The man who would be king

Indonesia's new leader is supremely confident that he is the mind to inspire and unite his country. Experts, opposition leaders and the IMF are not so sure.

Published May 22, 1998 7:00PM (EDT)

By all appearances, Bacharuddin Jusuf Habibie has little doubt he can fill the shoes of President Suharto, the Indonesian strongman who reluctantly resigned Thursday after the worst riots in his 32 years of authoritarian rule.

Habibie, Suharto's vice president and handpicked successor, once reflected: "God has given man a mind, conscience and energy. Those three divine gifts should be used properly. I had the good fortune to have everything work favorably. That is a fact!"

The big question now is whether Habibie -- or God -- can convince his distrustful population, a wary military, shaken investors and the International Monetary Fund that his "divine gifts" qualify him to lead Indonesia out of its economic and political crisis.

If the recent past is any indication, it doesn't look good. When Suharto announced Habibie as his choice for vice president two months ago -- just as Indonesian officials were negotiating an economic rescue package with the IMF -- currency markets responded by devaluing Indonesia's rupiah by 35 percent in one day. Opposition reaction to Habibie's cabinet -- mostly drawn from the ruling Golkar party -- has been cool.

"I don't think Habibie counts for very much at all," says Daniel Lev, a political science professor and Indonesia expert at the University of Washington in Seattle. "He's much disliked in the country. He's seen as part of the old regime, as Suharto's choice, so he's not going to mean much in the long run."

Constitutionally, Habibie's term as Suharto's replacement could last until 2003, when presidential elections are scheduled to be held. Few observers expect Habibie to last anywhere near that long. In the short run, however, opposition figures appear reluctant to reject Habibie outright. Amien Rais, the main Indonesian opposition leader, has said he will support Habibie, but only on the condition that the new president serves as a transitional leader and holds democratic elections within six months.

The military also has voiced its support for Habibie, at least publicly, though Indonesia watchers do not discount the possibility that ambitious officers might make a grab for power, especially if the political situation continues in chaos.

The biggest player of all, the IMF, has adopted a "wait and see" approach before it goes forward with its $43 billion plan to rescue the Indonesian economy -- and that could be a particularly bad sign for Habibie.

"The program is delayed, not suspended," a source close to the IMF told Salon. "It's still too early to say when the program will resume. We first have to wait until the security situation stabilizes and there is a government in place. We know that Mr. Habibie has been sworn in, but what's next? Whom are we going to talk to? There is no way we can speak to anybody if there isn't a cabinet in place."

Regarded as a brilliant but eccentric technocrat, the 61-year-old Habibie has been closely associated with Suharto since he was 13, when Suharto took him under his wing. He studied aeronautical engineering in Germany and held senior aircraft executive posts there before Suharto summoned him home in 1974 to serve as technical consultant for the country's industrialization.

In 1978, Habibie was appointed technology minister and became known for his grandiose plans for Indonesia's industrial development. His most notorious project -- the state-owned aircraft industry -- has spent more than $2 billion without producing a single Indonesian-built passenger plane. Under its rescue plan, the IMF has demanded that state subsidies for the company be eliminated.

Habibie, who has never served in the army, also is said to have stirred resentment toward him within the military by forcing commanders to procure equipment that many officers consider too expensive and ill-suited to their needs. According to Indonesia experts, Habibie is strongly suspected of pushing these procurement schemes for his own financial gain. A millionaire several times over, Habibie reportedly has a personal stake in at least 20 state-owned enterprises.

The new president also has alienated economists with his original, if unorthodox, theories. One, which became known in Indonesia as "Habibie's zig-zag interest rates theory," postulated that the government could control inflation by drastically raising interest rates and then dropping them just as sharply.

Habibie, a small, energetic man with a taste for classical music, has shown no sign that he is affected by such criticism. His official biography asks, "Why is it that the mere mention of his name will evoke a vibration in the hearts of young children and adults?" The answer: "He is the idol and dream of all parents, who wish their offspring to become another Habibie."

International bankers do not, as yet, feel quite the same way. Asked if the IMF has confidence in Habibie, one IMF source replied: "It's impossible to judge at this stage. If he is the one who gets support from all the political forces, we'll have to deal with him." Assuming the situation does stabilize, the source said, the IMF probably will "totally revisit" Indonesia's needs and come up with new and possibly less stringent guidelines for its bailout program.

In the meantime, Habibie will have to look less to the vibrations in children's hearts and more to opposition demands that he hold national elections by the end of the year. To accomplish that, Lev notes, Habibie will have to reconstitute political parties that have long been restricted under Suharto. "You have to understand that there are several generations of Indonesians who simply have had no opportunity for political experience at all," said Lev. "So it's going to be tough."

Watching from the wings will be the military, the only government institution in Indonesia that has any significant power. According to many observers, Habibie's lack of any political base will throw the ultimate fate of the country into the hands of the army.

"At the end of the day, everybody knows that Habibie has spent a lot of state money and made a fortune from his connections with the president and his position. To make people forget that is going to be pretty difficult," Lev said. "Habibie is a pretty smart man. I suspect he understands he's not going to last all that long in this position."

By Jonathan Broder

Jonathan Broder is Salon's Washington correspondent.

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