View From Indonesia with Keith Richburg
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TERENCE SMITH: Tonight that correspondent is Keith Richburg, Southeast Asia bureau chief for The Washington Post. He’s based in Hong Kong but has spent much of the past year covering the financial crisis that has spread from Thailand through Indonesia. Welcome. Keith, welcome home.
KEITH RICHBURG, The Washington Post: Thanks.
TERENCE SMITH: Indonesia, rioting, strikes, runaway inflation, civil unrest, is history repeating itself there?
KEITH RICHBURG: It’s starting to look fairly familiar to what happened in May, isn’t it? You know, the forces that brought down Suharto were primarily the economic forces there, people not having enough to eat, you know, people really seeing their – what they had built up over the last few decades quickly eroded by this financial crisis. And while Habibi has made a lot of concessions, if you want to call it that, on the political side, you know, opening free speech, allowing political parties to form, really creating a new openness in the government there, he has not been able to get a handle on this economic crisis, and it’s growing and growing and growing, and we could see him consumed by it much the same way Suharto was consumed by it.
TERENCE SMITH: There are reports just in the last few days of a threat of famine that could involve 17 million families?
KEITH RICHBURG: Well, that’s right. There’s a huge food problem there that’s actually quite complex. There is food growing in some areas. In fact, some areas are having a very abundant harvest now. There’s a distribution problem in moving the food around in the cities like Jakarta, where you have this massive unemployment problem. The main issue there is actually affordability. The purchasing power has just been completely eroded by this crisis. And you can see it every day, you know, just walking around on the streets of Jakarta. You know, I’m seeing more beggars on the streets than I’ve seen before. You’re seeing more street children out, people moving in from rural areas at the same time you’ve people who had moved in from the rural areas who’ve lost their jobs moving back again, so there’s an incredible movement of people going on there.
TERENCE SMITH: Where’s the break point, when does it reach a point of serious civil unrest, and even —
KEITH RICHBURG: That’s what people are waiting to see. I mean, the military has been putting out warnings now that people have to maintain calm, or the place could spin out of control. Where the break point is we don’t know. I mean, it’s getting dangerously close to that now, and it’s going to get worse. It’s going to get worse before it gets better. We still haven’t seen the mass wave of layoffs, the mass wave of factory closings that we all know are inevitable. At this point people had been generally keeping factories open, keeping stores open, not laying people off, and they can’t afford to muddle along now. They’re going to have to make these tough choices. A lot more people will lose jobs. They’ve got a lot of people in the city. It’s a congested, crowded capital. They’ve already could have tasted this, and the other thing to keep in mind, it was the students who were at the forefront of this movement that brought down Suharto. They went home for the summer. They’re back now, so they’ve got the students back out again, and, you know, this political calendar that Habibi laid out for new elections, takes you well into next year. He may not have that long.
TERENCE SMITH: And the military, are they in the barracks?
KEITH RICHBURG: They’ve always been out of the barracks and in politics in Indonesia, and that will be the case for a long time. They’ve got a big problem now with credibility. As this political process has opened, we’ve seen revelations coming out of atrocities committed in East Timor, atrocities committed in Irian Jaya, atrocities committed in Aceh, horrible atrocities, mass graves being uncovered, and within Jakarta, itself, in those last months of Suharto’s regime. We’ve got stories now of military units possibly being involved in the rioting of May, those really destructive riots. We’ve had these horrific mass gang rapes of Chinese women and girls as young as eight years old, and military units being implicated in that. They’ve got a credibility problem, but at the same time they need to be able to maintain order because a place like Indonesia, a vast archipelago like that and so many geographic entities – islands, ethnic groups could very easily spin apart. They’re in a tough situation; they cannot crack down now because they’ve lost their credibility. General Berranto was trying to restore it.
TERENCE SMITH: In fact, what’s the situation of the overseas Chinese – they – they represent a significant presence there, certainly in the mercantile, the merchant world, and many fled last April and May.
KEITH RICHBURG: That’s right. A lot of them were in Hong Kong; a lot are in Singapore; a lot went to Perth. Some have gone back tentatively. Some have moved their families out, and the head of the family will go back, check on the business, but they’re cautious, and they’re very scared. They get worried by what I call this ambivalent attitude coming out of Indonesia. When I interviewed President Habibi a couple of months ago, he was very ambivalent about the Chinese coming back. He said, yes, yes, we want them to come back; they’re Indonesians. But, on the other hand, if they don’t come back, we will survive; others will take their place. There’s a feeling that this tiny minority — only 3 percent of the population — maybe they’ve got too much of the economic pie, controlling three-quarters of it, and maybe this is an opportunity for the indigenous Indonesians, as they’re called, the Buli Putra, to take over some of these distribution networks run by the Chinese. That could be a dangerous path if they’re trying to follow that at the same time they’re trying to revive the economy, which relies on this ethnic Chinese capital.
TERENCE SMITH: When you talk to Indonesians, when you’re there, is there a resentment these days of the United States and the IMF, which are trying to impose controls on Indonesia?
KEITH RICHBURG: There is more resentment of the IMF. The program isn’t working, and there are some questions about why are we following this program that’s not working, that’s causing more pain and suffering? I don’t think there’s much resentment at this point that I hear directed towards the United States per se. There is a lot directed towards the IMF as an institution. There’s a question about, you know, this whole — the whole philosophy of the program. Are we bailing out international banks that lent money to Indonesia? I mean, why are we doing that, whereas the average Indonesian and the individual is in debt.
TERENCE SMITH: All right.
KEITH RICHBURG: And he’s saying why not have debt relief for the individual, why not debt relief for the poor farmer, so you’re starting to see a little bit of that. You’re going to, I think, see a nationalist backlash because what’s going to happen, the only way out of this is going to be for foreign companies to come in and start buying banks and buying land, buying some of these factories that are going bankrupt. And Indonesians will wake up one morning and find out that foreigners own a huge chunk of their economy.
TERENCE SMITH: What’s it like to be there for a foreigner? It’s a great bargain.
KEITH RICHBURG: It’s a great bargain.
TERENCE SMITH: Because of the inflation.
KEITH RICHBURG: Because of inflation.
TERENCE SMITH: What’s the atmosphere?
KEITH RICHBURG: The atmosphere is it’s depressing, among other things, because, as I said, you see a lot more beggars on the streets, more poor people. It was a place that had really boomed for a long period of time, so you still can come in and see the infrastructure of the go-go years still there. There is the Hard Rock cafes and the discotheques and the McDonald’s outlets. But then you walk inside and you see that most of them are empty now. You see that the skyscrapers have been constructed, and the cranes are sitting on top of them, because the buildings are incomplete. A lot of incomplete construction – you find – a friend of mine has moved into an apartment building there, a brand new – newly completed building, and he’s one of about three or four people in this 27-story building. The rest of it is just completely vacant because nobody could afford the rents.
TERENCE SMITH: Wow.
KEITH RICHBURG: I mean, it’s so – and also on the streets, you do also get this slightly dangerous feel. There are more people out who don’t have money. There are more beggars pressing their hands against the glass. It hasn’t gotten to the stage of what I have seen in some African countries or even in India yet. It’s heading very quickly in that direction. They’re talking about half the people going below the poverty line by the next year.
TERENCE SMITH: You live, when you’re able to get home, in Hong Kong.
KEITH RICHBURG: That’s right. Sometimes I get there.
TERENCE SMITH: Tell us what that’s like — 15 months now after the takeover.
KEITH RICHBURG: You know, the most surprising thing is what hasn’t changed there. It feels – looks – the smells and sights and sounds are very much the way it was before and without this sort of sense of foreboding, I mean, nobody knew what was going to happen when the Chinese took over and the British left, it’s happened now. They’re over the transition. There was almost a collective sigh of relief about the place as they looked around; they saw the flags changed – not much else did change. The one thing is Hong Kong has been caught up in the same regional economic crisis. What was completely unexpected – we were all expecting the Hong Kong residents – foreign correspondents there – we were all expecting a challenge on the political front, some attempt to lock up political leaders of the democratic party or some attempt to censor newspapers. It hasn’t happened. What we didn’t anticipate was this slowdown in the economy. You’ve got layoffs; unemployment is about four percent now, probably going to reach five percent. You’ve got companies, department stores closing down, the tourism industry has basically collapsed. You’re starting to see real suffering in a place that almost had full employment before, and it never really knew these problems. So it’s brand new for Hong Kong, and you’re starting to see real questioning of the government’s ability to handle this. Are they up to the task in this new all-Chinese government for the first time, actually handle a recession, which is what they’re going through right at the moment?
TERENCE SMITH: So it sounds as if perhaps we ought to stay tuned there too.
KEITH RICHBURG: It’s going to be a very interesting thing to see. It’s going to be very interesting now also because you do have left over by the British a new kind of democratic politics. The financial secretary there now is being called into the legislature to answer for things that they’re doing, to answer for mistakes being made, to answer for bad economic forecasts. There’s a lot of give and take going on now there, which is new, it’s brand new for China, and it’s happening on Chinese soil, which is interesting.
TERENCE SMITH: Thanks very much.
KEITH RICHBURG: Thanks for having me.