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Situation explosive as economic and political crisis deepens

Source
Green Left Weekly - June 28, 2000

Max Lane – The 10 years to 1998 was a decade of escalating mass protest in Indonesia, climaxing in the 1998 mobilisations of hundreds of thousands of people across the archipelago which toppled the aging dictator, Suharto. But that decade will be nothing as compared to what is down the line during the next one.

I have been visiting Indonesia now since 1969, 31 years ago, and I have never seen anything like what is happening now.

The economy has not recovered from the 1997 Asian economic crisis. Domestic demand has picked up substantially in the last 12 months, but it's been fuelled by regular injections of hundreds of millions of dollars of International Monetary Fund loans and by a spurt in exports made possible by the collapsing rupiah and the deregulation of commodity exports.

The rupiah has lost 30% of its value in the last two months; the stock market plummeted 25% over the same period.

While the official forecasts still hope for 4-5% growth, the head of the Indonesian Bureau of Statistics has indicated that it will more likely be 1.4% – a disastrous figure for a country that has lost as much as 50% in output since 1997.

Crony capitalism

The economy is even more dependent on mineral, agricultural and light manufacturing exports than it was before the crisis. The revival, let alone expansion, of production is dependent on the conglomerates belonging to Suharto cronies, most of whom are still in massive debt to Indonesian and foreign banks. The IMF is helping to reschedule the debts of these corporate bandits; many are trying to sell equity to new foreign partners to get finances to pay off debt.

The official debt now is huge, about US$170 billion, more than Indonesia's GDP. More than 50% of foreign exchange earnings are now eaten up by debt repayments.

Meanwhile, according to a survey by a World Bank-funded monitoring agency, more than 40% of the textile and garments work force have lost their jobs, as have more than 75% of construction workers.

Poverty

Poverty has hit all the major cities in the archipelago. The same agency assessed that about 40% of those classified poor before the crisis have had to sell their "assets" to survive, their radios, old TVs, furniture.

Official wage rates have gone up but employer compliance is low and, in any case, the rises that have been made – all less than 50% – don't even take real wages back to 1997 levels.

Crime – including violent theft – is rapidly increasing in the big cities. Some areas are already considered no-go areas for middle-class people with something that could be stolen from them.

The rural areas on Java, where more than 100 million people live, has also been hit hard. Millions have been forced back into the villages. The pressure on land is increasing again and land occupations are on the increase.

The sugar industry, probably the second biggest agricultural sector, after rice, on Java, is basically bankrupt. The IMF has insisted on lowering the barriers to sugar imports, forcing the local industry to the wall in less than two years. The US is dumping rice – as "food aid" – undercutting local rice farmers and thereby increasing poverty.

Oil price rises of 12% originally scheduled for April have now been rescheduled for October. In the meantime electricity prices for medium and large firms and public transport prices rises are already fuelling inflation.

Ruling class discredited The government is weekly, if not daily, rocked by one scandal after another.

For example, President Abdurrahman Wahid's personal masseur was able to sell his "influence" with the president to someone who wanted to obtain a position in BULOG, the government agency in charge of marketing rice. The masseur promptly disappeared with his $7 million "fee".

There are many other cases, including the appointment of Wahid's brother to the agency which has taken over Indonesia's bankrupt banks. The brother, a professional politician, explained that he was employed to be a preman, or "thug", for the agency.

In May, the attorney-general, the "clean skin" Marzuki Darusman, issued a legal document ending all investigations of Texmaco, one of the country's largest manufacturers and declaring it innocent of any actions harming the country. The company has a debt of $1 billion to the now government-run banks and has been exposed for borrowing the money under false pretenses. Rumours abound as to how much Darusman received for the backdown.

Then there have been the dismissal of economic portfolio ministers and their replacement by Wahid cronies and attempts by Wahid to remove the governor of the Bank of Indonesia, a move prevented by the courts and the parliament.

The government has lost almost every court case it has taken out against a Suharto crony. Even the owner of the notorious Bank Bali, implicated in huge money laundering for the supporters of former president BJ Habibie, had a higher court hand the bank back to him.

Figures linked to the IMF and World Bank have started urging the appointment of ad hoc judges from Holland (most Indonesian laws are still based on Dutch law.)

The scandals envelop the entire political elite and all parties in parliament. Party congresses are reported as undignified battles between money-hungry cliques.

The May congress of vice-president Megawati Sukarnoputri's PDI-Struggle was sometimes even depicted as a battle between cliques run by either Megawati's husband or by alleged jealous ex-lovers.

Newspaper reports almost every day carry some new rumour about meetings between two or more of parliamentary speaker Amien Rais, Megawati and Golkar party head Akbar Tanjung, or people linked to them, as they allegedly plot to unseat Wahid at the next session of parliament scheduled for August.

Every rumour and rebuttal is followed by another drop in the rupiah.

The major political parties' use of private militias to intimidate their critics and rivals has further discredited them. For example, the Banser militia, affiliated to the Nahdlatul Ulama religious organisation, which Wahid headed until he became president, trashed a newspaper office after it criticised Wahid. There have been several other such well-publicised incidents.

Unrest and radicalisation

Misery, uncertainty and a discredited ruling class come immediately upon the heels of a decade of steady politicisation of the population. Hundreds of thousands were drawn into the mobilisations of the last year of the Suharto dictatorship, and millions more saw what mass action could do.

As the people slowly become convinced that the military have been forced into retreat and repression has lessened, more and more social struggles break out everywhere.

A spectacular breakthrough was the strike and protest outside parliament by 40,000 teachers demanding a 300% wage rise. In April, 40,000 striking cigarette factory workers brought the large city of Kediri in Java to a total halt. The strike lasted 11 days.

Police headquarters for Jakarta and the surrounding region reported attending 601 strikes for the January-April period, with 224 strikes or protests recorded in April alone.

The militant Indonesian National Front for Labour Struggles (FNPBI) can now attract workers to its offices just by distributing leaflets offering the union's help in organising. It has now expanded outside textiles, garments and other light manufacturing to automobile assembly as well as harbour workers.

Student movement activity is also reviving, especially to demand Suharto's trial. In recent clashes between students and the police, there have also been renewed signs of the willingness of the urban poor to come out onto the streets to defend the students. During the next academic year, the de facto privatisation of the big state universities will galvanise additional student activist opposition to the government.

In Aceh and West Papua the movements for self-determination continue to gain strength. Just a week after the 2700-strong Papuan Peoples Congress in West Papua, hundreds of Acehnese occupied the provincial parliament to demand the election of new representatives who would struggle more seriously to organise a referendum on independence.

There is widespread interest on campuses in Marxism. People's Democratic Party (PRD) leaders are speaking almost daily at campus forums around the country.

All the major bookshops now have special stands with Indonesian language books about Che Guevara and Karl Marx, as well as about Indonesia's own non-Communist Party leftists, like Tan Malaka. The book on the life of Budiman Sujatmiko, PRD chairperson, has sold out. Marxist web-sites are popular.

The audience for left ideas is also identified by some of the brains in the liberal bourgeoisie. Publishing tycoon Gunawan Mohammad, who owns Tempo magazine, is sponsoring the publication of a new left-flavoured weekly, Kritik.

New priorities for imperialism

The deepening crisis in Indonesia is re-ordering the political and economic priorities of Washington, London and Tokyo, as well as Canberra. During the Suharto period, when everything seemed stable, priorities were determined by commercial competition between US, European, Japanese and Australian corporations.

Now the priority will be saving capitalism in the archipelago. The massive scale of the IMF bailout package, to which even Australia has promised a $1 billion contribution, is one signal of this.

The US and its allies are pumping in money to tame any potential radicalisation. Moderate trade unions and non-government organisations are being pumped full of Western cash, especially through the US-funded Solidarity Centre in Jakarta.

There are also reports that the social-democratic Socialist International, to which the Australian Labor Party is affiliated, is funding a new "left" publication.

The major imperialist powers were also unanimous in their approval for Jakarta's rejection of self-determination for West Papua, following calls for a referendum on independence issued by the Papuan People's Congress.

Australia and the US have now both resumed military cooperation programmes with Indonesia. Wahid is rehabilitating the military by sacking the hated Suharto-era generals, like Wiranto, and promoting officers, like Lieutenant-General Agus Wirahadikusumah, who have been outspoken against "military involvement in politics".

Wirahadikusumah, head of the Strategic Command, has no in-principle opposition to repression. He explained in a June 18 interview with Tempo Interaktif that he supports the declaration of local states of emergency if the police cannot handle unrest. He cited the use of force against protesters in Seattle as a positive example.

Support in Australia

The solidarity movement in Australia must build support for those forces in Indonesia, primarily the PRD and the mass organisations associated with it, that are challenging the imperialist agenda by building a workers-and peasants-based opposition and struggling for their democratic rights, such as the right to self-determination.

Student, worker and democratic rights organisations in Australia must urgently build stronger links with the militant struggle organisations across the archipelago.

This needs to be accompanied by a renewed campaign to expose the role of the international capitalist institutions, such as the IMF, World Bank and World Trade Organization, in causing the social crisis in Indonesia. We must also renew the campaign against the Australian government's complicity in imposing the IMF austerity on the Indonesian people.

We must also oppose the Australian government's policy of helping to train and equip the Indonesian military. They are only being prepared to suppress resistance to this austerity, including to use force once again to stop the Acehnese and Papuan peoples' attempt to escape from the misery that 35 years of IMF-and World Bank-supported crony capitalism has produced.

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