Socialist Action /June 2000
Economic and Political Crisis Simmers
in Indonesia
By GERRY FOLEY
Despite a relative stabilization after the election of a government of
the bourgeois democratic opposition to the discredited Suharto dictatorship,
the crisis in Indonesia continues to simmer.
The much touted economic recovery has failed to materialize. Since last
November, the national currency, the rupiah, has declined by 21 percent
against the dollar, and the value of stock shares has declined by 36 percent.
In a May 17 Reuters dispatch, correspondent Jonathan Thatcher wrote from
the Indonesian capital of Jakarta: "A cloud of gloom has descended
over Indonesia. Its financial markets have been plunging, along with hopes
that a shambling government can lead the country out of economic ruin and
political bedlam."
The chief of the Central Bureau of Statistics recently issued an estimate
that the economy would grow this year by only 1.5 percent, in contrast to
the projections of 3 to 5 percent by the president, Abdul Rahman Wahid,
and his economics minister, Kwik Kian Gie.
In a huge country with a dynamically growing population like Indonesia,
an annual growth rate of 1.5 percent would mean that the economy is losing
ground rather than gaining it.
At the same time, since Indonesian workers were superexploited and repressed
under the old regime, the weakening of the government has led to a swelling
upsurges of strikes demanding increases in extremely low wages.
For example, workers employed by the Japanese company Sony are demanding
a raise of 80 percent, and the management is threatening to abandon its
Indonesian operations.
In 1999, 125 strikes were officially reported. In the first quarter of
this year, there have already been 52. And government officials estimate
the real number of strikes is 10 times that. Rebellions of rural workers
and peasants have also taken place in many places. These are even less well
recorded. But the Wall Street Journal of May 25 reported that Wahid has
recruited more police "to quell looting of plantations."
None of the political problems left pending by the fall of the dictatorship
have been solved. In the first place, in the name of "national reconciliation,"
Wahid refuses to move decisively to prosecute Suharto and his corrupt cronies
and offspring.
But radical students, who were the spearhead of the protests two years
ago that forced the dictatorship to retreat, have kept up their demonstrations
demanding punishment of Suharto and the dismantling of his network of crony
capitalism. They have kept the issue before the Indonesian people.
In a May 18 dispatch from Jakarta, the Business Times reported that because
of the interlinking between the operations of Suharto's crony capitalists
and the capitalists supporting the new government no decisive measures have
been taken against the Suharto financial empire:
"The beginnings of an economic recovery [now more than dubious]
have muffled calls for the dismantling of the firms, while the family's
ties to the military and government ministries remain too strong to allow
such an outcome anytime soon, analysts say.
"'The current leadership is indecisive on whether [a purge of Suharto's
family from the corporate sector] would not upset a lot of people in their
own ranks,' said Manish Singhai, a vice president at Alliance Capital Management
in Singapore....
"'The system hasn't come down as hard [on these companies] as many
people expected it would,' said Calvin Ho, vice president and senior portfolio
manager with Citicorp Investment Bank (Singapore), which manages $150 million
worth of Indonesian assets.
"While calls now for Mr. Suharto's prosecution on corruption charges
make headlines daily and foreign firms steer clear of the former first family,
many Suharto firms remain largely untouched."
Furthermore, the new government's timid maneuvers to impose more civilian
control of the military have not changed anything fundamental but are arousing
a backlash among the generals. For example, the May 24 Business Times ran
an interview with the army chief of territorial affairs, Lt. Gen. Agus Widjoyo,
that stressed the military's determination to maintain its own fraction
in the parliament.
At the same time, the new government's feeble pretense of investigating
the violation of human and democratic rights by the military, particularly
in the rebel areas of East Timor and Aceh, have satisfied no one.
Nonetheless, the United States has quietly renewed its collaboration
with the Indonesian military. In The New York Times of May 25, Elizabeth
Becker reported:
"The United States broke the freeze this month by inviting Indonesian
military observers to joint exercises in Thailand and by completing plans
this week to hold the first joint exercises between American and Indonesian
armed forces in July.
"These exercises are a prelude to a much larger military-to- military
program the administration will present Congress this month to reward the
new, democratically elected Indonesian government for removing some of the
senior military officers under investigation for the East Timor massacres
and for imposing civilian control of the military, according to senior administration
officials."
Successive U.S. governments worked hand in glove with the Indonesian
military dictatorship and were complicit in its repression of the Indonesian
people in defense of the interests of local and international capitalists.
Despite the thin pretext of reform on both sides, this relationship obviously
has not ended.
The crisis in Indonesia is the result of tendencies inherent in world
capitalism today. It will not end without a decisive confrontation between
masses of working people and their exploiters. That confrontation is inexorably
drawing closer.
Socialist Action /June 2000 |