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Economic Successes Undermine Its Politics

August 04, 1996|Robert A. Manning | Robert A. Manning, a senior fellow at the Progressive Policy Institute, is a former State Department Asian policy advisor (1989-93)

WASHINGTON — Rumors of the death of China's 92-year-old patriarch, Deng Xiaoping, growing fears of implosion in North Korea and now riots and unrest in Indonesia, Southeast Asia's giant. Suddenly, the gleaming promise of a coming Pacific Century seems a fragile hope. More accurately, the strife and military clampdown in Indonesia last week are but another chapter in the sometimes painful saga of Asian modernization.

The riots in Indonesia, the most violent in three decades, shook the confidence and authority of Suharto's "new order" regime at a moment of political uncertainty. They illuminated the growing tension between a dynamic, liberalized economy and a rigid, controlled political system, one with no mechanism for, or experience of, succession. Finally, they symbolized Indonesia's nascent middle class and industrial workers bumping up against the limits of an antiquated, highly personalized system of power.

The seeds of the turmoil were sown in late June, when Megawati Sukarnoputri, the daughter of the country's nationalist hero Sukarno, was removed as the head of the Indonesian Democratic Party (PDI), one of two officially sanctioned opposition parties. Her ouster by military-backed factions was widely viewed as government-engineered. With Megawati seeking reinstatement in the courts, her supporters occupied the PDI headquarters in Jakarta, where they staged numerous rallies. When they continually defied orders to leave, the military stormed the building and arrested them. It was the military crackdown that sparked the riots.

Repression, however, will only compound Indonesia's problems, many created by its economic success. For just below all the official nervousness is the succession question. With parliamentary elections next year, and presidential elections in 1998, the aging Suharto is expected to run for a seventh five-year term. Under the Indonesian Constitution, the vice president fills out the remainder of the term if a president dies or is incapacitated. Suharto's choice for vice president has thus become a subject of rampant speculation.

Suharto's ruling party, Golkar, received 68% of the vote in the 1992 parliamentary elections. Though Megawati's party was expected to get less than 20% of the vote next year, the powers-that-be may have been seeking to get ahead of the curve, fearful of her snowballing popularity and her famous name. An estimated 20 million new voters, nearly one-fifth of the electorate, will cast their first votes in 1997. If Golkar fell below 60% of the total, control of the post-Suharto political system might be up for grabs.

The problem is further complicated by Indonesia's unprecedented economic success, which though underpinning its political stability has spawned rising expectations. Western-educated technocrats smartly used revenues from Indonesia's vast oil and gas resources to diversify and modernize its economy, which has grown at an average annual rate of nearly 7% for 25 years. Clinics, schools and services have spread across much of the countryside. Economic liberalization has attracted foreign investment, $39 billion in 1995 alone.

With a per capita annual income of nearly $1,000, some 60% of Indonesia's 204 million citizens now live above the absolute poverty line. Though some Western critics complain that companies such as Nike are running sweatshops in Indonesia, to many young women from local villages, the minimum wage they earn is far more than anything their parents made, and is viewed as a step on the road to a better life. With unions and civic groups gaining strength in the country's power calculus, these young workers face even better prospects.

Indeed, Indonesia appears poised to match the economic achievements of South Korea, Taiwan, Singapore and Hong Kong. But the road is rarely smooth. Each year, 2 million people enter the Indonesian job market. Development is uneven, fostering not only generational gaps, but also rich-poor, urban-rural divides. Ethnic Chinese, a small minority in the largest Islamic country in the world, dominate much of the economy. In addition, corruption, especially tied to greedy Suharto family members obtaining government favors and monopolies, is driving up the costs of doing business.

The buoyant economy and emerging middle class help explain why instances of unrest have not spread throughout society. Yet, beneath the surface, Indonesia's potential fault lines include widespread anti-Chinese sentiment, which occasionally sparks rioting; alienation of Islamic groups, most of which are currently integrated into Suharto's system, and regional secessionist pressures from Aceh to East Timor.

All this points up the volatility of the Indonesian predicament. Its economic growth has generated new social and political forces--unions, human-rights groups, Islamic organizations, environmental activists--and a middle class seeking more political liberties. Can the Indonesian political system reform itself to accommodate such forces?

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