A Challenge for Indonesia's New President

Indonesia's new President, Megawati Sukarnoputri, takes office with three things going for her. First, she is hugely popular, having won more votes in the last election than the man she is replacing, Abdurrahman Wahid, who was impeached from office. Second, she has the support of the powerful Indonesian military. And third, she has the good wishes of the international financial community. Megawati will need all three to get the Indonesian economy growing again.

Her first task is to bring some sense of stability to the country. The military can help, but it can also hurt. The support of the army was critical to Megawati's taking the reins of power, but the last thing Indonesia needs is for generals to run companies again and act as political kingmakers. She should contain their impulse to crush provincial attempts to gain more independence and a greater share of the profits from the country's natural resources.

Convincing the large Chinese community to bring back the billions of dollars in capital they took out after the last financial crisis is another important task for Megawati. She must assure them that the anti-Chinese riots that accompanied that crisis will not be repeated.

In the end, the new President will have to complete the job of moving Indonesia toward a real civil society that is governed by the rule of law, not cronyism. Privatizing banks and other state-owned businesses would help the process. So would keeping the troops in their barracks. Megawati's father, President Sukarno, stitched together Indonesia into a single country. She now has the chance to make it a modern country.

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