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Business suffers amid signs of persecution

Source
Wall Street Journal - July 17, 1998

Jay Solomon and Wayne Arnold, Solo – The economists and politicians trying to fathom how many billions of dollars will buy stability in Indonesia would do well to come read the signs here in the seat of the Javanese heartland.

"Real Javan," reads the graffiti painted on the doors of shop after shop. "Muslim Pribumi" (indigenous Indonesian) is another favorite. All along Slamed Riyadi street, the burned-out shells of Chinese-owned stores still stand as reminders of the violence that has brought this city to a halt since mid-May. On those shops still intact are signs advertising the owners' support for reform, and their non-Chineseness, authentic or not.

Ethnic Chinese account for two-thirds of Indonesia's private, urban economy. They dominate the distribution network for food and other essentials, and those who fled took with them their piece in that network. Those who remain hesitate to rebuild, afraid that the violence may not be over.

Crisis still rages

International Monetary Fund officials say the $43 billion pledged last November to help bail out Indonesia was thought to be enough to extinguish the country's financial crisis. The crisis still rages, and now those officials are scrambling to put into place an additional $4 billion to $6 billion in international assistance.

But until Indonesia's Chinese are convinced that staying isn't a grave risk, commerce will languish, trade will break down and food will remain scarce. "The government asks us to come back, and yet they place us in an even worse situation," says Iswahyudya K., an ethnic-Chinese goods distributor here. Like many Chinese across Indonesia, Mr. Iswahyudya is planning his escape abroad, if not for himself, at least for his children. "I don't have the money right now to send my children, but, of course, it's a long-term goal."

Kunto, a local Chinese property mogul, says that more than 600 ethnic-Chinese families have moved from Solo to the more peaceful Indonesian island of Bali or to Australia since May. His salesmen have been receiving scores of offers to sell their properties, both businesses and homes. "I haven't seen any effort from the local government to assuage our fears," he says.

Many ethnic Chinese here worry that the government itself, or at least elements of the military, acquiesced in the May attacks on the Chinese and their property in both Solo and Jakarta that helped trigger President Suharto's resignation.

Fill the Void "Whoever was behind the unrest clearly wanted to shut down the city's economy," says Mudrick Setiawan, Solo chairman of the Muslim-based opposition United Development Party. By removing the Chinese from the economy, other players could fill the void, he reasons.

In recent days, both President B.J. Habibie and armed-forces commander Gen. Wiranto have conceded that unspecified outside forces played a role in instigating the riots and set up a commission to investigate. Seven officers from a special-forces unit were arrested this week on charges of abducting human-rights advocates earlier this year.

That special-forces unit, called Kopassus and headed until shortly after Mr. Suharto stepped down by the former president's son-in-law Lt. Gen. Prabowo Subianto, is also at the center of speculation about its role in the May riots. But it remains unclear whether military personnel will be a focus of the investigation into the causes of the riots. "We're not there yet," an armed-forces spokesman said.

Meanwhile, those who saw the riots in Solo ask why the army didn't act to restore order sooner. One amateur video shows troops standing by as mobs ransacked local businesses. And Mr. Iswahyudya recounts the systematic way the military withdrew as the rioting took hold. He says "outsiders" with crew cuts and walkie-talkies stormed into businesses and reduced them to ashes. "Rioters couldn't do this. It was too efficient," he says.

Nagging questions

Even Solo's top law-enforcement official, Police Lt. Col. Imam Suwangsa, admits to having his doubts. "I don't know why the military wasn't here," he says, noting that the city is just a few kilometers from a regional Kopassus headquarters.

Questions about who, if anyone, instigated the May riots loom large as Indonesia's ethnic Chinese worry that they could become the targets of another outbreak of violence.

Sandyawan Sumardi, a Catholic priest who has led an investigation into the rapes of women during and after the May riots, says he is convinced it was an organized rampage. "I am fearful more violence will be unleashed to fulfill" peoples' political interests, he adds.

Indeed, unease in Solo has been stoked by the sexual assault last week on a local ethnic-Chinese woman. Unlike in Jakarta, where government officials now concede that more than 100 Chinese women were raped in May's unrest, Lt. Imam says this is the first such confirmed incident in Solo since the riots began.

Attempted extortion

Lt. Imam and neighbors of the victim recount four men from East Java being seen in the area of the crime. At home with her brother and maid, the 20-year-old victim had returned to Solo for her wedding when the attack occurred. The police captain said the assailants had attempted to extort money from the family, but in the end, made away with just 25,000 rupiah ($1.74).

President Habibie made a major appeal to assuage Chinese fears Wednesday, promising to be "proactive in giving protection and security to all layers of society."

But doubts remain. "You can consider what's happening an act of genocide," says Frans Winarta, an Indonesian human-rights lawyer who is ethnic Chinese. "There's a plan to take the Chinese out of the economy."

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