Craziness in the Archipelago: Indonesia goes gilla..
10th January 1998
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Relative calm characterises the streets of Jakarta this weekend, and the
Rat has finally been able to make telephone contact with correspondants
in Jakarta after 2 or 3 days of busy tones. A week of craziness saw...
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A budget delivered by Soeharto on Tuesday which seemed to have lost complete touch with reality, based on estimates of economic growth (around 4%), completely out of line with most informed local and international opinion, and spending proposals more suitable for good rather than the present bad times.
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A massive devaluation of the Rupea on Thursday to beneath the 10,000:1 per US dollar psychological barrier, followed by an almost as spectacular gain of 30% on Friday.
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A run on supermarkets and pasars as citizens reportedly bought up big in anticipation of food shortages or massive price increases. Initially limited to middle class stores, the panic buying spread to working class stores and markets by the weekend, although the rush is reported to have slowed down.
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The closing of stores dealing in imported goods who finally gave up rewriting price tags in response to currency movements, reportedly to open again with price tags in US dollars.
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A stock market crash, with substantial knock on effects in Singapore, which has major investments in the archipelago. South Korea, another major investor, also expects similar effects.
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Strong evidence that Indonesia is not taking seriously the terms of their IMF bailout.
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An editorial in the conservative Jakarta Post calling for Soeharto's resignation, and sporadic street protests calling for the same. This in a country where such questioning of a leader's capabilities is almost tantamount to treason.
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Reports of increasing unrest in provincial areas where political unrest and sporadic rioting has been already been a feature for several years.
Contemporary Indonesian politics is characterised by:
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A ruling elite with Soeharto for 32 years at its helm:
Like many neighboring countries, the term of the present powers has seen remarkable growth and increased prosperity for business and middle to upper class urban dwellers. With the majority poor relatively disenfranchised by distance and economics, paternal and autocratic government is tolerated by the new rich as any government, regardless of ideology and process, is looked on with favour by those who see their standard of living enriched by it. Again, like their neighbors, continuity and "strong" government was relevant and appropriate (and proved successful) for the economic development level of the time. ..But that time is now well past, and government styles have failed to keep up with economic and social development of their respective countries. This theme was also explored in another recent News item.
The happenings of the last six months, in the main unanticipated by those business people and professionals, who were used to just looking after their own interests and trusting governments 100% to maintain a positive business environment, are now forcing the same to do the unthinkable and question whether the same political and economic leaders who brought them to prosperity are also the right ones to maintain this prosperity.
It may well be warranted... ..managing a tiger requires completely different skills to managing a tiger cub... The latter requires parenting, stability, nurturing, and strong direction, the former requires collaboration, listening, flexibility, and information sharing. Yes, you still need strong leadership, but this is a different kind of strength...
Soeharto's elite continues to regularly ban newspapers, opposition political parties, and infiltrate opposition parties with their own network, as evidenced by Megawati's ousting as opposition party leader last year. Family members are given top jobs and business opportunities; inefficiencies and autocratic policies are accepted as corruption and "under the table" payments can make business problems, exclusionary policies and red tape which would seem normally insurmountable disappear like magic.
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A bubbling undercurrent of ethnic and religious zealousness and intolerance which has seen Buddhist temples, Mosques, Christian churches, and Chinese businesses desecrated and burned alike. Mob ethnic killings have been regular as well, only saved from substantive international publicity by the remoteness and relatively thinly spread nature of these incidents amongst a physically large archipelago.
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A hamstrung press without the resources or authority to report effectively on provincial developments adds to the confusion as the "oral" tradition still reigns supreme in Indonesia, where news by word of mouth from family and friends is trusted more than than printed (or government) sources. This is one of the reasons that rumours can escalate into panic in a few hours.
It may well be that Soeharto's gilla 1998 budget proves to be the albatross that presages the downfall of Indonesia's modern ruling elite. a budget that can only be explained as a desperate attempt by the ruling elite to extend Soeharto's rule by handing down a "popular budget", even to the extent of damaging the country's prospects as a whole.
The reason Soeharto has not named a successor is that clearly there is not any one competent enough... ..understandable in a government weakened by 32 years of almost absolute power, within a booming economy where good government came a poor second to the fact that Indonesia boasted a population and a market that the global marketplace could no longer ignore.
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