Commentary

24th May 1998

Students take to shaping future

By Mervyn de Silva

To another generation, Indonesia was Soekarno, Afro-Asianism, and the first serious efforts to mobilise the former colonies in a post-war world dominated by a new war, the Cold War, a term attributed to the American columnist Walter Lippman.

And so from Bandung to Belgrade. Tito's Belgrade on the new frontline, the U. S. - U. S. S. R, the anti-Hitler partners soon turned implacable enemies, separated as much by ideology as political systems.

Today, it is economics, business, currency, and the stock market... the market, and market economics.

"By almost any standard, 1997 has been a very bad year bringing drought, forest fires, air crashes, a currency collapse, a stock exchange slump and riots......." observed Quentin Peel and Sander Thoenes, two British reporters.

Was all this man-made? Was President Suharto the culprit? In a way, yes. He introduced corruption and nepotism (his son for instance) to what was already a regional crisis (Thailand, for example) primarily economic but aggravated by the scandalous conduct of a 'new class" the army included a sharing of spoils. How did he survive? Quentin Peel and Sander Thoenes who spent a month in Indonesia last year, wrote:

"The superstitious among Indonesia's 200 million people could be forgiven for thinking that the gods must be irate". The educated and a new generation did not blame the gods. The students, angry and brave, took to the streets. In an anti Suharto campaign which spread to all parts of the country. The students had two main slogans: prices and nepotism /corruption. In July last year you could get a US dollar for 2,400 rupiah. In January this year, the rate was 17,000 rupiah. That was the contribution of a man, a wheeler-dealer, who had met the President's son and proposed a quick fix.

The same month (no coincidence surely)? President Suharto informed his people he was prepared to serve a seventh term.

Indonesia is ASEAN's giant - large population, immensely resource - rich, a huge, modern army generously equipped. So Indonesia's troubles sent shock waves in the neighbourhood. Philip Segal filed this report from Hong Kong:

"Unsettled by riots in Indonesia, rising interest rates and a weakening Japanese yen, ASIAN stock markets and currency markets turned in one of their worst days of 1998 on Wednesday (May 13)".

But the economics and high finance alone cannot offer a total explanation. Corruption and bribery are fellow-travellers of market-economics, the "new wave" in Asia, from the sub-continent to the Korean peninsula. And with bribery and corruption, there is always nepotism. Thus, this stunning passion in Segal's despatch"

"Shares in compaines controlled by the children of President Suharto were savaged. BIMANTARA CITRA, a conglomerate controlled by one of Mr. Suharto's sons fell by 16.6 percent. PT Citra Marga Nusphala, a toll-road operator, controlled by Mr. Suharto's oldest daughter, who is also a member of the Cabinet, fell by 14.3 percent.

On the same day protesters pulled Timo cars, produced by a company owned by President Suharto's youngest son from a showroom, overturned the vehicles and tried to set them on fire.

They also broke into a branch of the Bank of Central Asia which is owned by the Salim group which in turn is headed by one of Indonesia's most prominent ethnic Chinese families and some members of Mr. Suharto's family..."

Market economics, Big Business, and family connections - the ruling family as patron - have been the principal factors in the Indonesian crisis, the country's vast resources notwithstanding. The plunder of a small, rapacious clique enjoying the generous patronage of the Presidency has led finally to a resignation. The only question left is "Exile" in Bahamas, south of France or Florida.

Student rebels

The educated youth, the university students most of all, become the conscience of the Nation. This is history, repeating itself, from Europe and North America to South, South-east and North -east Asia, the Korean peninsula surely?

Whatever they may be, they are not members of a lost generation.

The army

It is a temptation to romanticise the Indonesian drama, certainly the vital role of the country's youth who asserted their fundamental right to shape Indonesia's future - their future, and protect the country's wealth, their wealth. The U. S. and Japan have welcomed Suharto's resignation.

But the army will not tamely return to barracks. No. We are unlikely to see the Indonesian army do an 'about turn'.

Logically, the responsibility should be ASEAN's but ASEAN is not strong or confident enough to do that. If the crisis was in Malaysia ASEAN may have engaged in some sort of exercise in benign intervention but Prime Minister Dr. Mahathir Mohammed handled his troubles skilfully.

The impact of the Indonesian crises has been so wide that the prime minister of Taiwan has contributed an article to the ECONOMIST (by invitation) on the implications of the turmoil in Indonesia.

"Even though Taiwan's economic growth for the fourth quarter of 1997 will undoubtedly be affected by the financial troubles of Aisa, the domestic economy should still grow by 6.7%" predicts a self - assured Prime Minister Vincent Siew,

"Taiwan's economic fundamentals are in order. Taiwan's foreign debt is neglegible (100 million dollars) and its foreign exchange reserves exceed 82 billion US dollars".

Hulftsdorp Hill

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