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ASIET NetNews Number 20 - June 1-7, 1998

Democratic struggle

  • Defiant students demand Suharto face trial
  • Students target local television stations
  • Rallies target corrupt officials
  • Student protests go on in several cities
  • East Timor
  • 1,500 take part in free-speech forum in Dili
  • Habibie says no change in Timor policy
  • Political/economic crisis
  • Wiranto: Stop all this hounding and defamation
  • Poor harvest, wages could reignite rice riots
  • Over 1,000 killed in Indonesia riots
  • Is Indonesia about to be radicalized?
  • The May riots
  • Environment/land disputes
  • 1997 forest fires: new estimates
  • Labour issues
  • Bus drivers in Indonesian capital strike
  • Human rights/law
  • `Reformation' buskers member found dead`
  • Investigations to be speeded up
  • A wary media tries the taste of freedom
  • Rape victims of revolution still suffering
  • Politics
  • Wealth fuels investigative frenzy
  • Kin earned riches, says new leader
  • Megawati says: Stop hounding Suharto
  • Arms/armed forces
  • Timor crash kills 11 Indonesian army officers
  • Troops accused of shooting students
  • UK funded training for Indonesia forces
  • Economy and investment
  • Jakarta to roll over $129bn foreign debt
  • GDP falls 8.51% in first quarter

  • Suharto partnerships with foreign companies

    Democratic struggle

    Defiant students demand Suharto face trial

    South China Morning Post - June 4, 1998

    Jakarta -- Student protesters shouted "Hang Suharto" outside Parliament and staged a rowdy protest in a main street yesterday, ignoring an appeal by the military chief to halt "out-of-control" condemnation of the ousted leader.

    Mr Suharto, a former army general who turns 77 on Monday, faces growing demands to surrender riches accumulated during three decades in power.

    The 2,000 banner-waving students demanded he be put on trial for economic crimes. Soldiers closed the road.

    The protesters scoffed at a pledge by new President Bacharuddin Habibie to hold general elections next year, saying he was a corrupt lackey of Mr Suharto and should step aside.

    Later, the military sealed off a city-centre junction to stop about 20 busloads of protesters from staging a demonstration at Jakarta's National Monument, across from the Presidential Palace.

    Hundreds of students shouted slogans as soldiers, police and guests at adjacent five-star hotels looked on.

    Earlier, Mr Habibie urged Indonesians not to dwell on a corrupt past and focus on economic recovery. But with the economy expected to shrink at least 10 per cent this year, the task is daunting.

    Student protesters who helped dislodge the president accuse Mr Suharto of deepening Indonesia's financial crisis by exploiting state wealth.

    General Wiranto, the armed forces chief, said the nation of 202 million people should pardon Mr Suharto because he boosted economic growth and averted chaos by relinquishing power.

    A government commission, meanwhile, said the death toll over several days of riots in Jakarta in the middle of last month was 1,188, more than double a military estimate.

    In a report released yesterday, the National Commission on Human Rights also criticised the armed forces for failing to take prompt action to prevent rioting.

    The chairman of the ruling Golkar party, Harmoko, rejected demands from senior party members that he quit but said he did not want to be re-nominated for the post.

    Surabaya students target local television stations

    Jakarta Post - June 3, 1998

    Surabaya -- Hundreds of students marched yesterday afternoon to the private SCTV television station here demanding their demonstration for reform be broadcast and refused to budge until the station managers yielded.

    Traveling in two big buses and other personal vehicles, the students first went to the state-owned TVRI television station but were prevented from entering. They then went to SCTV, which is located nearby in the Darmo Permai housing complex.

    While several of their leaders negotiated with station manager Ris Anggono, the other students from, among others, Petra Christian University, Wijaya Kusuma University and Surabaya Teachers' Training Institute held a free-speech forum under the watchful eyes of security personnel.

    One of the students, Sapardi, said their demand to be broadcast was meant to help disseminate the students' call for total reform.

    The students defined reform as including the revocation of the five laws that govern the country's political system, and revision of the Armed Forces' dual function that enables the military to be not only security forces but also a political player.

    They also demanded the revocation of the subversion law, the release of political prisoners, general elections, the lowering of prices of essential goods, and an investigation into alleged corruption by officials.

    SCTV finally agreed to air the student demonstration on its 6 p.m. news bulletin yesterday.

    The students' move echoed that of another group of student protesters who last month took over the RRI radio station and broadcast a protest against former president Soeharto.

    Yesterday's demonstration called for the convening of a special session of the People's Consultative Assembly (MPR) to elect a new president and for Soeharto to be tried for corruption.

    The same demands were made by another group of students who staged a rally at the East Java provincial legislative council. They demanded the local legislators endorse their call for the MPR special session.

    In Medan, the capital of North Sumatra, 200 students from the Medan Teacher Training Institute continued with their demonstrations.

    They marched to the provincial police headquarters and demanded to meet police chief Brig. Gen. Sutyono to discuss the alleged sexual harassment committed by his men toward female student protesters last month. The students failed to meet with the police chief.


    Also yesterday, demonstrations were held by students and other groups against certain officials they considered to be corrupt.

    At the Ministry of Education and Culture office, staff members demanded the resignation of Director for Vocational Senior High Schools Jorlin Pakpahan for allegedly "cultivating practices of corruption, collusion and nepotism" at the ministry.

    Antara reported that yesterday's was the second protest held by the same group of civil servants; the first was held last week during the transfer of duty from outgoing minister Wiranto Arismunandar to Juwono Sudarsono.

    Then, the staff members demanded that the new minister fight the rampant corruption and collusion prevalent in the education ministry.

    In Padang, the capital of West Sumatra, 25 students continued their sit-in at the provincial legislative council and claimed they would not budge until State Minister of Agrarian Affairs Hasan Basri Durin resigned because of alleged corruption.

    Yesterday's was the students' fifth day at the complex. Supporters have been supplying the student protesters with food. Basri Durin is the former West Sumatra governor.


    Also yesterday, two groups of students demonstrated in Surabaya and Jakarta against what they called the United States' meddling in Indonesia's internal affairs. Seventy Jakartan students rallied outside the US Embassy in Central Jakarta, while 200 colleagues marched to the US consulate on Jl. Dr. Soetomo in the East Java capital.

    Both demonstrations passed without incident after delegations were received.

    In Jakarta, protesters calling themselves the Defenders Front for National Sovereignty criticized US aid to local Indonesian groups.

    "We reject all types of American intervention and condemn those sons and daughters of the nation who have already become the stooges of America," the group said in a statement.

    The Surabaya protest, by the unknown Indonesian Saviors Forum, also criticized the reported presence of a number of US naval ships close to Indonesia during last month's political turmoil and violence.

    Rallies target corrupt officials

    Jakarta Post - June 2, 1998

    Jakarta -- Emboldened by the success of student demonstrations for reform in major cities, fishermen, farmers and other groups are holding rallies to call attention to their own causes.

    Many of yesterday's demonstrations were to demand that certain officials resign due to alleged corruption. In Purwokerto, a small town in Central Java, for instance, 200 farmers of Nusamangir village Kemrajen district, rallied to demand that village chief Fuad Mahruri resign for allegedly embezzling about Rp 50 million.

    Some villagers have accused the chief of embezzling the funds for youth activities. Fuad has denied the charge and blamed the demonstration on agitators.

    In Semarang, the capital of Central Java, about 100 students of the local Teachers Training Institute marched to the provincial legislative council to demand that the body does not renominate Governor Soewardi for the 1998/2003 period.

    In a meeting with several legislators, the students noisily demanded that the councilors state in writing that they would not renominate Soewardi whose policies have been criticized as benefiting only a handful of people at the expense of the majority in the province. "Soewardi does not deserve to lead the province, because all this time he has dismissed the aspirations of the people, especially that of Moslem scholars and intellectuals," one student said.

    In Ujungpandang, the capital of South Sulawesi, more than 800 students demanding the resignation of Governor Z.B. Palaguna faced off yesterday with 200 members of a youth group who support him.

    Soldiers and police quickly positioned themselves between the opposing groups. The demonstrators lined up about 10 paces apart and traded shouts and epithets on the grounds of the local legislature buildings.

    Yesterday was the fourth day the students occupied the buildings. They have vowed not to leave until Palaguna, whom they have accused of corruption and nepotism, steps down.

    The students carried banners calling for reform. Their opponents, members of the youth wing of Indonesia's largest Moslem organization, Nahdlatul Ulama, wore green T-shirts and held posters inscribed "Reform Is Already Underway," according to Reuters. More than 100 students have also entered their fifth day of occupying the local legislature in the city of Jambi in central Sumatra, Antara reported yesterday.

    The students, from Sultan Thaha Saifuddin Institute for Islamic studies, have accused local officials of allowing gambling to flourish in the district, and claim they will not leave the premises until all slot machines are destroyed.

    In Medan, the capital of North Sumatra, hundreds of students, fishermen and farmers also used the momentum of the reform campaign to hold their own rallies.

    They visited the Medan legislative council, the North Sumatra provincial legislature, and the governor's office. Most of the protesters demanded an end to corruption, collusion and nepotism, but also added their own grievances to the list of social ills.

    For instance, the fishermen demanded that the government stop foreign trawlers operating in their waters as they threatened their livelihood.

    The same group also demanded that the Provincial Prosecutor's Office investigate alleged irregularities in the selling of land belonging to a state-owned plantation to Siti Hardijanti Rukmana, the eldest daughter of former president Soeharto.

    Separately, chief of the Wirabuana Regional Military Command Maj. Gen. Suadi Marasabessy was quoted by Antara as saying that public demands for governors and regents to resign could not be approved just like that.

    "We should first study the demands, whether they really represent the whole community, or just a small group of people," said Suadi who oversees all provinces in Sulawesi.

    "There should be due legal process," he said in Kendari, the capital of Southeast Sulawesi. "You can't think that because at a national level, demonstrations forced the (former) president (Soeharto) to resign, you can do it here."

    The Armed Forces, he said, would support the campaign against corruption, collusion and nepotism as long as it was conducted in a constitutional manner and was supported by facts.

    Meanwhile, it was reported that relatives of Governor Palaguna and regents in South Sulawesi had been transferred from various posts because they were thought to have obtained the posts through political and familial connections.

    Among those affected were Andi Henny Bataramaya, a daughter of Palaguna, Andi Amelia Malik, daughter of the head of the provincial development planning agency; and Andi Abubakar Amir, son of the Bone regent.

    Spokesman of the provincial administration, Baso Machmud, said the governor was committed to promoting reform throughout his administration.

    Civil servants "who obtained their jobs through collusion, corruption and nepotism should gracefully resign before they are forced to do so, because we will be consistent in our campaign for reform, " Palaguna was quoted by Antara as saying.

    Student protests go on in several cities

    Jakarta Post - June 1, 1998

    Jakarta -- Students in several cities, in a move resembling their colleagues' stand in Jakarta recently, are occupying local legislative councils to make their demands heard.

    While those in Jakarta took over the House of Representatives/People 's Consultative Assembly building in order to press former president Soeharto to resign, those in Jambi have been occupying the provincial legislature and governor's office in their fight against rampant gambling.

    Students in Ujungpandang, the capital of South Sulawesi, are occupying the legislative council building to demand that Governor Z.B. Palaguna, whom they considered corrupt, to step down.

    Antara reported from Jambi the capital of Jambi, that dozens of students of Sultan Thaha Saifuddin Institute for Islamic Studies have entered the fourth day of their occupation of the legislative building yesterday, while those from Jambi University camped out at the governor's office.

    On Saturday, they held free speech forums lashing out at authorities who have allowed various forms of gambling to flourish in the province of 2.4 million. The capital's population is 412,000. Both groups said separately that they would not budge until the authorities burned down all slot machines.

    Joeslin Nasution, a legislator of the United Development Party, joined the free speech forum staged by the IAIN students and pledged to bring the students' demand to the attention of the House.

    Provincial council chairman Chaeruddin was also supportive of the students' demand and said his office would pressure the military to get rid of all gambling machines.

    In Ujungpandang, hundreds of students from 42 universities occupying the provincial council building are demanding that Governor Palaguna be held accountable for what they described as rampant corruption, collusion and nepotism in the province.

    They said that they would not leave the building until the governor stood down. "We also demand the auditing of local officials' wealth," said Muh Ichsan, chairman of the Association of Makassar Students.

    Maj. Gen. Suadi Marasabessy, chief of the Wirabuana Military Command overseeing Sulawesi, joined a free speech forum staged by students on Saturday but reminded them that the provincial council had no authority to sack the governor. Only the president has authority to sack a governor, he said.

    Kallo Bandaso, the provincial council's deputy chairman, said he would bring the students' demand to the provincial council and consult the governor about it.

    "The students' demand will be channeled to the central government, although it is not the provincial council's stance, " he said. Separately, Palaguna said that he would allow himself to be audited. He said that all local officials were also expected to volunteer to do the same if needed.

    In Surabaya, East Java, nine soldiers were punished for their "disciplinary actions" in handling student demonstrations. There were no details given about the violation but some student demonstrations in the province had been handled forcefully by the military.

    Maj. Gen. Djadja Suparman, chief of the Brawijaya Military Command overseeing East Java, said that the nine soldiers were serving detention sentences of two weeks.

    "Soldiers should be strict in enforcing the law but on the other hand, strict actions will certainly be taken against those violating the law, " he said yesterday after briefing 1,000 military and police officers in the city.

    East Timor

    1,500 take part in free-speech forum in Dili

    Tapol - June 2, 1998

    At least 1,500 students took part in a free-speech assembly at the University of East Timor in Dili today, 1 June, according to a report received by TAPOL from local sources.

    The event took place despite attempts by the University Rector, P. Theo T. Ralella to prevent it from happening.

    The idea of holding a free-speech assembly was first discussed with the rector last week and members of the university senate supported the idea. The plan was made public with an announcement on the university notice board.

    The purpose of the free speech assembly was to discuss the impact of the reform movement in Indonesia on the situation in East Timor. Students were of the opinion that 'in one way or another, students in Indonesia and students in East Timor face a common enemy, dictatorship and a common goal, democracy.'

    Early this morning members of the university Senate held another meeting with the Rector but he argued that students were facing mid-term examinations. He proposed that the free speech assembly should be postponed until 9 or 12 June. Members of the senate accepted this proposal but when this was reported to about one thousand students who had gathered, they rejected the proposal as being undemocratic. They wanted to meet the Rector but he was not available so they decided to go ahead with the assembly anyway, to discuss the impact of reform in Indonesia on East Timor. The asembly commenced at 9.30 am and was attended by at least 1,500 students.

    The following was the result of the gathering:

  • The so-called Balibo Declaration was a political manipulation by the Suharto regime. We therefore demand the setting up of an independent international investigation team. Open dialogue between Suharto and Xanana is necessary to clear everything up. Both Suharto and Xanana should appear before the International Court of Justice so as to prove who is the real criminal.
  • Call for the unconditional release of Xanana Gusmao and all Timorese political prisoner.
  • Whereas Indonesia is looking forward the holding of a new election, East Timor should not take part in that election.
  • Support the (demand of) the GRPRTT (chaired by Manuel Carrascalao) for a referendum in East Timor.
  • It was agreed to take these demands to the local assembly as soon as possible but there are problems because the Rector was not present at the free-speech assembly. The (army) intelligence are searching for some students although it is not clear which intelligence is meant, as the SGI intelligence unit is no longer active. Does this mean that inteeligence operations are still continuing?*

    Three students are said to be in fear for their safety: Jose Aparicio Guterres, 29, English language department. Manuel Sarmento, 26, Pedagogy Faculty. Jose Chang, 31, Faculty of Political Science

    Students from the Polytechnic in Hera, East Dili were also present at the free-speech assembly. There are plans to hold another assembly shortly, although it is feared that human rights abuses may soon occur.

    Two journalists were present at the event: Tony Jenkins, associated with the UN, and Ms Yenuh Wai Man from Hongkong. There presence inspired the students.

    * The SGI was operated by Kopassus. The fact that it is no longer functioning in East Timor is a good sign for the East Timorese and may point to the fading fortunes of the thugs under Prabowo's leadership, at least in East Timor.

    Habibie says no change in Timor policy

    Reuters - June 2, 1998

    Jakarta -- President Jusuf Habibie has no plans to change Indonesia's policy on the former Portuguese colony of East Timor, the Jakarta Post reported on Tuesday.

    "The president gave the message that no matter who the president is, the position of Indonesia on the issue of East Timor remains unchanged," Indonesia's ambassador-at-large for East Timor Lopez da Cruz was quoted as saying after a meeting with Habibie on Monday.

    Indonesia invaded East Timor in December 1975 after Portugal had abandoned its colony just north of Australia the previous year.

    Jakarta then declared East Timor its 27th province in defiance of the United Nations, which still regards Portugal as the administering power. A small band of guerrillas has conducted an armed resistance in the territory since the invasion.

    Indonesia and Portugal have made no apparent progress in years of U.N. sponsored talks over East Timor's status.

    After the Habibie government began freeing some political prisoners, speculation has focused on the possible release of East Timor guerrilla leader Xanana Gusmao from a Jakarta prison.

    But da Cruz said Indonesia's position remained that Gusmao, serving a 20-year sentence for undermining the state and possessing illegal weapons, was convicted on criminal charges and not eligible for release.

    The Jakarta Post quoted Justice Minister Muladi as saying the government planned within one week to release 15 East Timorese arrested for staging anti-Indonesia demonstrations.

    Political/economic crisis

    Wiranto: Stop all this hounding and defamation

    Suara Pembaruan - June 3, 1998 (Summary by Tapol)

    The commander-in-chief of the armed forces (ABRI), General Wiranto , has issued a warning that people who fail to restrain themselves in their calls for reform will have to confront the armed forces.

    Reading from a prepared statement of his own, following a cabinet meeting, Wiranto said that while he did not want to minimise the importance of reform, the top priority must be given to overcoming the crisis. This means overcoming the monetary and economic crisis, solving unemployment and creating a calm atmosphere so as to be able to fulfil the basic needs of the people.

    He said that the political stance of ABRI was to support the Reform Cabinet of Habibie, as he had said on 21 May (the day of Suharto's resignation).

    He said that the wave of calls for reform were now pushing for an overhaul of anything and everything, and there are even signs that reform is being used to do things that deviate from the spirit of reform.

    ABRI wants to speed up the reform process but this should be kept within bounds. Reform must not be allowed to destroy the Pancasila and the 1945 Constitution which is the precondition for national unity.

    "ABRI therefore warns everyone at the centre and in the regions to keep reform on the right track," Wiranto said.

    He went on to praise the former president, Suharto, for showing wisdom at a critical time and offering his resignation in a way that avoided further turmoil.

    He had not resorted to the use of force to cling on to power, thereby helping to safeguard national unity.

    While recognising that he had shortcomings, as he himself had repeatedly admitted, as a Pancasilaist, the highly respected former president had contributed hugely to the advancement of the life of the nation and he should be treated correctly, in moral as well as constitutional terms.

    Poor harvest, wages could reignite rice riots

    The Australian - June 6, 1998

    Robert Garran and Maria Ceresa -- Fears are growing among analysts in Indonesia and Australia that a poor rice harvest and sharp fall in government rice stockpiles will spark more riots in Jakarta and rural areas.

    A researcher at the University of Indonesia, Ikrar Nusa Bhakti, warned that "maybe in the next few days there will be massive riots again in Jakarta to allow the people to get the food".

    Indonesian economist Iwan Aziz said: "The stock of rice ... will be enough only for the next three months. So a food crisis is really on the horizon three months from now."

    "The situation is very serious," Australian National University anthropologist Jim Fox said. "The crop is down, although we don't know how much because some is still being harvested.

    "The islands directly to the north of Australia -- Timor, Flores, Sumba and the Maluku Tenggara -- are doing it really tough. They have lost their corn crop, and they are going to have to bring in a lot of rice," Professor Fox said.

    Indonesia analysts fear that worsening economic conditions mean a growing number of Indonesians will not be able to afford rice and other staples.

    Rising prices for fuel and electricity were a key factor behind the riots last month that led to the downfall of former president Suharto.

    Rice prices have begun to fall after surging earlier this year, but the incomes of many Indonesians have been reduced so severely by the economic crisis that there are grave fears many will not be able to afford to buy the staple.

    Professor Fox said falling incomes and difficulties distributing rice were a more serious problem than the overall rice shortage, which could be met by increasing imports.

    Dr Aziz, speaking in a satellite interview from Washington DC, said there was little the International Monetary Fund could to do solve the rice shortage, except ease conditions for the next instalment of loans as part of the $US43 billion ($71 billion) IMF-led bailout package for Indonesia.

    Over 1,000 killed in Indonesia riots: rights body

    Reuters - June 3, 1998

    Jim Della-Giacoma, Jakarta -- Indonesia's official human rights body said on Wednesday that 1,188 people were killed in rioting which ravaged the capital Jakarta last month, more than double the death toll given by the military.

    The National Commission on Human Rights said thousands of shops, offices and vehicles were burned, women were raped and at least 101 people were injured. But it gave no details on the causes of the deaths or injuries.

    "The National Human Rights Commission has received quantitative reports of the material losses as a result of the riots that were very shocking, including the burning of 40 shopping centres, 2,479 shop houses and 1,604 houses which were previously looted," it said in a report sent to Reuters. "(Also) 1,119 cars, 1,026 homes and 383 offices were also burnt or damaged as well as 1,188 people killed and 101 injured and a number of cases of rape which are still being investigated," the report said.

    Indonesia's military said more than 500 people were killed in the May 12-15 riots, most of them looters who were trapped in burning buildings.

    The commission blamed the violence on the socio-cultural divide between sections of society, a slow response by security forces and provocation by groups it did not name.

    It said ethnic Chinese, who dominate Indonesia's economic life, bore the brunt of the losses in the riots, which were triggered by the shooting of six university students at Jakarta's Trisakti University on May 12.

    The disturbances of that week, together with rising student protests and increasing pressure from within the government elite, led to president Suharto stepping down on May 21, handing power to Vice-President Jusuf Habibie.

    The commission said there were six main causes for the spread of the riots, including corrupt government practices and the relative wealth of the ethnic Chinese.

    Government policy had created a socio-cultural wall between ethnic groups which was difficult to control and created the potential for racism, it said, adding the sharp wealth gap between racial groups stifled attempts at integration.

    But the commission also pointed the finger at the inadequate response of the security forces in controlling the riots once they had started. "At the time of the riots there was not seen any genuine efforts by the security forces to control the spread of the rioting. The containment was only seen long after an event had taken place or finished," the commission said.

    "The security forces took no anticipatory action in the face of strong suspicions that rioting would take place," the body said.

    "There were also organised groups that were reported to have started the destruction and the arson," the commission said, without giving any further details.

    The commission said the violations of the right to freedom from fear, life, property and dignity committed during the riots would have a significant economic impact for Indonesia.

    Is Indonesia about to be radicalized?

    American Reporter - June 2, 1998

    Andreas Harsono, Jakarta -- When dozens of people entered a spacious house on the Gunung Sahari street in a bustling part of Jakarta on May 14, they knew that the high-fenced building belonged to Indonesia's number one tycoon, Liem Sioe Liong a.k.a. Sudono Salim. "The dog of Suharto," brayed one visitor.

    The uninvited crowd entered the house with unmistakable anger. They ransacked the building, and took a larger-than-life portrait of Salim out to the street, where they jeered the image of the Chinese-born Indonesian who is an old friend of then-President Suharto.

    Elsewhere throughout Jakarta, Salim's Bank Central Asia, the biggest bank here, saw 122 of its 400 branches pillaged. More than 120 $30,000 automatic teller machines were reportedly lost to vandals and thieves.

    The message was clear. Neither Suharto nor Liem nor other Suharto cronies enjoys any popularity among ordinary people here. Price hikes, rising unemployment, corrupt practices, cronyism, high inflation and repressive government have cumulatively moved people to rebel.

    Finally, Indonesians said, the long-awaited volcano in Southeast Asia erupted. In Jakarta, millions of poor workers, unemployed youths and even children vandalized and partly burned 119 shopping centers, 13 traditional markets, and thousands of houses and cars. Jakarta was in the headline of every major newspaper worldwide.

    But a disciplined, student-led movement managed to occupy the Indonesian parliament building and to force Suharto to step down on May 21. The ashen- faced Suharto announced in a nationally- broadcast television report that he could not govern the country anymore. With a three-minute statement, he ended a 33-year, iron-fisted rule. People rejoiced.

    A glorious victory at last? "No," say many political analysts, economists, politicians and diplomats. Suharto has basically left behind a country with no uncorrupted big businesses or strong political institutions. The iron man is gone , but his corrupt regime remains behind. Worse still, he left a country on the brink of total chaos. Vice President B.J. Habibie, who replaced Suharto in accordance with the constitution, is widely known as a Suharto protigi. Even the International Monetary Fund (IMF), the World Bank and international investors remain wary of the new administration. Suharto's hand-picked parliament approved Habibie as vice president in March despite the disapproval of military officers, ruling Golkar party executives, some Muslim organizations, and minority groups -- especially Christians -- who mostly see Habibie as a sectarian figure, a big spender and an unqualified leader.

    The Indonesian rupiah instantaneously plunged to a historic low of 17,000 against the American dollar when the flamboyant Habibie was named as Suharto's vice president in January.

    Practically no big business in Indonesia was established without the patronage of Suharto as well as his six children, Max Lane of the Sydney-based Asia Pacific Institute for Democratization and Development says.

    "It's going to be difficult. Sweeping the cronies out means destroying the economic fundamentals of the country."

    The fate of the BCA conglomerate, for example, is closely linked to Indonesia's largest food producer, Indofood, which is also controlled by Salim. Big problems for Indofood are likely to affect food availability. The Salim group controls 96 per cent of the instant noodle market, as well as a large share of the market in cooking oil, wheat flavor, cement, and basic condiments such as soya sauce and tomato sauce.

    "There is a big public demand for the trial of economic criminals. But if you move too suddenly in the interests of justice and then you don't have an alternative source of noodles, then you will have a disruption in the supply of basic foodstuffs," said economist Mari Pangestu of the Jakarta-based Center for Strategic and International Studies.

    Lane predicted that the ongoing economic crisis may even lead to a mass radicalization of the world's fourth most populous country. The worst scenario, and unfortunately the most likely, is that without democratic and popular government, proper economic management and a new injection of funding, Indonesia will face a long season of political instability. As the popular credo goes, "Hungry people are angry people."

    "Nothing can stop the radicalization," said Lane, adding that the people will grow as impatient with the Habibie government, and as the Marcoses did in the Philippines, Suharto, his cronies and children will re-emerge from hiding to reclaim their fortunes.

    But Habibie has not, as perhaps the Suhartos expected, remain silent. In an apparent bid to win public support, Habibie immediately released some political prisoners, met with the riot-hit Chinese traders, allowed the establishment of political parties and promised to hold a general election next year.

    Opposition leaders, however, who had earlier demanded an election this year, charged that Habibie is only playing for time while trying to consolidate a new regime. Meanwhile, Habibie's economic team demonstrated little support for the eccentric president.

    In a briefing for foreign journalists, Mari Pangestu estimated that unemployment will rise to more than 15 million this year, or nearly 20 percent of the work force. With food prices rising sharply, this means that as many as 58 million people will soon be in poverty, far above the 22.5 million in January.

    "You aren't going to see any investment coming in for a while," Pangestu said. "The more you look at the numbers, the gloomier it gets." Others support that view.

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

    Tolleng, a former student leader of the 1960s, said without stable political institutions, it is very likely that the May 14 looting will be repeated. People are hungry, the economic situation is deteriotating and the government is very weak.

    Anyone holding the top job in Indonesia, whether Habibie, opposition figures like Muslim leader Amien Rais or nationalist Megawati Sukarnoputri, wouldn't be able to do much more for people than Suharto did under the structures of IMF reform.

    "They have no choice but to cooperate with the International Monetary Fund," said Lane, describing the economic restoration program recommended by the IMF is as a series of painful economic remedies.

    But many critics believe that the IMF has given Indonesia the "wrong medicine." IMF's strictures only exacerbated the economic crisis. The result, they say, is that no international financial institutions are willing to give credit guarantees to Indonesia.

    Perhaps, as an American diplomat here once told a friend, the worst scenario in Indonesia is not the worsening of the economic crisis, but the political consequences of economic hardship. "The world cannot afford to have 200 million Muslim radicals," the diplomat said.

    On the contrary, a democratic Indonesia, home to 210 million people, could be an important stabilizing factor in the region. A democratic Indonesia would be a precious gift to countries as far away as Australia, Japan and even China. Indeed, in addition, its immediate neighbors such as Thailand, Singapore, Malaysia and other southeast Asian countries would also benefit.

    But Muslim intellectual Ulil Abshar-Abdalla of the 30-million strong Nahdlatul Ulama organization rejects gloomy predictions, saying that the global capitalism which is to embrace the post- Suharto Indonesia must prosper and be accepted if the people of Indonesia are to establish a stable and civil society.

    Instead of the state, it is the people themselves who have to protect their interests from the bite of capitalism, he said.

    "There is a strong consensus in this country that democracy should be established. The Muslims, the Christians and the others do not want to resist the drive to democratization any longer," said Ulil.

    The May riots

    DIGEST No.61 - May 29, 1998

    The riots in Jakarta 13-15 May were probably the worst Indonesia has ever seen. In proportion almost equally devastating riots took place in Medan and surrounds (4-5 May), Palembang (13 May), and Solo and surrounds (14-15 May, with at least 19 dead). When President Suharto resigned, these events were somewhat overshadowed in the media. But they deserve much more attention, if only because they were so destructive. At the moment we have only sketchy Indonesian language newspaper reports. I have not had the opportunity to study even these in detail.

    Jakarta's death toll was initially put at 499 (army spokesperson, 17 May), then at 293 (police spokesperson, 23 May). A team led by the well-known Jesuit Sandyawan Sumardi said on 18 May that 1188 had died in Jakarta and Tangerang, including deaths by shooting and beating. The same report also mentioned Chinese being stripped and raped by rioters. Most deaths were of looters trapped in burning supermarkets.

    Coordinating Minister for Finance and Economy Ginanjar Kartasasmita on about 18 May put the damage in Jakarta at Rp 2.5 trillion (about US$ 250 million at prevailing rates). He said 2479 shop-houses had been damaged or destroyed mostly by fire. (The shop-house is the typical, small, almost invariably Chinese, retail business upon which urban society depends). In addition he listed 1026 ordinary houses, 1604 shops, 383 private offices, 65 bank offices, 45 workshops, 40 shopping malls, 13 markets, 12 hotels, 24 restaurants, 11 parks, 9 petrol stations, 11 police posts. Then there were 1119 cars, 821 motorcycles, 8 buses, 486 traffic signs and lights. The police later (22/5) gave considerably lower figures: 1344 buildings of all kinds, 1009 cars, 205 motorcycles.

    Dr Chris Manning, an economist and population expert at ANU, told a seminar in Canberra on 27 May that as many as 20-30,000 Chinese entrepreneurs may leave Indonesia permanently as a result of the riots in Jakarta and elsewhere. He pointed to the serious impact this would have on business in Indonesia.

    This is destruction on a massive scale. Older people said it reminded them of the revolutionary interregnum in 1945 after the sudden end of Japanese control, the so-called 'bersiap' period. Citizens formed vigilante squads to defend their neighbourhoods.

    Let's look at a map of Jakarta and see what happened. Immediate trigger for the Jakarta riot was the shooting of four students at the elite Trisakti University in Grogol, West Jakarta, on 12 May. The shootings shocked democracy activists around the country. They had been demonstrating persistently and entirely peacefully (with Medan as the only exception) for weeks against the Suharto government. After a commemorative ceremony at the campus ending late in the morning of Wednesday 12 May, rioting broke out around the campus. Some reports mention lots of angry shouts against the armed forces.

    Rioters -- the young urban poor, not students -- spread out in several directions and start setting fire to car showrooms, hotels, shops, a hospital. The following important roads are mentioned: Kyai Tapi, Gajah Mada, Hayam Wuruk, Daan Mogot, Latumeten, Pesing, Cengkareng, Kedoya arterial, Kebon Jeruk, the Grogol-Kali Deres road, also Jalan Juanda behind the presidential palace, and the Cawang-Grogol flyover. Electronics shops in Glodok, the Chinatown of Jakarta, are looted. All shops in nearby Senen close down, and pretty soon all business and traffic in the entire city close down. There is also an angry demonstration in the elite business district of Jl Sudirman, a long way to the south of Grogol.

    Rioting mostly spreads westward toward and into Tangerang -- past the international airport. A hospital is attacked, as are two churches in Tangerang. Cars are stopped on tollways and checked for Chinese -- many cars are put to the torch on the tollway, whose operators are soon told to abandon their post. Even though no one is collecting fees, the toll roads are soon deserted. Tens of thousands of rioters far outnumber the security forces, who mostly stay away from trouble rather than risk defeat or a bloody massacre.

    The rich flee to luxury hotels at the airport, Jalan Thamrin in the city heart, in Jalan Sudirman and at Ancol.

    Tangerang to Jakarta's west, like Bekasi to its east (where rioting breaks out the next day) is Jakarta's industrial belt. Hundreds of labour-intensive, temporary factories erected by foreign capital looking for cheap labour and a quick return on investment have become magnets for an urban proletariat. These are the people worst affected by the economic crisis -- bearing the brunt of the huge increase in unemployment (an additional 13 million this year alone?).

    Rioting goes on right throughout the night. The next day, Thursday 14 May, it continues in Hayam Wuruk and Gajah Mada, Jalan Samanhudi, Suryopranoto ('Krekot'), but spreads to many other areas of Jakarta than just West Jakarta where it had started. On this day the large malls seem to become particular targets -- this is where many looters die when fires are lit and they are unable to escape. The worst is Yogya Plaza in Klender, East Jakarta, with 174 charred bodies recovered.

    Places mentioned in the reports now range all over Jakarta: Kebayoran Lama-Cipulir-Cileduk, Jalan Kosambi Raya, Cengkareng Ring Road, Jalan Salemba, Jalan Sahari (including tycoon Liem Sioe Liong's house), Jalan Matraman, to the east of Freedom Square, up to Pluit and the Tanjung Priok harbour area, down to Tanah Abang, Senen, Cikini, and east to Kalimalang, Kranji, and Bekasi. There is even some in Depok in the south.

    By Friday 15 May the city is exhausted but rioting continues in a new area: Cinere, near the elite Blok M area of South Jakarta. Actions on some toll roads continue -- Kampung Rambutan- Cawang, Grogol-Kampung Rambutan. Mostly, Jakarta is counting its dead. Scavengers are having a field day with the rubble. Thousands mill around to observe the damage, leaving police edgy about the potential for more trouble. Over a thousand looters have been arrested in the later stages of the riots.

    The rioters are the urban poor who have had no political representation in the New Order. They have almost no political leadership other than the sometimes agitational preaching in hundreds of small mosques. Yes, they are anti-Chinese. More generally they are alienated by the entire modern economy. They take it out on the inaccessible symbols of the new rich -- banks, automatic teller machines, supermarkets, car showrooms, hotels, the cars of the Chinese. The retail revolution that is sweeping Indonesia has repeatedly angered those whose livelihoods remain dependent on more traditional markets, which were not nearly as badly affected.

    Were the riots provoked? Perhaps. I know it would't be Indonesia without conspiracy theories aplenty. It takes more to convince me than it does some others that provocation is not a deep-seated urban myth. But this time I think there are some indications of deliberate manipulation by some within the security forces. In my opinion this may well have happened particularly on Thursday 14 May, when rioting spread from West Jakarta over the whole city and when the malls were targeted -- pretty ambitious undertakings for young bloods.

    There are some eyewitness references, for example in the Sandyawan report, of well-built men arriving in trucks at flash points and shouting loudly that Chinese shops should be burned.

    Most evidence is circumstancial. Some observers point to the motive, often heard before, of deflecting crowd anger away from the armed forces (caused by the deaths of the students at Trisakti) towards the Chinese scapegoats.

    Human Rights Watch Asia has established in a recent report (already distributed to the RRT) that a Chinese scapegoating discourse certainly exists among certain military officers. Its aim is usually to deflect anger away from the ruling elite (although in the past it has also served to cause difficulties for rivals within the elite responsible for security).

    Last January I was not convinced that the elite anti-Chinese discourse could actually have affected events on the ground in the remote places where riots broke out, and I tended to play down its practical importance. But on 13 and 14 May the connection is more straightforward. These riots were politically charged in a way that the January riots in the regions were not. Tension was high among an elite painfully aware that Suharto's regime was crumbling.

    The late general Soemitro and others have given detailed accounts of the way riots in Jakarta were manipulated under conditions of similar tension in January 1974. Allegations that LtGen Prabowo and his colleagues (Muchdi of Kopassus and Sjafrie Syamsuddin of the Jakarta Area Command) were involved in provocation seem to be convincing even to armed forces commander Gen Wiranto.

    Gross irresponsibility such as this on the part of senior military officers of course runs clean counter to the normal military interest in stability. But I believe it is quite possible that in moments of dire emergency within the regime, in the absence of better ways of resolving internal conflict, short- term consideration may well over-ride the normal sense of responsibility. Conspiracy theories are of course difficult to prove. Yet much hangs on whether they are true or not. If true, then the Chinese minority has even less protection than that provided by a merely incompetent security apparatus.

    [Gerry van Klinken, editor, 'Inside Indonesia' magazine. For Refugee Review Tribunal, May 29, 1998.]

    Environment/land disputes

    1997 forest fires: new estimates place damage at $4.4 billion

    Ottawa (Business Wire) May 29, 1998

    The Indonesian forest fires of 1997 resulted in over USD 3 billion in damages, according to a study partly funded by Canada's International Development Research Centre (IDRC) and released today in Singapore by the Economy and Environment Program for South East Asia (EEPSEA) and the World Wide Fund for Nature (WWF). When added to EEPSEA/WWF's February estimate of haze damage, the total costs exceed $4.4 billion.

    According to David Glover, Director of EEPSEA housed at IDRC's office in Singapore, "This is more than the damages assessed for the Exxon Valdez oil spill and India's Bhopal chemical spill combined. The resources lost would have been more than enough to provide basic sanitation, water and sewage services for Indonesia's 120 million rural poor." The authors point out that the figures are conservative, and do not take into account loss of life, possible long-term health effects, or the full value of lost biodiversity.

    The principal damages include $493 million in timber losses; $470 million in foregone agricultural production; $1.8 billion in ecological services provided to people by forests (foods and medicine, water supply, erosion control, and others); and $272 million for the contribution to global warming from release of carbon. While global warming will be felt by the rest of the world, the other fire damages were suffered mainly by Indonesia itself. Estimates for area burned were derived from satellite mapping studies of Sumatra and Kalimantan by the National University of Singapore's Centre for Remote Imaging, Sensing and Processing (CRISP), with adjustments by EEPSEA and WWF for areas burned outside those provinces. These were then combined with per hectare values for various vegetation types and land uses.

    "The tragedy is that these fires were largely preventable," said WWF Forest Conservation Advisor Togu Manurung. "Tropical rainforests don't burn easily, even under drought conditions. Indonesian forests have been degraded by years of poor forestry practices -- that's why they are so susceptible to fires set by people."

    According to Timothy Jessup, WWF's Senior Policy Advisor in Jakarta, the fires were promoted by a series of poorly designed policies including:

  • a program to drain and convert 1 million hectares of peat forest to rice cultivation. Fires on these former wetlands have been the most difficult to extinguish and created haze laden with sulphuric acid.
  • unclear land ownership laws that encourage people and companies to clear land as a way of staking a claim. These are combined with weak enforcement of laws to regulate the use of fire for land clearing. policies that keep the prices of wood to processing mills low, providing little incentive to protect standing timber or to sell scrap wood rather than burn it.
  • short term leases of forest land to timber companies, which leave them with little incentive to manage forests sustainably.
  • "Changing these policies should be front and center in the new government's reform program," said Jessup.

    Land clearing by fire for planting of oil palm and timber caused up to 80 percent of the 1997 fires. Another recent WWF study shows that no-burn methods for land clearing are a promising option, although their environmental impacts also need to be assessed.

    The EEPSEA/WWF report does not predict damages from fires in 1998. By taking action now, it says, the Indonesian government could avoid a disaster on the scale of 1997.

    Labour issues

    Bus drivers in Indonesian capital strike

    Dow Jones Newswires - June 4, 1998

    Jakarta -- Stranding passengers, hundreds of bus drivers in Jakarta went on strike Thursday to protest against corruption and demand higher salaries.

    The drivers have long complained about corruption in the state Jakarta Transportation Co. Emboldened by democratic reforms in the wake of the ouster of President Suharto last month, they again pressed their demands for an overhaul of company management.

    A company official, I Made Gede, said bus drivers had pledged to restart service Friday after the management promised them a 15% salary increase.

    The purchasing power of salaries has been shrinking as Indonesia suffers its worst economic crisis in decades. The rupiah has lost more than 70% of its value since last year and prices of basic commodities are soaring.

    Human rights/law

    Member of 'reformation' buskers group found dead

    Kompas - June 4, 1998

    The Buskers Association of Yogyakarta (SPI) has called on armed forces commander-in-chief General Wiranto to investigate the death of Leonardus Nugroho Iskandar, known to his friends as Gilang, 24, a busker who was also a reformation activist in Solo. After going missing for two weeks, Gilang's body found on 23 May, lying under some trees on the side of the Tawangmangu-Madiun road. A press release issued by the SPI on 3 June states that Gilang was an SPI activist based in Surakarta. He was part of an SPI group set up at Lempuyangan Station in Yogyakarta.

    On 25 Apri 1998, Gilang attended a conference of buskers from all parts of Java held in Yogyakarta to support the students' movement for reform.

    According to the press release Gilang regularly took part in reform actions in Solo. Most recently, he took part in the occupation of the office of the mayor of Solo in mid May, after which he went missing.

    The press release said that Gilang's death is evidence that violence takes precedence, it is a tragedy that must be resolve in accordance with the law. The SPI renounces violence and condemns those responsible for Gilang's murder. It called on the commander-in-chief to thoroughly investigate this crime.

    Kontras wants kidnap investigations to be speeded up

    Suara Pembaruan - June 5, 1998 (Slightly abbreviated posting by Tapol)

    Kontras, the Committee for the Disappeared and Victims of Violence, has urged the Military Police to investigate thoroughly and with all haste the kidnapping of a number of activists. Further delays will only make it more difficult for several key witnesses to furnish statements. Delays are also spreading greater fear among the kidnapped activists who have since returned home. Kontras coordinator, Munir, said that thorough investigation of these cases also reflects on the standing of the legal apparatus.

    A third victim, Rahardjo Waluyo Djati, has now come forward with his testimony, following in the footsteps of Pius Lustrilanang and Desmond Mahesa. He said that during the time he was kidnapped from 12 March until 28 April 1998, he was beaten, given electric shocks and his neck was bound so tightly that he found it difficult to breath for several minutes. The tie was removed when one of the captors said that they did not want him to die too easily.

    But the torture that he will never forget till the day he dies was when they forced him to strip naked and then ordered him to lie on a slab of ice for 10 to 15 minutes. They used this form of torture on several occasions when they were trying to persuade him to tell them about what he did after the events of 27 July 1996.

    A wary media tries the taste of freedom

    Sydney Morning Herald - June 6, 1998

    Louise Williams, Jakarta -- In the final days of the Soeharto regime, the Government made one last desperate attempt to maintain control of way the crisis was reported by ordering all television stations to submit their broadcasts for clearance to a Government-controlled "TV pool" which would ensure a "positive spin".

    When the privately owned SCTV station broadcast an interview with the former environment minister, Sarwono Kusumaatmadja, saying the cure for toothache was to "pull out the tooth, right down to the roots", the news editor was removed and the reporters were warned to take care.

    Mr Soeharto's son, Bambang Trihatmodjo, who controls SCTV, was particularly angry that the journalists had refused to obey the government order.

    But the crackdown was followed by an argument on the Internet, as SCTV journalists sought support for their stand.

    At the same time -- as not a single newspaper dared to join the campaign for the President's removal on their editorial pages -- the Internet was buzzing with instructions on how to give food to students occupying the Parliament building, as well as alternative views of events.

    When Mr Soeharto was forced to step down last month, more than three decades of media control appeared to collapse with him.

    This week, news vendors on the streets were so overwhelmed with demands for new issues of magazines investigating the wealth of the Soeharto family that the cover price increased three-fold before photocopied issues were offered for the original price.

    In the port city of Surabaya, hundreds of students forced their way into the SCTV office to demand station coverage for their demonstration against corruption and nepotism and their demands for local government officials linked to the Soeharto regime to stand down. The former president's son's station had to comply.

    The Alliance of Independent Journalists (AJI), an underground illegal organisation during the Soeharto era, is snowed under with membership applications from journalists.

    Previously, journalists were required by law to belong to the one government-approved union and to attend regular education course on ideology. However, it is not yet clear the Indonesian media is really free.

    "For years we lived like pariahs -- people avoided us, feared us, rejected us and even sneered at us and called us "idealistically pretentious'," says the chairman of the AJI, Mr Lukas Luwarso.

    "But it didn't matter. We didn't think we could achieve the utopia of freeing the people from repression, but at least we could set the press free from fear, and so we deliberately published information which was not acceptable in the mainstream media."

    The AJI took a direct role in the reform movement, quietly training student leaders in how to make public statements and use the media.

    This week the former editors of two banned magazines, Tempo and Detik, announced they were preparing to reopen, saying they could now make plans for a new Indonesian press "which is free, dignified and responsible to the community".

    "Tempo will try to publish again, and together with the rest of the press community, honestly fight so the fresh wind can become a reality which will benefit the press community and the society at large," said Tempo's former editor, Goenawan Mohamad.

    But the jubilation in the ranks of Indonesian journalists is tempered by the fact that the new Government has not yet introduced legislative changes which will free the press.

    Existing laws have not yet been overturned which allow the Government to revoke the licence of any publication, as well as call on harsh security regulations if the publication is deemed to be threatening national security.

    The new Information Minister, Mr Yunus Yosfiah, has promised journalists a freer hand, but it is not yet clear what that means. Mr Luwarso said the AJI was not optimistic.

    "In fact, we are pessimistic and that's why we have to keep up the struggle. This is a new regime so it is only natural they make a lot of promises. But if their power is consolidated, we will down-trodden again.

    "If you see where power lies in this society, it is with the military -- and they have an attitude of concealment which does not fit in with an open press. That reminds us to be pessimistic."

    Rape victims of revolution still suffering in silence

    The Guardian - June 4, 1998

    John Aglionby -- A women's rights monitoring group in Indonesia is investigating reports that dozens of women were raped during the rioting last month that contributed to the downfall of the country's dictator, Suharto.

    The Mitra Perempuan centre said there had been so many reports of women, particularly of Chinese descent, being raped and publicly humiliated that it was to launch its own inquiry, despite police reporting no cases of sexual abuse during riots that swept through Jakarta and the surrounding areas from May 13 to 15.

    "At the moment we think dozens of women were attacked but it could be more that 100 by the time we finish our inquiries," the centre's volunteers coordinator, Dhanie, said. "It appears people have been paid to stay silent."

    Most of the attacks happened in Chinatown in west Jakarta, where thousands of buildings were looted and burnt in three days of violence sparked by the shooting dead of four students by the security forces, the day before.

    The authorities say 550 people were killed in the riots but, according to the country's official human rights body, the National Commission on Human Rights, the true figure is more than double that. The commission says it too is investigating cases of rape.

    Ms Dhanie said the incidents ranged from "mild" cases of sexual harassment, such as ten women who were taken from a bus, stripped and forced to bathe in a stagnant roadside pond, to extreme cases, including a pregnant mother and her three daughters who were either raped or molested in front of a cheering crowd.

    One worshipper at a church in west Jakarta said an indigenous Indonesian woman had stood up during prayers on Sunday to ask forgiveness for not coming forward to report what she had seen in her street.

    "This woman described how a mob surrounded a house with two Chinese women inside and said if they did not come out the house would be burnt. But the women preferred to die than be raped by the mob so they stayed inside and were burnt alive.

    "It turned out after the service that almost everyone had heard similar stories."

    Many of the victims have said that in most cases the perpetrators were not part of the rampaging mobs of urban poor. "There is clear evidence that much of the violence was orchestrated," said Christianto Ariswandi, a Chinese electrnoic goods shopkeeper whos premises were looted. "Even with the history of hatred against us, the locals would not have considered causing so much damage. After all, it is their neighbourhood to."

    He and many others believe elements within the military coordinated the violence.

    Ms Dhanie is not surprised that not one woman has reported the abuse to the police. "People are afraid they will either be raped again by the police or they wont be treated confidentially. There is a stigma about sexual abuse in Indonesia and women prefer anything to suffering public humiliation of being raped."

    Ms Dhanie said she doubted the centre's investigation will change attitudes. "Our society and culture are so patriarchal I believe it will take at least another generation before we have anything like equal rights here. Practically all the female victims said those doing the raping were cheered on by their friends."

    Set up in 1995, Mitra Perempuan is the only organisation caring for abused women in Indonesia. Ms Dhanie said: "The government not only tolerates the repression of women but actively supports it."


    Wealth fuels investigative frenzy

    Washington Post - June 6, 1998

    Cindy Shiner, Jakarta - From a noisy green tollbooth on the Winyoto highway, 26-year-old Yanto can pull in the equivalent of his daily salary in less than five minutes, collecting 30 cents a car. After half an hour, he has gathered an amount equal to a month's pay from the outstretched hands of the drivers.

    The toll road, which is owned by former President Suharto's eldest daughter, Siti Harjanti Rukmana, known as Tutut, brings in at least $40,000 a month. Yanto takes home $60.

    "The most important thing to me is to be able to work and make money," said Yanto, explaining why he continues to toil for someone as reviled as Suharto's daughter, and noting how the economic crisis that eventually led to Suharto's downfall has made it difficult for him to afford rice and other basic foods because of price hikes.

    The ever-widening earnings gap between people like Yanto and Tutut has unleashed a frenzy of investigations of Suharto, his children and their cronies, who amassed tens of billions of dollars over the past three decades of corrupt and nepotistic rule. Tutut made much of her money on the toll roads knotted around Jakarta that have come to symbolize the Hydra-like Suharto family empire.

    About 30 students demonstrated today at a toll road, carrying placards saying that paying the toll enriched the Suharto family. Police stood by as the students waved cars past the booths.

    "It's good. It's part of reform," a bus driver said. "We have to support the students and make all the tolls free."

    Economic hardship, sparked by a plunge in the currency last July, has fueled popular passion for retribution. The Indonesian press, attorneys and politicians are clamoring to reveal the financial abuses of the Suharto era while pushing for political and economic reforms that will ensure a future free of favoritism and fraud. Three local magazines ran cover stories this week featuring portraits of Suharto relatives and cronies on bank notes and bearing headlines such as "Family Business." Digging up information on the more than 1,000 businesses Suharto and his six children control is a massive undertaking one that foreign investors and some Indonesians fear could prevent the country from moving ahead fast enough to prevent social unrest and economic chaos.

    "The fury directed against Suharto, stoked by the almost daily reports uncovering his huge business empire, may run out of control to the degree that people may look to take the law into their own hands," the Jakarta Post said in an editorial Thursday.

    "We cannot afford this kind of frenzy because it would literally affect just about every sector in the economy, since it is being discovered that Surharto's family and cronies are engaged in businesses ranging from satellite communications, power, toll roads and document printing to oil and gas, transportation, food, pharmaceuticals, petrochemicals and plantations, to name just a few," the editorial said.

    The attorney general's office announced this week that it would investigate Suharto's wealth, but few here expect a sincere effort, because the attorney general, Sudjono Atmonegoro, was appointed by Suharto.

    "We are already all too familiar with the utterly poor record of the attorney general's office in pursuing corruption cases," the Jakarta Post said. "It was, after all, subordinated to the wishes of Suharto during his more than 32 years in power."

    Such skepticism has prompted the formation of at least two organizations to conduct inquiries into the Suharto family fortune. Indonesian Corruption Watch and Concerned Citizens for Public Assets are drawing on the expertise of lawyers, accountants and political scientists to peruse thousands of documents that they hope will shed light on how Suharto, his children and their cronies enriched themselves.

    Nor will President B.J. Habibie, who was Suharto's protege, be spared. He and his relatives have engaged in numerous lucrative business dealings over the years.

    "I think if he wants to get rid of this corruption, collusion and nepotism from the business practices, he will have to look into his own problems, his own house, and urge the other ministers to look into their own houses," said Mulya Lubis, a lawyer and chairman of Indonesian Corruption Watch.

    The fervor to dismantle the country's corporate structure has foreign companies worried that the economy, which is already sluggish because of recent political turmoil, will grind to a halt and further delay recovery. The companies, including several American multinationals, will have to readjust their approach to the Indonesian style of business to which they had grown accustomed namely, figuring out whom to trust now that Suharto's children and their cronies are under a cloud and how to conclude contracts without veiled payoffs, especially when negotiations hit a snag. "That's when you called those guys in, when you had an Indonesian problem," a foreign banker said.

    "Everybody knew how much it cost to get anything done," the banker said. "It was amazing. It was a price which you always put into a project 'This is how much my project costs, and this is how much corruption costs' so you could make your budget."

    Some Indonesians blame foreign companies for fueling corruption over the years, but they fear that forcing them to renegotiate their contracts would drive them away at a time when foreign investment is needed the most.

    Lubis said foreign companies should have the "good faith" to renegotiate contracts to help foster a clean and transparent business atmosphere in Indonesia.

    He said Corruption Watch was setting up a post office box to receive information from the public on financial abuses, and if enough evidence is uncovered, the group will push the Habibie government to try to seize the Suharto family's assets abroad.

    "Succession in Indonesia is not just a matter of changing one person, but a matter of changing a system, an oligarchic system," said George Aditjondro, who teaches the sociology of corruption at Newcastle University in Australia.

    He fled Indonesia four years ago, fearing arrest for his criticism of the Suharto family, and said he hopes to return here soon, with his new passport, to work on exposing financial abuses of the Suharto era.

    Kin earned riches, says new leader

    The New York Times - June 3, 1998

    Joseph Kahn -- Almost immediately after becoming president of Indonesia, B.J. Habibie pledged to create "a clean government, free from corruption, collusion, and nepotism." But one of the biggest threats to his rule may be growing concern that he and his family, following the model of former President Suharto, used public office to amass a private fortune.

    In the nearly two weeks since he replaced Suharto, Indonesian economists and political activists have begun to document the sprawling business holdings of Habibie's children and close relatives.

    The Habibie family does not have anything approaching the wealth of the Suharto clan. But Indonesian analysts say its worth might reach $80 million. That, however, does not factor in the wealth- destroying effects of the country's economic crash.

    "You can say that in this respect he is an A student of Suharto," says Rizal Ramli, an Indonesian economist who has collected data on the business holdings of top government officials. "We no longer have Suharto but we still have cronyism."

    In an interview on Tuesday with The New York Times, Habibie defended his own wealth and that of his family members, saying nepotism had not played a part in their apparent success. He acknowledged that some of his relatives have grown rich, but said they did so because of their strong education and work habits.

    Many of his brothers, sisters and children do business with government agencies, Habibie said. But he insisted that they do not get special treatment. And he appeared to reject calls to force his family to give up government contracts or dissolve business partnerships that have come under scrutiny.

    "Many people become rich if you work hard and you are educated," Habibie said. "And now they have to stop because I am the president for two weeks?"

    In his long political career, Habibie supervised some of Indonesia's highest-profile development projects. His purview included the state aircraft maker, a natural gas project, the Batam island development zone, and the state technology agency.

    Potential conflicts of interest between the offices Habibie has held and his family's holdings are not hard to spot. Habibie's two sons have business ties to the aircraft company, while one has contracts connected with the natural gas project. Two of Habibie's brothers and a brother-in-law have close ties to Batam island development project. His sister plays a key role in the state technology agency, while her husband has worked as a contractor there, according to officials at each company.

    The best known Habibie-linked company is controlled by his youngest brother, Timmy. Timsco Holdings has several score subsidiaries operating in many different businesses, some of them dependent on government contracts or licenses.

    Several Indonesian economists compare Timmy Habibie's operating style to that of Bambang Trihadmodjo, Suharto's middle son, which is characterized more by personal contacts than any particular expertise.

    Habibie's long involvement in the Batam island project has raised the most conspicuous conflicts. Though Suharto appointed Habibie to supervise the conversion of Batam, located near Singapore, into a manufacturing center and export zone, Habibie has governed it like a personal fiefdom, says investors and employees on Batam who spoke on condition of anonymity.

    Habibie long worked hand-in-hand with his brother-in-law, Sudarsono Darmosuwito, now retired, the zone's chief executive. When Habibie took the office of vice president earlier this year, he appointed a younger brother, Effendi (Fanny) Habibie, to succeed him as chairman of the Batam Island Development Authority, the island's main governing body. Fanny Habibie told Indonesian reporters last month that he will step down from the chairmanship. But that only begins to address the Habibie family interests there. Sudarsono, for example, controls two companies that have benefited from exclusive Batam licenses.

    P.T. Citra Lingkunan Lestari has done environmental impact surveys on behalf of investors wishing to set up factories there. P.T. Indori Mandiri Sakti has had exclusive rights to construct and manage Batam's two major harbors.

    Meanwhile, Timmy Habibie, Bambang, and Habibie's two sons, Ilham and Thareq, are partners in the main industrial park on Batam, called Batamindo Industrial Park.

    Foreign businessmen familiar with the Batam project said that virtually anyone who sought to set up export operations there was encouraged to do so within the family-controlled park.

    Megawati says: Stop hounding Suharto

    Suara Pembaruan - June 2, 1998 (Summary only by Tapol)

    In a speech to mark the anniversary of 'Pancasila Day', 1 June, Megawati Sukarnoputri said she is feeling deeply troubled to hear the terrible things people are now saying about former President Suharto. She cannot believe that Indonesians would treat their former president in such a way, which, she says, is not in keeping with the Pancasila.

    She said she still had terrible memories of how she and her brothers and sisters felt when her own father was replaced. 'I have asked all my brothers and sisters not to join in this kind of thing. Must it always be that every time there is a change of leadership, the person replaced will be reviled and hounded like this, she asked.

    [On June 3, Suara Pembaruan quoted Army chief-of-staff General Subagyo HS as "warmly welcoming" Megawati's remarks saying "What she said was very good indeed. Let us respect each other. This is the correct attitude for the Pancasilist Indonesian nation to adopt" - James Balowski.]

    Arms/armed forces

    Timor crash kills 11 Indonesian army officers

    Reuters - June 4, 1998

    Jakarta -- Most of Indonesia's senior military officers in the troubled territory of East Timor died on Thursday in a helicopter crash, a military official said.

    Eleven people died. Lieutenant-Colonel Supadi, chief-of-staff of the East Timor military region, told Reuters by telephone from the East Timor capital Dili that there was only one survivor in the crash of the army helicopter at 10:25 a.m. (0225 GMT) in mountainous terrain.

    "There were 11 killed. The head of the Udayana military command Major-General Yudomo was one of the victims. The East Timor army chief Colonel Slamet Sidabutar was also killed," Supadi said.

    "Only one survived, the head of the information section in East Timor, but he has serious injuries," he added.

    The dead included Sidabutar's assistants for intelligence and operations, the commander of the territory's eastern sector, the head of operations at the local military district, Yudomo's adjutant as well as the helicopter's pilot, copilot and support crew. Supadi did not mention what type of helicopter crashed.

    "They were on a working visit with the new military region chief (Yudomo)," Supadi said.

    Yudomo took over as commander of the Udayana region, which stretches from the island of Bali to Timor, after his predecessor Major-General Syharir was promoted to head the Kopassus special forces.

    That was part of a series of changes in the top positions in the army two weeks ago in the wake of former president Suharto's resignation.

    Supadi blamed the crash on bad weather and said the helicopter exploded into flames after hitting a mountain while travelling from the north coast town of Baucau across the rugged interior to Viqueque on the island's south coast.

    It had left Dili on an island-wide tour in the morning, he said. "The weather was bad and it crashed into the side of the mountain and burst into flames. Only the tail was left," he said.

    He said the accident had no connection with anti-Indonesian guerrillas active in the area and sheltering in the mountains of East Timor.

    Details of the exact crash site were not yet available but Supadi said it was remote and only accessible on foot after a one-hour hike from the nearest road.

    [According to a June 4 posting by Tapol, unconfirmed claims are being made that the helicopter was brought down by Falintil or by an act of sabotage from within the army. Tapol's sources say that the sky was clear and the crash occurred soon after take-off following an explosion on board - James Balowski.]

    Troops accused of shooting students to stand trial

    Agence France Presse - June 1, 1998

    Jakarta -- The Indonesian military has scheduled for Saturday the court martials of 19 soldiers suspected of gunning down student demonstrators on May 12, a report said Monday.

    The head of the Jakarta military police, Colonel Hendarji (Eds: one name) said the first court martials for "indisciplinary actions" were tentatively set to start on June 6, according to the Antara news agency.

    "But if they cannot be started on Saturday, then they will be held the following week," Hendarji said, adding that the postponment may be necessitated by further evidence and technical data needed for the cases.

    Military Spokesman Brigadier General Abdul Wahab Mokodongan said last week that nine officers, six non-commissioned officers and four privates were involved in the "Trisakti case."

    The finding followed an investigation into the shooting by a military team set up by armed forces chief General Wiranto after then-president Suharto stepped down May 21.

    Security forces opened fire on a peaceful student demonstration in front of the Trisakti private university in Jakarta on May 12, leaving at least four students dead.

    The shootings triggered widespread riots which left 500 dead in Jakarta and undermined the 32-year regime of Presdient Suharto. He stepped down in favor of his protege and vice president B. J. Habibie.

    The head of the national military police, Major General Syamsu Jalala, has said the 19 soldiers have been in military detention since May 28.

    The military said that only four students were shot in the Trisakti incident while the university said six were killed.

    UK funded training for Indonesia forces

    The Independent - June 1, 1998

    Fran Abrams -- Britain has spent almost #300,000 on military aid to Indonesia since Labour came to power, new figures reveal.

    The money spent by the Foreign Office, Ministry of Defence and, to a lesser extent, the Department for International Development -- does not include the budget for promoting arms sales to the regime, which remains secret.

    Since May 1997, British tax-payers have funded a range of training courses for the Indonesian military despite wide-spread condemnation of its human-rights abuses.

    Soldiers and seamen from Indonesia have received aid from United Kingdom experts in their own country, as well as attending colleges in Britain.

    Services on offer include courses on map-making, surveying and weather patterns, as well as English-language tuition and a sub- lieutenant's course for officers seeking promotion.

    A spokesman for the Ministry of Defence said its #42,800 share of the money promoted co-operative working. "If you finish up working together in response to a crisis it can help. Exposure to the professional ethos in our military programme can generate considerable good-will," he said.

    The Foreign Office said half the #225,000 it spent in 1997-98 was a "carry-over" from the previous year, though a spokesman could not say why. Much of it was spent on English-language training agreed under the previous government.

    The Foreign Office programme will be replaced this year with a new scheme targeted at promoting human rights, the spokesman said. "We look at these things case by case and consider them against human rights objectives," he said.

    Since 1990, the Ministry of Defence has spent #3.4m on military aid to Indonesia, according to figures released to Ann Clwyd, Labour MP for Cynon Valley. That does not include spending by the Defence Export Services Organisation in support of arms deals, including the controversial sale of Hawk jets by British Aerospace. An MoD spokesman confirmed that such support had been given but was unable to give figures on its cost.

    The Department for International Development has stopped giving aid to the Indonesian police, although a spokeswoman said it had met the residual costs of training for one officer in the past year.

    Ms Clwyd questioned whether the Indonesian officers would really learn liberal values from Britain. "I just cannot believe the Indonesian government would have chosen people with independent minds. This is another argument for parliament to have the opportunity to debate arms sales to countries that are dodgy," she said.

    The Foreign Office budget was disclosed in a parliamentary answer to Jenny Tonge, Liberal Democrat MP for Richmond Park. "We haven't seen any evidence yet of the peaceful skills that these people are supposed to be being taught. All we get is trouble," she said.

    The Campaign Against The Arms Trade said in a statement that despite the change of regime, the Indonesian military might still thwart the cause of democracy.

    "The support that successive UK governments, including the present one, have given to the military is indefensible, as is the spending of taxpayers' money on the marketing of weapons to forces responsible for genocide in East Timor," it said.

    Economy and investment

    Jakarta to roll over $129bn foreign debt

    Australian Financial Review - June 5, 1998

    Greg Earl, Jakarta -- Indonesia has secured an agreement with international banks to roll over its $US80bn ($128.8bn) in private sector foreign debt -- a development which may help stabilise the ailing rupiah.

    The agreement was expected to give Indonesian companies a rollover period of up to three years on debt originally supposed to be repaid over the next year, followed by a further extension of up to five years to allow deferred repayments.

    Under the agreement -- which was to be announced late last night in Frankfurt -- banks would get a shorter period for repayment.

    Speaking before the agreement, an Asia Development Bank director, Shoji Nishimoto, said the he also expected that some banks would accept substantial write-offs at the Frankfurt meeting but not necessarily announce them.

    Mr Nishimoto also confirmed that the ADB would allow its new loan funds to Indonesia under the IMF package to be used to recapitalise a selected group of up to 20 private banks.

    He said bank recapitalisation was an "acute problem" which was the highest priority for the ADB in assisting Indonesia.

    Some analysts have argued that the only way to save the country's banking system is for the Government effectively to nationalise it before selling equity to foreign investors.

    But Mr Nishimoto's comments indicate that the multilateral lenders are now prepared to allow their funds to be used to bailout a select group of banks in the interests of keeping the economy operating.

    Negotiators were due to reveal the details of the foreign debt agreement in Frankfurt last night where government, corporate, bank lender and multilateral agency representatives were meeting.

    But the rupiah was showing little positive response late yesterday, trading around 11,500 to the $US which compares with around 8,000 only a month ago before the rioting in Jakarta.

    Dow Jones newswire quoted an unnamed Indonesian official as saying that Indonesian banks would get four years in which to arrange a phased repayment of their short-term foreign debt. Companies would get a three-year grace period followed by a five-year repayment period.

    The Government was also expected to announce that the borrowers would be able to join a scheme managed by the Indonesian Debt Reconstruction Agency which would make greenbacks available to meet the repayments.

    About $US63bn of the estimated $US80bn in corporate foreign debt is held by companies, most of which are now not servicing the debt. The Frankfurt negotiations were also expected to pave the way for international banks to start honoring some letters of credit from Indonesian banks for trade finance.

    In a sign of the tight financial environment, some Australian firms in Jakarta say Australian banks have halted any new exposures to Indonesia even if companies are exporting out of Indonesia. A prominent economic consultant Rizal Ramli said this week that falling foreign exchange reserves, a growing Government Budget deficit and lack of capital inflow meant that the economy may not be able to survive more than three months without a change of government.

    The Indonesian debt rollover scheme (modelled on a similar arrangement used in Mexico) was made possible after the IMF took an active roll in debt talks in March.

    GDP falls 8.51% in first quarter

    Jakarta Post - June 2, 1998

    Jakarta -- Indonesia's economy contracted by 8.51 percent in the first quarter of 1998, the Central Bureau of Statistics said yesterday.

    Sugito Suwito, the bureau's chairman, also predicted that gross domestic product (GDP) would shrink by 10.1 percent this year, compared to the government's prediction in April that the economy would contract by 5 percent this year.

    This is the first time that the government's statistics agency has published quarterly figures for GDP growth rates. In the past, the government published the annual GDP figures as part of the president's state of the nation address in August. The GDP figure is calculated based on 1993 constant prices.

    The bureau said the construction sector was the worst hit by the recession, contracting by 27.16 percent. The manufacturing sector followed with 18.58 percent, trade, hotels and restaurants (14.38 percent), financial services (11.1 percent), mining (9.65 percent), other services (3.7 percent) and transportation and communications (2.5 percent).

    Only agriculture and utilities (electricity, gas and clean water) booked positive growth during the first quarter, respectively by 28.47 and 7.1 percents.

    The bureau said Indonesia's month-on-month inflation rate rose 05.24 percent in May, bringing the total increase in the consumer price index to 40.06 percent in the first five months of 1998.

    Sugito predicted that inflation would reach 80 percent to 85 percent this year, contingent on an absence of extraordinary happenings such as last month's massive rioting in Jakarta and other cities. "But if something like rioting happens again, inflation could surpass the 100 percent level " he warned.

    Sugito said the main driver of inflation during the first five months of this year was the prolonged monetary crisis, compounded by bad farm harvests and increasing fuel prices.

    Interruptions and breakdowns in the distribution network, especially because of the unrest in Jakarta and other cities last month, also contributed to the high inflation rate for May.

    Food prices rose 3.90 percent, processed food and cigarette prices 4.00 percent, housing prices increased 4.14 percent clothing 4.53 percent, health 2.4 percent and education and recreation 1.41 percent. Transportation and communication costs shot up 17.25 percent.

    On international trade, the bureau said Indonesia booked a surplus of US$5.09 billion during the first quarter of this year, with exports reaching $12.29 billion and imports $7.2 billion.

    Exports declined by 0.9 percent during the first quarter of this year to $12.29 billion with non-oil exports rising 9.5 percent to $10.02 billion and oil and gas exports falling 30.17 percent to $2.27 billion. Meanwhile, imports reached $7.2 billion.

    Suharto family partnerships with foreign companies

    WSJ/Dow Jones Newswires - June 2, 1998

    While Suharto's business associates spread far beyond his immediate family, the most intense focus of the crackdown is bound to be the businesses of his six children.

    The potential international reach of ventures involving "the kids" -- Sigit, Bambang Trihatmodjo, Hutomo Mandala Putra (Tommy Suharto), Siti Hardiyanti Rukmana (Tutut), Siti Hediati Harijadi Prabowo and Siti Hutami Endang Adiningsih -- is phenomenal. The Indonesian Business Data Centre estimates that investment in mega projects involving Suharto family members and foreign partners is $15.23 billion.

    Meanwhile, the list of foreign companies with joint venture stakes, strategic alliances or contractual arrangements with Suharto family companies reads like a "who's who" of global capitalism.

    Bambang's Bimantara Group has by far the most foreign connections, having created a network that some analysts believe may afford him more protection than his siblings.

    Bimantara has entered into various arrangements with companies like telecommunications giants Hughes Space and Communication Inc. of the US and Alcatel Alsthom SA (ALA) of France, car makers Ford Corp. (F) of the US and Hyundai Motor Corp. (Q.HMC) of South Korea, and electronics concern NEC Corp. (J.NEC) of Japan. Meanwhile, its infrastructure interests have brought it into partnerships with Siemens AG (G.SIE) of Germany, Enron Corp. (ENE) and Duke Energy Corp. (DUK) of the US, Hutchison Port Holdings of Hong Kong and Mitsubishi Corp. (J.MIB) of Japan. Among many other distribution joint ventures, Bimantara also owns a 15% stake in PT Nestle Indonesia, in which Nestle SA (Z.NES) of Switzerland controls 57%.

    Tommy's main investment vehicle is the Humpuss Group, 60% owned by Tommy and 40% by Sigit. Tommy's Humpuss Electronika has a semiconducters joint venture with Japan's Sumitomo Corp. (J.SUT) as well as with NEC. Tommy also has a water agreement with Bechtel Corp. (X.BTL) of the US, as well as ties with Bechtel via Humpuss Aromatics. In power projects, Tommy has a stake in joint venture Mandala Nusantera Ltd., which is 75%-owned by Asia Power Ltd. and 10%-owned by Electricity Corp. of New Zealand Ltd. (A.ELC). In telecommunications, Humpuss is in a joint venture with Bell Atlantic (BEL) and International Wireless Communications (X.IWL), as well as with Sigit. Tommy also owns the Four Seasons Hotel in Bali, along with foreign partners including Hotel Properties Ltd. (P.HPL) of Singapore.

    Through her holding company PT Citra Lamtoro Gung, Tutut has also made tie-ups with multinationals. One prominent one is her company's 25% stake in PT Lucent, the local subsidiary of Lucent Technologies (LU) of the US The far-reaching nature of these tie-ups make economists like Song Seng Wun, of G.K. Goh Securities in Singapore, nervous about fallout from prospective asset seizures and contract cancellations in an economy already in the grips of a tumultuous financial crisis.

    Song says the government should press ahead with "forward- looking" reforms that will ensure future contracts are awarded transparently. But he warns against retrospective retribution that may spin out of control.

    "You have over thirty years built layer upon layer of power in the name of one person in charge, effectively covering everything. Once we start unpeeling those layers, what do we have left?" Song said.

    But economists like Econit's Ramli describe the process as an important one of cleansing the economy, upon which foreign investors will ultimately look favorably.

    "In the long term the change of regime is good for foreign investors, because it is going to provide them with a level playing field in which they won't have to pay a fee for carried interests." The government hopes that measures to cut back on bureaucratic obstacles and to speed investment approvals, announced last week, will be enough to quell foreign investor concerns about placing their money in Indonesia.

    For his part, the foreign business executive thinks opportunities may surface again, but not for many months. He takes heart from the fact his company's local partner has military links as Indonesia's Armed Forces are seen as the country's only lasting political institution.

    Of his company's partner, he adds: "He's not from the first rung, and therefore he's not high profile. The attacks might stop before they get this far."

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