REVIEW ESSAY

The Fall of Suharto: A Review Note

Bhanoji Rao Departmentof Economics National Universityof Singapore

Stefan Eklöf, Indonesian Politics in Crisis: The Long Fall of Suharto, 1996-98, Copenhagen: Nordic Institute of Asian Studies, 1999. 272 Pages, ISBN 87-87062-69-0.

Eklof's book of nine chapters tells us the story of the fall of the former President of Indonesia. It is a blow-by-blow account of the happenings of the two-year saga. The first four chapters deal with the events prior to the 1997-1998 economic crisis. Chapter 5 is about the economic crisis of 1997- 98. The next three respectively deal with Suharto's re-election, stu- dent opposition and the end of the regime. Chapter 9 is the concluding chapter.

How It Happened

In spite of rapid economic growth and modernisation, and in spite of the success of Suharto's New Order system' for 30 long years, the regime had to end. There are two ways of looking at the process of the regime change. One way is to characterise it as an unfortunate event brought about by the economic crisis of 1997-98 at a time when the international financial institutions with their new found "comprehensive" development paradigm have begun propagating not just economic development but also democ- racy, accountability and transparency and eradication of the menace of corruption. A second way is to consider that the Suharto regime has only been tolerated and not really preferred by the people; it is just that a pro- democracy movement takes much longer to come to surface in a large country under authoritarian rule. The events in Indonesia during 1996-98 testify to the validity of both the arguments, the second creating the basis and the first the opportune moment. Eklof points out that since the late 1980s and throughout the 1990s, a wide range of dissidents (students, intellectuals, activists) has begun to openly challenge and criticise the Suharto regime. By early 1996, it was becoming openly clear that the Indonesian Democratic Party (PDI) under - the leadership of Megawati, daughter of late Sukarno the freedom fighter 326 and first President, could swing votes in its favour from the ruling Golkar party in the 1997 election. It would then be even possible for her to con- test the presidency in 1998. The rulers engineered a division in the PDI, Megawati was ousted in a party congress and another person was appointed the new chairman of the party. Megawati and her supporters were barred from taking part in the election. This provided her with an opportunity to openly accuse elements within the government and the military of engi- neering her removal by interfering with the party's internal affairs. This paved the way for the formation of a loose coalition of pro-democracy groups and the setting up of a Free Speech Forum that included students and other Megawati supporters. The forum called for reinstatement of full political and civil liberties. An attack on the PDI headquarters on 27 July 1996 was staged by the military to remove the Megawati supporters. The heavy handedness of the regime prompted further riots and protests not only in Jakarta but also elsewhere. Many of them in the second half of 1996 and early 1997 were not necessarily directly concerned with the PDI and pro-democracy movements per se, but were also rooted in ethnic, communal and religious conflicts, themselves part of an overall perception of income and wealth inequalities, hidden under the rug with no public discussion. The May 1997, election failed to restore the crumbling legitimacy of the regime. PDI's disastrous election result and Golkar bagging three quar- ters of the votes were interpreted as the result of the government's and the military's heavy handed interventions before and around the election. Despite all this and continuing protests, all would have been well but for the sudden and rather unforeseen economic crisis that descended on the country. From August 1997, Suharto and his government had to address the economic crisis, which began in Thailand and started spreading to the region. In October, Indonesia signed a bailout package with IMF but far too many negative influences continued to plague the economy and polity. These included the regime's indication of interest in the idea of a Currency Board system, disagreements between the regime and IMF, dispute between Finance Minister and two members of the Suharto family, failure to con- tain the raging forest fires in part of the country and concerns about the health of the President. The situation helped the opposition groups to openly and more boldly voice their criticism against the President. Subse- quent developments in January and February 1998 (the optimistic Suharto budget, renegotiation of the IMF agreement, signed by President Suharto personally, his preference for BJ. Habibie to be his VP in the March Presidential election, anti-Chinese propaganda, food riots) took their toll on the currency, the financial sector and the economy in general. Despite mounting opposition to his regime, Suharto got himself re-elected with Habibie as VP. The military did all it could to contain opposition and