Suharto's Risky Game Of Divide And Conquer

Just when it looked as if President Suharto, 76, might finally begin to restore confidence in his unhinged economy, things turned ugly. In early May, Suharto ended subsidies on gasoline, driving up prices by 70% and setting off riots. Then one of the country's most influential Muslim leaders, Amien Rais, called on him to resign or take blame for bloodshed. Next, Suharto cut short a weeklong state visit to Egypt. It seemed that the world's longest-serving leader after Fidel Castro might finally be losing his grip.

That is possible, but it is also true that Suharto is engaged in a complex and risky game to shore up his power. His moves aim to nudge Indonesia closer to the breaking point in an attempt to keep himself in office. By provoking limited social unrest, Suharto keeps any potential coup plotters in his military ranks busy trying to quell the turbulence. That prevents any real threat to his power and casts him as the sole remaining force keeping the nation from the abyss.

Since Suharto is also following International Monetary Fund dictates, the strategy carries a bonus. It keeps his $43 billion aid package intact. The cash will flow into Indonesia's coffers at a rate of $1 billion a month for the rest of the year. That's enough to keep the government going and give Suharto time to sort out a political legacy for his children.

DANGEROUS RIFTS. Of course, Suharto could lose control of this game. For starters, the opposition to his rule is strengthening faster than anticipated. Riots have escalated in the capital after sweeping secondary cities such as Medan, and several students have been killed. Army generals are starting to take seriously the demands from student leaders for a dialogue on political reform. The calls are joined by Amien Rais's 28-million-member Islamic group. And the presidents and senior professors of five top government-run universities added legitimacy by signing a similar statement on May 10.

Suharto's acts are also opening dangerous social rifts that could embolden his army commanders. On one side are Islamic factions who, if pushed too far, could line up behind Strategic Reserve Commander Lieutenant General Prabowo Subianto. On the other are dissident nationalists, led by former President Sukarno's daughter Megawati Sukarnoputri and a group of retired generals who would support the military's other top brass, Armed Forces Commander-in-Chief General Wiranto.

So far, Suharto has succeeded in keeping these generals suspicious of each other--and thus loyal to him. For example, he named Wiranto to investigate the detention and torture of student leaders and other dissidents. If Wiranto investigates too thoroughly, diplomats say, he could implicate Prabowo. That could be dangerous because Prabowo is Suharto's son-in-law and commands the crack unit with which Suharto seized power in 1965. A Wiranto misstep would risk incurring Suharto's wrath. If Prabowo attempts his own power grab, he risks a nasty investigation of possible human rights abuses.

With the instability serving his political maneuverings, Suharto won't act to stabilize the economy anytime soon. Ending subsidies on fuel, while mandated by the IMF, could have been implemented in steps through the rest of the year. By doing it all at once and fomenting violence, Suharto made the IMF an easy scapegoat. He can blame unrest on the West--and then show his leadership by quelling it.

Every day, Indonesia gets further removed from any economic recovery. The rupiah has plunged again, to over 10,000 to the dollar, after stabilizing near 8,000 in recent weeks. Meanwhile, the stock market's almost-daily dives are sending shock waves through the region. Normal business activity is almost completely paralyzed after the government failed to renegotiate nearly $80 billion in private debt, another factor undermining confidence in the economy.

As long as Suharto can keep IMF aid rolling in and his foes destabilized, he may be able to prolong his 32-year stay in office. His strategy will flop only if violence rises to a level that a disheartened and increasingly ambivalent military cannot or will not put down. Then people power may take hold in the streets, and Suharto will be history.

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