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INDONESIA:
BLAME THE VICTIM:
VIEWPOINT:
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ASIA | February 23, 1998 VOL. 151 NO. 7 |
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By Nisid Hajari
Three decades later, that same Suharto is struggling desperately to write a different ending for himself. The odds aren't good. A drought has depleted rice harvests. Factory and shop closings have spawned millions of unemployed in the cities, as well as riots in the countryside. Helmeted troops have been ordered to crack down on protesters. Whispers of shadowy bomb plots and echoes of loud, defensive rhetoric fill the Jakarta air. Yet on March 11, Suharto will almost certainly be nominated for, and accept, a seventh five-year term as Indonesia's President and de facto center of gravity. His bet is obvious, almost brazen-that only he, the erstwhile Father of Development, can save the nation from ruin. (To voices pleading that he at least anoint a capable heir, Suharto has responded by narrowing his choice of Vice President to two yes-men: technology czar B.J. Habibie and ruling party chairman Harmoko.) It's a gamble Indonesia may not want him to win. Suharto's determination to stay on fits with most of his responses to the crisis so far, which seem to have been designed to preserve as much of his kingly authority as possible. Only last week he announced perhaps his riskiest move yet-the creation of a "currency board" to peg the sagging rupiah firmly to a more stable currency, most likely the U.S. dollar. The scheme itself, used in economies as far-flung as Argentina, Hong Kong and Estonia, is simple and generally respected under the right conditions: after setting a particular exchange rate (Jakarta has hinted at 5,500 rupiah to the dollar, well above the current market rate), a central bank must maintain enough hard currency reserves to cover all the money in circulation; the bank then relinquishes control over interest rates and its role as lender of last resort. The system enforces monetary discipline, and ideally would encourage investors who are wary of the volatile local currency to return. Indeed, soon after rumors of the government's potential announcement began to circulate on Monday, the rupiah recovered from around 9,500 to the dollar to almost 7,500, as currency traders raced to unload their dollar positions. Photograph by John MacDougall-AFP
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he filigreed shadow plays of Java-wayang kulit-can meander for hours without climax. But over the centuries their endings have varied little. Indonesia's wayward puppet master, Sukarno, perhaps thought he had cheated the gods of wayang when he survived an abortive coup in September 1965. For six months, as his former communist allies were butchered across rice-green Java and Army-backed students howled at the gates of his Jakarta palace, the President clung to a crumbling throne. When the generals were ready, however, the end came swiftly. Troops surrounded Sukarno's palace on March 11, 1966. Within hours he had transferred effective power to a formerly low-profile officer named Suharto.