Indonesian Lessons for Rebuilding Afghanistan


By Michael Shari The international community may be cheering the fall of Kabul to the Northern Alliance. But the real battle has just begun -- rebuilding the economy of an impoverished nation, predominantly Muslim, that was plagued with factionalism, ancient hatreds, corruption, and violence long before U.S. warplanes arrived.

Afghanistan? Yes, but the description also applies to Indonesia. The international community faced a similar scenario in 1998, when the Suharto regime crumbled. And if international relief and lending agencies are smart, they'll study the consequences of their missteps in the archipelago and learn from their mistakes.

In Jakarta in January, 1998, and in East Timor in August, 1999, global agencies and Western governments operated under the assumption that they could install a whole new economy -- and a democracy to keep it growing -- as if air-dropping a care package from a plane. In both cases, they miscalculated badly, the results being economic devastation and mass murder.

AFGHANS FIRST. The U.S. and other governments supporting the reconstruction of Afghanistan must ensure that their political objectives incorporate the well-being of real, live Afghans and not fictitious statistics. International agencies administering the reconstruction must not ignore obvious signs of impending disaster -- even when that could compromise Washington's objective of hunting down Osama bin Laden.

When it comes time to hold Afghan elections, potential sore losers must be disarmed well beforehand. And agencies should study Afghanistan's political problems closely, rather than resorting to the usual imposition of ill-fitting, cookie-cutter policy formulas. At all costs, they should avoid falling back on last-ditch formulas that lead to failure, such as blindly supplying food aid to warlords and letting peacekeeping troops become idle objects for target practice.

In Jakarta, the International Monetary Fund and the U.S. Treasury pressed former President Suharto into linking a $43 billion bailout with a long list of politically impossible conditions in January, 1998. Treasury and the IMF insisted that Suharto revoke several state-subsidized monopolies from which his grown children and their business partners profited, such as a national car program, a plywood cartel, and a flour mill.

ON A MISSION? Against all expectations, Suharto agreed quickly to those demands -- as well as to the withdrawal of food and fuel subsidies. This tit-for-tat had disastrous consequences -- triggering anti-Chinese race riots, gang rapes, capital flight, and the still-unresolved collapse of the banking system. Thousands died, and the 76-year-old President resigned, yet the IMF kept lending to Indonesia despite a lack of reform.

Washington's motive had little to do with Indonesia's economic recovery. U.S. diplomats and World Bank officials have said in interviews with BusinessWeek that Treasury seemed to be on a mission to overthrow the oppressive Suharto regime. If true, the U.S. got more than it bargained for.

In the months before East Timor won independence from Indonesia in a U.N.-monitored referendum in September, 1999, the international organization ignored obvious and well-documented signs that the independence vote would trigger the murders of innocent East Timorese by the Indonesian army -- as well as the systematic destruction of almost every building, road, hospital, and telephone pole.

LAST-MINUTE CHANGES. The U.N. disregarded field reports from its on-the-ground staff, who had witnessed the Indonesian army conscripting East Timorese men into "pro-Jakarta" militias and training them to burn houses and forcibly migrate the population across the border into Indonesia-controlled West Timor.

In another blunder, the U.N. agreed that only Indonesian troops, not international peacekeepers, would be present during the election. The Indonesian military planned to intimidate the East Timorese into voting to remain in Indonesia. But the U.N. infuriated the army by changing the vote-counting procedure at the last minute, mixing the contents of ballot boxes so that soldiers would not be able to tell how each district had voted.

Within a few days, more than 1,000 East Timorese were murdered, and some 450,000 were herded across the border to West Timor. It took several months of military occupation by Australian troops and diplomatic intervention from Canberra to cease the bloodshed and destruction.

MEANS TO AN END. Will the international community make similar mistakes in Afghanistan? I fear that the governments involved are again operating from primary motives that have nothing to do with the well-being of Afghans. The U.S. wants to smash bin Laden's al Qaeda terrorist organization. Pakistan hopes that cooperating with the U.S. will further its ambition as a regional nuclear power. Liberating Afghanistan is merely a means to these ends.

Furthermore, the same U.N. and World Bank organizations that operate in Jakarta and East Timor are becoming involved in Afghanistan. Now, the World Bank, which has admitted that 30% of its aid to Indonesia went to "waste" during the Suharto regime, faces a challenge: Did it learn anything there? The bank argues in a new report that aid to Afghanistan should not be "earmarked," making it easier to channel funds as needs change and develop.

The stakes couldn't be higher in a country where the most recent government was founded on international terrorism, the main export is opium, and anti-Taliban guerrillas are at each others' throats because of ethnic divisions. Aid organizations readily admit that critical questions on how to proceed remain unanswered. "What kind of political umbrella will international assistance operate under?" asks the World Bank report.

Donors should insist on an answer at an international conference on Afghanistan's economic reconstruction that's tentatively scheduled to take place in Pakistan in late November. That would be a good start in an inhospitable land that, unlike Indonesia, has few Western influences to fall back on. Rebuilding Afghanistan will take far more than the equivalent of air-dropping an economic care package. Shari is Singapore bureau chief for BusinessWeek


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