CLOUDY HORIZONS

May 21, 1998
		Responding to widespread protests, Indonesian President Suharto resigned Thursday morning after 32 years in power. A Suharto protégé, B. J. Habibie, was immediately sworn in as president and vowed to complete the term begun by Suharto. What does this change mean to Indonesia?

Online NewsHour Special Report: Indonesia Oct. 20, 1999: Wahid selected as Indonesia's president. July 8, 1999: A discussion on Indonesia's election process. June 2, 1998: Indonesia attempts to form a democratic government. May 22, 1998: A discussion on changes in the Indonesian government. May 21, 1998: Indonesia in the wake of Suharto's resignation. May 20, 1998: Should Suharto resign? May 19, 1998: Suharto announces plans to step down. May 15, 1998: A report on the riots in Jakarta. May 14, 1998: Students protest against Suharto. March 10, 1998: A discussion on Indonesia's economic importance. Feb. 27, 1998: Can Indonesia restore confidence in its currency? Jan. 9, 1998: Indonesia's stock markets take a tumble. Nov. 13, 1996: A discussion with Jose Ramos-Horta. Oct. 11, 1996: Two East Timorese dissidents win the Nobel Peace Prize. Browse the NewsHour's coverage of Asia.   Former Indonesian President B.J. Habibie Presidential candidate Megawati Sukarnoputri Indonesian Department of Foreign Affairs	PRESIDENT SUHARTO: (speaking through interpreter) I have decided to resign my position as president of Indonesia. IAN WILLIAMS: The pressure had become irresistible, and the reaction was tumultuous. There was jubilation among the students occupying parliament, an unrestrained outpouring of joy; the people had prevailed. There are wild celebrations here, and already the call for the president to go has been replaced with demands that he be prosecuted. While at the palace, the ex-president immediately moved aside for the swearing in of his replacement; his deputy, B. J. Habibie. He's a Suharto protégé, without broad support and with dubious reformist credentials. But he was immediately backed by the head of the army. That didn't dampen the spirits at parliament or across the nation
	Students cautiously welcome change
	But for many, the removal of Suharto is only the first step. STUDENT: After the election we can choose a new president, but for temporary I am happy. STUDENT: Between Habibie and Suharto, what's the difference? How could you-no students-no students say Habibie for the president. IAN WILLIAMS: While Indonesia's foremost opposition leader was more cautious. AMIEN RAIS: If the new cabinet consists of corrupt people, as the new cabinet takes this new position, I will not entrust Mr. Habibie- IAN WILLIAMS: But it's unlikely that tens of thousands who celebrated in cities across the nation today would tolerate merely cosmetic change. With the economy in free fall and the continuing threat of unrest, much is at stake. With that in mind, President Habibie went on national television this evening to appeal for support. He gave no date for elections, but he claimed his would be a clean government, free from corruption, collusion, and nepotism-precisely the features of the Suharto regime in which Habibie played a central role. The ex-president left the palace today with his eldest daughter, one of several offspring who'd enriched themselves during their father's reign. The students continuing their festive occupation of parliament tonight are demanding Suharto family and cronies be held to account. It's a call that's likely to grow and one the new president will ignore at his peril. JIM LEHRER: Some analysis of the situation now from Douglas Paal, a National Security Council Asian specialist in the Bush and Reagan administrations, now president of the nonprofit Asia Pacific Policy Center; Bambang Harymurti, executive editor of one of Indonesia's largest newspapers, Media Indonesia. He's in the U.S. on a year sabbatical. Jeffrey Winters, an associate professor of political economy at Northwestern University, specializing in Southeast Asia, especially Indonesia. He was last in Indonesia in April. And Sidney Jones, executive director of Human Rights Watch Asia. She's written extensively about Indonesia and was last there in March.
	Did Suharto have a choice?
	Mr. Harymurti, in the final analysis, did Suharto have any choice but to resign? BAMBANG HARYMURTI, Media Indonesia Newspaper: I don't think so. I think the core element of the Indonesian-ruling government has already decided some way around killing of the students, that Suharto has to go. It's only a matter of how and when. JIM LEHRER: And did you think the army played any role in this at all? BAMBANG HARYMURTI: Very much so. JIM LEHRER: Do you think they also said it's time to go, sir? BAMBANG HARYMURTI: Yes, definitely. JIM LEHRER: Do you agree, Mr. Paal? DOUGLAS PAAL, Former NSC Staff: I agree. There were plenty of signs of divisions within the army but they seemed to have been unified in this area. JIM LEHRER: Professor Winters, any choice? JEFFREY WINTERS, Northwestern University: Well, actually I disagree that Suharto has stepped down. I think what Suharto has done is stepped into the background. He is now the puppet master. In all senses that matter Suharto is still in charge, I believe. JIM LEHRER: Ms. Jones, you agree with that, that Suharto stepped aside, rather than down? SIDNEY JONES, Human Rights Watch/Asia: No. I think he's gone. I think anything is possible now that he's gone. I think it's a situation where, in fact, Mr. Habibie may prove to be a surprise that even though nobody wanted him, he has no support, and his arrival has been greeted with despair in some ways by the students, he still can be a reformer perhaps, and the signs are that the people he's looking for for his cabinet may be, in fact, relatively good. JIM LEHRER: Professor Winters, what do you think we should know about Mr. Habibie? JEFFREY WINTERS: Well, I mean, first of all, in his announcement he said he was going to put an end to collusion, corruption, and nepotism, and I believe Mr. Habibie, given the fact that his family owns more than 80 companies, that his family is spread out across the Indonesian system in a nepotistic way, could really write a handbook on the subject. And so if he really is going to challenge all those things, I think he ought to start at home with his own family. JIM LEHRER: So, in other words, it's more of the same is what you're saying? JEFFREY WINTERS: Absolutely. The degree of continuity in this system is really stunning. I mean, this is about the absolute minimum possible change one could do and still have absolute continuity in the new order. The problem for Indonesia is that there is no credibility with this new face of the government, and it's precisely credibility that's needed to move forward on the economy front. JIM LEHRER: Mr. Paal, what's your reading on the degree of change here? DOUGLAS PAAL: Well, this is a first step of a series of steps that are going to take place as the simultaneous crisis of the economy and society and the political system work themselves through in this current crisis. It's going to be the first of many chapters in a long story. JIM LEHRER: You heard what Ms. Jones and Professor Winters said-different takes on Habibie. What's yours? DOUGLAS PAAL: My take on Habibie is that he's not very qualified for the job, and he lacks political roots to hold onto it. There is a possibility that he'll perform miracles in the next few days, stun everybody, and actually be a tiger who's changed his stripes. But you and I know how often tigers do that. JIM LEHRER: Right. So it would be a stunning thing- DOUGLAS PAAL: That's correct.
	Suharto and Habibie: a long relationship
	JIM LEHRER: -in other words-for that to happen. Okay. Mr. Harymurti, let's go through now and tell us about Mr. Habibie. His relationship with Suharto goes back a long time. BAMBANG HARYMURTI: Long time ago. Even the mother of Mr. Habibie is a close friend of president when the president was assigned as a local commander in Sulawesi and basically he live in front of the parents of Mr. Habibie's and they become good friends. JIM LEHRER: And Mr. Habibie was 13 years old at the time. He was a little boy and Suharto actually lived in the house for a while, right, and then he went on and became an engineer by training, correct? BAMBANG HARYMURTI: And basically it was Suharto who personally called him back for a special job in Indonesia. JIM LEHRER: In the government. BAMBANG HARYMURTI: In the government, yes. JIM LEHRER: And what has he been doing these last several years? BAMBANG HARYMURTI: Well, he has been doing for so far-he has been dealing with the high-tech. He has this belief that by leap frogging into high-tech, then that's the only way the country can, you know, become equal to any other countries in the world, which was very expensive, which was okay when Indonesia still earned a lot of money from oil before the oil prices, but now that is a big question mark. JIM LEHRER: Does he have any political base of his own? BAMBANG HARYMURTI: Well, he has a capability of turning foe into friends. I mean, one of the interesting figure is Amien Rais, which is the leading opposition. Partly he became big because in the early times he was protected by Habibie. JIM LEHRER: And what's Habibie's relationship with the army? Do you know anything about that? BAMBANG HARYMURTI: Well, he started that relations with the army because basically he took over many of military companies in defense production. For instance, the aircraft companies now which used to belong to the air force, Indonesian Air Force, but now it belong to several companies; the navy yard now is not the navy yard anymore. JIM LEHRER: You agree with Mr. Paal and Professor Winters that for him to really make any changes, it would take a stunning-it would be a stunning development? BAMBANG HARYMURTI: Not only for him; anyone else. I mean, Indonesia is facing a serious, serious problem even if, you know, you take Einstein, or, you know, the most genius of them all, the Indonesian economy is still going to go down for a while, because the Chinese have left-they left with their capital and less capital means less economy. And less economy means, you know, you get in worse condition. And in the same time then you have to take care of all the subsidy in order to, you know, fulfill your commitment with IMF, and that means price increases. And with the situation where the student thought they can always topple a government by demonstrating, this is a very explosive issue. JIM LEHRER: Sure. Well, Ms. Jones, let's go back to you now. Why are you slightly optimistic at least? In other words, the possibility that Mr. Habibie may surprise some people, what do you base that on? SIDNEY JONES: Well, I was totally pessimistic last night when I first heard the announcement because I agree with Jeff Winters that he seems like a complete crony of Mr. Suharto. But, in fact, it looks as though there may have been an alliance worked out before he actually took office, and if that's true, an alliance with the army and with some of the reformists, if that's true, he may be able to put in place at least for an interim period a group of people that may have the confidence of different sectors of the population. And from what I've seen of the new cabinet list-and it's still in the process of being drafted-he's reached out to the universities with the minister of education, someone who was very supportive of the students. He's reached out two different Muslim organizations. He's reached out to the NGO sector. And in his first remarks he talked about in trying to reestablish the rule of law and even reviewing the single law that's most hated by all Indonesians, which is the anti-subversion law under which most political prisoners have been arrested, those are good signs. And so even though I was pessimistic last night-I've got a lot more hope this morning. JIM LEHRER: What about-you would agree with Mr. Harymurti that no matter who's the president it's going to be a difficult task ahead, correct? SIDNEY JONES: It's going to be an enormously difficult task ahead. And I'm not sure that Mr. Habibie is going to last through the entire period. But at least this is a respite, and it's an important respite from the turmoil that we've seen over the last two weeks. JIM LEHRER: Will you grant it's a respite, Professor Winters?
	The election's aftermath
	JEFFREY WINTERS: Well, I think what's missing in this discussion is that earlier this week there was talk by Suharto of forming a national team for reform and there was talk of a schedule for holding free and fair elections. All of that discussion has been dropped. The mandate now for President Habibie is to play out the entire five-year term of President Suharto. The word yesterday was that he will step-or that when there are elections, it'll be in 2003. SIDNEY JONES: But that's not going to happen. JEFFREY WINTERS: Well, what hasn't been laid out is how the process of coming to elections is going to happen, and Mr. Habibie, himself, hasn't mentioned it. I think that's the key. Indonesia is not going to have a credible government for the purposes of its own legitimate authority at home, as well as for the purposes of convincing those who control investment resources to return until their election. JIM LEHRER: Do you believe, Professor Winters, that the people of Indonesia, the students and others who have been behind this revolt, will give Habibie some time to at least try to do something, or do you think that demonstrations and protests will continue? JEFFREY WINTERS: I actually expect the demonstrations and protests to continue, because I think Habibie-I expect Habibie to fail, because I know from where he comes, and someone was talking about changing stripes a moment ago. I haven't seen many instances of that in history. Right now the students are in a bit of confusion. I mean, it is no small accomplishment to have someone who just two weeks ago upon departing to Cairo said he will be in power until 2003, to have him actually step into the background as he has done. And there's a lot of celebration about that. But the people of Indonesia did not pour out into the streets to celebrate. They saw nothing to celebrate. And there are a large number of students who decided they're not going to leave the parliament building, and they scratched out the name on their banners that said, "Down with Suharto," and changed the name to "Down with Habibie." So I think there is a very serious possibility of continued unrest and continued protest. JIM LEHRER: Mr. Paal, continued unrest and protest? DOUGLAS PAAL: I think so. We'll have a short-term respite as people are disorganized and reacting to what happened, but the monumental problems that Indonesia faces require much more broad-based political solutions. People are being asked to make massive sacrifice in this society, and to do so, you have to have some sense of participation by the public in the choice of those sacrifices. And in Indonesia, they've just had a taste of power in the streets. And they're not going to yield that, I think, anytime soon. We'll be back in the streets in time. Habibie will be a transitional figure, in my view, unless, of course, miracles happen, and I don't expect that to be the case. JIM LEHRER: What about Ms. Jones' point that she takes some hope at least in this provisional cabinet, at least the names that are being circulated? DOUGLAS PAAL: I'd be astounded if he didn't have some optimistic sounding figures come into the cabinet, because he has to show something is new and something is different. But when you get back to that functioning of the system, the system is still the same-old system, as Professor Winters has said-and it's not broadly based; it doesn't have a lot of limber people who can respond to market forces. It has a president who's particularly famous for not wanting to respond to market forces. JIM LEHRER: So what-it's going to take reform from the top to the bottom of the whole system? DOUGLAS PAAL: It's going to take a long-term rolling reform of the political system of how the economy works. And in the meantime there's going to be a lot of suffering in Indonesia.
	Does President Habibie have a chance?
	JIM LEHRER: Are the people going to be patient and see that through, Mr. Harymurti? BAMBANG HARYMURTI: It very much depends on how Habibie will play his cards. One thing that I share with Sidney Jones in this case is Habibie has this unique capability to turn people who's angry with him, or hate him, into his camp. I can- JIM LEHRER: Do you know him? Do you know him? BAMBANG HARYMURTI: I know him personally. JIM LEHRER: What's he like, just personally? BAMBANG HARYMURTI: He's a person who can convince you-he's a very enthusiastic person. He can come to a room full of young students and make everybody misty-eyed because of his dream of how Indonesia can become- JIM LEHRER: Is he a good speaker? BAMBANG HARYMURTI: He's a good speaker, very, very nationalistic. He can-you know-raise the practicalisms of the people, but sometime he has a tendency to be long-winded-to make, you know, monologue. But, you know, he has been able to make people who has been basically a dissident and has been given no right-no civil rights whatever by the Suharto regime-and he came to them and turned them into normal people and also-50 for instance-and also-you know-Rais very much in the periphery, but he came to the center basically because Habibie provide the pathway. So I am-given that there is no economic problem, I'm sure Habibie has a good chance to-you know-to pull it through, but with this economic problem, it's very hard, especially with Suharto leaving, there are high hopes that things are going to change- JIM LEHRER: What about Professor Winters' point that-what did you say, Professor Winters, that his family has inroads into 80 companies just like Suharto's? JEFFREY WINTERS: His family has 80 companies. His brother, his wife, his children, his relatives, his extended relatives all hold their position. One of his brothers was the ambassador to the UK. Their entire-he is the product of the very thing he now says he's going to challenge. JIM LEHRER: Do you think he'll change that, Mr. Harymurti? BAMBANG HARYMURTI: Well, I think he will probably make it less, you know, less, visual-but I think the nepotism is not going to be as great problem as let's say in the United States because, for instance, those students of Trisakti -- six of them were shot dead. I mean, this is a university that-you know, member of the students from the jet set, from the elite, and most of them somehow become there because of nepotism. JIM LEHRER: All right. BAMBANG HARYMURTI: So it's too many dirt to share around if you want to really clean up the nepotism. JIM LEHRER: All right. BAMBANG HARYMURTI: And so it's not that black and white, I don't think so. JIM LEHRER: We have to leave it there. Thank you all four very much.