VIEW FROM WASHINGTON Congress is fed up with Suharto 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" 2+2=5: For ordinary folk, the numbers don't add up	ASIA	March 23, 1998 VOL. 151 NO. 11
	Don't expect a blank check As Suharto fiddles with the IMF, Congress and the White House lose patience By Christopher Ogden he republican leadership on capitol hill considers the idea of approving billions of dollars in added funding to bail out Indonesia to be a total non-starter as long as President Suharto, his family and cronies remain in place lining their pockets. Suharto, their thinking goes, is right up there with the late kleptocrats Mobutu Sese Seko of Zaire and the Philippines' Ferdinand Marcos in the category of skimming national funds and salting away fortunes in offshore banks. They will not sign on to a Suharto strategy if the primary goal, as it now looks, is to save Suharto. The Indonesian President, for his part, greatly resents foreign leaders and envoys insisting on reforms as the price of bailout help. Former U.S. Vice President Walter Mondale was sent by President Clinton earlier this month to tell Suharto that there were no quick fixes for Indonesia's plight and that he had to deal with "the underlying problems." Though Suharto's English is less-than fluent, Mondale, the veteran politician who was Clinton's first ambassador to Japan, has vast experience in dealing with leaders around the globe. Suharto's views rang clear in both their hour-long group session and the 30 minutes they spent one-on-one. He didn't want to hear the message from Mondale, who can read the mood of the U.S. Congress as well as anyone. The changes that the U.S., Japan, Germany and the International Monetary Fund were urging on him were unnecessary, Suharto insisted. He apparently could not get past the progress he had made in transforming Indonesia from a backward country, with one of the world's lowest per-capita incomes when he took over in 1966, to an Asian tiger and a darling of international investors. Applause from overseas had been ringing in his ears for so many years that he couldn't understand, it seemed, why he suddenly had to do everything differently. Besides, he didn't think much of the proposals advanced by Clinton, who was a 19-year-old sophomore at Georgetown University when Suharto took over from the corrupt President Sukarno. And the veteran leader displayed little confidence in the IMF, whose conditions he believed had been tried and proven unworkable. Mondale argued that the IMF rules were essential for restoring the international confidence necessary for raising the rupiah and allowing Indonesia to deal with its problems. Suharto has also heard from the U.S., including Clinton personally, that the people he chooses to implement his policies are of great importance to lenders. Since then, Suharto's picks of cronies B.J. Habibie as Vice President and plywood king Mohamad "Bob" Hasan as Minister of Industry and Trade have sharply reduced Indonesia's chances of getting a favorable hearing in the U.S. Congress. Furthermore, there is a near-consensus in Washington that Steve Hanke, the Johns Hopkins University professor pushing the idea of a currency board for Indonesia, is way off track. "Hanke's selling snake oil," says a Clinton adviser. And as long as Suharto continues to balk, the U.S. is prepared to as well. This is a change. For months, administration officials claimed that Indonesia is too big and too important to be allowed to collapse economically. And they still quite obviously do not want to see that happen. Markets rattled abruptly in the U.S. when the rupiah began plunging. Though they have recovered, there is tremendous concern that the Indonesian crisis could spread and drag down the economies of Malaysia, Thailand and the Philippines and lead to Asia-wide instability. Clinton, whose interest in Indonesia includes a 14-year relationship with the wealthy Riady family, has heard assessments recently that include panic scenarios involving tides of refugees headed to Australia. Clinton and his advisers do not consider the IMF conditions to be written in concrete, but they insist that their basic thrust must be implemented. "The only path that is likely to work is to put in place a good, strong reform program that deals with the problems," the President's point man on the subject, Treasury Secretary Robert Rubin, said last week. Putting an end to Indonesia's monopolies and costly infrastructure programs-such as the on-again, off-again efforts to launch a "national car" and a world-class aircraft industry-would be a good place to start. Unless something positive happens in Jakarta, and that now seems unlikely, the administration wouldn't be able to raise more funds for a bailout even if it wanted to. Clinton's popularity remains high despite investigations into his sex life, but his clout on Capitol Hill has been diminished. Newt Gingrich, the Speaker of the House who is considering his own run for the presidency in 2000, recently said Indonesia will have to meet stringent, negotiated benchmarks before each tranche of IMF refunding. The view in Congress, he maintained, was that-unlike Korea, which seems to be moving in the right direction-Indonesia remains "unreformed and corrupt." If Suharto stays in office and shows no inclination toward reform, he can expect as much financial support as Mobutu and Marcos received in their final years. None.
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