Indonesian Politics and Economics

Summary

As the report above from The Jakarta Post suggests, the rioting in Jakarta on 27 July surprised and shocked the city and temporarily unnerved business. The events point to continuing- and worrying- disenchantment among the urban middle and working classes but are not a prelude to general disorder and the demise of the Suharto regime. Suharto is in firm control, dissent has been stifled and the military are fully behind him in the run up to General Elections in 1997 and the Presidential Elections in 1998. Old age is increasingly Suharto’s toughest opponent.

The Jakarta Riots

August was dominated by the political aftershocks following the rioting in Central Jakarta on Saturday 27 July. Shops and offices along several main roads in Central Jakarta were looted and burnt. Eventually the military clamped down firmly on the rioters. Three people were reported to have died in the violence.

The violence was triggered by an attack earlier that morning on the Jakarta headquarters of the Partai Demokrasi Indonesia(PDI) by supporters of the new, Government-sanctioned leadership of the PDI. The headquarters had been under the control of PDI members loyal to the ousted PDI leader, Megawati Sukarnoputri (the daughter of Indonesia’s first President, Sukarno). For several weeks she had led a free-speech forum at PDI headquarters protesting her removal from the PDI leadership. The forum had become a broad protest against the Suharto regime generally.

The Government responded savagely to the unrest. Several hundred have been arrested. Several hundred have also “disappeared”. It is not clear whether they are in some form of official detention( the authorities deny it) or are hiding for fear of being arrested. Megawati has been questioned -and now silenced and sidelined. A heavy military presence protected banks and other key business sites for the first three weeks of August.

The Government alleged involvement by remnants of the Indonesian Communist Party(PKI), pointing to the PKI-style mass mobilisation techniques of a tiny group of young radicals who are now portrayed as having exploited the divisions in the PDI, stirred up the street violence of 27 July and incited earlier industrial unrest in both Jakarta and Surabaya. The Partai Rakyat Demokrasi (PRD), the umbrella organisation of these radicals, became the focus of the military’s PKI scare campaign.

The authorities arrested the head of the PRD, Budiman Sudjatmiko. He is a dropout from Gajah Mada University and like others in the “party” seems to have been doing no more than playing at being a revolutionary.

Implications

The swift, firm military response has stopped all public dissent in its tracks. The Armed Forces, moreover, have moved rapidly to show a united front in the face of the unrest. This should ensure an outward calm in the run-up to the 1997 General Elections.

The violence of 27 July, however, serves as a reminder of widespread urban middle and working class dissatisfaction with Suharto’s Indonesia. They are the most sensitive to the enormous disparities of wealth in Indonesia, which are most obvious in Jakarta. They deeply resent the Chinese and Suharto family dominance of business. Relatively politically aware, they supported Megawati’s Free Speech Forum.

The picture is not wholly gloomy for the regime. Some Muslim organisations were noticeably supportive of the crackdown. The head of the Indonesian Council of Ulamas(religious teachers) called on the government to take harsh legal action against those who had incited people in the lead-up to the rioting. Minister Habibie, speaking on behalf of his Association of Indonesian Muslim Intellectuals(ICMI), supported the Government’s actions. Committed Muslims would not be expected to mourn for the PDI, which many see as a Christian/abangan(nominal Muslim) movement.

The unrest, moreover, was restricted to Jakarta. There is a good measure of support for the PDI in Central and East Java, the traditional heartland of the PNI (Sukarno’s party) component of the PDI. In June I attended celebrations of Sukarno’s 95th birthday in his home town of Blitar in East Java. About 100,000 attended, all Megawati supporters. And yet rural Java and Indonesia generally stood apart from the unrest in Jakarta.

One reason may be that rural Indonesia is relatively more content than the urban middle and working classes. I visited Ms Suharto’s tomb at Giribangun in June. The site had been closed to the public for years until her burial there. It now draws 18,000 visitors -reverential visitors- a day(more on the weekends and special days). Suharto seems to be widely respected among the rural Javanese, probably reflecting acknowledgement of his role as Father of Development.

The events of 27 July temporarily affected the confidence of the business community and the Chinese in particular. The Jakarta Stock Exchange and the rupiah fell briefly but recovered quickly. Foreign investor confidence also recovered, albeit cautiously. The fact is that the fundamentals of the Indonesian economy are still very strong. Inflation is under control, foreign debt is being carefully managed and Indonesia is experiencing a sustained period of high, broad-based growth around 8% per annum.

Suharto may respond to the discontent with some economic policy changes. He is said to be contemplating a reversal of his priorities - stability first, development second and, finally, more even distribution of wealth (pemerataan)- to give primacy to pemerataan. This could entail a return to policies of the 1980s favouring pribumi business people. The heart of the problem, however, lies in the enormous gap between the bulk of society and a wealthy few, the President’s own connections with the richest Chinese entrepreneurs and his children’s business practices. The First Family’s wealth and business methods are an increasingly critical political issue, including for the Armed Forces.

The 1998 Presidential Elections: Suharto’s Future

The rioting provided a reason for an intensive crackdown on dissent and political debate in general, leaving the regime a virtually open field for political manoeuvre in the lead up to elections. The alleged PKI connection behind the violence signalled to the Armed Forces the need for total unity and for a closure of any differences between the military and Suharto. There is no prospect of social revolution of the kind that removed Marcos in the Philippines. Although some ministers are said to be concerned about his strategy, the President seems in a stronger position than could have been anticipated before the rioting.

One serious question clouds the future: how long will the President live? He is now 76 years old. He has just visited Germany for a thorough medical check-up -an absence which probably encouraged some in opposition politics to think the mice could play while the cat was away. The German doctors have said that he is in good health for a man of his age but this comment seems deliberately ambiguous.

It cannot be assumed that Suharto will live to the next Presidential Elections in 1998. According to the 1945 Constitution, the Vice President automatically becomes President without the need for any fresh election or confirmation by the People’s Consultative Assembly (MPR). If Suharto were to die before the Elections, there are good prospects of a reasonably orderly transition to the presidency of Try Sutrisno, the current Vice-President. There would be widespread grief and mourning at Suharto’s passing, particularly in rural Indonesia. There would be temporary business nervousness but an extremely tight and pervasive security clampdown imposed by a united military would ensure order. The death of Suharto in the next two years and before the Presidential Elections is more likely therefore to lead to an orderly transfer of power.

If, however, Suharto is alive in 1998, he will undoubtedly be unanimously re-elected President by the MPR. But it is also highly likely that Suharto will not see out a full term to 2003. On his death, his Vice-President would automatically become President for the remainder of the term. The critical issue in the 1998 MPR session is who becomes Vice-President.

It seems to be Suharto’s wish that his next Vice-President be his daughter, Tutut, whom he has been grooming for politics. She is Deputy Chair of the Government party, Golkar. Through her he could create a dynasty and protect -and grow- his children’s business interests.

Suharto’s concern to choose his successor himself will cause an inevitable political crisis. The crisis could arise first around the 1988 Presidential Elections. The Armed Forces are unlikely to support a Suharto dynasty, a continuation of Suharto’s current closeness to Muslim politics and continuing growth in the family’s business interests. The Armed Forces are likely to put forward their own candidate for Vice-President without prior consultation with Suharto -as they did in 1993 in nominating Try Sutrisno. Try Sutrisno could again be the candidate of the Armed Forces. Suharto must then decide whether to confront the Armed Forces and push his daughter’s candidacy, or let the military in effect choose his successor.

If, for some reason, the Armed Forces did not have the nerve to insist on their own candidate in 1998 and Tutut became Vice-President, the inevitable political crisis would be postponed until Suharto’s death. When he dies, the military will assume effective control. There will be widespread mourning and grief, temporary concern in the business community and extremely tight security imposed by the military.
Although Tutut would become President immediately, the military would in all likelihood not accept her as a long-term President. The military would probably move to convene a special session of the MPR -as Suharto himself did in the late sixties- even though the 1945 Constitution does nor require it. With the military firmly in control, a former general would in all likelihood be elected by the MPR as Suharto’s successor. Tutut might even remain as a figurehead Vice-President and symbol of continuity with Suharto. The process, because of tight military control, would be reasonably smooth. The key to a reasonably smooth transition will always be the military. While they remain united -as they are now- they are a powerful force for stability and will ultimately get their way.

2 September 1996