Growing Indonesian Unrest as Crisis Settles In

"How can I trust them (the government)? The more the government intensifies efforts to fix the economy, the more deeply the rupiah nosedives," said Kurnia, one among 3,500 employees who face the prospect of layoffs from Indonesia's national aircraft factory this year.

He was referring to the massive fall in the value of the Indonesian currency, the rupiah, which has plunged from 2,500 to a U.S. dollar before the crisis in July last year and hit a low of 16,000 rupiah last month.

Kurnia adds he cannot see the sincerity behind the much-publicized "I love rupiah" campaign initiated by President Suharto's eldest daughter Siti Hardianti Rukmana, who recently exchanged 50,000 of her U.S. dollars with rupiah. Memed, 34, an administrative staffer at the Bandung branch of the State Audit Body, added: "They are the ones who ruin the economy. All of a sudden, by selling a few thousand dollars or donating grams of gold, they are treated as saviors."

Some observers, many of them in the foreign press, are daring to theorize that with signs of anger erupting through riots over rising prices and calls for Suharto to resign, an end to one of the world's longest-ruling governments may well be within sight.

Suharto, 76, has ruled Indonesia for 32 years, his government buoyed by years of seven percent annual growth. But the economic crisis, which has wrecked international confidence in Indonesia, is posing the biggest challenge to Suharto's rule.

Last month, Indonesia had to accept a bailout package of $33 billion led by the International Monetary Fund. When the markets found Suharto's economic reforms wanting , it had to swallow its pride, redo the budget, remove popular subsidies on food and fuel, curb pet projects of his relatives and friends and pledge to end monopolies.

But response to the new accord Suharto signed did little to revive confidence in Indonesia, largely because the package did not address the fate of its $140 billion debt to the U.S.

In another bid at damage control, Jakarta last week assured it would meet all its debt obligations -- even those of private firms -- and set into motion a process for private debtors to negotiate rescheduling of their foreign debts. Some $65 billion of total debt burden is owed by private firms.

All of these troubles have contributed to the air of unease and tension in the country, but then again this is not the first time the Indonesian government has found itself in a fix -- and later found a way out.

In 1996, many declared Suharto's rule in danger after bloody protests broke out following the ouster from an opposition party of Megawati Sukarnoputri, daughter of Indonesian President Sukarno, due to what was widely believed to be a government-backed move.

But relative stability soon returned to the Indonesian political scene. Unlike the Megawati episode however, the economic crisis has badly hurt the incomes of many Indonesians, giving them a personal stake in how the economic mess is sorted out.

For instance, Memed says he has never touched a U.S. dollar bill but can clearly feel the impact of its skyrocketing value against the rupiah. "Prices of our daily basic needs are going up three to four fold," he said.

Some economists estimate that inflation has already risen to 25 percent and that unemployment had reached 10 percent as of the end of 1997, making for a potentially dangerous brew in an increasingly restless society.

Others, like 36-year-old Zulkifly, a small entrepreneur, says a revolution may not be necessary, but "Suharto and his regime should step down as the best way to deal with the crisis."

"The present economic calamity is the fruit of their incapability, so why don't they allow others to take their places," he argued, saying Thailand and South Korea were grappling with their problems much better after deciding on a change in governments.

Even some in the military, which has been always pro-establishment, say political changes are necessary. But they should be "carried out gradually", said Lt Gen Yunus Yosfiah, army chief of staff for social and political affairs.

Yunus says the changes should be in the context of "political development" and not "political reform," because the term suggests "we are now not on the right political track."

Indonesians are closely watching events ahead of the March session of the 1,000-member People's Consultative Assembly, which is set to give Suharto a seventh, fifth-year term as president.

However, not all Indonesians seem content with letting the country's political processes play out in March, if recent incidents of unrest are any indication.

On Jan. 18, a bomb exploded in central Jakarta that police say was made by sympathizers of the revolutionary youth group People's Democracy Party.

Last week, local police in East Java said hundreds of angry people attacked shops to protest rising prices. Similar disturbances broke out in East Javanese towns and cities two weeks ago.