As hostility to the IMF rescue package grows in Indonesia, xenophobic reactions are threatening to block the path to reform.
When Indonesia's IMF rescue package was first announced in October 1997, local newspaper columns were awash with optimistic comment. The IMF was a saviour god come to help Indonesia out of its currency mess. Better still, it would help relieve Indonesia of its corrupt crony capitalists by demanding more transparency.
'Globalisation' had a nice ring to it. Democracy activists said it meant unprecedented freedom to spread ideas via the internet and satellite TV. Business leaders said, or rather hoped quietly, that global capital would weaken the corrupt state with its myriad regulations and allow them to participate in the level playing field.
These globalising commentators represented a relatively new development in Indonesia's often nationalist, even xenophobic politics. Indonesia's emerging middle class wants its politics rational and in small doses. Nationalist calls for solidarity remind them too much of authoritarianism. The state, they say, must be depersonalised, cut down to size and held accountable through a system of rules. Conversely, they find the global market rather benign.
However, by January the tone of newspaper commentary had changed. For one thing, it became obvious that the ranks of optimistic globalists had been inflated by nationalists in disguise. Commentators like George Aditjondro were never known to take moral guidance from the exchange rate, but they supported the IMF cure because it seemed its medicine might be potent enough to kill the Suharto regime. Their support of the IMF program, in other words, was tactical rather than principled.
For another, it turned out that the IMF was no saviour god after all. The IMF is no charity. An IMF-led revolution was never going to happen. Indonesians realised they had been hoping for too much. No one but they can solve Indonesia's political problems.
On 15 January President Suharto signed a new letter of intent with the IMF agreeing to implement wide-ranging reforms. But as the austerity measures began to bite, a globalist agenda became increasingly difficult to sell. Even convinced globalists began to sound less upbeat.
Kwik Kian Gie is a respected economist, an adviser to popular pro-democracy leader Ms Megawati. He supported the IMF program, and it showed in Megawati's economic platform, which he announced on 12 January. However, his speech was honest rather than rousing: 'Sadly, we have to accept that foreigners will buy a lot of the Indonesian economy as Indonesian companies default'.
As the mood swung from optimism towards a sense of failure and possibly towards scapegoating, political discourse began to turn to tried and proven nationalist formulae. Anxiety-ridden words, first used during from the 1960s struggle to overthrow Sukarno amidst economic chaos, have returned to daily use: 'speculators', 'hoarding', 'economic crimes', and 'coup d'etat'.
The Leninist language adopted by nationalists in the 1930s and 1940s once more provides powerful weapons in public discourse. A televised image of the IMF's Camdessus, standing over Suharto with his arms folded across his chest as the latter signed away his economic sovereignty on 15 January, made economist Faisal Basri say angrily: 'This is a new form of colonialism. They have no sense of timing'. He had previously spoken out in favour of the IMF.
Basri joined a solid group of commentators who had warned against IMF intentions from the beginning. Nationalists maintain a sense of outrage rooted in the 1945 revolution. Protectionist, anti-capitalist, anti-Western, often anti-Chinese, but also pro- The People - in a word, populist - these are the adjectives that come to mind.
They range from the young land rights campaigner Noer Fauzi, who says the IMF package just represents 'unrestrained capitalism', to the famous psychic Gendeng Pamungkas, who says artlessly: 'I think the speculators and the money mafia are a plot by American spies. They want to undermine the government. I don't think the IMF can do much good - they will be met with lots of demonstrations'. An increasing number of them are qualified economists.
Many Muslims speak this way too. The chairman of the Indonesian ulemas council, Hasan Basri, says: 'Colonisation does not merely mean the entry of a foreign power into a country, but may take the form of bringing down the value of this country's currency to shatter the economic system'.
The most popular spokesperson for national political renewal is American-educated Dr Amien Rais, who chairs the middle class religious organisation Muhammadiyah. He likened the IMF package to 'an imperialist noose', and said of the 15 January agreement: 'It is like offering our necks to a foreign power'. Many young people hope (no doubt vainly) that Amien Rais will become the next president.
Dr Mahathir Mohamad rated as the second most popular foreign leader among youth surveyed in a Javanese city recently (Sadam Husein was first). The Malaysian Prime Minister's rhetoric may be maligned in the West, but his prestige among Indonesian Muslims is very high. He combines a sensitivity to Islam with modern economic prowess. And he has refused to accept an IMF package.
The trouble with reviving nationalist rhetoric is that anyone can do it, including the cronies with Swiss bank accounts. Suharto's own very wealthy son Tommy Suharto said of the latest IMF agreement: 'This is a new form of neo-colonialism from advanced countries'. He had just lost the tax breaks his father had given him for a new plant to build Korean cars. Suharto's half-brother Probosutedjo, also rich, said the closure of his bank under IMF instructions was 'a violation of human rights'.
Suharto himself refuses to say the deal he signed is 'colonialist'. But a nationalist backlash, while it certainly won't help him economically, may stand him in good stead politically. If he wants to, he has reason enough to portray himself as the victim of foreign pressure. The Council for Stabilisation of Economic and Financial Resilience he announced on 15 January is effectively a second cabinet. Camdessus has put his right-hand man on that council to keep an eye on Suharto's performance. The IMF has virtually written his national budget for the next three years. These are grave insults to his liberty.
If Suharto does play the nationalist card, it would be ironic. When he came to power in 1966 he opened the gates to foreign investment, saying that within 30 years Indonesians would be strong enough to reclaim the economy. Almost exactly thirty years later, the economic system he guarded is begging more abjectly than ever for foreign indulgence.
Even Kwik Kian Gie, who only a week earlier had supported the IMF program, said after 15 January he now felt uncertain. The IMF, he said, was 'a palefaced supervisor... to dictate and supervise the Indonesian people.... Good Indonesian businesses will fall into the hands of foreign businessmen'. He was appalled to discover that the US$43 billion standby fund may not actually be spent, and that the IMF expects Indonesia to lift itself out of its bog hole through the 'suffering and hardship' of the people.
Watching the rupiah spiral ever lower is depressing enough. But behind the feeling of powerlessness lies a more paradigmatic crisis of confidence, a sense that perhaps no one knows the answers.
Middle class activists who want to get rid of Suharto show surprisingly little euphoria now that their goal is in sight. The reason is that they face a dilemma. Should they continue to support the IMF program because it will hurt Suharto more than it will hurt themselves? Or, God forbid, should they line up behind the rhetoric of Tommy Suharto?
Another well-known economist, Christianto Wibisono, worries that the resurgence of anti-imperialist language is bad, not only for the economy but for Indonesian politics. As in the perennially indebted Latin America of the nineteenth century, he wrote, 'they hide behind nice words like patriotism, anti- Westernism, national character, identity, etc. They reject universal human rights... But in fact it all has only one objective, how to preserve the power status quo, if possible by means of a hereditary dynasty, and by eliminating the opposition'. He called on Indonesia's elite to adopt an American- style democracy.
Wibisono's pessimism reflects the mood of many in Jakarta who
now see only more palace intrigue ahead, more attempts by one
bureaucratic faction to mobilise people against their enemies,
and little chance for serious reform. In the absence of
fundamental reform, their best hope is that the future will bring
stronger moral leadership, sorely lacking today. That future will
be, if not more globalist, hopefully less military, possibly more
Islamic, and certainly more nationalist.
Gerry van Klinken, editor, 'Inside
Indonesia' magazine.
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