INDONESIA: GRAFT WON'T JUST VANISH (int'l edition) Suharto may leave, but corruption remains President Suharto stepped down and installed his vice president, B.J. Habibie as his successor a day after students demonstrated en masse at the Indonesian Parliament building. Jubilant students in their bright green, yellow, or turquoise school jackets marched past grim-faced soldiers, who stood aside to let the youngsters parade into the compound. Thousands of workers jammed the boulevard in front of the square, chanting ''Hang Suharto!'' and singing raucous songs. Vendors wandered through the crowd, selling mineral water and hats. ''For 30 years, we have been under an authoritarian regime,'' says Teten Masduki, a human-rights lawyer. ''Now, we are free.'' Yet the glee may be premature. Habibie is a trusted ally who is likely to carry out Suharto's interests rather than create an independent government. Further complicating matters, a power struggle is likely to continue among Suharto's deputies. However this game plays out, the winner will have to contend with a deeply ingrained system of corruption--corruption Suharto's successor may not be inclined to root out. That means that the result is likely to be a regime that looks a lot like the old one, while making some moderate progress toward real reform. Habibie's main rival remains armed-forces Commander-in-Chief General Wiranto, whom Suharto appears to trust more than anyone else in the military and who is highly regarded by the Jakarta diplomatic community as a leader who would encourage democracy. Wiranto unsuccessfully tried to block moves by Parliament Speaker Harmoko to impeach Suharto and hand over power to Vice-President B.J. Habibie, whom the army despises. A second potential rival was former army chief Try Sutrisno, who served one term as vice-president before being replaced by Habibie in March. He has a clean reputation by Indonesian standards. A third rival was Ginandjar Kartasasmita, a former air force officer and currently a Cabinet minister charged with negotiating with the International Monetary Fund. He also earned a reasonably clean reputation as head of the National Development Planning Board. ALSO-RANS. Suharto's most vocal opponents are unlikely to have much power in the new regime. Indonesian business leaders harbor grave doubts about the agenda of Amien Rais, head of the 28-million-member Islamic organization Muhammadiyah. His populist platform tends to blame Indonesia's economic problems on the ethnic Chinese minority. The business lobby also has little faith in Megawati Sukarnoputri, whose politics scarcely differ from those of the ruling Golkar party. Her popularity depends largely on nostalgia for the 20-year rule of her father, President Sukarno, whose disastrous flirtation with socialism drove Indonesia into 600% annual inflation and sparked a bloodbath that left 500,000 people dead in 1965. Whoever takes command will quickly face a dilemma: how to satisfy calls for justice without scaring off foreign investors. One of the demands of students is to recover ''the peoples' money.'' That means that the government will be under intense pressure to nationalize companies such as Bimantara Citra and Humpuss that are controlled by the Suharto children, and to prosecute family members. Since global heavyweights such as Siemens and News Corp. are partners with Suharto's children, such steps could lead to embarrassing revelations about the kind of deals they made. Since linking up with Suharto's family and cronies was for decades the only way to invest in Indonesia, their removal from power could improve the way deals get done. That could translate into more efficiency and profitability than most foreign investors experienced before they deserted Indonesia in late May. But don't expect too much change in Indonesia's way of doing things. The qualities that rank the country as the world's most corrupt after Nigeria won't be erased with a change of presidency. For one thing, the bureaucracy runs on miserably low salaries, so until civil servants make a living wage, bribery will remain. Here's some advice to Indonesia's next ruler: Ponder the lessons of Suharto's sad end. By Michael Shari and Bruce Einhorn in Jakarta RELATED ITEMS WORLD MARKETS CHINA THE BAILOUT SINGAPORE INDIA PAKISTAN Return to main story

Updated May 21, 1998 by bwwebmaster
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