A High Tech Vision Sparks A Flap...As Indonesia Toasts Its Freedom

Bandung, West Java, may not spring to mind as the center of Southeast Asia's aerospace industry, yet the picturesque city is home to a state-owned factory that produces everything from Bell helicopters to parts for Boeing Co. Indonesian Aircraft Industry, known by its Indonesian acronym IPTN, has employed expatriate consultants from the U.S., Europe, and Australia to build the testing ground for a unique--some say quixotic--technological vision.

The vision belongs to Indonesian Research & Technology Minister B.J. Habibie, whose influence stems from a long friendship with President Suharto. Habibie, an engineer educated in Bandung and Germany, believes Indonesia can become an economic superpower by skipping the stages of technological development through which Singapore and South Korea struggled.

BIG LOSER? Now, Habibie's vision is spreading to the U.S. and Germany in the form of the N-250, a new commuter plane that IPTN designed with electronic or "fly-by-wire" controls. Most parts for the 70-seat twin-turboprop plane will be manufactured in Bandung, but Habibie figures that final assembly in the U.S. and Germany will help assuage Western doubts about safety and reliability. U.S. officials in Jakarta confirm that Alabama and Georgia are competing to get the contract for an IPTN assembly plant, while Suharto has asked the German government to finance a second plant in Lower Saxony. This strategy could give the N-250 a fighting chance for sales in the West--by meeting NAFTA and European Union requirements on local labor and content.

But Habibie's aeronautical ambitions are strictly on Cloud Nine, to hear some tell it. Dennis de Tray, director of the World Bank's Jakarta office, dismisses IPTN as a $1.2 billion loser that the Indonesian economy, with a foreign debt of more than $90 billion, can ill afford. The Indonesian military resents Habibie's Bandung operations--which make weapons as well--as civilian meddling in strategic industries, according to S. Sapiie, vice-president of IPTN. The military has traditionally enjoyed total control over its own affairs. The fact that Suharto decided to allow Habibie to manufacture rifles and surface-to-air missiles was seen as a diminishment of army authority. And Indonesians living elsewhere resent that the Bandung-Jakarta route enjoys the country's newest toll roads, its most frequent flights, and its only luxury-class trains.

But Bandung retains its influence, as does Habibie. The technology czar is already designing a jet plane with state-of-the-art avionics, for production in the coming decade. Seven environmental organizations tried to sue Suharto last year for giving Habibie $185 million from Forestry Dept. funds earmarked to regreen denuded Borneo forests. The suit was thrown out of court long before lawyers had a chance to argue it.

If the name Bandung rings a bell, it's because in 1955 the Non-Aligned Movement (NAM) was founded there amid great hoopla, at a cool 769 meters above the fetid heat of Jakarta. Indonesia's then-President Sukarno hosted the NAM meeting at the Savoy Homann Hotel, an Art Deco relic recently renovated in commemoration of that event. As a pulpit for Third World leaders to demand a redistribution of wealth from North to South, the NAM conclave served as a launching pad for Sukarno's push to break out of diplomatic isolation after the Dutch were forced to withdraw. To commemorate the meeting, Art Deco facades are being renovated--paradoxically reviving the Dutch colonial atmosphere.

Bandung also is the cultural center of West Java, so the native Sundanese people gave the sleek N-250 prototype an animistic blessing ceremony, complete with music and dance, when it was rolled out of its hangar last November. The first public test flight will occur on Aug. 17, the 50th anniversary of Indonesian independence from the Dutch.

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