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FEBRUARY 23, 2004
Indonesia: Suharto's Party Is Surging It's one of the biggest political comebacks in Asia -- not just for a politician but for an entire party. Nearly six years ago, Indonesia's strongman, President Suharto, fell from power, toppled by popular disgust with the cronyism of the regime and its mishandling of the economy. Suharto's once all-powerful party, Golkar, became a casualty of the upheaval, losing control of the presidential palace when Suharto's successor, B.J. Habibie, was ousted in an ensuing election. Golkar's hold on power seemed broken forever. Money and Organization Now, the next President of Indonesia may well be a Golkar candidate -- most likely Wiranto, Suharto's former army chief of staff, who was driven from the service after a U.N. court held him responsible for permitting atrocities in East Timor. The comeback of this 55-year-old former general -- who denies involvement in any atrocities -- speaks volumes about the current disarray in Indonesia. The country has been so battered by ethnic strife, Islamic terrorism, increased corruption, and economic austerity programs that many voters yearn for the certainty and relative prosperity of the Suharto years. Wiranto denies any ambition to be the next Suharto: "My platform is not to revive [Suharto's] New Order or to construct a military regime," he said in a written response to questions from BusinessWeek. But Wiranto is promising to unwind some of the most painful reforms by reintroducing farm subsidies, rewriting Indonesia's open foreign investment rules, and getting tough with the International Monetary Fund and other creditors. Golkar's comeback stems from the party's own clever repositioning since Suharto's fall, and from disaffection with the three-year-old government of President Megawati Sukarnoputri. Over the past six years, Golkar kept its grassroots organization and funding intact and maintained a foothold as the second-largest party in Parliament. "Golkar will have a bigger chance in the coming elections than any other party because they have been preparing very well," says Hadar Gumay, deputy director of the independent Center for Electoral Reform in Jakarta. The party has shed several controversial candidates for the presidential nomination, including Suharto's daughter Tutut, who formed her own party. Megawati herself has proved powerless to deflect Golkar's bid. She hasn't done a bad job with the economy, which is coming back from years of subpar growth. But IMF dictates to remove popular Suharto-era subsidies for public utilities, fuel, and food earned her the enmity of ordinary voters. A policy she inherited from Habibie to decentralize government also backfired, encouraging the spread of corruption to localities across the archipelago. A recent poll showed that 58% of Indonesians believe life was better under Suharto. Megawati's approval rating has plunged from 37% last October to 13% in December. All these factors bode well for Golkar in local, provincial, and national legislative elections in April -- and in the two-round presidential vote set for July and September. Golkar in April could take as much as 20% of the vote from the Democratic Party for Struggle (PDI-P), Megawati's party. Wiranto's nomination as the presidential candidate would likely follow. In that scenario, pundits say, either Wiranto would win outright or a strong Golkar showing would force Megawati to cut a deal to share power -- with Wiranto by her side. Suharto's legacy lives on.  By Michael Shari Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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