Jakarta – This time will be a good opportunity for the nation to look back at what happened 25 years ago when the severe Asian financial crisis started to devastate Indonesia's economy and one year later in May 1998, it spelled the end of then-president Soeharto's 32-year rule. Indonesia practically went bankrupt and the nation was angry with Soeharto, his children and his cronies.
We should not allow the return of another Soeharto and greedy rent-seekers who normalize corruption and collusion. We must also remain on alert for tendencies to restore a dictatorship and the reign of political oligarchs characterizing Indonesia back then.
Indonesia signed its first letter of intent (LoI) with the International Monetary Fund in July 1997, just two months after the ruling party Golkar gained a landslide win that paved the way for Soeharto's seventh presidential term in March 1998. The LoI was aimed at showing off the country's economic resilience as other Asian countries were crumbling. But Soeharto was wrong, the LoI marked the beginning of the snowballing process of his fall.
On Jan. 15, 1998, then-IMF managing director Michel Camdessus forced Soeharto to personally sign another LoI in order to disburse a US$43 billion bailout after Soeharto was reluctant to take the IMF's prescribed medicine.
The IMF punished Soeharto's children and their cronies, but it was the whole nation that bore the brunt of the economic destruction. But we should admit that without international intervention, Indonesia would have been unable to stop the policy-making that prioritized the interests of those close to the ruler. Our financial and banking system later grew healthier thanks to international assistance.
When he assumed the presidency for the seventh term in a row in March 1998, Soeharto appointed his daughter Siti Hardiyanti "Tutut" Rukmana and his long-time golf buddy Bob Hasan as his Cabinet ministers in a bid to hold on to power.
But only two months, later massive student demonstrations across the nation forced Soeharto to end his 32-year dictatorship. On May 21, 1998, he quit – according to his terms – and was replaced by his deputy, technology czar BJ Habibie. Soeharto was named a corruption suspect but never stood trial until his death on Jan. 27, 2008.
His predecessor Habibie had little choice but to strictly abide by the IMF's terms and conditions because the global market had lost its confidence in Indonesia. Apart from the economic crisis, Indonesia also endured a political crisis. For students and youths, Soeharto's exit was not enough. They demanded an overhaul of the political system, including sweeping political reforms.
Despite his major political reforms and his total obedience to the IMF, Habibie failed to regain public trust because he was largely regarded as Soeharto's "golden boy". He withdrew from the presidential election after the People's Consultative Assembly rejected his accountability report.
Only in 2006 did Indonesia pay off all its debts to the IMF. To be fair, without the IMF's intervention, it would have been much more difficult for the nation to force Soeharto to step down and embark on historic political reforms to bring democracy back to life.
There are indications of a certain group that want to revive the good old days. They may hijack democracy to kill democracy, but we must not let the painful and bitter history repeats itself.