Assembly Delivers Sweeping Authority to Suharto

President Suharto was handed sweeping emergency powers Monday that give him dictatorial authority over all national issues, from the economic crisis to social unrest.

Details of the decree adopted by the People’s Consultative Assembly were not immediately disclosed, but sources said earlier that it was likely to include the rights to dissolve the assembly, abolish political organizations, name a presidential successor and arrest people without trial.

“It empowers the president to take over all state authority if the president thinks the state is in jeopardy,” Arbi Sanit, a University of Indonesia political scientist, told the Jakarta Post.

The 76-year-old Suharto--who has ruled for 32 years and today received, as expected, the assembly’s approval for another five-year term--asked for the powers in August, well before Indonesia fell victim to a financial crisis that is threatening to bring the country’s economy to a standstill.

Although human rights officials and some academics expressed concern, Suharto supporters pointed out that similar decrees have been in force during his entire reign, except since 1993. He used them only in 1965 in a bloody campaign to rid Indonesia of Communists and dissidents.

Even without the new powers, Suharto has had over the years no less authority than an ancient Javanese king. But Western and Asian economists worry that the decree is sending the wrong signal at a time when international investors’ confidence in Indonesia has evaporated and university students are calling for more democratization. The local currency, the rupiah, and the Indonesian stock market both reacted negatively Monday to news of the emergency decree.

“The decree seems to suggest Suharto feels the need to move even farther along the authoritarian road than he has,” said Bruce Gale, a Singapore-based economic-risk consultant. “The question is why. And the answer must be that he expects more opposition.

“But I think we’re really dealing with minutiae analyzing all this. Suharto runs the country pretty much as he wants anyway. The broader question is whether he is going to implement the International Monetary Fund reforms. That is what everyone is waiting to see.”

Suharto signed a 50-point, $43 billion IMF package Jan. 15 and has repeatedly said he would abide by it. But he has also hedged. He introduced his own “IMF-Plus” plan last month, and he said Sunday that the IMF plan he had signed was not in tune with the Indonesia Constitution, which stipulates that major sectors of production must be controlled by the state.

Although Suharto’s intentions are hard to read--he smiles and nods, but in Java that doesn’t necessarily mean yes--observers believe that he is moving toward setting up a currency board that would peg the rupiah at a fixed rate to the U.S. dollar. Most economists say Indonesia does not have sufficient foreign reserves or a stable enough economy to support such a move.

The IMF and several Asian heads of state have urged Suharto to abandon the idea, at least until reforms are carried out. The IMF underscored its displeasure with Suharto on Friday by announcing that it was postponing for a least two weeks a $3-billion installment due Indonesia on March 15.

Many Indonesians--and a small but growing number of Western officials--believe the IMF has been too tough on Indonesia. They say they detect a deepening mood of public nationalism as Indonesians try to counter the perception that they are being pushed around by an organization over which the U.S., as the IMF’s largest shareholder, has virtual veto power.

“If you look at all the IMF is demanding,” a European diplomat said, “it’s like the conditions the Allies demanded after the last war. This package is a landslide victory for the Western industrialized nations.”

These skeptics contend that, although Suharto has not done everything the IMF requires, he has made progress in dismantling monopolies, cutting subsidies and curbing excesses. They criticize the IMF for withholding the $3-billion installment just as a new Cabinet is to be sworn in. The message, they say, is: We don’t trust you or have confidence in what you’re trying to do.