the skyrocketing costs.
Industry analysts say as many as half of Indonesia's 240 pharmaceutical producers have ceased operations in recent months, and that the remainder have cut back output by as much as 70%.
Eha, a Jakarta secretary at a tea company, spent hours this week shuttling among pharmacies looking for the common, broadbased antibiotic amoxycillin as well as some blood-pressure medicine. She's lucky, she says, because at least she can afford to buy the drugs. With stocks of the cheaper generic medicines shrinking, she says, people such as her driver are being forced to buy on the black market or are resorting to traditional, herbal-based medicines.
"When you're sick, you have to do something," Eha says. "Traditional medicines are a last resort."
Possible solution
The government is reviewing proposals to bring down drug costs by organizing purchasing cartels to import raw materials for drug factories in bulk. Last month, the Ministry of Health approved a plan by Prima Adiahusada to coordinate bulk buying. By prioritizing life-saving drugs, cutting out frills, and doing bulk purchasing, a Prima Adiahusada executive estimates retail drug prices can be brought down by about 40%. He warns, however, that these steps must be taken immediately.
"We have two months before the country runs out of drugs -- no medicines, no needles, no health care," this executive says.
The government itself is considering importing emergency medical supplies. But with President Suharto having pledged to the International Monetary Fund to stick to an austere budget, a buying spree is difficult. Many in Indonesia's health-care industry, however, say there may be no other choice. "At the moment, the real problem is that the government isn't providing enough medicine," says Does Sampoerno, a professor at the University of Indonesia's school of public health. "Without any drugs you are letting people die, and isn't that the same as killing?"
Jakarta -- Violent protests have again erupted in key parts of Indonesia, with thousands of people burning shops as they challenged higher food and fuel prices, according to police and news reports Monday.
Violence flared during the weekend in up to 10 towns and villages on the densely populated island of Java and on Sulawesi, the officials said, with shops and the ethnic Chinese minority taking the brunt of the mobs' fury. About 2,000 people pelted shops with stones in the western coastal town of Banawa, in Central Sulawesi Province before being dispersed by paramilitary and police units, a military officer said.
Another large disturbance occurred in Pasuruan, 750 kilometers (470 miles) east of Jakarta, where 400 people demonstrated in a marketplace against higher kerosene prices, the police said.
"They wanted to attack fuel agents there," a police officer said. "But fortunately, soldiers and police arrived in time." About 30 people were detained for questioning.
In Banawa, security forces regained control after two hours, arresting several alleged ringleaders, the military officer, Suwardi, said by telephone from the district military headquarters there. "People are still concerned," he added. "Shop owners are still afraid to open. They raised prices indiscriminately and almost every day for basic necessities. " The officer said 13 shops had been damaged.
Analysts warn that social unrest could increase as the painful effects of Indonesia's current economic crisis are felt. Unemployment and inflation are rising after a dramatic drop in the value of the currency, the rupiah. Austerity measures, enacted by the government under an International Monetary Fund economic rescue plan, are adding to the discontent.
A private television station, RCTI, reported that teenagers and children attacked shops in Ujung Pandang, provincial capital of South Sulawesi, on Monday. Dozens of other stores, mostly owned by minority ethnic Chinese, closed down in fear of more violence.
Chinese make up only 4 percent of Indonesia's population of 202 million but they dominate commerce and are often targeted in civil unrest. A resident said the attack was "obviously caused by current price hikes."
Ujung Pandang, about 1,400 kilometers northeast of Jakarta, was shaken by a series of anti-Chinese rioting in September, in which five people were killed.
Monday's disturbances were the latest in a recent series of such incidents. Security personnel were patrolling Tuban, a coastal town about 100 kilometers northwest of Pasuruan, on Monday after three days of rioting over higher food prices, the police and residents said. Residents in Tuban said the violence coincided with celebrations for the end of Ramadan, the Islamic month of fasting.
A police officer said 46 people had been arrested after disturbances rocked Tuban last Wednesday, Thursday and Friday. A local government official said that about 20 stores had been ransacked.
Sangwon Suh -- Lukman is a supervisor for a construction project in Central Jakarta. But the luxurious apartment complex the 38- year-old was helping build has been put on hold, a casualty of Indonesia's liquidity crisis and drastic economic slowdown. Lukman and his fellow workers are to be laid off. Life is already difficult enough for him without the prospect of a long spell of unemployment. The price of rice used to be 960 rupiah (11c) per kilo; it has now jumped, he says, to 1,600 (19c). "I would do anything to feed my wife and children," he says. More ominously, he adds: "I want to go to war, killing those people who have caused me trouble."
Anyone higher up the social ladder is a target of Lukman's anger. The government: "This is the globalization era, but they have been too loose." The tycoons: "They gulped down the nation's resources, but they have no responsibilities." Lukman is one of millions of ordinary Indonesians who feel that fate has suddenly turned on them. These people are not likely to understand the logic of economic cycles, the effects of a capital crunch and political machinations. But they do know one thing: they are helpless and angry. How this anger erupts and how it is directed could play a bigger role in deciding Indonesia's future course than the plans of international bankers, the outcome of power politics or the campaign of the opposition.
Authorities are watching nervously as Lebaran, the festive holiday that marks the close of the Muslim fasting month of Ramadan, approaches. Traditionally, Lebaran has been a time for feasts, new clothes and gift-giving. This year, the holidays are predicted to be the most subdued in recent memory, but most families and workers still have enough cash to celebrate together. "This is only an embryo of social unrest," says Arief Budiman, professor of Indonesian studies at the University of Melbourne. "As long as there is food on the table, there is no problem."
But when the food runs out, hold tight. After having drawn down their savings for Lebaran, Indonesians will return to a drastically different economic environment. Unemployment, always a difficult figure to set for Indonesia, is being estimated as high as 7 million. The revised government budget removes subsidies for fuel and electricity, as well as state monopolies on essential goods. Though the phasing out of the subsidies will not begin until April 1, food prices have already started to climb as a result of a drought that has ravaged the agricultural sector. In at least one place, vendors have been cutting bars of soap in half because people cannot afford the whole thing. Kastorious Sinaga, a sociologist from the University of Indonesia, believes that the country is facing two kinds of unrest. The first is demonstrations led by activists. These, says Sinaga, "tend not to be destructive." Indeed, organized expressions of dissent are often tolerated by the country's watchful military. In recent weeks, as calls for political reform have become more public, the capital has seen almost daily demonstrations both in support and against the government in front of parliament. All have been peaceful.
Sinaga believes activists are being cautious, aware as they are of the crackdowns that followed the student-led demonstrations in 1974 which greeted the visit of Japanese Prime Minister Tanaka Kakuei. But activists may also be looking at other historical precedents. During the twilight years of first president Sukarno's rule, student demonstrations -- backed by the Communists, Muslims and various military factions -- helped create a period of instability. "The students want to make sure they are not tools again," says Bonar Tigor Naipospos, an activist with a non-governmental organization who is familiar with the student community.
Far more dangerous is the second type of unrest: riots. Fueled by less controllable factors such as hunger and unemployment, these are spontaneous, disorganized and violent -- and more likely to spark a confrontation between government forces and the people. Already this year, there have been scattered, spontaneous riots across Java (see map), the most recent of which occurred in Kragan, Central Java, on Jan. 26. Some 17 shops were attacked after talk of sharp price increases.
While generally unpredictable, such spontaneous disturbances in the past have often been directed against the ethnic Chinese community. Making up less than 5% of the population, the Chinese are popularly believed to control over two-thirds of Indonesia's business. That may not necessarily be so, but perception is everything.
At the village level, they are usually the merchants who deal in staple goods and are easy economic targets for frustrated Indonesians. Lately, Chinese shopowners in Semarang have been confronted by shoppers shouting: "You Chinese! Why don't you go back to your homeland?" This kind of resentment can easily boil over to violence, as happened last year in Ujung Pandang on the island of Sulawesi, when mobs burned down Chinese-owned businesses and property after a mentally-disturbed ethnic Chinese man murdered a schoolchild. As a precaution, the governor of Jakarta reminded Chinese on Jan. 27 not to celebrate Lunar New Year in public.
Unfortunately, the Chinese have been sometimes used as safety valves to deflect anger away from other parties. Recently, there was an explosion at an underground cell of the outlawed People's Democratic Party; some of its members were supposedly making a bomb when it went off. Allegedly found at the scene was a document containing the name of prominent businessman Sofyan Wanandi, head of the Gemala Group. Wanandi was subsequently investigated by military intelligence. He said he had been cleared but the police added that he could be questioned again. On Jan. 27 and 28, Muslim protesters gathered outside a think tank connected to Wanandi and demanded that he be tried.
Some critics accuse the government of setting up the whole incident to cow the public and of using Wanandi, an occasional government critic, as an example. It is also notable that the tycoon is an ethnic Chinese (and a Catholic one at that), and the affair has done little to dissipate the anti-Chinese atmosphere that has been building up.
The irony is that while this may take the heat away from the government in the short run, it could spark riots pitting the majority Muslims against the minority Chinese, thereby creating the very turmoil that most ordinary Indonesians themselves desperately want to avoid.
[With reporting by Yenni Kwok and Jose Manuel Tesoro/Jakarta]
Jakarta -- Fishermen angered by a poor catch and rising prices of basic commodities have rioted in Indonesia's Central Java province, a report said Monday.
Police in the northern coastal district centre of Rembang arrested 21 people over the unrest there and in several other nearby towns some 300 miles east of Jakarta, the Jakarta Post added.
"They were just a few desperate fishermen," Rembang police chief Lieutenant Colonel Sukamto was quoted as saying of the violence in his town late last week.
"Life has been hard because of the unfriendly weather in the seas, while prices of basic commodities such as kerosene were rumoured to soar.
"But, because demand was too high, stores naturally ran out of stocks. People could not believe what was happening and went on a rampage," he said, adding the fishermen attacked and looted shops.
Calm had since been restored and shops had reopened, Sukamto said. However, hundreds of police and troops were on standby to deal with any further unrest.
Disturbances had also broken out in the nearby towns of Lasem and Sarang, he added, with mobs targetting shops owned by ethnic Chinese. Those incidents followed rioting in the adjacent towns of Kragan last Monday and Tuesday and Sluke last Wednesday.
Social unrest is on the rise in Indonesia as the economic crisis gripping the country forces price hikes and mass lay-offs.
Paul Watson, Cikampek -- On dust-blown flats that used to be good farmland, a grand shrine rises to honour the greed and sheer gall of Indonesia's first family.
President Suharto and his extended family have their fingers in every conceivable pie in Indonesia - from cellular telephone networks, to power plants, toll roads, banks, and oil and gas exploration.
The family is into so many businesses that Indonesians simply call it Suharto Inc. Estimates of the family's assets run as high as $56 billion.
Here, in these dusty flats, is the latest visible indication of the staggering fortune, estimated at $56 billion, of President Suharto's family.
At the centre of the scattering of huge, unfinished steel structures, is one that's three storeys high and as long as a football field. It's the perfect toy for President Suharto's youngest son.
Blue tarps hang from the girders, flapping in the breeze that stirs up rust-brown dust devils which swirl across about 100 bulldozed acres.
Out on the edge, next to the highway, there's a billboard that pictures two engineers in white hardhats and lab coats, a man and a woman smiling at their clipboards.
Even now, with the economic mess the country is in, Indonesians are expected to buy the same old dangerous illusion: that any cost is justified in the name of national pride. Or presidential privilege.
"We want to be blessed," the billboard says. "Here we will build the national car factory."
After six months of construction, the plant where the president's son, Hutomo "Tommy" Mandala Putra, is supposed to turn out Indonesia's national car is far from complete.
Lots of new cars are lined up just the same, all of them Timors covered in white cloth blankets to keep them clean of the construction dirt.
About 500 of them are parked in 25 rows beneath corrugated metal roofs. Every last one of these so-called national cars was built in South Korea and imported duty free to Indonesia.
Tommy's Korean partners, Kia Motors, went broke as the region's economic crisis mounted last year, reportedly leaving him stuck with close to half of some 40,000 Timor cars he imported.
By presidential decree, Suharto's son and his cronies have diverted millions of dollars from the country's treasury to build the myth of a national car.
The Timors that sold went for about half the sticker price of similar Toyotas, which led the Japanese to challenge the subsidies at the World Trade Organization.
It's one of several fantasies the International Monetary Fund (IMF) wants Suharto to snap out of before he drives the country over a cliff. But his son, for one, refuses to give up.
He needs a $1 billion loan to finish the plant, which will be tough to raise now that the collapse of Indonesia's currency has left most of the country's biggest corporations unable to pay their debts.
But even after giving in to the IMF under intense pressure, and cutting off government support for his son's project, Suharto is encouraging him to keep it alive with private money.
It doesn't take a Harvard business grad to see that the Timor is a giant turkey that an investor would have to be crazy, or very charitable, to feed with his own money.
Yet Tommy insisted recently the car plant will be finished, and Timors will start rolling off the line here, even though few Indonesians would be caught dead in one.
"I don't believe this is a very meaningful setback," he told reporters after his father signed the IMF deal earlier this month and the Timor lost its tax breaks.
"As I've said before, business has its ups and downs and I'm always ready to face the worst."
Just the kind of talk that makes investors deeply suspicious about Suharto's promises to knuckle under and stop the rot that's destroying the economy. Tommy doesn't even seem to get the message that Indonesians don't like his cars anyway.
Taxi drivers know cars. Jakarta cabbie Anthoni Ganda says few Indonesians are willing to risk buying a Timor because the engines are notoriously rough, the Korean makers are broke, and spare parts are hard to find.
People tend to whisper when they offer an even better explanation: driving a Timor is an invitation for a rock through the window, or worse, if anger continues to build and protesters attack anything associated with a Suharto.
At 76, and after almost 33 years in power, President Suharto is going for his seventh five-year term in March despite ever louder calls from his own people to step down.
His six children, three men and three women, must be glad to see him so determined to hang on. It's access to the very top which foreign investors want when it comes to doing business in Asia.
That they're willing to pay dearly for it explains why Suharto, who was an army general before taking charge in 1965, now has a family worth nearly half of Indonesia's gross domestic product, and at $56 billion, just less than the cost of the $60 billion IMF bailout.
Apart from supporting Tommy's car venture, Suharto granted him monopoly control of Indonesia's cloves, a key additive to local cigarettes and a once lucrative export.
Tommy made such a botch of the clove business the price collapsed, farmers destroyed their crops and the government lost several hundred million dollars.
The IMF insisted Suharto break up his son's clove monopoly as another key condition of this month's bailout.
Suharto's eldest daughter, Siti Hardijanti Rukmana - better known by her nickname "Tutut" - had her hand in the battle over Canada's Bre-X Minerals goldfield, which turned out to be a gigantic fraud.
Before the fraud was uncovered last year, Tutut was allied with Toronto's Barrick Gold Corp. in a struggle for a cut of the Busang goldmine, which was supposed to be the world's biggest.
That put Tutut up against her much weaker brother, Suharto's eldest son, Sigit Harjoyudanto, who backed the losing side in Busang and is also in the banking business.
The Busang field turned out to be worthless, and thousands of small Canadian investors lost a bundle in the scam. Tutut is still sitting pretty.
Her name also comes up in connection with a taxi company called Steady Safe, to which Suharto's daughter sold an 11 per cent share of her multi-million dollar toll road company.
Peregrine Investment Holdings, once Hong Kong's biggest investment bank, then loaned $370 million, a third of its capital, to the taxi company. The bad loan drove Peregrine into bankruptcy earlier this month.
Tutut is also one of the eight chairpersons who run the ruling Golkar party, one of three Suharto allows to campaign under strict controls that keep him in the presidential palace.
Tutut's other business concerns include tolls from national highways, power plants and a vast real estate empire.
Her name even appears on the short-list of possible successors to President Suharto, not least because she has high-level backing in the military - not to mention a vault full of money to buy support.
Another Suharto son, Bambang Trihatmodjo, tried to challenge his younger brother Tommy's national car monopoly by building Korean Hyundais, but his father refused to back him with tax breaks.
The family's vast wealth hasn't stopped Indonesia's financial hemorrhaging, or apparently, the family's grandiose ideas.
Naturally enough, critics of the move to prop up East Asia's economies with massive loans from the IMF are asking what's going on. The loudest complaints come from both sides of Capitol Hill in Washington.
The right wing demands to know why U.S. taxpayers are putting up billions of dollars to rescue foreign bankers who should have known better.
The left wing says the IMF is forcing millions of people out of work, and making life for millions more of the poorest unbearable, while the Suhartos and their cronies only get fatter.
| Politics |
Raphael Pura, Jakarta -- Trying to project Indonesia's political future has become a national obsession, as President Suharto prepares to begin his seventh term next month amid the toughest economic downturn in more than 30 years.
Much of the speculation has centered on Mr. Suharto's still-to-be-announced choice as vice president, a post that is growing in importance as the 76-year-old president ages. Mr. Suharto has privately indicated that he's leaning toward naming 61-year-old Minister of Research and Technology B.J. Habibie as his vice president.
Mr. Habibie -- like some other potential nominees -- would be a controversial choice. He's popular with some nationalist Islamic groups and enjoys a rapport with Mr. Suharto, his mentor for more than 20 years. But the foreign and Chinese business communities, as well as segments of Indonesia's non-Muslim and moderate Muslim communities and the military, aren't happy with the prospect of Mr. Habibie as No. 2.
Mr. Suharto doesn't have to signal his choice formally before early March, so Indonesians continue to spin out scenarios. But Indonesian political analysts say the president's ultimate decision is unlikely to be challenged; it hasn't been in six previous sessions of the People's Consultative Assembly, which selects the president and his deputy.
Here is a glimpse of some other potential vice presidential nominees, should Mr. Suharto decide not to tap Mr. Habibie. This isn't an exhaustive list; Mr. Suharto has a reputation for not tipping his hand until the last moment, and a dark-horse selection is always a possibility.
Incumbent Vice President Gen. Try Sutrisno, 62 years old. The retired army general is seen as a possible interim leader. He's from the mainstream Java political heartland, has solid military and Muslim credentials and evinces a tolerant, low-key public persona that makes him agreeable to many segments of the political spectrum. But Mr. Try has some drawbacks: His mild personality is considered uncharismatic, and he exhibits little of the forcefulness needed to see Indonesia through a crisis. In addition, Mr. Try is not known to have strong economic views. * Ginandjar Kartasasmita, 56, head of Indonesia's National Development Planning Board. A savvy bureaucrat, Mr. Ginandjar boasts a decades-long career in a variety of important government posts, and an intellectual's grasp of economic ideas. He also has a shrewd nose for grass-roots politics, plus wide international experience: He studied in Japan and is fluent in Japanese and English. But some critics regard him as an economic nationalist who is mistrusted by Indonesia's more orthodox economic technocrats and by the ethnic-Chinese business community. As a former air force officer (an administrator, not a pilot), Mr. Ginandjar may lack the optimum military credentials to win strong backing from an armed forces dominated by army brass. Army chief of staff Gen. Wiranto, 50. A professional soldier from central Java who once served as Mr. Suharto's adjutant, Gen. Wiranto enjoys a reputation as a competent, popular officer. Unlike others in Indonesia's officer corps, he's not perceived as a particularly "political" general, despite his ties to Mr. Suharto. Still, Gen. Wiranto has been loyal to the president and appears to support the existing nexus between politics and the military. For example, last year he allowed his wife and 21-year-old daughter to be appointed to the People's Consultative Assembly, a move that drew criticism. Gen. Wiranto also lacks broad national and international recognition, and isn't known for a particular economic philosophy. Siti Hardijanti Rukmana, 49, President Suharto's eldest daughter. A vice-chairwoman of Golkar, the government's political arm and the dominant faction in Indonesia's Parliament, the stylish Mrs. Rukmana is the most politically visible of the presidential children. As an indefatigable defender of government programs and policies, Mrs. Rukmana has demonstrated campaigning skills. But her high profile may severely cloud the prospect of winning her father's nomination as vice president. With Mr. Suharto facing growing criticism for granting business privileges to his children, Mrs. Rukmana's nomination would be widely viewed as a "dynastic" choice that would be certain to spark a fresh political firestorm. Information Minister R. Hartono, 56. Gen. Wiranto's predecessor as army chief of staff, Mr. Hartono has cultivated ties to Indonesian Muslim activists and is perceived to have some influence with Mr. Suharto through his close friendship with Mrs. Rukmana. Problems: Mr. Hartono, who has actively campaigned for Golkar, is considered a "political" officer who isn't well- regarded by some of Indonesia's professional officer corps. He, too, lacks particular economic training or experience, and isn't widely known within Indonesia or abroad. Hartarto Sastrosoenarto, Coordinating Minister for Production and Distribution Affairs. An Australian-trained chemical engineer, Mr. Hartarto has been a cabinet minister for 15 years, at various times overseeing industrial and trade affairs. Mr. Hartarto is a bureaucratic survivor not particularly known as an influential policy-maker. His main strength derives from his image as one of Mr. Suharto's most trusted loyalists. A long shot, Mr. Hartarto is a figure without wide national recognition or an international profile.
Jakarta -- The Armed Forces (ABRI) reaffirmed yesterday its commitment to renominating President Soeharto even if there was a change in its leadership.
ABRI spokesman Brig. Gen. A. Wahab Mokodongan said the Armed Forces choice of Soeharto was part of its "strategic plan" to help restore the ailing Indonesian economy.
"I can tell you that ABRI will not reverse its support for President Soeharto's renomination even when the incumbent Armed Forces chief is replaced," he told The Jakarta Post.
Wahab made the remarks in response to rumors that incumbent ABRI Chief Gen. Feisal Tanjung would be replaced soon. The spokesman declined to comment on the speculation.
"Even if we have to have three successive ABRI chiefs ahead of the general session of the People's Consultative Assembly (MPR) next month which will elect the new president, we will not change our choice," he said.
Wahab said any changes or adjustments to the plan would only cause the Armed Forces headquarters difficulties in the future. He did not elaborate.
He also dismissed speculation that he was among the ABRI leaders likely to be replaced.
The 1,000-strong MPR will convene next month to elect a president and vice president and endorse the 1998/2003 State Policy Guidelines.
Constitutionally, the five factions in the MPR, including the 113-member Armed Forces faction, should announce their presidential and vice presidential candidates in the general assembly, scheduled for March 1 to March 11.
"The Armed Forces headquarters will formally announce its presidential and vice presidential candidates at the end of this month," Wahab said.
He said ABRI's decision to renominate Soeharto was made in the belief that Soeharto would be able to overcome the current economic crisis while the military was also aware of demands for political reform.
"Political reform is needed to accelerate development to improve prosperity ... yet we believe restoring the country's battered economy is more crucial now and should have top priority.
"And ABRI still trusts President Soeharto to lead the country."
He said he doubted critics who said the economy would improve if Soeharto was replaced.
Wahab added the Armed Forces had discussed names for the vice presidency but would support anyone that the president elect picked.
"We will support Amien Rais if pak Harto eventually chooses him for the post," he said.
He was referring to the outspoken Yogyakarta-based Moslem leader, who is also chairman of the 28-million strong Muhammadiyah Moslem organization.
Wahab denied reports that ABRI had publicly announced its vice presidential candidates.
"We've never said that our candidates for the vice presidency were incumbent Try Sutrisno or Army Chief of Staff Gen. Wiranto."
"One thing for sure is that our candidate will represent the majority of people's aspirations," he added.
Yang Razali Kassim -- Indonesia's political tension triggered by the financial crisis took a new twist last week when some prominent members of the elite, including the Wanandi brothers, were quizzed by the security authorities in connection with a bomb blast in the capital on Jan 18.
Sofyan Wanandi and Jusuf Wanandi found themselves implicated in an alleged plot by the banned People's Democratic Party (PRD) to exploit the financial turmoil and prevent the re-election of President Suharto in March.
The Wanandi brothers were cleared by the Jakarta office of the Bakorstanas (the Coordinating Body for National Stability) after statements were taken. But military investigators told The Business Times they would not rule out the possibility of questioning them again in future.
Wanandi. They denied any links with the group. "They have been cleared for now. They may or may not be called up again, depending on what comes out of future investigations," a senior military officer said.
In a press conference in Jakarta soon after being questioned at the Bakorstanas headquarters on Monday, Sofyan Wanandi repeatedly denied any involvement in the Jan 18 blast. "The entire clarification of the situation has been accepted by the authorities and that is all they told me today," he said. But this did not prevent protesters from demonstrating outside the Centre for Strategic and International Studies (CSIS) soon after, demanding the think-tank be closed and Sofyan Wanandi put on trial. The CSIS, located at Tanah Abang in Jakarta, was founded some 20 years ago with the help of the Wanandi brothers and several intellectuals and was highly influential in the early years of the New Order.
The crude home-made bomb blew up accidentally two Sundays ago, destroying a low-cost apartment in Tanah Tinggi, central Jakarta. Two out of three suspects said to be linked to the left-leaning PRD were arrested. The chief of the Jakarta Bakorstanas, Maj- Gen Sjafrie Sjamsoeddin, told the press that documents found at the site of the blast seemed to suggest an attempt to mobilise the elite coordinated directly by the Wanandi brothers.
According to Maj-Gen Sjafrie, an e-mail message seemed to implicate Sofyan Wanandi as the mobiliser of financial support from business groups and his brother Jusuf as the mobiliser of moral support from intellectuals and overseas groups.
According to the weekly magazine Gatra, references were also made to a reform- oriented revolution through the mobilisation of "four forces": economic support through the Wanandi brothers; mass support through pro-democracy groups sympathetic to opposition figure Megawati Sukarnoputri; think-tank support through the CSIS; and military support through a "retired general who once was very powerful" -- an oblique reference to former commander-in-chief Gen Benny Murdani.
The current commander-in-chief of ABRI, the armed forces, Gen Feisal Tanjung, said the questioning of the Wanandi brothers had nothing to do with their ethnic background or "Sara" -- the Indonesian codeword for sensitive issues of race, religion and tribalism. "The law has to be upheld. If anyone is found guilty, he has to face the consequences. This action has nothing to do with Sara," he said. As if to prove the point, the military two days later disclosed that a prominent Muslim media owner, Surya Paloh, had also been implicated by the alleged plot and was questioned. His newspaper, Media Indonesia, subsequently sacked a reporter who wrote a story quoting a PRD denial of the alleged plot. It also reprimanded an editor who approved it.
The questioning of Sofyan Wanandi, 56, who heads the diversified Gemala Group, and his brother Jusuf, 60, a seasoned lobbyist and director of CSIS, is significant for three reasons: First, for the first time since the financial crisis hit the Indonesian economy, some of the country's business leaders and outspoken opinion-makers are being put on the defensive.
Secondly, it shows an ABRI solidly behind President Suharto. In fact, this seems to mark the beginning of a counter-offensive by the Indonesian leader to reconsolidate his hold on the presidency which has been shaken by the financial crisis -- the worst since the economic collapse of the 60s which forced the first president, Sukarno, out of power.
Thirdly, it refocused attention on the behind the CSIS group, which, despite its waning fortunes today, has for a long time been politically influential in Indonesia and is still held with regard.
Sofyan Wanandi not only heads Gemala but is also part of the Prasetya Mulia Foundation and the Jimbaran Group, which bring together largely ethnic-Chinese local conglomerates. The Jimbaran Group, for which Sofyan is spokesman, is meant to respond to President Suharto's call two years ago for the large corporates to spread the wealth and help smaller companies grow.
During the economic crisis of the 60s, Sofyan and Jusuf were among several student leaders who successfully mobilised an anti-Sukarno uprising supported by the army, which the then Gen Suharto commanded. After Gen Suharto took over power in 1967 and installed the so-called New Order, many of the student leaders became prominent figures in government, business and politics and were also instrumental in the formation of the ruling Golkar.
Sofyan himself, who has had close links with the military in the early days, later became successful in business. Jusuf went on to set up the CSIS. Run by bright, articulate and active people, the CSIS turned into a major opinion-shaper with links to major think-tanks overseas, especially in the West.
A key factor that made the CSIS effective, however, was the backing it enjoyed from the late Ali Murtopo, one of the early power players of the New Order. After his death in the early 80s, the CSIS group latched on to his proteges such as General Benny Murdani, who eventually rose to become a powerful military commander-in-chief, in fact too powerful for the President's liking.
In one of the most surprising shake-ups 10 years ago, President Suharto moved Gen Murdani out of his post just before the presidential election of 1988. Now retired, Gen Murdani spends some of his time at the CSIS, where he has an office.
Like other intellectuals and thinkers in Indonesia, the Wanandi brothers have minds of their own. They walk a fine line between their roles as defenders of the Suharto government overseas and as critics at home. But over time, because the CSIS has been dominated by Indonesians who are either of ethnic Chinese descent or are Catholic or both, it drew resentment and suspicion from sections of the majority community which see the think-tank as a base to expand minority influence or keep Islam in Indonesia in check.
The CSIS denies this. But partly in response to such charges, it has lately developed close links with Abdurahman Wahid, the leader of the Nahdahtul Ulama, a powerful mass-based Islamic movement with millions of members. Abdurahman Wahid however is as controversial a Muslim leader as his links with CSIS. Although critical of President Suharto, his voice is now muted because he is in hospital recovering from a stroke, at a time when reform- minded critics of the president would need him most.
The questioning of the Wanandi brothers must have come as a surprise to many because it is unlikely that they would be reckless enough to link themselves with a banned group like the PRD. "Are we that stupid?" Sofyan Wanandi asked.
But he has also been seen of late to be too critical of the government for its handling of the economy and for letting the rupiah crash so badly at the expense of businesses. It seems that President Suharto is beginning to hit back at those deemed to have added grist to the international attacks on the rupiah.
"As head of a conglomerate, Sofyan is outspoken, in fact too outspoken. Also, Sofyan and Jusuf are seen to be with the Murdani group. So it looks like President Suharto is beginning to show that he remains in control of the situation. He appears to be eliminating any possibility of him being dethroned through the CSIS," economic analyst Dr Hartojo Wignyowijoto told BT.
Or is President Suharto actually making pre-emptive strikes to soften the opposition against his preferred heir-apparent B J Habibie?
It is no secret that the CSIS group has little liking for Dr Habibie, whom they tend to dismiss in derogatory terms, both as a minister as well as a potential successor. The CSIS, and Sofyan Wanandi in particular, is said to have campaigned against Dr Habibie, favouring current Vice-President Try Sutrisno, who is said could be more pliant to his former boss, Gen Murdani, than Dr Habibie would ever be.
But according to those close to Dr Habibie, the president made it clear last week to ABRI chief Gen Feisal Tanjung that he wanted the research and technology minister to be in the running for the vice-presidency and that special instructions had gone out to pave the way for his rise.
A few days later, aides of Dr Habibie were called to ABRI headquarters and informed of the military's stand to carry out the president's instruction. On the same day, Gen Feisal, accompanied by the chairman of Golkar, Harmoko, and the head of the civil service, Home Minister Yogi S Memet, called on President Suharto.
It was during this meeting that President Suharto accepted his renomination for a seventh term as well as discussed new criteria for the vice-presidency which were seen to favour Dr Habibie.
The move on the Wanandi brothers last week may well be the beginning of more things to come as the March presidential election gets nearer. What these will be will become clearer as the election gets closer.
[The writer is BT's regional analysis editor]
| Miscellaneous |
Kafil Yamin, Jakarta -- Child malnutrition continues to be a blot on Indonesia's impressive record of poverty reduction in the last three decades.
Malnutrition is the underlying cause of 60 percent of all deaths of children under five years of age, according to the State of the World's Children 1998 report by the United Nations Children's Fund (UNICEF). The report ranks Indonesia 67th in the global list of under- five mortality with 336,000 deaths annually compared to the annual number of 4.73 million births.
This means Indonesia, which has cut poverty incidence from 70 percent to 14 percent in three decades, is worse off than South- east Asian neighbours like the Philippines, Malaysia or Vietnam.
UNICEF also says child malnutrition in the country was recorded at 35 percent. Though the figure has fallen from the 39 to 44 percent figure during the period 1994 to 1996, analysts say the decline is taking place slowly.
There are also other signs of poor child health, ranging from deficiency of iodine and Vitamin A and the prevalence of acute respiratory infections.
UNICEF officials in Jakarta point to the fact that iodine deficiency disorders (IDD) continue to cause high goiter rates especially in the eastern, poorer part, of Indonesia. In where IDD remains endemic, the rates of goiters are at 28 percent among school children and between 23 to 28 percent for pregnant women.
Goiter sufferers are often found in rural areas, like villages in Central and East Java and mostly in the islands of Bali, Nusatenggara and Lombok. But iodine deficiency problems are not always easily spotted, especially when no glob of flesh is readily seen on the neck.
"If the goiter sufferers are children, you won't see a glob of flesh on their necks," said Sunawang, nutrition programme coordinator at UNICEF Jakarta. "IDD is caused by more by natural factors," he said, linking micronutrient deficiency, poor diet and the environment.
"In eastern areas of Indonesia, iodine elements disappear from the soil surface due to natural processes, such as erosion, floods, etc. Food coming from such soil through farming and agriculture then have no iodine content," Sunawang pointed out. So "the only way is to add iodine to food."
In a 1987 presidential decree, the Indonesian government required all salt produced to be iodised. Producers who do not comply with this regulation are subject to punishment.
The salt iodisation campaign, commonly used in many developing countries, has worked smoothly in cities, where government orders are more easily carried out and monitored.
But that is not the case in remote villages, not least because of ignorance about the importance of iodine in diet. "There are cases where people consume uniodised salt because it is the only salt available in the marketplace," Sunawang said.
Inadequate child care and knowledge about health is also a factor in malnutrition and child deaths, the UNICEF report says.
Indonesian authorities have made impressive headway in spreading the word about oral rehydration therapy (ORT) to control diarrhoea in children, so that by 1994, overall use of ORT reached 99 percent.
But the other component of care of diarrhoea patients -- giving sufficient fluids -- was only practiced by 53 percent.
Thus, the UNICEF report says that diarrhoea remains the cause of 23 percent of under-five deaths in Indonesia. The same report says acute respiratory infections, often found among slum communities and poor villages, cause 40 percent of infant deaths.
Needless to say, child health is intertwined with maternal well- being. Maternal mortality remains high at 425 in 1992, though this has fallen from 450 per 100,000 live births in 1986.
Child health experts link this to poor access and coverage of antenatal care, noting poor existing capability to detect and refer 'at risk' obstetric emergencies. This means the country will be hard pressed to meet the goal of 225 deaths per 100,000 live births for this year.
Other figures shed more light on mothers' health. Almost two- thirds of Indonesian women are anaemic. The maternal anaemia rate stands at 40 percent, a situation unlikely to be addressed solely through the distribution of iron-folate tablets during pregnancy.
Sunawang said 26 percent of women still have inadequate dietary intake, which contributes a great deal to both child malnutrition and maternal mortality. While only 14 percent of the population have daily per capita energy intakes below the government- recommended daily allowance, experts say people need to better educated on dietary choices.
"Common people, including the rich, prefer to consume good- tasted foods than nutritious ones," said a medical expert who runs a health consultation programme on television.
UNICEF officials, however, add that Indonesia deserves credit for its success in eliminating vitamin A deficiency.
Two decades ago, more than two million Indonesians were affected by Vitamin A deficiency, which can cause blindness and damage the immune system. With UNICEF, the government distributed high-dose Vitamin A capsules to children ages one to five, reducing deficiency levels dramatically.
The rate of severe Vitamin A deficiency has declined by more than 75 percent, sparing the eyes, health, and lives of millions of children. Blindness among children due to vitamin A deficiency was eliminated in 1994.
Severe Vitamin A deficiency, however, persists in three provinces -- West Java, Central Java and East Java -- where half of all children under five had inadequate levels of vitamin A.
The government aims to eliminate vitamin A deficiency totally by the year 2000, among others by food fortification and intake of Vitamin A-rich food.
It is also giving high-potency Vitamin A capsules to mothers after they give birth. This, however, will require special effort since only 35 percent of births occur under medical supervision.