Suharto’s Time Has Passed

How soon the Asian economic crisis ends depends in no small measure on how soon confidence in its hardest hit national economies is restored. Until this week, Indonesia’s government had made almost no effort to show either its creditors or its more than 200 million people that it was serious about making the reforms needed to restore economic stability, reforms that the International Monetary Fund demanded in return for the $43-billion bailout it organized. This perverse foot dragging by President Suharto’s regime has cost Indonesians dearly.

The value of the currency, the rupiah, plunged, panic buying emptied stores, rumors that Indonesia might declare a moratorium on its $133-billion foreign debt shook financial markets. The result was a mobilization of international pressures on Jakarta to honor the commitments it made earlier to the IMF.

U.S. and IMF officials are in Indonesia, talking up the urgency of instituting sweeping reforms. Initial contacts seem to have provided some basis for optimism. But Suharto promised earlier that he would do what had to be done, and then promptly introduced a new national budget that, among other things, continued to fund redundant and uneconomical enterprises and projects. That many of these are owned by Suharto’s family did not escape notice.

Suharto, a retired general, will complete his sixth five-year term in March, and plans to seek reelection by a tame National Assembly. But the economic crisis has led to an outpouring of public criticism and drawn fresh notice to the nepotism that has made his relatives rich. Sukarno’s six children and their spouses have stakes in banks, power projects, toll roads, mineral deposits, auto manufacturing, hotels, petrochemicals--the catalog is endless.

It is clearly time for Suharto, 76 and ailing, to step down and it is time for Indonesia to get leaders who show some interest in putting the needs of the world’s fourth most populous country ahead of the greed of a ruling oligarchy. Considerable economic progress was made during Suharto’s long authoritarian rule. But the excesses of rampant cronyism and corruption helped bring on the current debacle, with all its international consequences. Indonesia has been handed a road map for economic reform. What it needs now is a new navigator.