Day Three of riots in Indonesia. Student protesters blame President Suharto for the current economic crisis and are demanding his resignation. After a background report, two regional experts discuss the situation.

PHIL PONCE: For more now we get two perspectives. Abigail Abrash is the program director for Asia and the Middle East at the Robert F. Kennedy Memorial Center for Human Rights, a non-governmental human rights group based in Washington. William Liddle is a professor at Ohio State University specializing in Indonesia, Southeast Asian and third world politics. He was in Indonesia most recently in February. And welcome both.

Ms. Abrash, how do you see what's happening in Indonesia?

ABIGAIL ABRASH, Robert F. Kennedy Memorial Center: Well, I think it's very clear from what your viewers have just seen in that little film that the political situation is changing very dramatically in Indonesia. I don't think that what's happening now is really a surprise to people who have been watching the situation for years and have seen the level of public resentment against the Suharto regime growing and the level of civil society organizing for a political transition also growing.

PHIL PONCE: How severe of a change would you characterize it as being?

ABIGAIL ABRASH: Well, I think it's a very severe change. I think it's totally inevitable. I think what you're seeing in the footage here is a total meltdown of governance in Indonesia. The military is holding firm for the moment. Indonesian civil society organizations are moving forward with plans for a peaceful political transition, but everything is hanging in the balance.

PHIL PONCE: Professor Liddle, a total meltdown?

WILLIAM LIDDLE, Ohio State University: Well, that's perhaps a little bit extreme, but I must say I do see myself that there are major changes occurring in Indonesian society. I think it's very clear now that President Suharto will not be in power for very much longer. And as recently as a few weeks ago, most observers were not predicting that. But I think the really interesting thing is what is happening with the Indonesian military. Again, most observers would have predicted that something happened to President Suharto. Then the Indonesian military would step in to power and you would have a continuation of the military regime, just under different leadership. But I think now we're seeing a real shaking of the military base. The military leaders don't have the kind of control that I thought they would have.

PHIL PONCE: When you say that President Suharto's days may be numbered. Is it going to be--do you predict that it will be a voluntary step down? Will he be forced out? What do you think will happen?

WILLIAM LIDDLE: Well, what President Suharto said in Cairo, before he came back, was that he was willing to step down if the process were done constitutionally. Of course, there's a certain element of trick in that because he said that before, and then of course everybody asked him to stay on and he says, okay, I'll stay on because the people want me to. But in this case what he's--what he said, I think, is being taken up by people, and so there's going to be an arrangement made by which he will--a process will take place by which he will be able to step down gracefully.

PHIL PONCE: Do you see--excuse me--do you see President Suharto stepping down, one way or another?

ABIGAIL ABRASH: Yes. It's very interesting what Professor Liddle mentioned about a constitutional process because just today in Jakarta a number of Indonesia's leading civil society lawyers went to the parliament, to the head of the parliament, and presented basically a road map for constitutionally and legally how the legislature walks Indonesia through this process. It begins with accountability by the military for what has happened on the campuses, for the killings, a withdrawal of troops from the campuses, and a commitment by the military to respect freedom of expression and opinion by all Indonesian citizens, so people engaged in pro-reform activities can express their views freely. It then takes the next step of saying that if that doesn't happen, the parliament must call on the president to intervene. And if the president is unable to do so or fails to do so, a special assembly of the parliament should be called according to the Constitution, according to the law to enact a transition to basically--to remove the president from his position if he is unable to act according to the law.

PHIL PONCE: Ms. Abrash, what is this tapping into?

ABIGAIL ABRASH: Very deep and widespread resentment against the Suharto regime. Suharto has been in power for 32 years. His rule has been marked by deep levels of corruption, very widespread and large scale corruption, which has stifled economic opportunity for a number of different sectors within the populace. Also, in outer lying areas of Indonesia there is very, very little, if any, representation of local interests. So in places like Irian Jaya or East Kalimantan in Indonesian Borneo there is no representation of individuals and their political will. There is no political participation.

PHIL PONCE: Professor Liddle, what do you see as the underlying causes?

WILLIAM LIDDLE: Well, I think that that's right. I think Abigail has that right, except that I think that I would stress that President Suharto for 30 years stayed in power not simply because he used coercion and kept people who would oppose him out of the political process but rather because he created a kind of balanced political system in which he certainly used coercion when it was necessary. But he also rewarded people, and he rewarded them particularly with the benefits of economic growth. One key really to understanding this government for 30 years has been the continuing economic growth. And so when that stopped last summer, last July, then President Suharto understood completely and right away that he had to get the vote process started again, or he was going to be in political trouble. And he hasn't been able to do that. So the balance here is one in which he can't use the coercion that he's used for all of these years because he doesn't have the support that he got from the economic growth all those years.

PHIL PONCE: Professor, one of the images that we saw in the video pieces was that of people looting the business of one of President Suharto's children. Is there a lot of resentment towards his family in general?

WILLIAM LIDDLE: Right. I think that has always been one of President Suharto's political weaknesses. He built his regime in part by rewarding friends and punishing enemies financially. But the money that he got from the economy he was able to use very effectively to both reward individuals but to reward large social groups like rice farmers and urban consumers and so forth, again maintaining this kind of balance. But he also over the years--and it became increasingly a problem since, oh, about the mid 1980's, as his children moved more and more into businesses, he also was very--he showed favoritism toward his children, gave them all kinds of economic opportunities, and the resentment toward those kids' business activities has been growing for more than a decade. So it's quite understandable that you see those scenes that we saw in the clip tonight.

PHIL PONCE: Ms. Abrash, one of the things the professor mentioned earlier was the role of the military. Is the military right now the entity that's going to determine which way this is all going to play out?

ABIGAIL ABRASH: Many observers feel that it is, and the military is really looked upon as the only viable national institution. The military does hold a lot of the cards in this equation, and it will very much rest. Whether this is a bloody crackdown and thousands are killed, or whether this is more of a velvet revolution a la Eastern Europe, really is in large part up to the military.

PHIL PONCE: Professor, one of the images we saw was of the--some people in the military and some of the people in the streets being affectionate with each other, embracing and holding hands and that sort of thing. What are observers to make of that?

WILLIAM LIDDLE: Well, we've been watching that rather closely actually, and it appears to be the case so far that it's mostly marines who are engaging in that kind of activity. And there's a long history of the marines not being very friendly with the army, so there may be some inter-service rivalry that's a part of that. But to the extent to which it spreads to the army of course, it represents a serious threat to army--the army's continued dominance of the society.

PHIL PONCE: As far as alternatives to the rule of President Suharto, what kind of an opposition is there?

WILLIAM LIDDLE: Let me come back for a moment to the military because I think it's very important to understand that the military may hold the cards to Indonesia's future. But it looks to me as though just in the last 48 hours or so that I've been observing this that really it looks increasingly to me like the military has dropped those cards. That is to say, they look quite disunited, quite demoralized, quite without ideas as to what they are going to do. And what that does then is to give all of the initiative to the opposition, and that's your question, what's happening with the opposition. And we will see, but there is a moderate opposition. We saw Megawati Sukarno Putrie in the clip and there was a reference to Indonesia's leading Muslim. And I think that was meant to be Amien Rais, who is the head of an organization called Muhammadiyah. These people form--these two people--Rais and Megawati--formed a coalition, an alliance last year. They're moderates. They represent the Muslim core of the society but also a kind of secular nationalist core of the society, and if they can get it together and get support from some other leading elements in society, they can keep the army on the defensive and really push this society into a democratizing direction. It's really quite an extraordinary thing that nobody was predicting, I think, just a few weeks ago.

PHIL PONCE: Ms. Abrash, are you optimistic that the country can head towards democracy?

ABIGAIL ABRASH: I am, and I'll tell you why. I think that this coalition is a very broad based coalition, the coalition that Professor Liddle was referring to. Amien Rais has actually announced the formation of a people's council which I think is envisioned as something like a civilian transitional government, sort of a transitional cabinet for Indonesia, and should all of the constitutionally and legally offered remedies fail, if the legislature cannot walk the country through this crisis, this people's council is ready and waiting to take over and is made up of very well respected individuals, very widely recognized public figures throughout Indonesian society. And I believe the people's council is actually attempting to reach out to some of the outer lying areas I mentioned, reaching out to people like Nobel Peace Prize Laureate Bishop Below from East Timor, reaching out to people who are respected and recognized community leaders.

PHIL PONCE: Professor, in the short time we have left, what do you think the United States's posture should be as this unfolds?

WILLIAM LIDDLE: Well, I think we're doing just the right thing. I think for most of the time during this crisis since last summer what we've been doing is applying economic pressure, that is to say, telling the Suharto government that they ought to follow the recommendations from the IMF, and I think that's been right up until the last few days. And now I think political pressure has been added to that. That is to say, we're encouraging the Indonesian government, the military and President Suharto to engage in a dialogue with these opposition groups. But at the same time, we're doing that very gently because Indonesia is a very nationalistic society. These leaders on both sides, both government figures and the opposition figures are very concerned about the autonomy, the independence of Indonesian society, and so we have to treat this rather gingerly, but I think that's what we're doing so far.

PHIL PONCE: Professor, Ms. Abrash, thank you both.