Sander Thoenes profiles Indonesia's likely next vice-president

B.J. Habibie used to be a joke Diplomats and business people once rolled their eyes upon hearing the name of the man who has been minister for science and technology in the past four cabinets of Indonesia's President Suharto. They would crack jokes about his zigzag theory, which held that high interest rates boost inflation and should therefore be brought down, raised again and lowered once more to promote economic growth.

They humoured him as he pushed the president to close magazines that criticised his costly aeroplane manufacturing plant and threatened to dismiss academics who dared oppose his ascendancy in politics. They laughed at the number of portraits of himself in his office and home.

But Mr Habibie's nomination this week for the vice-presidency wiped the smiles off their face. Parliament is unlikely to nominate anyone but Mr Suharto's personal choice for running mate in March, when the legislature and 500 hand-picked officials will vote for a president and vice-president.

Suddenly, this former butt of jokes has become the most likely successor to one of the world's longest-ruling presidents. If things go according to plan (which is not certain), Mr Habibie may before long take over from a 76-year-old Mr Suharto who has ruled for 32 years. This would put him in charge of 200m people, 17,000 islands and some of the world's most valuable natural resources.

Even the International Monetary Fund, normally painstaking in its efforts to avoid involvement in politics, has voiced reservations. Stanley Fischer, its first deputy managing director, this week described Mr Habibie as a man "whose devotion to new ways of doing things was limited". Why are people so concerned about him?

Supporters of Mr Habibie say his alternative views on development have come to appeal to Mr Suharto because the traditional western prescription of open markets and deregulation has ended in such catastrophe. While the west preaches liberalism and adjustment, Mr Habibie believes in a big-bang theory of development. According to this view, a country can make itself rich behind closed markets simply by applying the right approach to technology.

Thus he has launched one of the few aircraft manufacturing operations in the developing world. The project may not have been successful, but the western-style approach to development has hardly been a glittering success either. At present exchange rates, it has failed to raise per capita income above the level it was when Mr Suharto seized power three decades ago.

The quest for a different approach seems natural. But financial markets clearly take a western view. Share prices have dived in recent days and the rupiah followed suit on Friday. The fall partly reflects concern that a plan to peg the rupiah to the dollar may not get off the ground. But Mr Habibie's nomination also played a role. The last time markets fell sharply was when Mr Habibie's candidacy was first rumoured in January. Then the rupiah lost 35 per cent in one week.

It must give Indonesia's domineering military a grim satisfaction that its critics at home and abroad shudder at the thought of seeing a highly skilled civilian take over from an officer with only basic education. Mr Habibie holds a doctorate in engineering from the Technische Hochschule in Aachen, has helped design deep-sea submarines, railway carriages and high-pressure water chambers for atomic reactors, and boasts an 18-year career at German aircraft maker Messerschmitt-Boelkow-Blohm.

But he is not an economist, at least not an orthodox one. He has opposed trade liberalisation and favoured import substitution and lavish subsidies, in spite of the rampant corruption they have brought to Indonesia. His promotion of high-technology industries flies in the face of a serious shortage of skilled labour and lack of markets.

Mr Habibie is little liked abroad. Diplomats at several embassies have said that visiting ministers are treated to rambling lectures. "He just holds court and goes on and on about his planes," recounts one diplomat. Indonesia's decision to set up a currency board to peg the rupiah increases concerns about his perceived limitations because a scheme would sharply increase the costs of sudden economic failure.

"Some people are looking at this with rose-tinted glasses," the diplomat adds. "They think Habibie will be sidelined as a vice-president. But that's wrong. He is a meddler." Mr Habibie may find himself isolated. He has made little effort to build alliances among the elite. His only claim to power is a life-long tie to Mr Suharto, who befriended his widowed mother when he was 13.

General Wiranto, about to be promoted to chief of the armed forces, is believed to have told the president that many officers oppose Mr Habibie. They are wary of his rash statements and suspicious of his civilian background

His opponents often assume the army would simply shove Mr Habibie aside if Mr Suharto were to die. That may be wishful thinking. "As long as Suharto has made a decision it's difficult for anybody to fight it," says one diplomat. "He is still very much in control. And Habibie has some support in the army."

The support of at least two generals may be enough to keep the army too divided to push him out. Most officers will remember the infighting within the military and the slaughter of more than 500,000 civilians that ensued in 1965 when a half-hearted coup against Mr Sukarno, the former president, failed.

Mr Habibie's opponents also tend to forget that he is quite popular with the middle classes. Some students like him because he is a civilian in a country dominated by the military - and a scientist at that. He also has some support among Moslems who share his dislike of the Chinese minority which dominates the economy. Some observers suggest he would like to copy Malaysia's policy of favouring ethnic Malay over ethnic Chinese in government jobs and contracts.

"He is a man who is very interested in his field, technology, but pays little attention to the economy or to social problems," says Amir Santoso, a political analyst with ICMI, a Moslem organisation chaired by Mr Habibie. "I doubt he will promote reforms. I doubt he has the broad political influence and support, even among the Moslems."

That is assuming Mr Habibie feels he needs popular support. "He thinks he can do anything," says a diplomat. "If he had a bumper sticker on his car it would say: 'Engineers can do anything'."