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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mark Myword who wrote (3917)	5/27/1998 9:46:00 PM
From: Stitch	Respond to of 9980

William, <<Stitch - what do you see as the likelihood of an all-out people's revolution in Indonesia , where they throw out all the former cronies of Suharto and wipe the slate clean (including repudiation of foreign debt , which arguably the people don't owe , as they got virtually no benefit from the funds that were lent)? I see this possible scenario as the one thing that would really rock the Asian markets , if it were to occur.>> I think the likelihood is small, frankly. The military is still in a strong position, armed, as someone pointed out, with the latest and greatest from the U.S. and other weapon purveyors. A more frightening scenario to me is the rise in nationalism that often accompanies the dreadful effects of gross governmental negligence and banditry. It is just too convenient as a diversion. A rise in nationalism could lead to Sukarno type expansionism and sabres could rattle again. I am quite sure that Malaysia and Australia have not forgotten those days and it could be another reason Singapore reversed its many year policy and is playing such willing host to the 7th fleet. To use a term coined by Sukarno himself, and later popularized in a movie, we could have "The Year of Living Dangerously" all over again but I believe it unlikely. Analysis I have read suggest that the recently vocal and violent activity in Indonesia was largely ill organized students and the always hovering lawless faction that isn't organized at all...as alas...there is no honor among thieves. Further, Indonesia is a vast archipelago made up, primarily, of geographically dispersed people. The ethos is one fashioned by village life. Outsiders (meaning outside the village) are largely viewed in a wary fashion. While there are some common threads like the widespread acceptance of Islam, there is still cultural dispersion in terms of day to day life. This presents a terribly difficult populace to mobilize against a ruling government that is technically superior in every way (communications, weapons, transport, budget, etc.) If there still is a PKI I suspect it is fragmented, undermanned, and undernourished. Similar fate was met by the once organized labor unions. Both factions were atomized in 1965 when up to 3 million people lost their lives as a result of the military coup that deposed Sukarno, placed Suharto in power, and crushed the PKI. But there is still another element present today that has not been a force in Indonesia until recent times. That is the growing middle class. Largely educated, more worldly, and fairly well informed, it was these voices that startled the world when demonstrations for Megawati (Sukarno's daughter yet articulate spokeswoman for democracy) were held last year. It may well have been a wake up call for the military establishment. Maybe they realize things can never be like they were before. I read where this middle class has grown by 1.2 million people per year for the last few years though it may now slow down. It is really because of these people that I am optimistic. I really believe that things in Indonesia cannot be the same again. And I think we may be seeing what we will later call the first tenuous steps towards a real democracy. Do not forget that Habibie is only the third post colonial president the country has had. I expect his term of office to be much briefer then his predecessors. I do think these steps are going to be accompanied by severe recession and there will be social unrest in Indonesia. My hope is that IMF and world bank involvement can be restored and accompanied by safety net social programs. IMO the U.S. has an opportunity here that should not be missed. Best, Stitch