Fwd (GLW): INDONESIA: Situation explosive as economic and political crisis deepens

Alan Bradley alanb at SPAMelf.brisnet.org.au
Sun Jun 25 19:56:07 MDT 2000

The following article appears in the latest issue of Green Left Weekly

INDONESIA: Situation explosive as economic and political crisis deepens

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

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 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

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

Ruling class discredited

The government is weekly, if not daily, rocked by one scandal after

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

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

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

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

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

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

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,

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

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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