President Habibie's cabinet has decided to let East Timor go. Should the East Timorese reject the current Indonesian offer of wide-ranging autonomy, Foreign Minister Ali Alatas announced on Wednesday, the Indonesian government will later this year propose to the nation's highest law-making body (MPR) that East Timor should be allowed to secede. The move was a response to John Howard's 21 December letter urging autonomy followed some years later by an act of self-determination, Alatas added.

'After 22 years they still don't understand that Indonesia went in there not to get something but to give', Alatas said somewhat spitefully. 'We only went there to help, but if they still can't understand that, then let's not muck around for another 5 or 10 years, we'll pull out now'. Gaoled resistance leader Xanana Gusmao meanwhile will be moved to house arrest so he can play a greater political role.

In Dili after the televised announcement people embraced in the streets. Bishop Belo broadly welcomed it too, though he regretted Jakarta's insistence on excluding a referendum. For over two bloody decades Suharto refused to acknowledge there was a problem in East Timor, let alone contemplate a political solution. In six months Habibie, often taunted as a Suharto look-alike, has done more to lift hopes than many dared to dream. Why did he do it? And will it work?

Habibie did it primarily because the East Timorese pressed him to it. They have conducted a disciplined campaign of resistance with amazing stamina when everyone told them it was 'unrealistic' to expect independence. Yesterday one of Indonesia's leading dailies, Media Indonesia, editorialised about a 'new realism' in which East Timor was best given its head. So much for the omniscience of the 'realist' school of political science!

Habibie also did it because he badly needs international good will to fund the country's economic recovery. The Cold War is over. He will now win a lot more brownie points with the US by letting East Timor go than by claiming, as Suharto did, that he's saving the world from another communist Cuba. He made the autonomy offer last June to persuade the IMF's backers to restore aid disrupted by the protests of April and May. He made the latest offer because his one remaining Western ally on East Timor, Australia, has at last backed away from full support for integration.

But will it work? First reactions from key East Timorese players have been cautious. Jose Ramos Horta, who leads the resistance outside Indonesia, said: 'I don't trust the Indonesian side. They never deliver what they promise'. The history of Indonesian falsehoods is indeed long and tawdry. Today's top military officers all have Timorese blood on their hands. The refusal to consider a referendum is still a refusal of democratic process. Nor is there any mention of an international presence. Moving Xanana to house arrest looks like a reluctant half-measure to accommodate the UN, rather than a change of heart about his real political importance. Ali Alatas made his statement with a sense of petulance threatening to belie his promise that, come crunch time, East Timor would be let go 'properly and honourably'.

However, assuming Habibie will eventually bite the bullet on these admittedly difficult issues of face, at least four other obstacles will have to hurdled in short order.

First, can the Indonesian military implement a 'proper and honourable' withdrawal? Recent accounts indicate they are still fond of the psy-war tricks they first used just before the 1975 invasion: arming 'pro-Indonesian volunteers' to wreak havoc in the East Timorese polity.

Second, how will an independent East Timor deal with the significant proportion of its population of Indonesian descent? Will they be citizens? Will they be protected from East Timorese who have grown to hate Muslim newcomers who dominate their markets?

Third, what place will there be in East Timor for the thousands of Timorese who fled overseas? They lost their houses and land to Indonesian migrants, have had a completely different life experience, yet also fought hard for their country.

Finally, how will the little nation pay for itself? Clearly the Timor Gap Treaty will have to be renegotiated, but it won't be enough. Will East Timor's neighbours and friends - including Australia and Indonesia - help it onto its feet?

These are issues for the East Timorese as much as for Indonesians. Now is the time to make the most of Indonesia's willingness to move forward on East Timor.

[This article appears in The Melbourne Age, 29 January 1999]

Gerry van Klinken, editor, 'Inside Indonesia' magazine