From the article of 'Petrel'
No.671 / April 11, 1998

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The economic crisis does not have subsided.

Will the re-election of Soeharto cause revolution?


Soeharto was re-elected for seven times at the Indonesian president election on March 10, and the long-term, dictatorial regime of Soeharto that has already lasted even for 32 years resulted to continue for further as many as five years. The economy and politics of Indonesia just deepen the confusion further.

Though Soeharto has been highlighted and extolled as a powerful leader who has pulled not only home country Indonesia but also ASEAN and the non-alliance nations before, he has nothing to do in the serious economic crisis since last year and the voice to request the retirement is successive from the inside and outside in the country now.

However, Soeharto has been elected for seven times and announced new Cabinet on March 14 as if to repulse and to challenge such a criticizing voice. The national conference to choose President is occupied to majority by such person who were appointed by Soeharto and the member of Assembly of Golkar, the government party of the supporting association. So the election was only the farce.

As for the personnel of the new Cabinet, Habibie, the stuff members, who was called "small size Soeharto" because the clan was developing the family business, became the Vice-President, the eldest daughter of Soeharto Siti Hardijanti became the Minister of Social Services. --She has been thought to get surely the president of the government party Golkar for the next term.-- Muhammad Hassan who is a king wood, presiding the plywood cartel, and is the Soeharto clan's financial support person, became the Minister of Trade and Industry. In addition, Faud Bawazier who is called the Soeharto clan's safe keeper became the Minister of Finance.

It is common to all these fellows that they are the relatives or the stuff members of Soeharto, and the party receives the favor of the Soeharto system entirely and has enjoyed the wealth exclusively. Do you say how will the fellows part with the own (clan's) rights and interests on the whole? It is equal to the control of the thief of the thief exactly. Judging from this, he might have no will to accomplish the economic reformation from the beginning, of which IMF assumes to be the condition of the financial support of 40 billion dollar such as the abolition of the cartel of monopoly, the exclusion of the family business preferential treatment.

Soeharto speaks "The economic structural reformation agreeing with IMF does not agree with the constitution providing for the family principle" to IMF, and to the United States behind IMF, and made the confronting posture clear.

People value the family in Indonesia and they provide for it in the constitution. So, Soeharto says it is natural that he gives his family preferential treatment. However, the market reacted at once after the speaking of Soeharto the currency rupiah fell largely and the other Asian currencies fell. The economic situation deteriorates more and more, and the influence does not stop only in Indonesia and spread to the other Asian nations, too.

In such situation, the other ASEAN countries, that are desperately rebuilding their economy from currency crisis last year, are in great fear lest the large country in that area, the Indonesian economic confusion should spread to their home countries. Though the ASEAN countries have been boasted of the cooperation system up to now, and have repulsed with unity to the "intervention" of advanced countries --especially of Europe and USA-- such as "Democratization demand," they get irritated the speech of Soeharto and the personnel of new Cabinet very much and do not even try to conceal dissatisfying.

The Bangkok post, the English papers of Thailand criticize, "A dictatorial leader who does not lend the ear to our advice is making the economic revival efforts of each country in the region a hostage." His sworn friend Lee Kuan Yew Senior Minister of Singapore spoke and criticized Soeharto in the interview as "It is wrong to help the family by using the public standpoint. The society of which dishonesty is praised will collapse."

Of course, irritation is not only in foreign countries. The rupiah stagnates in one dollar = 10 hundred rupiah level with cheap about as many as 75% more than July last year, the import letter of credit cannot be accepted, and the imports such as industrial parts, farm products, and the medicines are sluggish. There is a private think tank that forecasts, "The consumer prices rise rate will be 40-50%, the growth rate of the substantial gross domestic production will be minus 3-5%" in '98 terms, too.

Actually, the prices rise hits the life of the people directly and especially afflicts the city inhabitant. The consumer prices rise rate in February is 12.7% over last month and the rising width expands from 6.88% of January. It is said that shopping guest's appearance is sparse though abundant in goods at the market in the capital Jakarta city where the shop of food and miscellaneous goods stand side by side, too.

Moreover, the corn and soybean that are the raw material of domestic animal's fodder are covered almost by import in Indonesia, the price of these imports rose suddenly because of the fall of the rupiah and triggered the food price hike. In addition, the drought worsened and led to the sudden rise of the price of vegetable. The prices of daily necessaries such as toilet paper and soap became almost two times, too.

The price hike is not only in goods. Because the subsidy to the fuel is scheduled to be reduced from April, the rise of the price of gasoline is not avoidable. It is the situation that the price hike application such as the bus fare is already in succession. Moreover, the crisis of unemployment attacks the worker. The government is forecasting that the unemployed become 8 million persons only at current year. Furthermore, it is said that the illegal entrant to Malaysia is increasing rapidly trying to escape from the economic crisis of Indonesia.

However, Soeharto only preaches the "three love movement" as "I love rupiah, the domestically produced goods, and the savings" to the mass of the workers who receive the difficult of the economic crisis directly, and does not even try to touch his wealth at all.

The riots breaking into shop occur in the provinces and the movement demanding the Soeharto retirement of students is occurring every day in Jakarta. Though the action criticizing the Soeharto system clearly has not occurred besides student in the city --because the army takes the guard system like martial law-- the dissatisfaction is surely rising, and the situation is that it is not amusing whenever occur even a large-scale riot and an anti-establishment action.

The monopolistic capital of Japan cannot be indifferent in such a dangerous situation, too. Anyway, the amount of the claim of the Japanese bank for Indonesia is 23,200 million dollar (June, '97) and is in the head position of the amount of financing par country. It might be certain that the economic confusion of Indonesia would give deep damage to the Japanese monopolistic capital suffering from sequelae of the bubble collapse. In addition, the voice to criticize the "lack of policy" of Japan from the United States is growing day by day, that is, "Japan gives priority only to the problem of the home country and does not even try to move for the solution of the Asian economic crisis."

Then, Prime Minister Hashimoto conferred with Soeharto in haste and Soeharto was an attitude of flexibly corresponding to the mutual agreement with IMF. I wonder Soeharto, as he was, was not able to stand to the situation of economy not improving at all and the voice of the international criticism and softened the attitude.

The conference with IMF was restarted and agreed to put into practice excluding some reformations and it is expected to restart the financial support. However, the crisis of the Soeharto system did not leave by this. The cause of the crisis at this time --the excessive production, the excessive money capital made like a bubble, the huge foreign debt and the family business, etc.-- does not be solved in any way and it is doubtful whether Soeharto is serious to solve it.

The crisis is only sent a little ahead. There is enough possibility that it will spout in further more violent shape in the future, and moreover, it will not stop only in Indonesia, and become the fire point of new crisis to involve Asia and furthermore the world.

(Takumi Yakuwa)