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Habibie's Rule Isn't As Wobbly As It Looks (Int'l Edition)


International -- Asian Business: INDONESIA

HABIBIE'S RULE ISN'T AS WOBBLY AS IT LOOKS (int'l edition)

Indonesia's chief maneuvers cleverly to strengthen his hand

To many observers, the position of Indonesian President B.J. Habibie has never been more precarious. The economy is in ruins. Outside Jakarta, Islamic mobs are burning down police stations to avenge 180 brutal murders blamed on the government. Jakarta traffic is paralyzed by students demanding Habibie's resignation for tampering with a special session of the highest legislative body, the People's Consultative Assembly (MPR), which convened on Nov. 10 to debate democratic reforms.

Yet, in the context of Indonesia's tortured politics, Habibie hardly looks like a goner. In fact, the diminutive aircraft engineer may emerge from the current turmoil in his strongest position since he took office last May, following President Suharto's resignation. Widely derided as an interim ruler, Habibie is using an incumbent's powers to strengthen his hand. Habibie will never enjoy the undisputed powers Suharto wielded--but he may be a serious player far longer than anyone imagined.

Habibie's current strength lies in Golkar, the party established by Suharto that still has a sizable majority in the MPR. At the recent special session, Habibie has had no trouble pushing through a plan to switch voting procedures in national elections. One of the new rules will require candidates to be long-standing residents of their districts.PURGING THE AGENDA. That rule favors Golkar. The party has spent three decades nurturing a political network, which none of the country's 100 new political parties can hope to match. "All of my colleagues who have started their own parties are spending their time on TV talk shows. The real groundwork of opening branch offices, printing pamphlets, and putting campaign workers on the streets is not being done," says Education Minister Juwono Sudarsono, a moderate academic appointed by Suharto shortly before his downfall. Another worry is that Golkar could use its control over the bureaucracy to get away with vote buying, according to Laksamana Sukardi, treasurer of the Indonesian Democratic Party, which is run by the popular Megawati Sukarnoputri, daughter of former President Sukarno.

The Golkar representatives also eliminated some potentially damaging debates from the session's agenda. One was whether the MPR should vote this month on replacing Habibie as President. The other debates concerned calls to examine Suharto's record and track down his family's fortune. "These guys were all part of the Suharto government. They don't like to take a sporting chance, and they cannot afford to lose," explains a Jakarta banker.

The MPR session was the latest of many strides Habibie has made recently. In May, he cut a deal with Armed Forces Commander-in-Chief General Wiranto, who gets to keep his job in return for supporting Habibie. In early November, investigators found that military personnel were involved in the anti-Chinese race riots and gang rapes in May. But Habibie allowed the army to voice its objections to these findings, and he is expected to keep the top brass out of trouble. With this move, he has also placated hard-line Islamic leaders implicated in the investigation.

In October, Habibie also started playing hardball with challengers within Golkar. He let the Justice Minister go public with allegations that Coordinating Minister for Economy, Finance, Industry & Development Supervision Ginandjar Kartasasmita had benefited from the extension of a mining contract for Freeport-McMoRan Copper & Gold of the U.S. The scandal is dealing a blow to Ginandjar's political ambitions.

To thwart Habibie, the parties of the top opposition leaders--Megawati and Islamic politicians Abdurrahman Wahid and Amien Rais--are counting on an erosion of support for Golkar before the mid-1999 elections. Surveys predict that these three parties will win 45% of the seats in the legislature, while Golkar would remain the largest party, but with only 35% of the seats.

Such results would force Golkar to seek a coalition partner. But Habibie can still make new friends. Golka, for example, is proposing legislation that would favor Muslim entrepreneurs. And Habibie can use a $43 billion International Monetary Fund bailout to prop up food supplies, contain inflation, and build a safety net. In devastated Indonesia, the party that delivers the rice may still prevail.By Michael Shari in Jakarta


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