Niksch, Larry A.

This report discusses the worsening political tensions in Indonesia that emerged as a result of discontent with policies enacted by President Suharto and his government, and the effects that these tensions have on US policy. The report cites the shooting of students by riot police, as well as rioting in Jakarta in May 1998 as another factor for the political unrest and uncertainty

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Congressional Research Service  ̃The Library of CongressCRS Report for CongressReceived through the CRS Web98-468 FUpdated May 18, 1998Indonesia: May 1998 Political Crisis andImplications for U.S. PolicyLarry NikschSpecialist in Asian AffairsForeign Affairs and National Defense DivisionSummaryAfter years of mounting political tensions and amidst acute  economic difficulties,the shooting of students by Indonesian riot police and massive rioting in Jakarta,Indonesia’s capital, in May 1998 has moved the crisis into a more uncertain period.  Thepolitical crisis centers on demands from anti-government activists, supported by largenumbers of university students, for political changes including President Suharto’sresignation, a clarification of presidential succession, an end to corruption and economicprivileges, open elections, and independence of parliament and political parties fromgovernment control.  Another key issue is the influential  role of the military inIndonesia’s politics and government.  Several scenarios or outcomes are possible in thenear term: a Burma-style military crackdown on anti-government elements, the initiationof limited political reforms by Suharto,  action by the military to oust Suharto or reducehis powers, and a “peoples power” revolution.  The new situation affects U.S. policy bybringing the issue of  political reform into the center of U.S. decision-making andmaking  the ability of the United States to influence the Indonesian military as the keydeterminant of U.S. influence.  This report was written before President Suharto’sresignation and will not be updated.BackgroundThe shooting of students by Indonesian riot police and massive rioting in Jakarta onMay 13-14, 1998, has moved Indonesia’s economic and political crises into a new stage,more uncertain and volatile.   Political discontent with the government of PresidentSuharto emerged in the early 1990s.  After a period of relaxed controls on civil libertiesin 1993, the government imposed new restrictions on the press and other institutions inmid-1994. Sporadic, localized outbreaks of violence began in mid-1995.  In July 1996,a riot broke out in Jakarta as a result of the Indonesian government-instigated ouster ofMegawati Sukarnoputri from her position as head of the Indonesian Democratic Party.The Democratic Party (PDI) is one of two “opposition parties” the government hasallowed since the early 1970s.  The government has closely regulated and restricted theseCRS-2Shiner, Cindy.  Indonesia’s Leader Stands Tough.  Washington Post, May 2, 1998. P.A1.1Landler, Mark.  Indonesian  Riot Police Open Fire at Protests,  Killing Six Students.  New2York Times, May 13, 1998. P.A1.Richburg, Keith.  Military’s Role Seen as Key to Indonesia’s Fate.  Washington Post, May310, 1998. P.A19.Emmerson, Donald K.  Indonesia: Will Suharto Survive?  PacNet, May 8, 1998.4two parties, and it feared Megawati’s aim of converting the PDI into an independentpolitical party.  Acts of violence rose again prior to parliamentary elections in May 1997.The elections were held under severe government-imposed restrictions on campaigning.Political turmoil declined after the elections but grew again in 1998 in response tothe collapse of Indonesia’s currency, the rupiah, the inability of Indonesian companies toservice over $60 billion in private sector debt, and rising inflation and unemployment.University students took the lead in organizing protests that increasingly called forPresident Suharto’s resignation.  President Suharto responded in early May 1998 thatthere would be no political reforms until the end of his presidential term in 2003.1Tensions mounted in early May when the government began to lift subsidies fromfuel and electricity, as mandated by the government’s agreement with the InternationalMonetary Fund (IMF) for a package of IMF-facilitated aid of $43 billion.  A riot tookplace in the city of Medan on the island of Sumatra the first week of May.  On May 13,Indonesian riot police (a branch of the armed forces) fired on students from TrisaktiUniversity, who had moved a protest from the campus to the streets.   In reaction, a2massive riot broke out in  Jakarta.Until the Trisakti incident, the Indonesian military had allowed students to proteston campus and had not used lethal force against off-campus protests.  In early May,President Suharto and General Wiranto, the Defense Minister and armed forcescommander, had warned of tougher measures against protesters.  The military also hadbeen accused of a series of disappearances of anti-government activists since January1998.  General Wiranto denied that the military command was involved in thedisappearances, and he stated that the military was prepared to discuss political reforms.3The Contentious Political IssuesSuharto’s status: President  Suharto has been in power since 1967.  Student leadersand other anti-government activists have placed Suharto’s resignation at the top of theirdemands.Presidential succession: Suharto, who is 77, never has named a successor.  He wasre-elected President in March 1998 for a five-year term.  This has raised political andeconomic uncertainties as reports of health problems surface periodically.  Speculationhas grown that he seeks a dynastic succession, possibly through his daughter, SitiHardijanti (known as Tutut), who is expected to assume the top position of Golkar, theruling, pro-government political party, in October 1998.   Under the constitution, Vice4President B.J. Habibie would succeed Suharto if Suharto left office before his term ended.Habibie has been a close confidant of Suharto.  Some analysts interpreted his selectionCRS-3Richburg, Keith B.  Jakarta Protesters Angry, Organized.  Washington Post, May 8, 1998.5P. A33.Thoenes, Sander.  Taking Aim at Asia’s ‘Crony Capitalism,’ Christian Science Monitor,6January 21, 1998. P.1.Cronin, Patrick and Ott, Marvin.  The Indonesian Armed Forces (ABRI).  Strategic Forum,7Number 26, August 1997; Mydans, Seth.  To Some Indonesians, Army is Rock of Nation, NewYork Times, February 16, 1998. P.A3.as Vice President as a tactic by Suharto to sideline Habibie as a potential rallying pointfor anti-Suharto elements.  His relations with the military have not been close, but themilitary did accept his elevation to the Vice Presidency in March 1998.  He wascontroversial as Minister of Research and Technology where he initiated programs andadvocated policies that appeared contrary to the economic policies advocated forIndonesia by the IMF and the World Bank.  Habibie’s views on political reform areuncertain.  An organization he chairs, the Association of Indonesian Muslim Intellectuals,issued a statement on May 5, 1988, criticizing the government’s position on politicalreforms as “vague, too little and too late.”5“Crony capitalism”: Speculation of a dynastic succession is controversial partlybecause of the extensive economic monopolies that President Suharto has granted to Tututand his other children and to close friends.   Anti-government critics have called for an6end to “crony capitalism.”  The IMF also has called for a dismantling of several of themonopolies as part of its financial assistance program.The role of  the parliament: The 500 member House of Representatives has beenviewed generally as obedient to President Suharto.  Suharto appoints 75 members fromthe military, and he plays a role in selecting most of the others.   Any discussion or debateover political reforms will focus on the relationship of the parliament to the executive.Elections and political parties: A key element of the Suharto political system hasbeen to restrict the number of political parties to three (including Golkar) and control theother two political parties, including restricting their campaigning during parliamentaryelections.  President Suharto’s successive re-elections in the 1970, 1980s, and 1990s havebeen insured by his control over the Peoples Consultative Assembly, which elects thePresident every five years.  The Peoples Consultative Assembly has 1,000 members,composed of the 500-member House of Representatives and 500 chosen by thegovernment.  The importance of this issue was demonstrated by the struggle between thegovernment and Megawati Sukarnoputri over control of the PDI in 1995 and 1996.Role of the military: Since Indonesia gained independence from the Netherlandsin 1949, the armed forces has acted in accordance with a doctrine known as the dualfunction.  Under the dual function, the military has both a defense role and a political-governmental role.  Besides enforcing internal security, the military is integrated into thecivil administration of the country, occupies 75 seats in the House of Representatives(formerly 100), and participates in  the top levels of Golkar.   Military officers have said7that the military expects to choose Suharto’s successor. CRS-4Near Term ScenariosThe government and the military will “do a Burma,” fire on protesters, declaremartial law, and institute mass arrests to suppress dissent.  Despite the TrisaktiUniversity incident, the military leadership appears to want to avoid such action.  Suhartowould have to have united military support for a Burma option.  There is speculation thatthe military is divided between factions loyal to  General Wiranto and General PrabowoSubianto, Suharto’s son-in law, whom Suharto recently appointed to command the well-equipped 27,000 Army Strategic Reserve or Kostrad.   Exercising a Burma option likelywould suppress the protests but would isolate Indonesia internationally and likely wouldresult in a termination of the IMF program.  However, Suharto and the military couldemploy it as a last resort if they fear losing their powers in the wake of mounting disordersand public opposition.  A first step could be the sustained employment of lethal forceagainst violent rioters, if the government concluded that public fears of rioting wouldbring about public approval of strong military measures. Suharto initiates a process of limited political reform or leads a dialogue onreform.  Suharto’s  apparent opposition to political reform leads to a conclusion that hewould have to be persuaded by the military, his children, close friends, or a combinationof all three groups.  Such a Suharto initiative could include a clarification of his view ofsuccession and disavowal of any design for a dynastic succession.  It also could includea plan for consideration of future electoral reforms.  Such a Suharto initiative  likelywould lower political tensions if his opponents perceived him to be sincere and would bemost conducive to economic stabilization and future recovery.  Those opponents whocontinued to demand his resignation would lose public support at least in the short term.The military ousts Suharto or reduces him to a figurehead.  A figurehead rolewould be similar to the situation of 1965-1967 when the military disarmed PresidentSukarno of his powers but kept him in office.  Such action by the military would satisfythe leading demands of the anti-Suharto forces.  The military might institute limitedpolitical reforms, such as clarifying presidential succession, reducing the economicprivileges of Suharto’s children and friends, and enlarging the role of parliament.However, the military probably would not allow a broad democratization, which wouldthreaten its political and governmental roles.  Whoever would lead a military moveagainst Suharto might seek the presidency for himself.  The longer term outcome of thescenario would depend on whether the military and the anti-Suharto forces could reachan accommodation on the scope of political reforms.A “peoples power revolution”. Like the Philippines in 1986and Thailand in 1992,urban middle and working classes would take to the streets in the thousands, paralyze theoperations of the government and the economy, force Suharto to step down, and bringabout a fundamental political re-structuring toward democracy.  The emergence of apeoples power revolution would require a greater unity among anti-Suharto groups thanpresently exists so that protests could be directed rather than descend into violence andrioting.  It also would require the support of the military or key elements of the military,as was the case in Manila in February 1986.  If a peoples power revolution brought downSuharto, political restructuring would take several years with many uncertainties alongthe way, as the Aquino presidency demonstrated in the Philippines after Marcos’ fall.Potential civilian leaders are inexperienced in running a government, and there areCRS-5Cohen, Margot.  Divided They Stand.  Far Eastern Economic Review, March 12, 1998.8P. 22-24.Mann, Jim.  U.S. Backs Suharto Despite Calls for Reform. Los Angeles Times, March 1,91998. P. A1; Sanger, David E. and Kristof, Nicholas D.  U.S. Set to Back $1 Billion Outlay toAid Indonesia.  New York Times, May 1, 1998. P. A1; Blustein, Paul.  U.S. Urges Suharto toShow Restraint.  Washington Post, May 2, 1998. P.A15.potential rivalries among them.   Their relations with the military could be a potential8obstacle to political stability and restructuring.  Economic recovery likely would be a slowprocess as investors and bankers would act cautiously until the political outlook clarified.President Suharto will feel pressure in the coming days to decide between a Burma-style crackdown or the initiation of limited political reforms.  If he does not make adecision and elects to try to muddle through the present crisis, the prospects of a militarymove against him or a popular revolution likely will grow.Implications for U.S. PolicyThe turn of events in May 1998 has several implications for U.S. policy.  Until theincident, the Clinton Administration followed a policy of supporting President Suhartopolitically, endorsing the IMF’s pressure on Suharto for economic reforms,  urging theIndonesian military to show restraint in dealing with protests, and criticizing thedisappearances of anti-government activists.    The new situation will force the9Administration to decide whether and to what extent the issue of political reform becomespart of the U.S. policy agenda.  It will raise the tactical question of whether PresidentClinton will address President Suharto on political reform as he has on economic reform.Making political reform a visible element of the U.S. policy agenda could create pressureson the Administration to distance itself from Suharto if he does not take the initiative inthis direction.The Administration also will have to decide how to react if the Indonesiangovernment cracks down on its opponents Burma-style.  The Administration would haveto decide whether to impose sanctions on Indonesia as the United States did to themilitary regime in Burma after the September 1988 massacre of pro-democracydemonstrators, thus aborting the IMF program.  The dilemma for U.S. policymakers isthat economic sanctions and termination of IMF assistance likely would aggravate internalinstability in Indonesia and the possibility of greater violence.  The alternative responsewould be de facto accommodation to a crackdown similar to the Administration’saccommodation to the Chinese government, which would be criticized in Congress, theU.S. media, and by elements of the American public.The ability of the United States to influence the Indonesian military probably will bethe key determinant of the American ability to influence future political developments.The military would play the crucial role in all of the above scenarios.  Projecting U.S.influence  may require the utilization of U.S. military officials as de facto diplomats, sincethe U.S. military, especially the Navy, has had more extensive contacts with theIndonesian armed forces leadership than have U.S. civilian officials.  Moreover, in anyof the above scenarios, the U.S. military could be expected to continue to act in accordwith the vital national security interest in securing the cooperation of the IndonesianCRS-6military in allowing the passage of American warships through Indonesian watersconnecting the Pacific and Indian Oceans to deal with military crises in either the PersianGulf or the Western Pacific.

Indonesia: May 1998 Political Crisis and Implications for U.S. Policy

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Indonesia: May 1998 Political Crisis and Implications for U.S. Policy

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