Vikram Khanna, Singapore – Indonesian political leader Abdurrahman Wahid yesterday said his party, the National Awakening Party (PKB), is open to forming a coalition with the Indonesian Democratic Party (PDI) led by Megawati Sukarnoputri, as well as with Muslim leader Amien Rais and other democratic parties, to form a government in Indonesia after the general elections in June.

The chairman of the Nahdatul Ulama movement, which has more than 40 million followers, Mr Wahid is tipped to be one of the front-runners in the elections, scheduled for June 7. Many political analysts reckon that a coalition between his party and Ms Megawati's could prove a formidable combination.

Mr Wahid, also known as "Gus Dur", was speaking to some 400 people at a lecture organised by the Institute of Defence and Strategic Studies (IDSS). He then spoke to the media on a range of issues.

On economic policy, Mr Wahid maintained that he is not in favour of the concept of the "people's economy" which is being championed by the present government. "The people don't believe in that," he said.

Referring to the cooperative movement, the centrepiece of the people's economy, he pointed out: "To give credit without collateral is not economics. It's purely politics."

He said his own economic policies will be conducive to the "profit motive", adding that he would welcome foreign investment.

At the same time, he seemed to suggest a less open economic system. "We want to have an economy oriented more to the use of our own resources. We should produce domestically whatever we can. Only what we need, we will get from outside." He also said that policies would be designed to benefit the majority of Indonesians, who live in rural areas – for instance, through higher prices to farmers for their products. "By raising farmers' incomes, the rest of the economy will be pulled up."

Mr Wahid said he would support Kwik Kian Gie, a key adviser to Ms Megawati's party, as coordinating minister for the economy and Finance Minister Bambang Subianto as minister for the treasury. He would also appoint Chinese and Christians to the cabinet, and would make East Timor rebel leader Xanana Gusmao foreign minister.

He also expressed confidence that the June elections would be free and fair, indicating that there is wide support for this from not only the international community but also the Indonesian armed forces and all political parties – including the ruling Golkar party.

Mr Wahid, who has strong secular credentials despite his Islamic background, said he is open to forming a coalition with the PDI. Although Ms Megawati has indicated that her party would not form any coalition, Mr Wahid pointed out that this is applicable only before the polls, but after that, she might change her view.

He said he is not concerned about the possibility of votes being split between his own party and the PDI. "There is no conflict between PDI and PKB," he said. "If PKB wins, PDI will respect that, and if PDI wins, PKB will respect that. We will not cancel each other out."

He also ruled out a military coup despite the rising violence in the country. "If [army chief] Wiranto wants to grab power, he can do so, but it would be impossible for him to keep it."

Speaking of the violence, Mr Wahid said he would be able to stop the unrest in Ambon, Sambas and other areas "within about a month".

He indicated he will be visiting Ambon soon with other political and religious leaders to settle the strife there. "The masses in Ambon don't have leadership. As soon as we give them leadership, they will go with us."

He suggested that there is no cause for alarm about the current insurgencies in Indonesia and said the majority of people in the troubled areas do not want independence, except in East Timor.

But even there, independence is unlikely because an independent Timor may not be economically viable and would be dependent on external assistance.

The PKB leader said he would give "full autonomy" to Indonesia's provinces, including allowing them to hold their own elections for governors and district heads.

On possible candidates for the presidency, Mr Wahid suggested that he would ideally prefer someone other than himself. "I am respected by the people," he said. "If I become president, people won't come to my house any more. But if I have to carry out a task, I will do it."

Among other candidates for the presidency, he mentioned the Sultan of Jogjakarta. As for Ms Megawati, "she can become the vice-president. Or she can be the chairman of Parliament".

With regard to Mr Suharto, Mr Wahid indicated that followers of the former president had a hand in some of the violence in Indonesia. He also said that Mr Suharto "should be taken to court" to be tried for past abuses.

"I know that by going to court, we will not achieve anything because Suharto is clever," he said. "[And] if the court cannot solve the problem, the NPR [parliament] will take up the issue. Suharto will then be tried socio-politically rather than legally."

At the IDSS lecture was its director, SR Nathan. Replying to questions from the Singapore and foreign media on the lecture series – which has thus far seen speakers from the political opposition – he said the IDSS thought it important to hear Golkar's views as well.

Both Golkar general chairman Akbar Tandjung, who is also state secretary, and deputy chairman Marzuki Darusman were invited, said Mr Nathan, but Mr Akbar could not visit due to pressing engagements. Mr Marzuki, who will be in Singapore next week for an Institute of South-east Asian Studies seminar, is willing to also speak to the IDSS next month.

Mr Nathan has also written to Indonesian President BJ Habibie "to seek his assistance to nominate a speaker to give another perspective to this series of lectures". The most recent speakers on Indonesia have been Ms Megawati and Amien Rais.