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Indonesia Teeters Like A House Of Cards Suharto Resists Changes Despite Economic, Social Crises

For 30 years, Indonesia could do no wrong in the eyes of the international community.

It was Southeast Asia’s most powerful playmaker, a model of economic development and political stability, a haven for foreign investors who came to praise President Suharto’s wisdom.

While times were good, Indonesians - and foreign investors - were willing to overlook a lot: the $40-billion Suharto family fortune built on skimming and nepotism, the lack of political development and democracy, the feudalistic style of a leader who ruled as part king, part CEO.

Indonesians and investors were, after all, reassured time and again by the World Bank and others that Suharto’s Indonesia was sound economically and poised for continued economic growth.

So now, as the economy suddenly unravels and social unrest threatens, shopkeeper Lofti Sastro found himself slightly shocked and saddened this past weekend to assess the performance of the president and the local currency with the words, “Suharto broken, rupiah broken.”

It all happened so fast that he feels more confused than angry. He does not understand how highly paid international bankers could say one week that Indonesia was healthy as an ox, the next that it was in economic tatters.

What he does understand is that his food bill has tripled in two months’ time, his son was laid off from a factory job and his future looks very uncertain.

Like most Indonesians, he has grown tired of Suharto and wishes he would just fade away. He says this with reluctance because he loves his president for many things - lifting the nation out of poverty, raising the education standards, giving Indonesia a leading voice in Southeast Asian affairs - but in the end, he noted, “32 years is a long time to be president. Too long.”

Suharto, 76, doesn’t see it that way.

On Tuesday, he will win a stacked election in the 1,000-member People’s Consultative Assembly for a seventh five-year term and begin anew his battle with the International Monetary Fund to rescue Indonesia - the world’s fourth most populous country - from economic, and, perhaps, social disintegration.

The 11-day assembly that culminates with his “election” widely is viewed by Indonesians as a charade, designed largely to endorse whatever Suharto wants it to endorse.

Nonetheless, Suharto, a one-time bank clerk who came to power as an army general, is sparing no precaution to ensure that the 20 million residents of Greater Jakarta do not ruin the festivities.

Assemblies of more than five people, including weddings, are banned through March 18, and 25,000 military troops are on duty in Jakarta, under the command of Suharto’s son-in-law, Lt. Gen. Prabowo Subianto.

Schools and universities are closed, and a magazine editor has been called in for questioning after depicting Suharto as the king of spades and writing: “No matter how many times we turn the card, President Suharto will still be elected.”

Thousands of university students in Jakarta and scattered cities have ignored the ban and held daily, peaceful protests on campus, calling - as they have for years - for democracy and Suharto’s resignation. Army troops ring the campuses but make no attempt to interfere. Nor have they attempted to stop countryside riots directed primarily against Chinese shopkeepers.

The riots, which claimed five lives, stopped suddenly two weeks ago as if on command, leading to speculation in Jakarta that the government condoned, if not organized, the disturbances in order to divert attention from Suharto’s troubles and justify Suharto’s plan to give himself what he calls as-yet-undefined “special powers” to deal with the economic crisis.

Exactly what Suharto’s game plan is mystifies even the most seasoned Asian and Western diplomats.

Three times he has pledged his commitment to the 50-point reform package demanded by the IMF in exchange for a $43 billion bailout. Each time he has used mirrors to avoid full compliance, contending that the IMF antidote is not working.

The IMF is scheduled to make a second, $3 billion payment to Indonesia on Sunday, but, under pressure from Washington, it will probably delay the disbursement.

Clearly, economists say, in his “yesno-maybe” responses to the IMF and Indonesia’s creditors, Suharto is playing a poker hand, hoping to negotiate less stringent conditions and keep the family fortune - as well as his reputation - intact.

Tags: unrest