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Into the void

Source
Far Eastern Economic Review - June 4, 1998

By John McBeth, Michael Vatikiotis and Margot Cohen in Jakarta – The Javanese King has gone, long live the President – but how long will B.J. Habibie remain president?

The answer lies in the interplay of forces revolving around the three main players in the post-Suharto era: armed-forces chief Gen. Wiranto, Coordinating Minister for Economy and Finance Ginandjar Kartasasmita, and Habibie. They, in turn, are in a race against time to establish legitimacy before the newly potent student movement runs out of patience in its quest for reform.

In the confused early dawn of this unexpected new era, it's not at all clear what the outcome might be. What is clear, though, is the magnitude of the vacuum left by a leader whose relentless accumulation of power over three decades has left Indonesia with no strong political institutions or mechanisms to fall back on.

The political upheavals that led to his overthrow have exacerbated Indonesia's economic problems and stalled the rescue programme led by the International Monetary Fund. The economy is expected to contract 10% this year, unemployment is already estimated at 14 million, or 15% of the workforce, and inflation is running at 60%. Privately held foreign debt is estimated to be as high as $70 billion and the banking system is collapsing. The economy's downward spiral could jeopardize an orderly transition to a stable new leadership. At the same time, the unresolved leadership questions could prevent a real economic recovery. "We have to recognize that the economic measures will only work and be really effective if there is political stability," IMF Asia Director Hubert Neiss said on May 26 after arriving back in Jakarta to explore ways to revive the rescue programme.

Relief that Suharto's May 21 resignation ushered in a peaceful transition is giving way to the realization that Indonesia's agonizing climb out of the political and economic void has only just begun. Can it manage both at the same time?

This is posing a frustrating dilemma for those who struggled to bring about political renewal. "Habibie represents the old regime, so we want change as soon as possible. Yet everyone understands there should be special consideration to deal with the economy," says businessman-activist Arifin Panigoro, sitting in his living room, from where he kept student protesters fed and watered during their occupation of parliament.

The broad coalition of students, intellectuals and professionals who helped push Suharto out of office want to fashion the framework for a multiparty democracy within a year, followed almost instantly by parliamentary and even direct presidential elections. But they fear economic hardship will distract the government from the task of building a new political system, delaying elections.

Certainly, Habibie's lack of popular legitimacy and elite support are not conducive to a stable political situation, or even prudent policymaking. Although key opposition figures like Amien Rais seem willing to allow the new president a grace period, many of the student groups who spearheaded the campaign against Suharto are bent on pursuing "total reform." Translation: Dump Habibie too. "Habibie is part of the Suharto regime," says Annas Alamudi, a 21-year-old activist at the University of Indonesia. "Although he promised to make changes in the electoral laws, we are sceptical that he will make any real changes in the system."

Habibie is balanced at the top of an awkward triangle of power. He is caught between dependence on the military led by Wiranto and the key economic ministers led by Ginandjar. Neither man has demonstrated unequivocal support for the new president. Indeed, the military has privately signalled that its tolerance of Habibie derives only from the constitutional manner in which he succeeded Suharto.

Gen. Wiranto, who is also defence minister, is popular because of the perception that he tolerated the student protests and prevented clashes with the security forces. He has also promised to punish soldiers found guilty of shooting dead six demonstrators. And he has consolidated his authority, mainly through the swift removal of Army Strategic Reserve commander Lt.-Gen. Prabowo Subianto, Suharto's son-in-law.

Although engaged with civilians behind the scenes in searching for a peaceful transfer of power, the military is reluctant to fill the void Suharto left behind. It also has an innately cautious approach to political reform. The military's head of social and political affairs, Lt.-Gen. Bambang Yudhoyono, says he believes that reform is the answer to the country's problems. But he also urges caution, saying a national consensus is needed to support any changes to the political system. The armed forces have been deeply involved in the nation's political and economic life under the doctrine of dwifungsi or "dual function." The army has yet to respond to demands that its special position be changed – but it is unlikely to accept a diminution of its role.

The second important centre of power is Ginandjar, who heads the economic ministers, made up mostly of holdovers from Suharto's cabinet. He represents policymaking continuity, which is probably an advantage in dealings with the IMF. But his association with Suharto's corrupt regime also raises concerns about the revival of cronyism.

Ginandjar is thought to have presidential aspirations and has called for new elections to be held "as soon as possible." He told a press conference on May 23: "One thing is for sure, we have to have a new government with a new mandate from the people." Most analysts saw his statements as a bid to woo reformers and the IMF alike. Seated on either side of him were members of his new economic team, the nucleus of a 36-member cabinet Habibie had named the day before. Ginandjar's apparent pre-emptive strike infuriated Habibie, says an aide to the president. But it also forced him to make a commitment to elections "as soon as possible" himself. Habibie had at first appeared to be dragging his feet on the political-reform issue. In his initial policy statement on May 21, he referred only to "gradual" reform and seemed to be asserting his constitutional right to remain in office until 2003.

Habibie, Indonesia's first non-Javanese president, became active in politics only after Suharto asked him to head the Indonesian Association of Muslim Intellectuals, or ICMI, in the early 1990s. Since then, Muslim activists have seen him as a vehicle for pushing a new political order – one less reliant on the military and reflecting more fairly the interests of Muslims and non-Javanese. As a protege of Suharto, Habibie seemed a good stalking horse for change. Now, he brings a mixed bag of progressive and conservative political actors to centre stage, but the Islamic background of many of his followers worries the ethnic-Chinese minority and many non-Muslims.

Given his background, scepticism about the new president is hardly surprising – despite positive early moves like the release from prison of opposition politician Sri Bintang Pamungkas and labour leader Muchtar Pakpahan. Habibie's failure to recognize the sense of urgency behind reformist demands has reinforced widely held doubts about his political skills. "This guy just doesn't have any political sense," says Sarwono Kusumaatmadja, a former environment minister and one-time secretary-general of the ruling Golkar party. "He has a marvellously clear tunnel vision. He has a habit of uttering bloopers without being asked."

Most Indonesians have an even murkier vision of what politics is all about. The vast majority of the population has never been allowed more than fleeting participation in Indonesia's political life over the past 32 years. "This will be real politics for the first time," notes a senior Western diplomat. "Ambitious people competing for influence in an atmosphere where before it was impossible. The chance of that playing out smoothly is zero."

Sarwono has similar qualms. "People won't have difficulty in identifying the moral principles," he says, but when it comes to the nuts and bolts of politics, "no-one knows how. We've been thoroughly brainwashed and misled."

But Indonesia needs a new political system before elections can be held. That will require extensive revisions to five pieces of legislation, covering the structure and composition of the House of Representatives, the People's Consultative Assembly, mass organizations, political parties and general elections.

Emil Salim, a former minister and a voice of moral authority throughout the political crisis, insists that many of these issues have already been debated within the government. "We're not starting from ground zero," he says. That is certainly true with the all-important electoral law. A confidential study by the state-funded Institute of Social Sciences is already being considered by parliament as a possible basis for new electoral legislation.

Commissioned by Suharto in 1994, the study (a copy of which has been seen by the REVIEW) suggests a combination of district voting and the existing system of proportional representation. It also lays down residency criteria for candidates and limits the presidency to two five-year terms – a proposal the military leadership has endorsed. "In principle, all the points were accepted" in late 1996, says the editor of the study, Mochtar Pabottingi, "but Suharto said it wasn't time yet."

The study's authors had envisaged the government embarking on a phased reform programme beginning with the May 1997 parliamentary elections and culminating in 2007 with an end to military representation in parliament and the lifting of restrictions on the number of political parties. "What we want to do now," smiles Pabottingi, "is crush 10 years into six to 12 months."

The contours of Indonesia's post-reform political landscape can only be guessed at. But one organization seems doomed to disappear in its present form: the ruling Golkar machine. Forced to play on a level field at last, and bereft of Suharto's patronage and government largesse, only a third of Golkar's 325 legislators would win votes in a fair election, analysts estimate.

Some analysts also see a dangerous combination of political opportunism and social pressure obstructing the path to economic recovery. University of Indonesia economist Sri Mulyani Indrawati fears the Habibie government, eager to court popularity, will pursue expansionary macroeconomic policies that could tilt the country towards hyperinflation. "The political position of this government is that they have to please people," she says.

The influence in the cabinet of populist figures like Cooperatives Minister Adi Sasono could see the introduction of government-funded schemes to help small and medium-sized enterprises. Meanwhile, the Islamic constituency may have to be pacified with a programme to direct business into indigenous Indonesian, or pribumi, hands.

Whether Habibie stays through to early elections or is felled in a power struggle, the fact is that post-Suharto Indonesia is still evolving, which makes stability hard to see on the horizon. And it may well be that Indonesia's youth will have to go onto the streets again – if only to remind the elite that the time for dithering over reform is over.

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