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Push to oust Soeharto

Source
Sydney Morning Herald - January 8, 1998

Louise Williams, Jakarta – An Indonesian Muslim leader has called for President Soeharto to be replaced and has proposed an alliance for political reform between key Muslim figures and the pro-democracy leader Ms Megawati Sukarnoputri as the currency continues its slide.

Mr Amien Rais, who heads the 28 million-member Muhammadiyah organisation, asked Mr Abdurrahman Wahid, leader of the 38- million strong Nahdlathul Ulama, and Ms Megawati to "stand with him on a common platform for political reform".

The two leaders cautiously welcomed the approach. Ms Megawati, daughter of Indonesia's founding President Sukarno, said she "accepted the idea, in the context that they share the same goals".

Mr Wahid said "we feel the same need for political reform" and attacked unspecified "political hooligans" whom he said were running the country's politics.

Mr Rais called on the Indonesian people to reconsider plans to renominate the 76-year-old Mr Soeharto for a seventh five-year term in March, citing his failing economic policies.

"Re-electing President Soeharto means that we maintain the status quo," he was quoted as saying in the Jakarta Post newspaper. "Meanwhile, the status quo has failed to curb the monetary crisis.

"The driving and jolting force for political reform would be stronger if Megawati and Wahid join me on a common platform for reform. We all have the same goals with our movement."

Mr Rais's call shows growing impatience as the economy continues its dive, with the rupiah losing 12 per cent to hit a new low of 8,300 to the US dollar as markets reacted against Tuesday's Budget speech by Mr Soeharto.

Financial analysts labelled the Budget disappointing, deceptive and unrealistic.

Indonesia's worsening crisis helped send currencies and sharemarkets across East Asia tumbling yesterday, shaking even the most conservative financial bastions of Hong Kong, Singapore and Taiwan. Hong Kong's share market fell 5.9 per cent, and Singapore's dropped 4.5 per cent. The Australian dollar fell to its second successive 11-year low, hitting US63.17c in response to the massive sell-off in Asian currencies. It closed at US63.49c, US0.27c lower than Tuesday's close.

Weaker global share markets pushed the All Ordinaries Index lower. It closed 38.40 points, or 1.43 per cent, lower at 2646.9, with resource stocks leading the fall. Benchmark 10-year October 2007 Commonwealth Government bond yields rose six basis points to close at 5.72 per cent.

A National Australia Bank report yesterday showed growing disparity in business conditions in the local economy.

"The difference between the fast recovering domestic sectors of the economy and externally exposed sectors is quite marked in the level of confidence recorded," it said.

"In many ways [the economy is] being pulled and pushed by increasingly strong forces operating in opposite directions. That is increasing strength in interest sensitive domestic sectors of the economy, as against more gloomy Asian activity."

Indonesia's Budget appears to breach conditions on Jakarta's acceptance of a $US38 billion currency support package from the International Monetary Fund, causing speculation that the IMF might stop further credit until tougher reforms begin.

One IMF official was quoted by The Washington Post as saying: "We would like to see the senior leadership in Indonesia stand up and be counted on the reforms.I think the markets are asking themselves the question of just how much the senior Indonesian leadership is committed to the major reform measures that affect the [Soeharto] family."

Officials in Canberra insisted that Australia's $US1 billion contribution to the IMF bailout had always depended on Indonesia's adherence to the IMF program.

Mr Soeharto's Budget assumes an exchange rate of 4,000 to the US dollar, an inflation rate of 9 per cent and a economic growth of 4 per cent this year. It fails to cut fuel and electricity subsidies, or achieve a surplus equivalent to 1 per cent of GDP, as sought by the IMF.

Many economists forecast zero or negative growth for this year and inflation above 20 per cent, which would cause hardship for Indonesia's 200 million people as unemployment increases.

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