A troubled inheritance


The world has become accustomed to sounding the death-knell for Indonesia. The dark cloud of economic collapse hangs over the resource-rich archipelago like a miasma. Its island provinces are restive and rancorous. And it is uncertain whether Indonesia’s new President Megawati Sukarnoputri can stem the tide of economic malaise and mismanagement. There is growing panic that Indonesia, with 250 million people scattered over 17,000 islands, and sitting on vast oil and natural gas wealth, timber reserves, mineral deposits, agricultural and manufacturing potential, will be unable muster the political will to kick-start an economic upturn.

But so far, Megawati has made all the right moves. Her rise to the position once occupied by her father can seem like the fulfilment of a political destiny. But she has not behaved like someone resting on their inheritance. On Tuesday, the active Indonesian president embarked on her first regional tour since assuming office. Megawati is scheduled to visit the nine fellow member states of the Association of South-East Asian Nations (ASEAN). Indonesia’s neighbours were quick to express their satisfaction with Megawati’s astute political moves at home and her penetrating appraisal of the challenges that lie ahead.

Last week, after much prevarication, Megawati announced the names of those who will try and help her reinvigorate Indonesia. Her new coalition cabinet is mainly composed of smart technocrats (see box). Virtually the entire team has eye-catching credentials, which have impressed Indonesia’s creditors and trade partners. Breaths caught though, as Megawati took her time naming the country’s Attorney General, Muhammad Abdul-Rahman, the last and 33rd member of her cabinet. The post is crucial: its incumbent will oversee the cases of high- profile graft and human rights abuses which incriminate former presidents, their families, cohorts and hangers-on.

Another worrying sign is that Megawati has not yet decided whether to dismiss the board of directors of the country’s central bank, a move the International Monetary Fund (IMF) vehemently opposes, but which would be popular with parliament.

Otherwise, Megawati has won the respect of world powers and international finance institutions. She has carefully avoided appointing anyone who could be accused, as was her predecessor Wahid Abdurrahman, of being an aging curmudgeon unable to grasp the opportunities available to the post- Suharto Indonesia. But though Megawati has gone for freshness in her cabinet, not all the team are political novices. Indeed, 13 served in previous cabinets; giving her inner- circle a leavening of experience. She still has a long way to go to prove her mettle, but Megawati’s start has been commendable.

Her other moves encourage, too. Most Indonesians are well aware of the corruption their rulers are said to benefit from. But Megawati has come out stoutly against barratry. No special favours were bestowed on members of her Indonesian Democratic Party of Struggle (PDIP), and no seats reserved for them either. And to silence gossip that Megawati’s husband Taufik Kiemas, a rich entrepreneur, capitalised on her newfound political fortune, one of her first moves was publicly to caution her relatives against using her post to enrich themselves. Kiemas, who runs a chain of petrol stations and hobnobs with the wealthiest of Southeast Asia’s tycoons, pledged support for his wife’s anti-corruption campaign.

Other problems may need more. The economy is in straitened circumstances, and Megawati faces a daunting task — debt management, corporate debt restructuring, and, above all, fence-mending with the country’s major creditors and international financial organisations, especially the IMF. Officials representing world finance have already sounded notes of approval. Talks between the IMF and Indonesian officials began on Monday. High on the agenda would have been the $400 million loan that the IMF put on hold last December, which effectively stalled the larger $5 billion programme of which it was a part. But Megawati has stressed that Indonesia will not grovel before its benefactors.

Megawati also pleased international commentators when she clipped the wings of the military. In particular, she apologised for army excesses in Aceh and Irian Jaya and confessed to their human rights abuses. “We apologise to our brothers who have long suffered as a result of inappropriate national policies,” Megawati told the nation last Thursday on the occasion of the 56th anniversary of Indonesia’s independence from Dutch rule. “There should not be any impression that we are trying to hide those gross violations. We need to pay more attention to human rights,” she added.

But she only went so far. She insisted her government would never permit the restless provinces to secede. East Timor, which broke from Indonesia in 1999, had a different status, Megawati explained. Moreover, Megawati warned separatists in Aceh and Irian Jaya that, unlike East Timor, which had massive and sustained international backing, they do not enjoy foreign support. “Everything must remain within the context of safeguarding the territorial integrity of the unitary state [of Indonesia],” she stressed.

Megawati pledged to take personal charge of resolving the secessionist uprisings and political impasse in Aceh and Irian Jaya. But barely a few hours after Megawati’s nationwide address, Aceh was rocked by explosions. The bombings continued after Friday prayers but there were no reports of casualties. Under former President Suharto, Aceh was declared a “special combat zone” where counter- insurgency operations resulted in atrocities and human rights violations. In the past decade, the independence struggle has claimed the lives of over 6,000 people — mostly innocents caught in the crossfire between government troops and forces of the Free Aceh Movement (FAM). Since the government offensive earlier this year in March, an estimated 1,000 people have died.

They may not be all. Indonesia’s Army Strategic Reserve Command has already established a long-range reconnaissance unit in Aceh in preparation for a protracted campaign against FAM. Meanwhile, Megawati ordered Indonesian Vice-President Hamzah Haz personally to handle the delicate task of defusing communal disturbances in Kalimantan, Sulawezi and the Maluku Islands. In a statement that worried human rights groups, Indonesian Foreign Minister Hassan Wirayuda, a former ambassador to Egypt, has ruled out an international probe into atrocities in Aceh, underpinning Megawati’s uncompromising stance towards FAM.

Responding, Human Rights Watch (HRW) urged the Indonesian president to fill her pledge to prosecute members of the armed forces for instituting a reign of terror in Aceh and for gross human rights abuses. HRW criticised FAM too, accusing it of a policy of forced expulsions, of persecution and of intimidating ethnic Javanese immigrants in Aceh. Already domestic need and foreign pressure seem to be colliding.

President Megawati is heir to a political destiny. But the inheritance tax on her political capital is formidable: separatism; economic woe; an army jealous of its privileges. Megawati has gathered a redoubtable team, and has the sympathy of the IMF, and for now the applause of her people. But she will need them all in the years ahead if her hard-won patrimony – and Indonesia’s future – is not to crumble: irrevocably.

In composing her new cabinet, Indonesia’s President Megawati Sukarnoputri has made an effort to reinstate ministers sacked by her predecessor.

Yusri Al-Ihza Mahendra, who was fired by Wahid, was reappointed as minister of justice. Mahendra, who schooled at the University of Science, Malaysia, was constitutional law professor and chairman of the Islamist Crescent and Star Party. His promotion appears a bid to broaden the complexion of the cabinet.

Matori Abdul-Djalil, a civilian, has surprisingly been given the defence portfolio. He is a former head of Wahid’s political party, but was later dismissed.

Susilo Bambang Yudhoyono, a fast rising star is Megawati’s new security chief. As Minister of Security and Political Affairs under Wahid, Yudhoyono drafted a reform programme for the armed forces. The US-educated general was one of the few military figures who stayed popular in the post-Suharto era.

Lieutenant-General Hari Sabarno stays as deputy speaker of the National Assembly, representing the military and the police. Sabarno has long led the military-police bloc in parliament. Sabarno vehemently opposed Wahid’s threat to declare a state of emergency and was openly critical of Wahid’s domestic policies.

Dorodjatun Kuntoro-Jakti, outgoing ambassador to the US, is named minister of economy. He was economics professor at the University of Indonesia, Jakarta.

Rini Suwandi, an Indonesian-American, is minister of trade and industry. Suwandi, who was born and bred in the US, was educated at the prestigious Wellesley College and began her career with Citibank in 1982, before being poached by Indonesia’s largest car manufacturer, Astra. Suwandi engineered Astra’s impressive debt restructuring deal, the first such successful undertaking by an Indonesian company after the 1997 financial crisis.

Boedinono (who goes by one name) takes the finance ministry. A top-notch bureaucrat with vast experience in banking, Boedinono was with the National Development Planning Agency (Bappenas) under B J Habibie. He was educated at Indonesia’s Gaja Mada University, Yogyakarta. As a former central bank director, Boedinono is held partly responsible for the multi-million dollar scandal over liquidity credits to banks which were ruined after the Asian financial crisis of 1997.