2+2=5: For ordinary folk, the numbers don't add up COVER: GOING IT ALONE As he begins his seventh term as President, Suharto packs his cabinet with political cronies and continues his standoff with the IMF, further raising the stakes for a struggling Indonesia CAMDESSUS INTERVIEW: "We are not always right" VIEW FROM WASHINGTON: Congress is fed up with Suharto	ASIA	March 23, 1998 VOL. 151 NO. 11
	THE NUMBERS JUST DON'T ADD UP By David Liebhold/Jakarta ven before indonesia's economic crisis, caring for two four-year-olds was a challenge for a single mother. But these days, a soaring inflation rate-about 30% since June-is stretching Mita Yani's budget past sustainable limits. "Every time I go shopping I feel sad and angry," says the soft-spoken university assistant lecturer. Like millions of other Indonesian mothers, Mita's biggest headache is the price of milk, which has more than doubled in recent weeks. "Almost my whole wage goes for milk for the children," she says. Indonesia has become a battleground for politicians and advisers desperately vying to find a cure for the nation's economic ills. On the grass-roots level, meanwhile, life is becoming almost unlivable: as inflation soars, the numbers just don't add up. Salim, 28, used to work in an auto body repair shop in north Jakarta, supporting a wife and two children on about 80¢ a day. Last month the workers went on strike, demanding a wage increase to $1.50 a day to keep up with prices. It was a desperate calculation: "Our living costs were much higher than our wages," says Salim. Management responded by closing the business and firing all 40 workers. Now Salim scours the streets for scrap metal and cardboard, which can bring in 10¢ on a good day. His life savings amount to 5¢-a 500 rupiah note that he keeps, neatly folded, in his pocket. He doesn't even have bus fare to go home to his family in West Java. For Indonesian companies, too, the rupiah's massive depreciation is turning things upside down. Just ask Endy Bayuni, managing editor of the Jakarta Post. His paper has been losing money since January, squeezed by a three-fold increase in the price of news-print and plummeting advertising revenue. "Most businesses are just trying to survive," he says, "hoping things will improve." The soaring cost of imported medical supplies may have already claimed lives. Many kidney disease sufferers, for example, find themselves unable to pay for dialysis-the cost of just one treatment at a Jakarta hospital has reportedly quadrupled to $57. State utilities, meanwhile, are reducing their use of chemicals for purifying the water supply and may soon do without them altogether. "I don't think too many countries can sustain a 70% currency drop in a six-month period," says Scott Guggenheim, a senior anthropologist with the World Bank in Jakarta. And the worst is probably yet to come. Under its IMF program, Indonesia is due to begin lifting heavy fuel subsidies on April 1. Especially as the cost of natural gas rises, state-owned power company pln will also be forced to raise its electricity tariffs, boosting inflation even further. Other time bombs are ticking away. Earlier this month the major state-owned Bank Exim conceded it faces potential losses in the hundreds of millions of dollars on the forward foreign exchange market. With a majority of Indonesia's more than 200 commercial banks already insolvent, few foreign banks are accepting letters of credit from Indonesian firms, crippling exports. And domestic credit is largely unobtainable. "It would take a brave man to say that there are more than 15 banks that have any money," says a U.S. banker in Jakarta. "The banking sector is facing a wall of debt that is going to smack us between the eyes." While the bankers, businessmen and politicians hold their crisis talks, ordinary Indonesians are struggling just to make it through each day. Mita has switched to a cheaper brand of milk powder and worries about how she is going to pay school fees. "As a mother and a worker I can't hope for much," she says, "because there's not much chance of finding a better-paying job. What can I do? I just have to accept what happens."
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