Suharto's Risky Shadow Play
Jakarta's brinkmanship in negotiating with the International Monetary Fund has Washington worrying that the U.S. may "lose" Indonesia if something isn't done quickly. The prospect of social upheaval in a strategically important nation of 200 million Muslim people is pushing aside the original impetus to financial and economic reform.
It shouldn't. Indonesia is not America's to lose, nor is it Europe's or Japan's. The responsibility for the welfare and well-being of the Indonesian people lies in the hands of President Suharto. In twice refusing to follow IMF agreements, he has chosen to put the economic interests of his fabulously wealthy family and friends above those of his country's farmers, workers, and middle class. Indeed, in suppressing opposition to his recent election to a seventh term as president, Suharto has added to the political uncertainty that is behind the capital flight and the dramatic drop in the rupiah.
All the rest is a shadow play. Things are rarely as they seem in Indonesia. Quiet threats to turn it into another Iran, an anti-American Muslim state, are mostly show. The military would never stand for it. There are suggestions that Indonesia's constitution forbids the IMF pact because it runs counter to the constitution's goal of promoting a family-centered economy. Those are self-serving. It is the Suharto family, after all, that has benefited most from economic policies. The "proof" that Indonesian society will explode if the IMF doesn't cave--the pogroms against the Chinese--is more often than not a creation of local police and political cadres.
The IMF can't ask taxpayers around the world to bail out the Suharto family. A currency board will temporarily bail out Suharto's cronies, but not his people. And if anyone loses Indonesia to chaos and poverty, it will be Suharto.