Clinton Welcomes Decision by Suharto, Calls for Reform

President Clinton on Thursday welcomed the departure of Indonesia’s President Suharto and pledged U.S. diplomatic and economic help, provided that the new government moves quickly to broaden its base and open up the nation’s long-closed political system.

While calling for democratic reforms in Indonesia, Clinton and his top aides seemed to treat Suharto’s successor, B. J. Habibie, as almost irrelevant. Clinton did not even mention Habibie in his brief statement, which described Suharto’s decision to step down as “wise.”

The president pledged that “the United States stands ready to work, as we have with other nations in the past, to support Indonesia’s leaders and people as they pursue democratic reform.”

State Department spokesman James P. Rubin said the Clinton administration would not try to prescribe Indonesia’s political future, but he noted that it should be judged on the basis of “inclusiveness, dialogue, and restraint by the military.” While Rubin did not say so, critics of the former Indonesian leader say those principles were almost totally lacking during Suharto’s 32 years in power.

Although the U.S. government maintained generally cordial relations with Indonesia during Suharto’s tenure, officials conceded that Washington’s influence is limited. The administration tried to avoid overplaying its hand by offering little specific advice to the new government. But officials repeated the word “democratic” in expressing their hopes for Indonesia’s development.

“Our objectives are financial stability, economic growth, political reform and human rights,” Rubin said. At the same time, he said the administration would wait at least until Habibie picks his Cabinet before announcing specific U.S. responses.

“Prior to the naming of a Cabinet, and we’ve signaled what we want to see from that Cabinet, it’s hard to make an advance judgment about what the right decision will be on any particular assistance program,” Rubin said.

Administration and International Monetary Fund officials said they would wait to see what sort of economic program the Habibie government adopts before deciding whether to proceed with the $43-billion rescue package assembled by the IMF last fall. So far, Indonesia has received $4 billion from the rescue package. IMF officials have said an additional $1-billion installment scheduled for early June has been delayed because of the political turmoil.

Still, U.S. and IMF officials welcomed Habibie’s pledge to carry out the economic reforms that Suharto had promised and then suspended.

Treasury Secretary Robert E. Rubin told reporters after a congressional hearing that officials want to see who Indonesia’s top economic officials will be, then closely examine the policy proposals they put forward.

Federal Reserve Board Chairman Alan Greenspan was similarly noncommittal. “We have to wait and see what policies emerge on political and economic” areas, he told lawmakers during a hearing of the House Agriculture Committee.

Both U.S. and IMF officials had privately expressed hope that Ginandjar Kartasasmita, who served as Indonesia’s point man on economic reform talks during the Suharto regime, would be returned to that post in the Habibie administration--and today he was.

Habibie said during his first speech as president that he will “continue all the commitments which have been agreed with the international parties--especially by carrying out all the economic reform programs that have been agreed with the IMF.”

Earlier, Greenspan warned the congressional panel that even though the first phase of the Asian financial crisis appears to have passed, the danger has not ended and that there remains “a small but not negligible probability” that the turmoil could spread and hurt the U.S. economy.

Although Suharto agreed to step down from the presidency, he and his family continue to wield substantial economic power in Indonesia. Suharto, who was raised in poverty, became one of the world’s richest people during his three decades in power.

But administration officials carefully avoided talking about the corruption that marked Suharto’s tenure. Instead, they praised the former president in a way calculated to preserve his dignity and make it easier for Suharto’s supporters to turn in a democratic direction.

“Indonesia is a very great nation: populous, wide ranging, diverse, with remarkable accomplishments to its credit in the last few decades,” Clinton said. “It has a great future.”

Still, the State Department did not lift a warning to Americans to stay out of Indonesia, at least until the political upheaval plays itself out. “The situation is generally calm; we have no reports of violence against Americans,” State Department spokesman Rubin said. “But for the moment, we do not plan to change our present posture, which urges Americans not to go there.”