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Poor are facing hunger as crisis intensifies

Source
Wall Street Journal - July 10, 1998 (abridged)

Jay Solomon, Sumber Wungu – Unbowed by his poverty, the village elder is more than happy to display his menu for the day: processed cassava root, perhaps some corn – and grasshopper.

"They're actually quite healthy," says Rakiman, as a local boy displays a fried, clipped grasshopper that spent its last minutes in a nearby tree. In fact, they're making a business out of selling the insect in this arid central Javanese village, at 6,000 rupiah (40 cents) a kilogram. Cocoons can also make a nice meal if need be, Mr. Rakiman says.

Sumber Wungu is a troubling example of Indonesia's mounting difficulty in feeding its poor, but it isn't the only one. World health officials now fear that up to half of the nation's 200 million people will face acute food shortages by year end, sending the World Bank, United Nations and International Monetary Fund scrambling to put in place effective assistance programs. The IMF has pledged $43 billion in aid, but diplomats in Jakarta estimate that an additional $10 billion in cash and supplies may be needed within six months.

For Mr. Rakiman's village, hunger is not new. Centered in the Gunung Kidul district of Yogyakarta province, inhabitants of this highland area see drought and famine come in cycles. Last year's drought ended, but not before ruining this year's rice crop. The rain has returned in the middle of the dry season, causing confusion among farmers over whether to plant. And the prices of fertilizers and pesticides have increased beyond the villagers' means.

What has changed is the undoing of progress. Village leaders say that in recent years rice and chicken had become a regular part of their diets. "Before the crisis our people ate tiwul [processed cassava] only once a week, but now we eat it all the time," says Sukarji, Sumber Wungu's village chief. Moreover, water shortages were abating, and electricity came to the village five months ago. Now, Mr. Rakiman says, "We're headed back to the 1960s."

And the bigger picture is just as bleak. The rupiah has plunged more than 80% in value since last year, and rioting in May disrupted many food-supply networks controlled by ethnic-Chinese Indonesian traders. In the neighboring city of Solo, for example, more than six weeks after the rioting, the preponderance of the city's Chinese-owned businesses remain boarded up or burned out and their owners too frightened and broke to reopen. The result: Cooking oil and other staple food prices remain at astronomical levels, causing many traders to simply stop supplying areas like Sumber Wungu, knowing the residents there can't afford the goods. Cooking oil "is too expensive for us" at 8,000 rupiah a kilogram, concedes Mr. Sukarji.

The question of revamping Indonesia's food-supply network is a particularly thorny issue dogging Jakarta in recent weeks, because it is divided along racial lines. Indonesia's minister for cooperatives, Adi Sasono, has preached the removal of middlemen from Indonesia's food-distribution network in favor of state-owned cooperatives. The argument goes that cooperatives will bring more players into the supply trade, lower the price of goods and diminish the threat of hoarding. Chinese Indonesians make up a large number of these middlemen, and charges of hoarding fueled much of the violence against them in recent months.

Academics and aid workers, however, see Mr. Sasono's plan as simplistic, if not dangerous. Indonesia's cooperatives themselves don't have the strongest reputation for efficiency, and the government risks alienating its ethnic-Chinese population even more.

What's needed, according to Loekman Soetrsino, a professor at Yogyakarta's Gadja Mada University, is a more balanced approach: assisting the ethnic Chinese in rebuilding their stores, while also including a larger proportion of the population in the food trade. "The Chinese have controlled trade here for centuries, you can't replace them overnight," Mr. Loekman says. He proposes enacting affirmative-action programs on two fronts: one to help Chinese Indonesians enter nonbusiness sectors, while at the same time training pribumi, or indigenous Indonesians, in the distribution trade.

The second key component needed to alleviate Indonesia's food problem is a refocusing on an agricultural sector that has largely lain dormant for the past decade, academics charge. Ironically, they note that Mr. Habibie himself played a large role in shifting Indonesia's economic focus away from agriculture and into high technology, having served for most of the past two decades as former President Suharto's minister for industry and technology.

Dibyo Prabowo, an agricultural economist at Gadjah Mada, notes that after Mr. Suharto's government led Indonesia to rice self-sufficiency in 1984, the government seemed to lose all interest in agriculture. Instead, it focused more on industrial businesses, and under the stewardship of Mr. Habibie, attempted to make the leap into aerospace and automobile businesses. The result is that Indonesia is slack in the agricultural technology needed to meet food demand and is dependent on imported food items that are unaffordable. Even in densely populated Java, large tracks of land sit idle – farmers lack the knowledge to effectively cultivate them.

Mr. Dibyo thinks agriculture could prove to be the savior for Indonesia, however, as the country tries to dig itself out from under nearly $200 billion in foreign debt. As a fertile nation, Indonesia could use the sector to again start earning hard-currency reserves, he says. More important, it would give the country a firmer economic base. "We made the error in the past of not having an agricultural base we could fall back on," Mr. Dibyo says. "Now we have to move forward step by step."

[On July 9 the South China Morning Post reported that Habibie issued a veiled warning to ethnic Chinese traders to resume business operations in the wake of rioting or risk losing contracts. He told members of the Chamber of Commerce and Industry that he was willing to issue a presidential decree canceling distribution contracts if there was no recovery within two weeks - James Balowski.]

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