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 The world's fourth-largest nation is an ueasy coalition of ethnic and religious groups.
 n a hot Southeast Asian day, Abdurrahman Wahid, the president of Indonesia, sat in front of the members of a leading university as one scholar after another praised him for his commitment to human rights. Wahid, who is essentially blind due to several strokes, was guided to the lectern. Once there, he gave a thoughtful, off-the-cuff speech, which was warmly received by the crowd, some of whom cheered him lustily.
The entire occasion was delightful--except that it took place in Bangkok, not in Jakarta or another Indonesian city. Several days after his glowing welcome at the Thai university, Wahid was back home, facing separatist rebellions, a debilitating financial collapse, and constant political backbiting, with parliament making every effort to get him to quit. Confronted with all these problems, what did Wahid do? He planned another trip abroad. The largest Muslim country on earth, home to 224 million people, Indonesia stands at a crossroads. Secessionist tensions are tearing it apart, the economy is staggering under crushing debt, investors are pulling out, and brutal interethnic violence is taking its toll. Tough, even harsh, decisions need to be made to put this nation back on track. If Indonesia falls apart, the impact on the region and even the United States would be enormous. By far the largest country in Southeast Asia, it is a linchpin of regional security. It sits astride the Strait of Malacca, one of the world's most important shipping lanes. An unstable Indonesia could disrupt billions of dollars' worth of sea traffic. Widespread violence there probably would result in waves of refugees washing up in Malaysia, Singapore, and Thailand, destabilizing the political systems and economies of those important U.S. allies. In addition, such unrest would disrupt important trade flows, for Indonesia is a major supplier of oil and natural gas to America and a key market for U.S. exports. Less tangibly, if the country disintegrates into a cycle of violence, it would put in doubt the notion that Islam can be tolerant. Chaos might allow Islamic fundamentalists to make headway in the archipelago. A TOUGH HISTORY  free, democratic Indonesia could never be an easy place to govern. The massive country stretches across three time zones and encompasses hundreds of ethnic groups and languages. Irian Jaya, Indonesia's easternmost island, boasts over 700 language groups. Although the government has heavily promoted Bahasa Indonesia, the national language, many Indonesians do not speak it, and numerous residents of islands other than Java, the main population center, feel little connection to the country.
What's more, policies implemented during the Suharto dictatorship, which lasted from 1966 until 1998, exacerbated ethnic and economic fissures. To preserve the unity of the state, Suharto unleashed the armed forces on outlying provinces with separatist ambitions, places like East Timor, West Papua, and Aceh, a small, resource-rich province in western Sumatra. Given free rein, the military slaughtered thousands.
Meanwhile export-oriented economic policies, designed to help Indonesia catch up to fellow Asian "tiger cub" economies Malaysia and Thailand, benefited a small group of politically connected Javanese. These nouveaux riches funneled a percentage of their wealth back to Suharto and his family. As a result, Indonesia became one of the most corrupt countries in the world. "You can't imagine how rotten the system was under Suharto," says Laksaman Sukardi, a leading reformer. When Suharto wobbled in 1997 and '98, tensions that had been building for decades were unleashed. Mobs rampaged through cities, demanding punishment for the Indonesian strongman and wreaking havoc on property. The political unrest provoked inflation and forced down the value of the country's currency, the rupiah. When the devaluation of the Thai baht triggered the Asian financial crisis in July 1997, Indonesia's economy melted down. The economy shrank by 12 percent in the first half of 1998, the most dramatic contraction in any major economy since World War II. The economic pressure helped force Suharto out. As his regime crumbled, the urban working class took out its anger over years of fighting a cronyistic, kleptocratic business culture by looting the homes of wealthy Indonesians, especially those with ethnic Chinese backgrounds. A BIT OF THE GOOD ...  espite the chaos of 1998 and '99, some progress has been made in the post-Suharto era. While the Jakarta press once simply mouthed propaganda, today the archipelago is a hotbed of investigative journalism, and an increasingly literate population is learning to question its leaders' actions.
"One of the reasons why Indonesia is becoming noisier, seeing more conflicts coming to the surface ... is because people are becoming educated," says Nurcholish Madjid, rector of the University of Paramadina Mulya in Jakarta. In addition, the military, once used as a tool of repression, has begun to slowly professionalize its ranks, weeding out some incompetent, corrupt, and brutal officers. Most important, after decades of sham elections in which Suharto's party, Golkar, always triumphed, in the fall of 1999 the country held its first truly free vote. In that election, Megawati Sukarnoputri, daughter of independence hero Sukarno and head of the Indonesian Democratic Party of Struggle, won the largest share of the popular vote. But through elaborate coalition building in parliament, Wahid, formerly the head of a large Muslim social organization, became president, with Megawati as his vice president. Upon his accession, political analysts expressed high hopes for the new president. Wahid was seen as a tolerant, forward-thinking reformer who could tame the country's corruption, inspire its populace, and lead it toward democratic consolidation. ... BUT A LOT MORE OF THE BAD  nfortunately, since the initial euphoria, little has gone right. Wahid has governed in an erratic and autocratic style, frequently abandoning Indonesia to showboat abroad. Meanwhile, the rest of the country's political leaders have spent their time rebuking the president, sitting on their hands, and fighting off corruption scandals. While the president and other leaders venture on lavish overseas trips and launch recriminations against each other, they fail to address the country's burning issues.
After coming into office, Wahid and his government promised greater autonomy to restive outlying regions like Aceh. Although the central government negotiated a cease-fire with rebels there, Wahid has flip-flopped on his promises of autonomy, loosing hard-line troops on Aceh and West Papua. These troops have arrested popular community leaders,
Consequently, separatist and interethnic violence has been on the rise over the past two years. Human rights groups estimate that more than 3,000 Indonesians died in separatist-military violence last year. In West Papua, rebels have stepped up their attacks on government installations, using spears, axes, and clubs to bludgeon government troops to death. In the Molucca Islands, a highly diverse area in the east, the army has allegedly protected local Muslims, doing nothing while Islamic extremists murder Christians. This February, while Wahid was visiting the Middle East, Indonesian soldiers stood by as mobs of ethnic Dayaks terrorized ethnic Madurese on Borneo. The Dayaks killed at least 500 people and beheaded many of their victims. As the violence in Borneo and other regions spiraled out of control, Malaysian Defense Minister Najib Razak warned that "the breakup of the state, the Balkanization of Indonesia," now seemed possible. Indonesia's business class, which is centered in Java, isn't any happier with the government. Foreign investors, whose capital is crucial, are disappointed that the Indonesian Bank Restructuring Agency (IBRA), which was set up to manage the nation's failed banking system, has not been proactive enough in liquidating the bad assets of hundreds of poorly managed, opaque companies. As foreign investment and loans decrease--the International Monetary Fund has postponed its latest disbursement of funds to Jakarta--Indonesian businesspeople face a tightening credit crunch. Meanwhile, rich former Suharto cronies who siphoned huge amounts of cash from government-linked businesses go unpunished, further angering the business community. POLITICIANS' PARAMILITARY GROUPS  hen dealing with separatists and businesspeople, the government has faltered. But when it comes to politics, it has failed completely. Although politicians in the post-Suharto era have permitted a freer press, they also have fostered intolerance by harshly attacking each other, rarely dealing with each other face-to-face, and building up paramilitary organizations to support themselves. Today, each major Indonesian leader--Wahid, Megawati, and several others--controls a large paramilitary force comprised primarily of die-hard young men totally dedicated to the politician.
The pols' words can have a vicious impact. After Wahid was censured by parliament, his paramilitary group, Banser, went on a rampage in East Java. Armed with guns, sickles, machetes, and fire, Banser burned down the offices of other political parties and terrorized the populace.  Wahid's large paramilitary force is particularly disturbing because the president seems increasingly inclined to authoritarianism. Wahid always had some autocratic leanings. As head of the 30-million-strong Muslim charitable organization Nahdlatul Ulama, he was essentially an "uncrowned king" with total authority, said an editorial in the Jakarta Post. Now, Wahid seems to have developed a siege mentality: He relies on few advisers to make policy, ignores criticism, disdains parliament (he has fallen asleep during legislative sessions), and appoints people to key positions largely because of personal links. Wahid does not seem to recognize that many of his close friends appear to be dirty. Even worse, when things go bad, the president is ready to resort to executive actions. Most notably, in February, Wahid allegedly asked the armed forces to declare a state of emergency. To their credit, army leaders refused. But some analysts worry that Wahid might not ask next time, preferring instead to use his paramilitary group to declare a state of emergency, potentially triggering all-out chaos. Right now, Indonesia looks grim. "Given all the disasters that have occurred since Suharto fell, it looks almost like this country can't be ruled by a free leader, ... that it's bound for disintegration," says one Southeast Asian diplomat. Megawati agrees. The country today is "going through the worst times we have experienced in the last 56 years," she told reporters. Economically, this pessimism is justified. Despite all the social and political catastrophes of the past three years, Indonesia's economy actually is in worse shape than its polity. IBRA has only begun to tackle the mountain of bad debt--it currently controls roughly 70 percent of the economy--and once it does begin to liquidate assets, the real economic pain will be felt. What's more, a slowdown in the United States, the biggest market for Indonesia's exports, could deprive the country of vital hard currency. Tourism, which has been a savior of Thailand's struggling economy, is unlikely to pick up in Indonesia as long as beheadings in Borneo make the front pages of American and European newspapers. WHAT NEXT?  aking all these negative factors into consideration, the World Bank recently warned that Indonesia's economy is on the verge of collapse. Other leading economists are also seriously concerned. Although a rise in oil prices helped the economy in 2000--Indonesia has sizable deposits of oil and natural gas--most economists don't expect growth to top 3 percent in 2001, a piddling figure for a developing country and far less than what Indonesia needs to raise average incomes.
Politically, there is somewhat more reason to be optimistic. Although secessionist sentiment remains strong in West Papua, Aceh, and a few other places, some rebels have shown a willingness to compromise. The Free Aceh Movement has accepted several limited cease-fires, and the Papuan militants appear divided between hard-liners and those who want to remain part of Indonesia. If Jakarta delivered true federalism to outlying regions--permitting increased devolution of fiscal authority, greater local control of natural resources, and removal of some of the armed forces--it might be able to hush these demands for independence. The United States could assist by helping to professionalize the Indonesian armed forces through military-to-military contacts and multilateral Southeast Asia training exercises. What's more, Indonesian politics are not as depressing as they seem. In the long run, the personality-driven clashes over prestige, power, and money that are roiling Jakarta must evolve into debates over policy. This sea change has taken years in more mature
Nevertheless, a diverse array of pro-reform nongovernmental organizations has sprung up in Jakarta, and there is a committed core of reformists among the younger group of politicians. If the country's leadership allows younger politicians more say, begins to crack down on Suharto-era cronies, keeps its paramilitary organizations shackled, and tones down the vitriolic debate in the capital, it may be able to raise the level of Indonesian politics and pave the way for institution building. For their part, says Lt. Gen. Agus Widjojo, a senior member of the armed forces, average Indonesians must understand that processes move more slowly in the democratic era, and that street riots and other extraconstitutional actions are not necessarily the appropriate way to effect change. Indonesia today is in a dire state. No other country in Southeast Asia has been forced to recover from the regional financial crisis and at the same time revamp its political system. Indonesia must accomplish a range of urgent political and economic tasks in a limited time. All of them could have a significant impact on America's political strength in one of the world's key regions, as well as on the wobbly U.S. economy. At times, it seems that no one--certainly not Wahid--has any idea how to lead the country, how to put it on the right track. "Indonesians today ponder where our country is heading," says Sukardi, the human rights activist. For the time being, it is heading nowhere good, but there is hope. Just five years ago, Indonesia was still ruled by a ruthless kleptocrat. At that time, few analysts believed they would see free elections so soon. For Indonesians' sake, many observers hope the analysts will be surprised again. 
Joshua Kurlantzick covers international business and economics for U.S. News & World Report. |
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