Indonesia Vows ’99 Election, Will Take Over Key Bank

In moves designed to bolster public confidence, Indonesia’s new government announced Thursday that it will hold a general election in 1999 and will take over the troubled Bank Central Asia, the country’s largest private bank.

President B. J. Habibie and leaders of parliament said they are committed to scheduling the election shortly after reforming the nation’s electoral laws. They said the new laws should be ready by mid-1999.

Reaction to the news was mixed. At a rally Thursday, unhappy students called on Habibie to resign and urged parliament to call a special session to elect a president and vice president without close connections to the previous government. Habibie is a confidant of former President Suharto, who was forced out of office last week after 32 years in power.

Amien Rais, head of the 28-million-member Muslim group Muhammadiyah, said the government must set a firm date for a general election, to be held within a year, to put an end to the political uncertainty.

Faith in Indonesia’s economy is in short supply. Sjahril Sabirin, the governor of Indonesia’s central bank, said Thursday that the government had pumped 8 trillion rupiah (about $760 million), or twice the capital of Bank Central Asia, into the ailing institution in recent days in order to cover huge withdrawals by panicked citizens.

But the capital infusion was not enough to reassure bank customers spooked by the violent riots that preceded Suharto’s fall from grace. Bank Central Asia was closed Thursday, but the central bank governor reassured customers that their deposits were safe and that the bank would be reopened under the supervision of the Indonesian Bank Restructuring Agency.

The bank, which is co-owned by Liem Sioe Liong, a wealthy ethnic Chinese businessman, and two of Suharto’s children, was a target of angry mobs that destroyed several hundred bank branches and automated teller machines and burned down Liem’s Jakarta home during the recent riots.

Habibie is fighting a desperate battle to manage a chaotic political transition while keeping his nation from slipping into insolvency. His supporters and critics are united on one thing: Political stability is key to keeping the economy from imploding.

Hubert Neiss, chief Asia representative of the International Monetary Fund, continued his review Thursday of the new regime’s economic damage-control program, including its ability to fulfill its most recent IMF agreement. After Indonesia’s currency and stock markets went into a free fall last summer, the IMF agreed to provide a $43-billion support package in exchange for extensive economic reforms.

In an indication of the political uncertainty that continues to haunt Suharto’s successor, Neiss met not only with Habibie but also with some of his chief opponents, including Muslim leader Rais and Megawati Sukarnoputri, the daughter of Indonesia’s founder, Sukarno.

The IMF is trying to determine whether it can restart its aid program, which was put on hold after the riots broke out. Neiss is scheduled to deliver his report Monday to the IMF executive board.