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Indonesia can't hide glee over Bush

Source
Dow Jones Newswires - November 14, 2000

Tom Wright, Jakarta – Indonesian Foreign Minister Alwi Shihab's premature response to an apparent Bush victory in the US presidential election last week showed how much Jakarta wants to see a Republican in the White House.

Alwi jumped the gun to tell reporters he was happy with George W. Bush's victory – prematurely called by US networks – because the Republican candidate wasn't an "interventionist." Now, as the US waits for a recount of votes to determine its next president, Jakarta is hoping that a Bush government – which may include Asian experts such as former Indonesian ambassador Paul Wolfowitz – won't apply the same kind of diplomatic pressure to influence domestic policy as its Democrat predecessor.

US-Indonesia relations are in the doldrums, amid a growing wave of Muslim-led nationalism, but also due to what critics say is an increasingly hard-line stance toward Indonesia from the Clinton administration.

Washington's frustration with President Abdurrahman Wahid's one-year-old democratic government broke into the open in September after the failure of Indonesia's army to stop the killing of three UN workers by pro-Jakarta militia in West Timor.

Defense Secretary William Cohen, visiting Jakarta soon afterward, threatened to withdraw economic aid if the country didn't move quickly to end its security problems, which also affect US mining and energy interests.

In contrast, Bush's foreign policy advisers, which may include Wolfowitz as possible future defense minister, are against using issues such as foreign aid to influence Indonesian domestic politics, analysts say.

"I don't think the Bush camp would try to use budgetary aid as a lever," says David Fernandez, JP Morgan's regional economist, and former lecturer at John Hopkins University, where Wolfowitz also teaches.

Foreign policy should not be aimed at "lecturing, and posturing, and demanding, but demonstrating that your friends will be protected and taken care of, and your enemies will be punished," Wolfowitz wrote recently.

Wahid the only option?

Still, both the Gore and Bush administrations would continue supporting Wahid – the country's first democratically elected president for over 40 years – due to fear of what could replace him, analysts say.

Despite anger over the UN murders, and the slow pace of economic reform, the US didn't withdraw aid, doling out its share of $4.8 billion for next year's budget at an Indonesian donors' meeting in Tokyo last month.

"US foreign policy [to Indonesia] will remain unchanged" whichever candidate wins the election, acting US embassy head, Steve Mull, told reporters last week in Jakarta.

But Al Gore's foreign policy advisers, which would probably be led by US ambassador to the UN Richard Holbrooke, would be more inclined than Bush's team to keep up the pressure on Indonesia, analysts say.

The Clinton administration, through US envoy Robert Gelbard, has stepped up public criticism of Indonesia, especially the military, and the state-run electricity company's failure to honor power purchasing contracts with American businesses.

Indonesian lawmakers have called for Gelbard's removal, claiming that he has tried to influence military and political appointments – charges which the embassy denies. Relations hit rock bottom this month when the US embassy closed to the public, citing a "credible" security threat.

The US State department then put a travel warning on Indonesia, after Muslim groups angered by Washington's support for Israel in the Middle East conflict threatened to expel American tourists from hotels in a central Javanese town.

Republicans face same problems

Wolfowitz, a big supporter of Wahid, would probably bring a lighter touch to dealing with Indonesia, a country where public criticism can often be counter productive, analysts say.

Bush's economic team, which would probably be led by Larry Lindsey, a former Federal Reserve board governor, is also likely to speed up reform of the International Monetary Fund, a move which could further reduce tensions with Indonesia.

Indonesian politicians have criticized the fund for trying to force the country to sell assets at fire sale prices as part of a $5 billion bailout of the economy.

Lindsey, a possible treasury secretary under Bush, is more likely to want a refocusing of the IMF's role on emergency lending at times of balance of payments crisis, not domestic reforms, analysts say.

Still, a Bush government would face the same problems as its predecessor in safeguarding US business interests at a time of rising Muslim antagonism toward the West.

It would also face the same difficulties in trying to ensure Indonesian state-owned companies, such as the electricity concern, keep to contracts signed with US companies under the 32-year unbroken rule of now-discredited dictator Suharto.

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