A paper by Buni Yani

It is still a question in today’s Indonesian contemporary history whether the rise of then-Lieutenant General Soeharto to power in 1966 was a matter of “historical accident” where Soeharto was created by the stage of history, or whether he created the stage himself. But by the collapse of the regime in 1998 following nationwide protests by students and people which had catapulted the black spot on the New Order helm, increasing numbers of people tried to “straighten”² and “clarify” the history. Some of them indicated the involvement of Soeharto in the 1965 abortive coup which led to the end of the power of President Soekarno, the first president.

Soeharto got sweeping support from almost all parties including students and intellectuals, as well as armies that were under his command. The new regime then fixed the bankrupt country left by its predecessor, Old Order President Soekarno (Crouch 1984:75; Robison 1997:32-3), by assuring people that the economy should be the priority in his new administration. In a relatively short time Soeharto’s New Order regime was able to stabilize the economy (Mackie 1993:76), making his potential adversaries unable to topple him. This economic success was the prime justification and legitimacy for the regime until its collapse in 1998.

It seems the dictum “l’histoire se repete”³ applied when the regime’s collapse was also caused by the economic crisis following the country’s currency collapse. The economic crisis caused sweeping hardships, especially in the countryside where people’s purchasing power fell nearly to zero.

This paper will discuss the rise and fall of Soeharto’s New Order regime, 1966-1998, which was caused by economic factors. By hypothesizing that the economy was the dominant cause of the regime’s rise as well as its fall, this paper will examine evidence that supports the argument. Sources in the form of books and media reports are in Bahasa Indonesia and English. The following sections will begin with the rise of Soeharto to power.

Genesis of the New Order Regime: When Economic Growth and Development Become Ideology

Probably the most important question concerning the rise of the New Order to power, is, if there were no bloody Communist coup on September 30, 1965, would the regime exist? Both foreign and Indonesian historians put the problem of the coup attempt as a crucial element in assessing the existence of the New Order in Indonesian modern history. It appears that the coup that threw the country into chaos was a justification for the then-Lieutenant General Soeharto to “save” the country. Saving the country was a sublime deed, and this was the oath and commitment of the armed forces.

According to history written by the New Order regime, on the night of September 30, 1965, seven army generals were killed by the Indonesian Communist Party or PKI (Partai Komunis Indonesia). The intent was to paralyze the capital city of Jakarta in an attempt to rule the country. This New Order version of history was taught in schools and touted through books, the press and films; campaign mounted to brainwash people so they would accept the regime’s legitimacy. Any dissidents who tried to question or reinterpret the history were regarded as “subversive” or “Communist.” But recently, mainly after the fall of the regime, this version of the country’s history has been questioned.

The coup attempt interpretation is still contested (this account can also be found in the work of McDonald 1980:43). Soeharto’s New Order made the PKI the scapegoat which led to the massacre of around 500,000 people identified as members of the Communist Party and affiliated with it. The rumor of the so-called Dewan Jenderal (Council of Generals) who conspired to commit the coup was part of Soeharto’s campaign to discredit the PKI. This theory says that the Dewan Jenderal conspired to rule the country by, first, killing the seven prominent generals. If this theory is true, then Dewan Jenderal is an indication of an internal problem within the army. However, this account is doubted by several researchers.

A contradictory opinion says that assessing the bloody coup attempt while ignoring the role of Soeharto is almost impossible. In an interview in Arnold Brackman’s The Communist Collapse in Indonesia, Soeharto claimed that on the night of September 30, he was treating his three-year-old son who fell sick. Soeharto said,

Two days before September 30, our three-year-old son had an accident at home. He poured hot soup on himself and we had to rush him to the hospital. Many friends visited my son there and on the night of September 30 I was there, too (May 1978:117).

W.F. Wertheim, a noted expert on Indonesia, doubted Soeharto’s claim, arguing that a military officer who was as important as Soeharto knew nothing about the coup. Lieutenant General Soeharto was the commander of the Indonesian elite force Kostrad, or the Army Reserve Strategic Command. Wertheim says,

How curious, that a man, who was one of the main plotters in the coup, and whose attention should have been fully occupied by the preparations for what was to happen that night, found time to go out of his way to enquire after the health of a little child! Suharto’s⁴ explanation that Latief probably wanted to know whether he, Suharto, the famous fighting general who had led, on the first of March, 1949, the raid on Jogja, then in Dutch hands, was so much preoccupied with the illness of his child that he could be counted upon not to interfere is too ludicrous to be taken seriously.

What matters is that the plotters, far from finding Suharto unimportant, on the contrary deemed him so important that they wanted to make sure where he stood, just before their action would start (May 1978:117-8).

A softer tone of suspicion against Soeharto’s involvement in the Communist coup attempt may be found in Schwarz’s work (2000). According to a polite Javanese-style conversation between President Soekarno and Soeharto, Soeharto himself seized power from Soekarno after the President failed to return conditions to normalcy. Amidst chaotic conditions with students flocking to the streets for demonstrations, Soeharto met President Soekarno.

… A dispirited Sukarno, President for Life, Supreme Commander, Mouthpiece of the Indonesian People, and Great Leader of the Revolution, asked plaintively: “Soeharto, what are you going to do with me? I am your leader.”

“I have always respected you as I have my parents,” Soeharto replied. “To me you are not only our national leader, but I consider you as a parent. I’d like to regard you highly but, unfortunately, you do not wish this.” It was, though clouded with typical Javanese indirection, a readily understood message that Sukarno’s days were numbered. “I was sure,” Soeharto said in a later recounting of the story, “that Sukarno knew what I meant.”

He was right. Sukarno, finally beginning to decipher the writing on the wall, asked one more time, just to be sure: “Is this true, Soeharto?”

“Yes, it’s true,” Soeharto replied (Schwarz 2000:2).

An account of the coup is contained in the so-called Cornell Paper. This interpretation held by several Indonesianists from Cornell University argued that the coup attempt was an “internal affair of the army” (Mody 1987:15). Quoting the paper, Mody said,

The coup of 1 October 1965⁵ was neither the work of PKI nor Soekarno himself… though both were deeply involved. They were more victims than the initiators of events (Ibid 1987:15).

The debate over the rise of Soeharto’s New Order — whether it was legally accepted because of the nation’s chaotic condition or because of the “hidden coup” – became obsolete when the regime was able to fix the country’s economy. Starvation, the most frightening disaster in the third world, failed to materialize as the logical consequence of the “successful” economic development. Accompanied by the oil boom of 1973-4, the “efficient” use of foreign loans had jacked the economic growth up to seven percent (Mackie 1993:76).

The new government was busy arranging plans for development not long after it came to power. As Soeharto’s New Order was a military regime with no expertise in economics and development — it is even said that it was doubtful whether Soeharto knew what IMF was (Bresnan 1993:74)⁶ – he asked for help from several economists at the University of Indonesia. With the involvement of the academics in the development process, this period marked the rise of what was known as “technocrats,” an elite group of scholars who had expertise in economics. This group was later known as the Berkeley Mafia – referring to their alma mater in Berkeley, University of California’s School of Economics. They included Soemitro Djojohadikoesoemo, Muhammad Sadli, Emil Salim, Subroto and Widjojo Nitisastro, all of whom were professors at the University of Indonesia’s School of Economics. The “Washington factor” was suspected of playing a role behind this economic team.

This inspired the American New Leftist, David Ransom, writing in Ramparts, to brand the team as the Berkeley Mafia and to link them with a Washington conspiracy to infiltrate Indonesia both economically and politically. There is no doubt that Washington was delighted at the appointment of the team and did all in its power to ensure that the Indonesian economy was run in a way that it approved; but no evidence has been produced to justify the pejorative term, Mafia, which unfortunately has found its way into at least one learned work (May 1978:338).

This “Washington conspiracy” is widely believed, given that a strong economic advisory team was sent by the U.S. government, including the Harvard Development Advisory Service.

The first step of Soeharto’s new administration was to lower inflation in a bid to stabilize prices. Skyrocketing prices had instigated students demonstrations in Jakarta that also contributed significantly to the fall of President Soekarno. The inflation rate doubled from 1961 to 1964, increased sevenfold in 1965, and continued at the same rate in the early part of 1966 (Bresnan 1993:56). As Bresnan puts it,

One of the causes of the inflation was the persistent and growing deficit in the government budget. The deficit was related, in part, to impact of important political events. The deficit jumped in 1958, reflecting the “outer island” rebellion; again in 1961, reflecting the West Irian campaign⁷; and again in 1964, reflecting “confrontation.”⁸ On each of these occasions, the increase in the deficit was greater than it had been the time before (Bresnan 1993:56).

Only at the end of 1998 did the government succeed in controlling inflation, and over the subsequent three years it has never been greater than 10 percent (Bresnan 1993:71).

The country’s foreign debt as of December 31, 1965, during President Soekarno’s tenure, totaled $2.3 billion (Bresnan 1993:67). Poor economic performance accompanied by spiraling internal political affairs tainted Soekarno’s image in the eyes of the people at large. At that time Soekarno ignored economic development. Instead, he pushed for his leadership recognition among Third World countries. For Soekarno, politics was everything (politik sebagai panglima). In some cases, though it seemed that he developed the economy, that was not the final goal, as any measures he made were aimed at building his political image among the Third World countries. Thus, several lighthouse projects were set up although they had no direct effect for improving people’s economic condition. One of these projects was the Bandung Asia Africa Conference in 1955 which would later become the embryo of Non-Aligned Movement and South-South cooperation.

Soeharto’s technocrats totally reformed the country’s economy to a laissez-faire economy. Formerly closely linked with the socialist system since President Soekarno was a Communist sympathizer and allowed the Communist Party to exist in Indonesia, it now became a capitalist system. From being a state-controlled economy, it now became a market-driven economy. This economic decontrolling materialized in a number of policies contained in the October 3, 1966 decrees.

The state eliminated the existing system of multiple exchange rates and import-export licensing controls from a large portion of the country’s international trade. The central bank announced it would sell foreign exchange at a rate to be fixed from week to week. On the same day, import licensing restrictions were greatly liberalized. In practice, importers were free to import what they wished, with the exception of certain key commodities. At the same time export procedures were simplified, and most central and regional government authorities were expressly precluded from interfering in the export trade. The effect of these actions was to remove numerous distortions from the domestic price structure and to eliminate a major source of bureaucratic and political corruption (Bresnan 1993:64-5).

This economic reform brought about significant results for several countries as well as international financial institutions supported the step. These economic policies were first outlined at a conference of representatives of the Indonesian government in Tokyo on September 19, 1966. Seven creditor countries were represented – the United States, Japan, Britain, France, West Germany, Italy, and the Netherlands. The International Monetary Fund (IMF) and Australia also were represented, while Canada, New Zealand and Switzerland sent observers. Ironically, the largest single creditor, the Soviet Union, was not invited (Bresnan 1993:63).

Part of the statement presented before the creditor countries read,

For some months now a reshaping of our political structure has taken place. A new order has emerged with a pragmatic rather than doctrinaire approach in solving our nation’s problems.

Specifically, the (Consultative Assembly) ordered the Indonesian Government to formulate and to carry out an economic stabilization programme to be preceded by an immediate rescue programme. In this respect the control of inflation receives first priority, while the rehabilitation programme is primarily concerned with the following sectors: food, infrastructure, exports and clothing.

The creation of the right social and monetary condition being uppermost in our mind, the Government has planned to introduce to this end measures which in broad outline are as follows:

1. by rendering a more proper role to market forces, create a wider and equal opportunity for participation in the development of our economy by all creative efforts, state and private, domestic and foreign alike;
2. the achievement of a balanced State Budget;
3. pursuance of a rigid yet well-directed credit policy of the banking system;
4. establishment of a proper link between domestic and the international economy through a realistic exchange rate, and thus creating stimuli to reverse the downward trend of the balance of payments (Financial Times, September 22, 1966, cited by Bresnan 1993:63-64 from Arndt and Panglaykim’s “Survey of Recent Developments,” Bulletin of Indonesian Economic Studies no. 4, June 1966:3-4).

These new economic policies brought about economic conditions that increased the number of people doing business, mainly the ethnic Chinese. This period was the embryo of the so-called konglomerasi, an Indonesian term referring to the growing number of conglomerates, which would materialize as monsterous leviathans⁹ in the late 1980s and 1990s. Thus, a small number of nouveaux riches existed. These were intentionally created by the government in accordance with its “trickle down effect” theory.¹⁰

To sustain development, the New Order created what is known as the Five Year Development Plan or Pelita (Pembangunan Lima Tahun) in 1969. Different emphases were given to different Pelita in accordance with the development needs during that time period. For example, early Pelita gave emphasis to agricultural development while the latter Pelita shifted to industrialization with export orientation. With the Pelita the government started new and rational state budget management that began in April and ended in March the following year. The Ministry of Finance and the Agency for National Development Planning or Bappenas (Badan Perencanaan Pembangunan Nasional) acted as “the guardian of public treasury,” while other departments acted as “the spending advocates” (Mas’oed 1989:186). The budgeting process can be elaborated as follows:

The process is begun with the preparation of a “project proposal list” (DUP, Daftar Usulan Proyek) by every unit in the governmental body during July and August every year. The DUP is then sent to the guardian for further review;
During September-October, the guardian gives assessment to various DUPs and conducts meetings with officials from the concerned departments;
After knowing the planned development investment, the government begins its diplomacy to obtain foreign aid, with Inter-Governmental Group on Indonesia (IGGI) as the major donor institution;
In early January every year the President proposes the State Budget (RAPBN) in the form of a bill to the House which is usually accepted without significant change. After approval by the House, the President signs the bill, and it thus becomes State Budget Law. The next phase is the budget spending;
The development budget spending begins with the submission of a “project filling list” (DIP, Daftar Isian Proyek) by departments and governmental agencies to the Minister of Finance and Bappenas Chairman based on the DUP received previously;
The departments through a tender procedure choose contractors to execute the projects. The contractors could be state-owned or private companies (Mas’oed 1989:186-7).

The IGGI gave aid to Indonesia in two forms, projects and programs. As its name implies, the project covers a wide range of development projects, while the program consists of credits for food and other selected commodities. In the beginning, as there were only a few projects, program aid dominated: in 1969-70 the commitment for the program was $320 million, with $180 million for projects. But in 1972-73 the commitment for program aid was $320 while projects amounted to $350 million (May 1978:342).

The New Order’s rise to power, as well as its endurance, was supported by at least two elements, internal and external factors. The internal factors include sweeping supports from students, intellectuals and armies. The external factors are foreign political and financial supports. Political support was also provided by the United States government fearing that the Communists would take over the power as President Soekarno allowed the PKI to grow. Financial support came from international financial institutions including the International Monetary Fund (IMF) and the World Bank (WB).

With its success in stabilizing the country in both economy and security, the new regime depoliticized people (Mackie 1993:77) in order to maintain stability. The government rhetoric claimed politics was something “evil” which could not bring prosperity. This was a contrast to the previous government which had made politics a priority while at the same time ignoring economic development. Depoliticization took place in the form of repression and threats by the state. Participation in politics made one always suspect as a “dissenter,” while daring to criticize the government meant “subversive” or “PKI,” the terms which directly victimized the Old Order government. At the village level people were barred from actively participating in politics, which was known as the “floating mass” (massa mengambang). The “floating mass” practice included the isolation of people in the villages from party politics except just prior to the five year General Election.

The regime’s success in maintaining stability was possible because of the repressive military support. Bureaucracy was militarized with most positions filled by military officers, from the presidential post to the village level lurah or kepala desa.¹¹ This militarization turned the country into one of the worst abusers of human rights. There was no freedom of speech. A critical press was regarded as a potential threat to the state which could ruin the stability. Some brave enough to criticize the government were banned and barred from operating. Political, human rights and environmental activists who held protests were arrested and thrown into jail. Stories about killings and torture by the military were rampant and regarded as normal in the name of “stability” and “economic growth.”

The oil bonanza of 1971-74 put the national economy at the peak of its growth. However, prior to this lucky period, export commodities in several non-oil and gas sectors had increased which also fueled the engine of growth. OPEC increased the oil price from around US$3 to US$12 per barrel in 1973-4; and later to over US$33 in 1979-80 (Mackie 1993:85).

The paradox in this period is, while on one hand economic growth had brought about prosperity to the people, but on the other hand the state had become more and more repressive to maintain security and stability. The New Order regime argued that without stability the country would not be able to overcome economic backwardness. Development slogans filled all types of media. The state became the “stabilizer” in a bid to pursue a “just and welfare state.” Almost every day radio and television stations, as well as newspapers, carried such messages. People were required to accept this “episteme” created by the ruler. Otherwise, they could be sent to jail.

According to several intellectuals, up to this point, the state not only controlled how the people should behave to maintain such an economic performance through stability, but also how they should “think” and “understand” reality. Through the media the state created discourses it expected to be mainstream. Through the development jargon people were forced to swallow messages with which they sometimes — even frequently – disagreed. To use historian Taufik Abdullah’s terminology, the state had applied a “hegemony of meaning” over the people through jargon (in Latief and Ibrahim, ed. 1996). This “hegemony of meaning” was the way the government controlled consciousness of the people who in turn could not but accept any programs promoted.

The Decay and the Fall of the Regime

Samuel P. Huntington’s thesis (1968) may best describe the fall of Soeharto from power in 1998 following massive nationwide protests which destabilized the country. Soeharto’s success with economic development resulted in a middle class and a few nouveaux riches. Nationwide, quality of life improved, and the literacy rate grew, accompanied by greater demands for political participation and openness. Along with this economic success, in the early 1990s President Soeharto began to change his leadership strategy by opening wider space for freedom of speech. This keterbukaan (openness) may be compared with Gorbachev’s glasnost in the former Soviet Union. This new policy was hailed enthusiastically by the people at large. Control over the press was eased, critical artists – though still required to have licenses to perform — were no longer tightly controlled. Intellectuals in a few seminars and forums with limited audiences dared to criticize several government policies, mainly those related to the wide gap between the rich and the poor.

This openness did not last long. The government again applied tight control over freedom of speech. In 1994 the Ministry of Information banned the licenses of three leading critical publications, namely Tempo (Time) and Editor magazines, as well as Detik (Second) tabloid.¹² These publications were well-known for their investigative reporting. Tempo, prior to the ban, reported the purchase of several secondhand warships from Germany, a deal which was allegedly full of corrupt practices involving a number of high-ranking officials. The new openness seemed to have threatened the government with critical views. Tight control had again showed that obviously the country’s economic growth was not followed by adequate political participation for the people.

This gap, according to Huntington, could create destabilization. He argues that “economic development itself is a highly destabilizing process and that the very changes which are needed to satisfy aspirations in fact tend to exacerbate those aspirations” (Huntington 1968:49). Thus, rapid economic development,

1. disrupts traditional social groupings (family, class, caste), and thus increases “the number of individuals who are déclassé … and who are thus in circumstances conducive to revolutionary protest;¹³
2. produces nouveaux riches who are imperfectly adjusted to and assimilated by the existing order and who want political power and social status commensurate with their new economic position;
3. increases geographical mobility which again undermines social ties, and, in particular, encourages rapid migration from rural areas to cities, which produces alienation and political extremism;
4. increases the number of people whose standard of living is falling, and thus may widen the gap between rich and poor;
5. increases the incomes of some people absolutely but not relatively and hence increases their dissatisfaction with the existing order;
6. requires a general restriction of consumption in order to promote investment and thus produces popular discontent;
7. increases literacy, education, and exposure to mass media, which increase aspirations beyond levels where they can be satisfied;
8. aggravates regional and ethnic conflicts over the distribution of investment and consumption;
9. increases capacities for group organization and consequently the strength of group demands on government, which the government is unable to satisfy (Huntington 1968:49-50).

Almost all of these nine conditions occurred in the country prior to the regime’s collapse in 1998. This economic growth can be likened to a hydraulic pump that added energy to social unrests. There were sweeping criticisms and complaints about the fact that there were only a few channels for political aspirations.

The top-down management could be found anywhere in the country. The so-called “patrimonial” and “paternalistic” practice of governance was rampant. It was almost impossible to find a pure idea that arose from the bottom and was then adopted by the top management. This type of governance was a reflection of Soeharto’s authoritarian and militaristic regime that assumed that security and tight control over the people would sustain economic growth.

The 1997 General Election was again won by the ruling party Golkar (Golongan Karya or Functional Group). In the March 1998 MPR (People’s Consulative Assembly) General Session, the highest body, Soeharto was again elected as the President, for the sixth consecutive time. But since April protests spearheaded by students demanding that Soeharto step down had prevailed nationwide. The military repressed the protests which frequently ended with bloody violence. The killing of three Trisakti University students accelerated the fall of Soeharto from power. The protests formerly only done by students now involved people on the street. Jakarta turned violent with the persecution of the more prosperous ethnic Chinese. Indigenous people attacked ethnic Chinese believing that the economic pie had only been enjoyed by these few minorities. Some believed that this ethnic Chinese persecution had nothing to do with racial hatred, but was merely related to the economic jealousy.¹⁴ Pressures for Soeharto to step down grew with the increasing scale of violence. Since May 19 the students had occupied the MPR building. Soeharto offered to reshuffle his cabinet to save his power, but the resignation of 14 key ministers ended his dream. On the morning of May 21 Soeharto announced his resignation, broadcast nationwide by TV and radio stations.

Huntington’s thesis argues that rapid economic growth might potentially destabilize a country. In the case of Indonesia, however, it can be said that the Asian economic crisis was the most significant factor that led to the decay of the regime with its inability to solve it. The crisis was preceded by the rupiah currency decreasing in value against the US dollar. In June 1997, the rupiah was still around Rp2,200 per US dollar, but the next month currency was unable to stand against the “domino effect” of the regional currency crisis generated by Thailand’s baht’s tumbling down. The rupiah’s value decreased slowly to levels of Rp2,300, Rp2,500, Rp3,000, and Rp5,000. In a few months the currency’s value again tumbled to Rp7,000. The worst condition the currency had ever experienced was when it reached the level of Rp17,000.

This currency devaluation brought about skyrocketing prices which hit people’s low purchasing power. When the currency crisis could not be handled, it impacted the economy which in turn caused an economic crisis. This economic crisis created massive bankruptcy among companies which had to import their raw materials. The decreasing value of the rupiah meant that they needed more rupiah to purchase the materials whose prices were in dollars. With bankruptcy, massive layoffs occurred everywhere which hit to social stability. A widespread unemployment was thus unavoidable.

The economic crisis created a nationwide panic since all goods prices could no longer be afforded by the people at large. The crime rate increased, number of unemployed jumped. The country that formerly had claimed success in reducing the number of people living below the poverty line no longer could be proud of the achievement, as the number of poor people again swelled.

The development that the New Order was always proud of was suddenly extinct. Previously the IMF and the World Bank praised Indonesia for its success, moreover it was always able to pay its loans on time. But the crisis dissolved the pride, and all of the development successes became a mirage. In this condition a wave of unhappy feeling that could not be barred by the autocratic regime grew. In March nobody would dare to predict what would happen in May. Soeharto’s days were numbered. And May 21, 1998 became Doomsday for his power that led the country to a transition toward democracy.

Concluding Remarks

Different from what happened (or is happening) in Africa where “the problem is not so much that development has failed as that it was never really on the agenda in the first place” (Ake 1996:1), in Indonesia, development had been on the agenda of the ruling regime as well as the technocrats that accompanied it. The Indonesian development problem lies in the absence of good governance with corruption prevalent, lack of accountability, and poor transparency. The creation of the Pelita or Five Year Development Plan was the most important program in terms of development. This Pelita had improved the people’s quality of life, income per capita, and other economic indicators. The economic growth could be maintained at the level of seven to eight percent per year. But since the state practiced what is known as “crony capitalism,” only a handful of people really enjoyed the development’s pie. Thus, we can say that the problem was poor economic equality at the expense of high economic growth. Since the early 1990s a few intellectuals¹⁵ have criticized this economic gap arguing that it was a time bomb that could explode anytime because of social jealousy. This warning materialized in the May riots that led to Soeharto’s fall.

This “crony capitalism” was possible because of the absence of good governance. Businessmen ruled, while the bureaucrats became their servants who could be bribed. This problem, according to several proponents of neo liberalism, made the economy and development inefficient which in turn affected the economic fundamentals. That is why when the monetary crisis hit the country in 1997, Indonesia did not bounce back as quickly as did Singapore and Malaysia. Rather, it turned into a prolonged economic crisis which still exists today.

Doubtless U.S. government aid to Indonesia as well as that of other donor institutions is part of their interest to promote democracy (Carothers 1999). However, in this post-Soeharto regime Indonesia’s transition toward democracy is costly. Some believed that the violence which sparked across the archipelago is a sign of potential disintegration, mainly after the independence of East Timor. Skeptics see that Indonesia, with its more than 13,000 islands – the largest archipelagic nation in the world, and its 220 million people, will no longer exist if this transition fails to run smoothly. Stability no longer exists. Euphoria towards democracy generated chaotic conditions which promise nothing for economic recovery. Thus, few spoke of development in this post-Soeharto era as it is not a “sexy” topic. All energy is spent enjoying democracy and the political turmoil it brings about.

Although the country has a new designation as the third largest democracy in the world, after India and the U.S., it will still take a long time to make it a culture which can educate its people and lift them from their backwardness. Today the House has become the government’s control, a role that was impossible in the Soeharto era. However this “checks and balances” role of the House has sometimes created turmoil as it brought about conflict with the President. Recently President Abdurrahman Wahid, the first democratically elected President, was given a memorandum by the House for two alleged corruption practices. This memorandum potentially could lead to a Special Session that could oust the President. The conflict between the House and President who victimized economic recovery program was thus sharpened. The IMF has suspended its aid several times. The government’s credibility is now at stake.

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Tempo (Time) Magazine, January 29, 2001