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Fourteen months into his five-year term, Indonesian President Abdurrahman Wahid is under siege. Blind and frail after a series of strokes, he faces a range of crises. Among them: an exodus of foreign investors, demands for independence from resource-rich provinces, destabilizing lawlessness linked to supporters of ousted President Suharto, and military officers resentful of being removed from politics. In mid-January, sitting behind a desk stacked with CDs featuring Latin music and Beethoven, Wahid discussed his challenges with BusinessWeek's Singapore Bureau Chief Michael Shari. Here are edited excerpts of their conversation:
Q: How would you assess your performance?
A: I think there is one problem that was not realized by everybody: that the problems of Indonesia are such that the whole solution cannot be brought into one single bracket. Sometimes we have to postpone cases which will touch national security -- for example, the question of [former defense minister] General Wiranto's involvement in East Timor.
Q: Given that the U.N. has charged Wiranto with war crimes in East Timor, wouldn't an investigation help advance Indonesian reform?
A: I have to deal with other things: to maintain territorial integrity on one hand and to begin economic recovery on the other. Even in economic recovery, we have to abandon our first policy of encouraging foreign investment. Why? Because the coming of foreign investment would have to be accompanied by improvement in the bureaucracy, tax system, law, as well as the existence of political stability and security. Those things we lack. So we have to give attention to the second choice, and that is to encourage more exports, which we did.
Q: Now that the central government is surrendering some of its authority to the provinces, aren't you afraid that Indonesia will disintegrate?
A: No, I'm not afraid of that. Because we have three elements that unite us. One is the unity of the administrative system throughout Indonesia. The second is that the national language is so pervasive. Third, no province is rich enough [to survive by] itself.
Q: Can you control the military?
A: Oh, yes. And I think the hierarchy is loyal.
Q: How long will the generals give you before they change their minds?
A: Well, I believe in them, and they always consult me on things, and I don't think they will [abandon me]. Of course, there are officers who resent what we did. But they are usually not in command.
Q: Is there a deal allowing the government to exist so long as certain senior officers are not held accountable for war crimes?
A: This is wrong. It's not true. There was never a deal. But what is clear is that I never lack respect for the command.
Q: If there's one company that could resuscitate the economy, it's Pertamina, the national oil company. But it seems to be prevented from carrying out necessary reforms.
A: That's a totally wrong impression. [In November], Pertamina announced a new structure, and on Jan. 3, it announced the personnel who would man that structure. Of course, this will take time to produce. You know, Suharto's people were still there at the management level. But not now. We are convinced now the people there are good.
Q: Do you believe Indonesia still needs money from the International Monetary Fund?
A: Oh, yes, of course. But it depends on the rate of investment here. Now [applications] for investment don't require us to get further loans from the IMF. We shall respect the IMF because what it decides would have great implications for us.
Q: What do you need IMF funds for?
A: In the past, loans were needed but not now. The most important thing is not the loan itself but the institution. If we don't take the loans, then the IMF can do things to make our situation impossible.
Q: What could they do to you?
A: Oh, they could tell potential investors to go away from us.
Q: What can you do to try to bring back foreign investment?
A: Foreign investment went away from us because of the need for law improvement, good bureaucracy, more fair taxation, security, and political stability. So we have to do many things at once in order to make the conditions right for investment.
Q: Do you believe some of the recent violence in Indonesia is intended to scare away foreign investors?
A: Yes. They don't want to see economic recovery soon because that will strengthen me. Those people who would like me to go down may be status quo-preferring people who are afraid of the courts. And petty politicians who would like to be rulers themselves. And also fanatics who can be used to undermine the situation, with money of course, [on grounds that] we are un-Islamic.
Q: Are you talking about Suharto and his son Tommy?
A: Well, I don't name names.
Q: Why haven't the authorities been able to arrest Tommy, who was convicted for his role in a real estate scam?
A: Well, with Tommy, it's not so easy. Why? Because he hides among 211 million people. Even if we win, we'd be like the American government back in the '20s or '30s. They couldn't just apprehend Al Capone, either.
Q: How is your health?
A: Fine. Every day I walk about two or three kilometers around the gardens, and also on the treadmill every day. So that shows that I have the stamina to carry out this job despite what people say about this. The domestic press is controlled by those who would like to see me step down.
Q: Who wants to see you step down?
A: I can't say. I lack legal evidence. But of course I can feel who it is.
Q: What are your hopes for the new U.S. Administration?
A: I think an understanding that the world cannot be ruled by one policeman. So then we have to grow foreign policy together. It should be based more on trust than on mistrust like in the past.
Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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