Expect Indonesia "Spiral of Violence," Warns Journalist

What he did not expect was a question put to him by the chief interrogator: "Which do you think is best -- the International Monetary Fund (IMF) or our current currency board?"

Nairn told his interrogators that the IMF and President Suharto's recently-appointed currency board were equally bad. This response, Nairn he told an audience at the March 24 Socialist Scholars Conference at the Borough of Manhattan Community College, disappointed the Indonesians. "They really seemed to want my financial advice," he said.

"It's not clear that Suharto himself will last the year, and it's not clear that the army regime...will survive," he argued. "(The Suharto government) has been a very sophisticated, at times totalitarian, regime -- yet it is now on the brink and could be brought down."

Some of the cracks in the regime emanated from the source of Suharto's strength over the years: Indonesia's military (called ABRI), which toppled the country's first president, Sukarno, in 1965, according to other analysts.

"Possibly, support (for Suharto's ouster) will come from the military," argued Jaffar Siddiq, an Indonesian human rights lawyer. He noted that Suharto's newly-appointed vice president, Jusuf Habibie, is "the first civilian to be a vice president, and I know that the military does not like him."

Siddiq believed the ABRI may attempt to take advantage of Indonesia's current woes stemming from the East Asian economic crisis by taking over and installing a new face who, while appearing more moderate, would be as dictatorial as Suharto.

"What we might fear is that the military would come in with a velvet glove (and say), 'Look to us for your deliverance'," said Jeff Ballinger, head of Press for Change, a New Jersey-based group which focuses on labour conditions in Indonesia.

Suharto's basic problem stems from the economic crisis which has left his traditional supporters, including U.S. businesses, looking for a steadier hand in Jakarta. The value of the Indonesian rupiah has plunged by 70 percent against the U.S. dollar since last summer, when fears over bad loans and bank failures in East Asia prompted several waves of speculative attacks on the region's stock markets.

Since then, Suharto has seemed unwilling to follow IMF recommendations to dismantle Indonesia's protectionist, low-wage economy and install policies for even lower wages and an elimination of food and fuel subsidies for the poor. More importantly, the 50-point IMF program would affect the president's family and friends directly.

Suharto has posed as a nationalist fighting Western interests in his dispute with the IMF, Siddiq noted. But he has also profited from a system of "crony capitalism" by which, Nairn claims, the Suharto family's wealth has risen to an estimated $4 billion. Top officials, including Trade Minister Bob Hassan -- called "the Plywood King" for his control over Indonesia's timber trade -- are longtime Suharto friends.

Between the protection of his own interests and the need to avoid social unrest from cutting subsidies, Suharto faces massive difficulties in agreeing to the terms of a $43-billion IMF bail-out.

However, if the Indonesian president reneges on the deal, IMF chief Michel Camdessus declared last week, "we have never hesitated to interrupt our financing when a country doesn't fulfill its commitment. Of course, we will have to do that with Suharto if...he ignores his signatures and his pledges."

At a time when protests against Suharto are growing, the clash with the IMF could fuel a wave of social unrest against the regime. However, Nairn warned, the United States by all indications is "sticking to the regime, stubbornly, apparently to the end."

Indonesia's feared security force KOPASSUS, or Red Berets, have been involved in 20 of the exercises -- and Nairn contended that some 20 more manouevres are scheduled with the group, which is blamed for atrocities in West Papua, East Timor and Aceh, for the remainder of 1998.

Nairn expressed concern over Washington's approach to any change of government in Indonesia. "They want to keep Suharto, but even if they can't...they definitely want to keep ABRI and the police state intact," he said.

Suharto's regime has been known for its brutal repression -- notably the killings of at least half-a-million people in the immediate aftermath of the coup against Sukarno, and of more than 200,000 Timorese following the 1975 invasion of East Timor.

Timorese activist and Nobel Peace Prize co-winner Jose Ramos Horta said after protests against the Jakarta regime increased last year that Suharto "appears insensitive to his people's just demands for change and democratic participation," and seemed to be losing his grip even before the economic crisis.

"A spiral of violence can be anticipated for Indonesia from now on, as dissent grows," he predicted. "It will be met with the customary repression...Even the survival of the Indonesian state may well be jeopardized, with consequent impact on the stability of the Southeast Asian region and beyond."