Dallas Morning News - 09/23/98
By Gregg Jones
JAKARTA, Indonesia - The conversation is livelier these days around Rojak Tasikmalaya's ginseng stand in Jakarta's crowded
Tanah Abang market. All the subjects that ordinary Indonesians used to shun for fear of running afoul of the authorities - the
president's performance, military abuses, government corruption - are now fair game for anyone.
But that's about the only difference the 30-year-old market vendor has noticed in the four months since President B.J. Habibie took
power from Suharto, the strongman who was forced to resign amid riots and demonstrations last May.
"I don't feel any different since Suharto stepped down," said Mr. Tasikmalaya. "There's been no change in my life. I want prices to
fall, not the president."
Yusuf Riadi, 45, a market security guard, nodded solemnly. "The thing we worry about most is our stomachs," he said.
Such statements capture the grim mood in Indonesia these days, where initial euphoria over Mr. Habibie's restoration of political and
civil rights has been eclipsed by despair over soaring food prices and unemployment, plummeting wages and even hunger.
After three months of relative peace following the bloody May riots that toppled Suharto, the fears and frustrations gripping Indonesia
are being vented again in a growing wave of riots, looting, strikes and demonstrations across the main islands of Java and Sumatra.
In Jakarta last week, angry students tore down the gates of the parliament complex and demanded that Mr. Habibie lower the price
of basic goods or resign.
"I'm so afraid that we're coming to a social revolution," said Sofjan Wanandi, chief executive officer of the Gemala Group, an
Indonesian conglomerate. "I don't see any light at the end of the tunnel. I've become so pessimistic in the last few days."
Indeed, the news for Indonesia and its 210 million people is only getting worse.
Indonesia's economic output is on a pace to contract by 15 percent this year. Inflation is 80 percent and rising. An average of
15,000 workers are losing their jobs every day.
A report by the International Labor Organization projects that 75 million people, or about 36 percent of the population, have already
slipped below the poverty line; nearly half the population is expected to be in poverty by year-end, and the figure is projected to soar
to 140 million people by the end of 1999 - levels not seen here since the 1960s.
"We've gone from the zenith of economic achievement to the nadir in less than a year," said a veteran Western diplomat based in
Jakarta.
The social costs of the crisis are already strikingly evident:
Beggars, a rarity in Jakarta in recent years, now converge on cars at major intersections. The destitute compete with young men
and children who strum guitars and shake homemade tambourines for spare change;
School enrollment of eligible children has fallen to 54 percent from 78 percent last year as tens of thousands of children are forced
to work full time as street beggars and garbage dump scavengers, according to school officials and social workers;
Thousands of unemployed men are now trying to make a living in Jakarta by driving becaks, the bicycle taxis banned from the
capital's streets after Indonesia's economy began booming in the 1970s.
High rice prices
Stoking much of the latest unrest is the soaring price of rice, Indonesia's staple food, which has tripled over the past year and has
risen sharply again in recent days. As a result, an estimated 750,000 families are now eating only one meal a day while others are
being forced to eat grass and leaves, aid agencies said.
There are nearly daily reports of hungry mobs stealing rice from paddy fields, raiding rice warehouses and robbing trucks carrying
harvested rice. The Jakarta Post described the incidents as "acts of desperation" and warned that "more unrest could easily spread
to other parts of the country."
In a speech earlier this month, Mr. Habibie bluntly acknowledged the perils Indonesia faces.
"If our economic problems cannot be solved within a short time, their influence will be felt in other areas," he said. "Social unrest will
prevail. Crime will rise. In such a situation, the chance of human rights abuses taking place will surely be bigger."
Mr. Habibie, 62, has won praise from foreign diplomats and analysts for moving rapidly to liberalize Suharto's authoritarian political
system.
He has freed restrictions on political activity, which has led to the formation of more than 50 new parties. He has removed
constraints on the media. He has released some of the country's best known political prisoners. And he has encouraged an
examination of Suharto era corruption and human rights abuses.
"It's incredible how open this place is now, considering the way it was four months ago," said David Timberman, Indonesia program
director of the Washington-based National Democratic Institute for International Affairs. "It's just a profound shift in the whole
orientation of Indonesia."
Indonesian analysts are less charitable when it comes to grading Mr. Habibie.
"He's a nice man, tries to make everyone happy, but he forgets to govern," said political commentator Wimar Witoelar. "There is no
policy direction."
Lack of confidence
The business community, which has long been leery of Mr. Habibie because of his free-spending ways as Suharto's technology
minister, takes an equally dim view of his performance as president.
"There still isn't confidence in Habibie, especially among foreign investors, domestic investors and the Chinese community," said
Mr. Wanandi, a leading ethnic Chinese businessman in Jakarta. "I don't think he can stay until the general elections next May."
Economists contend that Mr. Habibie has sent mixed policy signals that have hurt efforts to restore investor confidence. He has
downplayed the seriousness of the crisis, and he has talked up pain-free, populist proposals such as redistributing assets and
strengthening subsidies rather than the austerity measures most economists advocate.
"He has shown weak leadership," said economist Mari Pangestu. "The economy is still spiraling downward, and it's going to get
worse before it gets better. We're going to have to bite the bullet."
Mr. Habibie's defenders say there is only so much he can do to slow the downward economic spiral, which was set in motion by
Suharto's corrupt, crony practices.
"No one who is president now will get much credit," said Dewi Fortuna Anwar, a top Habibie adviser. "In the economic sphere, the
best the government can do is try to develop the framework to try to stabilize the prices. It will take time for confidence."
Mr. Habibie has purposely focused on the issues of political transformation, "promoting greater transparency and accountability
within the framework of the existing constitution," said Ms. Anwar.
But many Indonesians remain deeply skeptical of Mr. Habibie's commitment to democratic reforms and clean government, given his
own role in the Suharto regime and the fact that many Suharto holdovers still serve Mr. Habibie.
His pledges to end Suharto-era nepotism were mocked recently after he awarded his wife and brother with state medals. And his
commitment to reform was questioned when he refused to overturn Suharto's ouster of the country's most popular politician,
Megawati Sukarnoputri, from her position as head of the Indonesian Democratic Party.
The most critical test of Mr. Habibie's commitment to political reform will occur in November, when a national assembly controlled
by the ruling party meets to approve new laws for next May's general elections, analysts said.
"If you didn't have an economy in such dire straits, you could lay out a scenario where they would come through all this," said a
senior Western diplomat. "But it's not clear people are going to be patient enough to let this all happen."
Vedi Hadiz, an Indonesian political scientist at Australia's Murdoch University, frets that Mr. Habibie and his political opponents are
frittering away a historic opportunity to peacefully cultivate democracy in the world's fourth largest country.
"Everybody's in a race against time because of the economy," said Mr. Hadiz. "The problem is both the political opposition and the
powers that be aren't responsive to this time urgency. And so we have a stalemate. Everyday I've become a little more pessimistic."
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