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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

Week of December 4, 1998

JAKARTA Public pressure on the government to place former president Suharto under house arrest mounted. The ruling Golkar party, Suharto's political vehicle during his 32-year rule, joined oppositionists and former government officials in agreeing that house arrest was a logical consequence of the current investigation into Suharto's wealth. In June, Forbes magazine estimated Suharto's personal wealth at $4 billion. So far over $18 million in assets and bank deposits belonging to Suharto and his family have been uncovered. In response to the pressure, Suharto turned over control of seven charitable institutions worth $530 million to the government. Five show signs of being financially mismanaged.

Return of the Muzzled Media?

THE HABIBIE HONEYMOON IS OVER for the Indonesian media. Following aggressive coverage of "Black Friday" by television station SCTV, it seems that the president's patience with the unshackled press pack has worn thin. In a sudden about-face on recent debt-restructuring agreements, state-owned Bank Bumi Daya has called in SCTV's loan, opening the way for the government to acquire a majority stake in the channel. A spokesman at the department of state enterprises confirmed that the government is considering taking a 52.5% stake in SCTV, but denied any political motives. Workers at SCTV are not convinced. An official statement from the company labeled the plan "an authoritarian move to control the national media." After a period of tolerance, the Habibie who was instrumental in banning Tempo and two other magazines in 1994, does appear to be making a comeback. But, at least for now, the president seems content with a "Habibieization" of Suharto Inc.'s media arm, rather than orchestrating any wide-ranging clampdown. The 52.5% stake he is eyeing is currently held by Mitra Sari Persada, a company co-owned by Suharto's cousin, Sudwikatmono. The remainder is held by Datakom Asia, run by high-profile SCTV board member Peter Gontha - a business partner of Suharto's son, Bambang. Sources say that Timsco, a firm run by the president's brother, Timmy Habibie, is at the forefront of negotiations to acquire the SCTV shares. Timmy is also said to be chasing 40% of another TV station, Indosiar, mainly owned by the Salim Group of another Suharto crony, Liem Sioe Liong.


Week of November 27, 1998

SYDNEY Members of the East Timorese Resistance took to the streets to mark the seventh anniversary of the Dili massacre. Days afterward, highly classified documents came to light showing that senior Australian officials knew of further killings, despite denying that they had taken place at the time. Opponents charge that then foreign minister Gareth Evans covered up the incident for fear of upsetting Jakarta when multi-billion-dollar oil reserves were at stake in the Timor sea.


Week of November 20, 1998

CLASHES BETWEEN THOUSANDS OF STUDENT PROTESTERS and pro-government Muslim youths marred the Nov. 10 opening of a special session of the People's Consultative Assembly. It met to approve a number of decrees, including a ruling on the controversial role of the armed forces in government. Tensions rose the next night when protesters trying to march on Parliament clashed with troops. In a separate meeting, four recognized leaders of the reform movement - Abdurrahman Wahid, Amien Rais, Megawati Sukarnoputri and Sultan Hamengkubuwo X - agreed that a new government should be formed no later than three months after general elections next May.


Week of November 13, 1998

JAKARTA The IMF put off for more than a week consideration of another $1 billion installment of its $11.3 billion lending program to Indonesia. The Fund says that despite the delay, its financial aid program remains "on track."

Java's Murders: A Theory

ONE REASON THE MURDERS OVER THE PAST THREE MONTHS of at least 150 people in East Java, most of whom are members of the 30-million-strong Muslim organization Nahdlatul Ulama, have been so difficult to fathom might be because they do not have a single origin - or a single purpose. An NU source believes that at least four operations are occurring. One is aimed at former members of the Indonesian Nationalist Party, which had been former president Sukarno's party later merged into the Indonesian Democratic Party, a faction of which is now led by his eldest daughter, Megawati Sukarnoputri. Another campaign is aimed at purging Islamic theology at the town and village level. Still another operation targets NU, a source of government opposition and a bastion of traditional, middle-of-the-road Islam. The fourth has unknown groups intentionally releasing mental patients to contribute to the chaos.


Week of November 6, 1998

HANOI Indonesia asked officials to ban a painting from Singapore that is scheduled to appear in the Philip Morris ASEAN art exhibition in the capital. The picture graphically depicts the May riots which presaged the fall of Suharto.

BECAUSE OF THE RISING INFLUX OF INDONESIANS, New Zealand and Australia recently changed their visa procedures. Wellington revoked visa-free entry for Indonesian citizens, while Canberra has become more stringent in issuing the permits. New Zealand Immigration Minister Tuariki Delamere says in the last four months, over 300 Indonesians who entered the country later claimed refugee status.


Week of October 30, 1998

EAST JAVA Army chief Gen. Wiranto says conflicts among the political elite are behind the more than 150 murders in East Java. "There are certain political interests which want to make use of the current difficult situation for their aims," he told the Kompas daily. And Abdurrahman Wahid, head of the 30-million-strong Nahdlatul Ulama Islamic movement, says he knows the "puppetmaster" behind the killngs. Neither man gave names.

Tanri Abeng: Man With a Plan

Indonesia's Minister for the Empowerment of State Enterprises, Tanri Abeng, may soon present a "privatization masterplan." In the rush to divest itself of 12 state-owned companies, under Tanri's direction the government has often haphazardly signed deals with the first suitor to come through the door. There have been several spats over privatization since the great sell-off began. Tanri got into hot water in May for agreeing to sell part of Krakatau Steel to a foreign investor without opening the process up to bidding. In the case of the cement company Semen Gresik, the government backed down from its plan to sell 35% of its share after demonstrators at the plants protested against foreign ownership. The Mexican company Cemex SA got 14% instead - in what at least one foreign bidder felt was an unfairly skewed process. Tanri has made plenty of enemies in the divestiture process, including most of the people on the board of directors at Telkom, the state telecom monopoly.And Djiteng Marsudi, the former chief of the electricity monopoly PLN is not a great fan, either. But Tanri's "masterplan" might at least finally lay a basic roadmap for Indonesia's erratic privatization process.


Week of October 23, 1998

DILI Protesters in East Timor continued their demonstrations, demanding the resignation of Gov. Jose Abilio Soares.


Week of October 16, 1998

JAKARTA Tempo is back. The feisty weekly was closed by former president Suharto in 1994. Its first issue covered the rapes of Chinese women during the May riots that overthrew Suharto. The military continues to issue contradictory statements about the veracity of the reports.

JAKARTA Sotheby's and Christie's auctions were inundated with paintings from Indonesian owners at their Oct. 3-4 sale. One art observer denied a sell-off, saying owners were merely "focusing" their collections.


Week of October 9, 1998

VIRTUALLY REVERSING THE IMF'S ORIGINAL APPROACH, the World Bank called for making economic growth the top priority in efforts to help Asia. Calling the economic crisis "absolutely unprecedented" at a press conference in Washington, the Bank broke with its own traditional formula of structural reforms and direct anti-poverty programs and pushed a strategy aimed at quickly spurring growth by boosting fiscal spending. It also called for urgent measures to protect low-income groups for the duration of the crisis.

PONTIANAK A brawl between army and police units in the West Kalimantan capital sparked a shooting spree which left up to three people dead and several injured.


Week of October 2, 1998

JAKARTA The investigation into former president Suharto's wealth will go ahead even though he has repeatedly denied having stashed funds abroad. The government team looking into the matter says Suharto has agreed to surrender his domestic banking records. He will also give President B.J. Habibie a list of his personal holdings.

Lessons Learned at Trisakti

IN JAKARTA, SOME RIOT POLICE wearing full body armor are wielding Sony handycams, not carbines or teargas launchers. When Asiaweek's Jose Manuel Tesoro approached one of them at a recent demonstration, he was told the police are now recording their encounters on the streets to avoid "what happened last time." Enforcement authorities, embittered by the trial of two police officers for the deaths of four students at the Trisakti University demonstrations that helped bring down former president Suharto in May, are taping their actions to protect themselves. Made to pay for the overreaction of the armed forces, the police do not want to find themselves scapegoated again.


Week of September 25, 1998

JAKARTA Rumors that the country would follow Malaysia down the capital-control path sent the stock index down nearly 9%, to its lowest level in five years. Both President B.J. Habibie and his central bank governor have ruled out the possibility.

Fun with Academics

CALL IT THE BATTLE OF THE BOFFINS - Steve Hanke the currency-board guru from Johns Hopkins University vs. Paul Krugman, the Massachusetts Institute of Technology free-marketeer famous for being one of the first to cast doubt on Asia's economic miracle. Krugman has called Hanke, among other things, a "rupiah Rasputin" and "a self-promoter whose image as a successful country doctor has been pumped up by resumé inflatio n."

Hanke speaks well of Krugman, too: "Governments should eschew Prof. Krugman's advice about the desirability of exchange controls," he told Asiaweek. "These controls promote crony capitalism, depress asset prices and rob people of the right to freely use what belongs to them. Like all pyromaniacs, Professor Krugman has now washed his hands of Dr. Mahathir's dastardly deed in Malaysia. Prof. Krugman's recantations provide the most devastating critique of exchange controls." (Krugman had claimed "some re sponsibility" for Mahathir's opting to implement currency controls but then urged caution.)

With Russia pondering a currency board and Asian governments disillusioned by the heavy toll IMF policies have taken on their economies, Hanke feels vindicated. "The facts have shown that my early Cassandra-like diagnosis and prognosis about the economic crisis in Asia were correct and those provided by the IMF and U.S. Treasury were wildly off base. Asian governments should dump the IMF's prescriptions of fiscal a usterity and floating exchange rates. These policies only act to further depress domestic demand and create more unused capacity. To mitigate their economic problems, the countries should adopt currency boards." As Rome burns, at least the economists are still able to play their fiddles.


Week of September 18, 1998

PONTIANAK Mobs in the provincial capital of Kalimantan looted scores of warehouses and stores of rice, sugar, cooking oil and instant noodles for at least three days. Similar scenes are occurring across the country. The U.N. Food and Agriculture Organization estimates more than 7.5 million Indonesians face "acute household food shortages" in the next 12 months.

AT LEAST FIVE PEOPLE WERE INJURED outside Parliament early Sept. 8 as riot police confronted student protester s, right, who were demanding lower prices for food staples. They called for President B.J. Habibie to step down and hand over power to a transitional authority. It was the most determined show of force by students in Jakarta since thousands staged a much larger sit-in which helped force president Suharto's resignation on May 21. The demonstrations continued into mid-week, and broadened to other parts of the city prompting armed forces chief Gen. Wiranto to warn that the protests must cease. In Surabaya, Hab ibie was jeered in his limousine and troops fired into the air to disperse scuffling demonstrators on Sept. 9.

SOUTHEAST ASIA'S FINANCIAL CRISIS has severely depleted regional health budgets, according to the World Health Organization. In some countries, even access to basic drugs has become a major problem. Regional director Uton Muchtar Rafei asked rhetorically at a WHO conference in New Delhi: "What is the point of economic stabilization if people are destabilized? What is the point of economic recover y if human resources are lost?"


Week of September 11, 1998

JAKARTA Political activist and kidnap victim Pius Lustrilanang announced plans to sue ex-special forces chief Prabowo Subianto. Prabowo was discharged from the army Aug. 24, after a military council found him responsible for the abductions.

MANILA The Asian Development Bank revealed that last year's Indonesian fires destroyed $4.5 billion worth of forest. The Bank hosted a two-day workshop to develop a regional action plan for fighting the fires and haze that also ruin ed tourism and caused serious health problems.


Week of September 4, 1998

JAKARTA Muslim leader Amien Rais resigned as head of the Muhammadiyah Islamic movement and launched the National Mandate Party. Rais promised that the new party would be non-sectarian, welcoming all Indonesians regardless of race or religion. In Palu,Central Sulawesi, the Indonesian Democratic Party congress was less harmonious. Supporters of Megawati Sukarnoputri, ousted as party leader by the Suharto government in 1996, disrupted the conference, leaving 17 injured inclu ding five police officers.

FRIGHTENED BY REPORTS of the rape of women during the May riots in Indonesia, many ethnic Chinese are packing their daughters off to schools in Malaysia. Some 10,000 visitors - almost all Chinese - thronged a two-day exhibition of Malaysian schools in Jakarta recently. About 95% of the students who signed up were ethnic Chinese.


Week of August 28, 1998

PROSTITUTION is a major employer and money earner in Southeast Asia, an International Labor Organization study says. Based on 1993 and 1994 data, the ILO estimates that the sex industry directly and indirectly accounts for 2% to 14% of the gross domestic product in Indonesia, Malaysia, the Philippines and Thailand.

DESPITE THREATS AND RUMORS of civil unrest, the country celebrated its 53rd Independence Day quietly on Aug. 17. The next day, a military council ended its quest ioning of three senior officers, including Lt.-Gen. Prabowo Subianto, son-in-law of ex-president Suharto, over their suspected involvement in the kidnapping and torture of activists. During his State of the Nation address on Aug. 15, President Habibie - according to an adviser - deviated from his carefully scripted speech to offer an apology to people who suffered human rights violations under Suharto. But across Asia, demonstrators used Aug. 17 to protest the rapes and violence directed against Chinese wom en in the May riots that ousted Suharto.


Week of August 21, 1998

ACEH Hundreds of government troops will be withdrawn by early September. A human-rights team will soon start a probe into reports of mass graves in the province, which has been wracked by a Muslim secessionist movement for years.

JAKARTA The 1996 ban against the leftist People's Democratic Party was overturned in court, although jailed members of the group have not been freed.

INDONESIA PARTIALLY DEFAULTED on its sovereign debt repayments for the first time. On Aug. 10 Ja karta managed to cover the interest due but not repayments on the principal. A new repayment plan will start in September, the Paris Group of creditor nations says.


Week of August 14, 1998

WASHINGTON, D.C. The IMF has less than $10 billion left to deal with the financial crisis in Asia, U.S. Deputy Treasury Secretary Lawrence Summers warned. The government wants Congress to authorize $18 billion for the Fund. So far it has given $35 billion dollars to aid Asian nations.

JAKARTA Military intelligence is reporting rumors of planned mass unrest around Aug. 17 - Independence Day. Under particularly close scrutiny is the provincial capital of Semarang which escape d the violence that swept many cities, including Jakarta, in May. And Jakarta Governor Sutiyoso called for capital city residents to tighten neighborhood security ahead of the day, too.


Week of August 7, 1998

KUALA LUMPUR Opposition activists called for U.N. intervention in Indonesia to protect victims of ethnic violence there. The Democratic Action Party's youth wing chairman Lim Guan Eng also used the call as an opportunity to launch an attack on PM Mahathir Mohamad.

TO MARK THE ANNIVERSARY of the July 27, 1996 riots in central Jakarta, tens of thousands of supporters rallied outside the house of Indonesian Democratic Party opposition leader Megawati Sukarnoputri. The meeting w as peaceful.


Week of July 31, 1998

Jakarta Controversy erupted over a decision to allocate $1.9 million for a retirement mansion for former president Suharto. By law, all presidents and vice presidents have the right to an honorary home after they retire.


Week of July 24, 1998

Jakarta The 24-page DeTak (Pulse) tabloid - one of three weekly publications banned under ousted president Suharto for critical reporting - is back in print. DeTak replaces DeTik (One Second), which along with Tempo magazine and another weekly, Editor, were closed under Suharto.


Week of July 17, 1998

THE HEAD OF THE IMF's Asia-Pacific operations urged developed countries to put up more money to help Indonesia rebuild its economy. "Indonesia needs money. Please help poor Indonesia," Kunio Saito said at a news conference in Tokyo.

WASHINGTON The Institute of International Finance - a U.S.-based group of 285 private financial firms - is launching an investigation to determine how private lending bodies contributed to the Asian crisis and to propose guidelines for avoiding su ch mistakes in the future.

SOME 96 MILLION Indonesians - about 47% of the population - will be living below the official poverty line by the end of the year, government statisticians say. In 1996, the reported figure was 11%.


Week of July 3, 1998

KUCHING Having failed to reach an agreement on the U.S.-backed pact to liberalize trade within Pacific Rim countries, APEC trade ministers will meet again in November to try to close the deal. The American trade representative Charlene Barshefsky singled out Japan as the recalcitrant partner to lowering trade barriers and praised Indonesia, the Philippines and Thailand as ready to make the necessary changes.

JAKARTA The commander of the armed forces, Gen. Wiranto, appointed Ad miral Widodo to be the navy's new Vice-Admiral, Air Vice-Air Marshal Hanafie Afnan to head the airforce and named Maj.-Gen. Roesmanhadi as the nation's police chief.

BLITAR Over 30,000 people besieged the town of Blitar, East Java, for the 28th anniversary of the death of the country's first president, Sukarno. The Blitar commemoration, the largest since restrictions were put in place by his successor, the now-deposed Suharto, may be the last. The Sukarno family is considering moving the patriarch's remai ns closer to Jakarta


Week of June 26, 1998

JAKARTA The newly appointed attorney general, Maj.-Gen. Andi Muhammad Ghalib, will continue the probe into the alleged fortune of former president Suharto and his family. Ghalib will keep a 35-member investigative team in place to track down and study evidence about Suharto, his family and cronies.

THE U.S. LIFTED employment restrictions on Indonesian, Malaysian, Philippine, South Korean and Thai students studying in the States. The program allows them to work longer hours to help pay for their education or only attend school part-time without the risk of losing their visa status.


Week of June 19, 1998

EL NI--O-LA NI--A A study by three world meteorological organizations forecast a weakening of El Niņo, and the entry of La Niņa, a cooling of eastern Pacific water temperatures, causing more rain to fall in the region. Expect the effect to be felt by December.

JAKARTA The National Commission on Human Rights says at least twice as many people died in rioting in Jakarta last month than previously reported. It revised the death toll to 1,188, up from about 500.

EAST TIMOR President Habibie is considering a special status for East Timor, similar to that of other provinces, like Aceh and Jogjakarta. He granted amnesty to 10 East Timor political prisoners, but rebel leader Xanana Gusmao remains jailed.


Week of June 12, 1998

INDONESIA'S INFLUENCE

Who is afraid of the repercussions of Suharto's overthrow? Beijing has certainly stepped up security around the ninth anniversary of the Tiananmen crackdown. And Malaysian opposition leader Lim Kit Siang minced no words at a party function when he declared, after citing events in Indonesia, that: "Mahathir is part of the problem of the multiple Malaysian crises, causing the national crisis to become so intractable and insoluble, and he is no more part of the solution."

Has Myanmar's junta taken the lesson to heart too? The State Peace and Development Council (SPDC) was long an ally of Suharto. But soon after his ouster, the Myanmar Monitor - a U.S.-based newsletter that is seen by some as a public relations tool of the generals - quoted opposition leader Aung San Suu Kyi. It mentioned her call for "a peaceful settlement" to the standoff between opposition groups and the government. The junta had allowed her National Le ague for Democracy to go ahead with a meeting to commemorate the eighth anniversary of the 1990 elections that the military government overrode to retain power. The Monitor article - "Cooperative Efforts Required" - seemed to be a call for dialogue. Similar gestures have been made to the NLD in the past, but always broke down when the SPDC insisted Suu Kyi be excluded. And the National Council of the Union of Burma, operating out of neighboring Thailand, made it even clearer: "As the aggressive Indonesian m odel of Suharto has been thoroughly crushed and immersed in shame by the heroic students and people of Indonesia, it is necessary for the top leaders of the SPDC to cull a lesson from the development without delay."

BANGKOK Ethnic-Chinese Indonesians with at least 10 million baht ($250,000) in cash have been offered permanent residency in Thailand. Successful applicants would be required to make investments or deposit the money in Thai accounts.


Week of May 22, 1998

Dengue fever continues to plague Indonesia, where more than 32,000 people have been infected this year. Southeast Asian countries are bracing for the worst epidemic in years, expected to peak in May or June. The mosquito-borne disease has killed more than 800 people across the region this year.

A two-day workshop opened in Jakarta on May 11, aiming to strengthen ASEAN's ability to prevent and alleviate the haze caused by forest fires. It is part of a $1 million Asian Developme nt Bank project to implement a regional haze action plan agreed to by ASEAN ministers in December. Part of the group's work will be to write a report on the causes of fires in Indonesia, and assess firefighting capabilities.


Week of May 15, 1998

Heavy rains put out most of the fires in East Kalimantan. Only 50 of about 800 hotspots are still smoldering. If the hot, dry weather returns, there is a danger that the fires can start again. "It is still not safe," warns Hartmut Abberger, a German firefighter in the region. He estimates at least 450,000 hectares of forest, bush and grasslands burned in the past four months.


Week of May 8, 1998

Business news tabloid Kontan reported that the clove monopoly, run by President Suharto's son Hutomo Mandala Putra (Tommy), is still in business despite a January decree worked out with the IMF. Kretek (clove cigarette) makers reportedly must buy cloves from a new company, Kembang Cengkeh Nasional, controlled by Tommy. Otherwise, they can't purchase tax stickers for the cigarettes.


Week of May 1, 1998

The government said it met the first deadlines of the IMF for the implementation of economic reforms. It named seven companies it will privatize in 1999, announced trade reforms including the withdrawal of a ban on palm oil exports, and raised minimum bank capital requirements.


Week of April 24, 1998

THE UNITED NATIONS HIGH COMMISSIONER FOR REFUGEES criticized France, Switzerland and Brunei for handing over to police 27 Indonesians seeking asylum in their embassies in Kuala Lumpur. "They could have waited a little longer since these people need to be heard" so as to determine whether they are valid political refugees, the UNHCR said in Geneva.


Week of April 17, 1998

Science, Technology and Environment Minister Law Hieng Ding says the haze will return to Peninsular Malaysia in May unless forest fires in Indonesia are put out by then. He said winds will blow smoke from the fires in Sumatra and Kalimantan - which Indonesia says it cannot stop - across the Malacca Strait.


Week of April 10, 1998

In Indonesia, Life Imitates Art

This from a high-ranking source within the Malaysian government: In Indonesia, a visiting senior ASEAN minister met with finance minister Mar'ie Muhammad just days before President Suharto's new cabinet was announced. Mar'ie, who knew he would no longer be in the government and that he had fallen far out of favor with Suharto, was very depressed. His visitor told him no t to be hard on himself, relax, go to a movie. The visitor suggested Titanic, which he and his family had recently seen. At that point the distressed Mar'ie blew up. "Why would I want to see a movie like that? We are the Titanic!" he yelled. What's more, he said, his compatriot Sudrajad Djiwandono, the sacked former head of the central bank, was among those pushed from the sinking ship. Lost in the metaphor, Mar'ie calmed down, musing that the now abandoned plan for a currency board to control foreign excha nge rates was not the iceberg that was going to sink the country, but only the tip of the problem. The visiting ASEANminister did not say how much longer the bewildered former finance minister continued in that vein - or whether Mar'ie ever went to see the film.


Week of April 3, 1998

Rais Ducks a Feint and Stays on His Feet

Amien Rais heads Muhammadiyah, Indonesia's second-largest Muslim organization, with 28 mill ion members. It is a well-reported fact that an investigation of a meeting which he and 17 other people attended is underway - although Rais has not yet been qu estioned. On Feb. 5, the group attended a discussion called by Rais's thinktank, the Center for Strategy and Policy Studies (CSPS) at the Radisson Hotel in Jogjakarta. Rais insists that all that was discussed was Indonesia's political and economic situation. But a CSPSresearcher at the meeting,Sofian Effendi, sent a memo to then minister of research and technology, B. J. Habibie, accusing the group of planning a demonstration of one million people during the March 1 opening of the People's Consultative Assembly. That was the convention which returned President Suharto to his seventh te rm in office and made Habibie vice president.

Effendi has since joined Habibie's vice presidential staff. And Rais is clearly under pressure following the accusations. But Rais swears he and his colleagues are innocent and says he is ready to be questioned by investigators. With his mass power base, he has little to fear.

Rais is known to be disappointed by not getting more liberal Muslim intellectuals into the new cabinet. For Habibie, putting pressure on Rais might help reassure President Suharto of h is own loyalty. Given the lack of a more coherent opposition, Rais has emerged as the point man for much of the popular sentiment arrayed against the government. For now, neither side seems prepared to upset that precarious balance.

MALAYSIA-INDONESIA Kuala Lumpur stepped up efforts to keep out a new wave of boat people seeking relief from crisis-hit Indonesia. A sea and air operation along the Strait of Malacca mobilized more than 500 personnel and four naval ships to scare off thousands of would-be ill egal immigrants. Authorities want to avoid the costs of detaining the people, most of them seeking jobs.

NEGOTIATIONS TO RELEASE THE SECOND IMF TRANCHE of about $3 billion were proceeding well at mid-week. That launched a 7% rally for the rupiah. Government reports that it would insist on compulsory reporting of private sector debt and interest rate hikes, coupled with hope that the country would adhere to IMF-imposed guidelines, buoyed many investors.


Week of March 13, 1998

Jakarta Moms Tak e On the State

For the women - mothers - who demonstrated in Jakarta protesting outrageously high milk prices last week, one of the most illuminating aspects of their arrest was the fact that the state - or at least the police who hauled them down to the station house - hadn't the faintest clue of how to deal with legitimate popular complaint. A group of about 12 women had congregated outside the Hotel Indonesia in mid-morning, holding signs, s inging and praying. They were outnumbered by the foreign press corps by about six to one. Their intention was to draw the world's attention to the plight of Indonesia's mothers and children. It worked.

This was not your run-of-the-mill, taking-it-to-the-streets mob. Among the organizers were Karlina Leksono, 40, an astronomer, who works in a research agency headed by B.J. Habibie, the sole candidate for the vice presidency. Gadis Arifia Effendi, 33, has an M.A. and teaches in the University of Indonesia's philosophy department. Wilasih Noviana, 30, is studying law.

The women were allowed to finish their little demo - they were surrounded by foreign cameras, remember - and herded into a police pickup truck. By mid-afternoon, they found themselves answering the same five or six questions - posed in an increasingly rude manner - in the Vice Control Unit, usually reserved for prostitutes and pushers. The last of the women, Leksono, was released at two the next morning.

What their interrogators couldn't seem to grasp, the women say, was that they are not aligned with opposition parties, nor do they back Megawati Sukarnoputri, a long- time oppositionist. The police were at a loss on how to deal with a few women acting on an impulse of concern. It seems it is the threat of organized opposition that most worries authorities, and it is a fear that keeps them from making the distinction between discontent and disloyalty.


Week of March 6, 1998

Haze from forest fires in Kalimantan has reached neighboring countries again. An air pollution expert in Jakarta warned it will get worse:"In a week the rainfall and wind direction will change so there will be a change around to Malaysia and Singapore."Another adviser says the fires are too big and widespread to be effectively contained.


Week of February 27, 1998

Seven ethnic Chinese businessmen are the country's biggest taxpayers, while the next two largest contributors to the state's coffers are Bambang Trihatmodjo and Hutomo Mandala Putra, children of President Suharto, the Finance Ministry says. Its report of the 200 highest tax-payers did not include the amount of taxes paid by each individual.


Week of February 13, 1998

A Farewell to Arms Deals

Russian arms sales in parts of Asia are suffering from the economic downturn. Ruslan Pukhov, director of Moscow's Center for Analysis of Strategies and Technologies is convinced of it: "I think that the contracts, especially with Indonesia, are lost for the time being." He thinks business will pick up in two to four years. Many in Moscow think the $500 million deal with Indone sia - including 12 Sukhoi Su-30K fighter-bombers - was shot down by U.S. Defense Secretary William Cohen when he met with President Suharto recently. They say he made U.S. involvement in bailing out Jakarta from its economic crisis contingent on cancellation of the contract. An official at the Indonesian embassy in Moscow told Asiaweek a proposal to only postpone the deal might be in the works, but the offer has not gone to the Russians yet.

"We have had no rains for over two months and fire spots have re surfaced again in areas with heavy coal seams," the meteorological office in Samarinda, East Kalimantan, reports. Some flights from Samarinda's airport and Balikpapan were canceled because of low visibility.


Week of February 6, 1998

Hidden in the Vision

Java's mystics think they know why Indonesia is so troubled: because fate has decreed it. "It's our karma," Permadi, a well-known Javanese soothsayer, told an Asiaweek reporter seeking the future. He points to an ancient prophecy spun by a pre-Islamic 12th-century king, Jayabaya, who saw as far as the first three presidents of the post-colonial period. According to the myth, the country's first ruler would be a leader with a "voice like thunder," a description that fits the Independence hero, Sukarno. His successor, however, would be someone quite different: a "Prosperity Warrior," whose policies would enrich the country. That, says Permadi, is the quiet Suharto, under whose rule Indonesia became a successful developing nation. But between the second leader's rule and that of his successor, says the soothsayer, there will be a time of madness, marked by natural disasters and moral corruption. "There wi ll be many children without parents," says the former lawyer, intoning in nasal Javanese the prophecy's cryptic couplets. "Men will become women, women will be men, and lose all their inhibitions." But what new leader might emerge from this topsy-turvy period? "He is called the Hidden Warrior," says Permadi, "someone who is unexpected." When the times call out for clarity, even prophets are silent.


Week of January 30, 1998

INDONESIA-TAIWAN Officials in Jakarta met with Taiwan Premier Vincent Siew, despite strong protests from China. His trip is part of Taipei's diplomatic offensive tied to the regional financial crisis, which Taiwan has largely escaped so far. Beijing rumbled a warning to Asian countries (Siew has recently been to Singapore) to "strictly honor their commitments to the one-China policy."

Two of the largest banks will merge. Bank Dagang Nasional Indonesia, the country's 9th- argest bank, owned by major conglomerate Gajah Tunggal, will unite with Bank Internasional Indonesia (BII), the 8th-biggest, controlled by tycoon Eka Tjipta Widjaja. They will be joined by three smaller institutions. The new group will have assets of over 50 trillion rupiah - about $5.2 billion - and will retain BII's name.


Week of January 23, 1998

SILKAIR AFTERMATH The U.S. Federal Aviation Commission ordered immediate inspections of American Boeing 737s. The move comes after investigators into the Dec. 19 crash of a SilkAir 737 in Sumatra found that 26 fasteners were missing from the right-side rear horizontal stabilizer. SilkAir records show they were in place at regular maintenance checks.


Week of January 16, 1998

The three-week search for the remains of SilkAir Flight 185, which crashed Dec. 19 in Sumatra's muddy Musi River en route from Jakarta to Singapore, ended Jan. 6. Salvage teams turned up enough evidence to identify only four victims out of 104 people onboard, but they did locate the flight data and cockpit voice recorders, which were sent to the U.S. for analysis.

The central bank - Bank Negara - wants merger agreements between smaller finance companies and larger ones co pleted by March 31. The bank identified four companies to act as anchors for smaller companies, shoring up the troubled economy's credit industry: Arab-Malaysian Finance, Hong Leong Finance, Mayban Finance and Public Finance.

INDONESIA-SOUTH KOREA Deposed Kia Chairman Kim Sun Hong was appointed an adviser to Indonesia's Timor Group, which has a shaky joint venture with the bankrupt Korean car-maker to produce low-priced automobiles in Indonesia. Kim was involved in the Indonesian car project from early o n, but was forced to resign as chairman of the Kia Group in September, two months after the group went under.


Week of January 9, 1998

Suharto Returns With Vigor

Not long ago in Jakarta there was a suspicion that the respected Bank of Indonesia (BI) governor Soedradjad Djiwandono would soon be losing his job. That has not turned out to be the case, yet. But when President Suharto returned on Dec. 22 from an extended rest period enforced by his doctors, one of his first acts was to fire four of seven top-level BI directors and bring in an old ally - Radi us Prawiro - to try to bring order to the private financial sector. Three of the men Suharto dismissed are now under investigation for corruption. Soedradjad - the men's superior - was not informed of the changes. But familial politics may also have a hand. Soedradjad is believed to have been the man behind the denial of a loan to one of the president's children, and his name can hardly be popular within the family circle.


News from Indonesia in 1997


News from Indonesia in 1996


News from Indonesia in 1995


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