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Indonesia's Elections: A New Beginning? (Int'l Edition)

International -- Asian Cover Story

Indonesia's Elections: A New Beginning? (int'l edition)

The elections: A new beginning?

In Jakarta's main business district, thousands of supporters of Indones opposition leader Megawati Sukarnoputri ran through the streets in mid-May, beating and kicking anyone who dared brandish the yellow flag of the ruling party, Golkar. Hundreds of miles away in the city of Yogyakarta, a 16-year-old Megawati supporter who strayed into the wrong neighborhood was beaten to death while mobs overturned food carts and smashed the windshields of passing motorists. Nearby, in the town of Jepara, four supporters of Islamic cleric Abdurrahman Wahid were hacked to death with machetes by members of a rival Muslim party.

Such scenes suggest that Indonesia's passage into democracy with the June 7 legislative elections won't end the violence that has gripped the country since the downfall of strongman Suharto last May. The dangers are real. With a populace bitterly divided among four dozen political factions, there's a chance that violence will erupt again in this seething, ethnically diverse nation of 200 million, no matter who wins. If Suharto's handpicked successor, President B.J. Habibie, clings to power through unfair means, warns economist Hadi Soesastro, "it could be an explosive situation again."

It's a dark scenario--but by no means the only possible one. For the scary headlines obscure much that has been going right lately. Taken together, the positive developments could lay the foundation for a new Indonesia. The most important question for the long term is not who wins more votes on June 7. It is whether the rival factions can put aside their feuds and seize the immense opportunity to rebuild this shattered country.

The seeds of a brighter future have already been sown. Democracy, though still imperfect, is taking firm root. The indigenous peoples of Indonesia's many provinces are set to win more autonomy and a greater share of the fruits of economic growth, addressing grievances in provinces that have endured decades of ferment and military atrocities. Pressure from the International Monetary Fund has given reformers in the government the cover they need to tackle serious structural problems created during Suharto's 32 years of corrupt rule. The government also is replacing policies that pushed growth at all costs with a more sensible development model that addresses the population's true needs.

Underpinning these trends is an economy that finally appears to be bottoming out after 20 months of free fall. Gross domestic product rose 1.3% in the first quarter of this year, the first such increase since the rupiah started to crash in 1997. The currency has stabilized at about 8,000 to the U.S. dollar, up more than 50% since the depths of the crisis in early 1998. Monthly inflation, once in danger of raging out of control, is near zero. And the central bank's cleanup of the bombed-out banking system is well under way. "Indonesia has achieved stability," boasts Kadhim Al-Eyd, head of the IMF's Jakarta office. The economy is getting an extra boost with payments of $400 million every two months from the fund, in addition to the $43 billion package approved last spring.

The most hopeful development doesn't show up in opinion polls. It comes from talking to Indonesians across a broad swath of society. Most have grown tired of revolt, instability, and poverty and want to get on with their lives. "People are fed up with trying to get jobs," says longtime Suharto critic Lukman Sutrisno, an economist at Yogyakarta's Gadja Mada University. They also know jobs will come only if foreigners believe Indonesia is stable, he adds. Taruno, a 40-year-old Jakartan, says he has grown wary of raucous Megawati rallies. "People like me want to be able to work," he says. "We don't want violence."

But to move forward, Indonesia's factions must first bury their machetes. That's what makes June 7, the first democratic vote since 1955, such a watershed. Habibie could exercise his legal authority to appoint 238 of the 700 seats in the electoral college, which meets in August to choose the President. Thus, it's possible for him or another Golkar candidate to become President even if Golkar wins only a quarter of the seats in the smaller House of Representatives (chart, page 33).

Many experts think that a coalition formed on May 21 by the three biggest opposition parties--Megawati's Indonesian Democratic Party-Struggle, Wahid's National Awakening Party, and the National Mandate Party led by Muslim leader Amien Rais--stands a good chance of winning at least 40% of the House seats. If so, a Habibie presidency would be seen as illegitimate and he would have another fight on his hands.

Yet the rival parties do have incentives to forge a pact. Should Golkar win fairly, it still will have to reach out to the major opposition leaders. Likewise, should the opposition alliance pull off an upset, it will have to cut some sort of deal with Indonesia's old guard to make the bureaucracy work and to placate the military.

That may be hard to stomach for Indonesians who demand justice after decades of brutality and graft. But the only way out

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