Dr Stephen Sherlock
Foreign Affairs, Defence and Trade Group
8 April 1998
Contents
Major Issues Summary
Introduction
Indonesia's Economic Crisis
Origins of the Crisis
The Crisis Hits Indonesia
The Government's Response-Reform and the IMF
Social Effects of the Crisis
Inflation and Food Shortages
Job Losses, Unemployment and Underemployment
An End to Affluence, a Return to Poverty
The Politics of Crisis-President Soeharto and the
New Order
President Soeharto and the Army
The Vice-President and the Army
Change from Below: A People's Power Movement?
The Implications for Australia
From Weakness to Strength:
Indonesia-Australia Relations
Australia and the Region
Australia's Response
Conclusion
Endnotes
Appendix: Australia's Trade with
Indonesia

Major Issues
Summary
The Asian currency crisis arose from a collapse
of confidence in the ability of a number of countries to maintain
their fixed exchange rates while continuing to allow the free
movement of foreign finance capital at a time of increasing current
account deficits.
The Indonesian rupiah was initially not affected
by the pressure on other regional currencies. When it begin to
fall, however, the underlying weakness of the Indonesian financial
sector was revealed and private foreign debt was far higher than
previously thought. The crisis worsened in Indonesia because of the
lack of an effective government policy response.
The International Monetary Fund (IMF) financial
stabilisation package agreed to by the Indonesian Government
contained conditions requiring Indonesia to reform its financial
sector, reduce fiscal expenditure and radically change the nature
of government involvement in the economy. Disagreements between the
Indonesian Government and the IMF over implementation of the
reforms have become the focus for controversy about the role of the
IMF. Much of the controversy derives from the fact that the IMF
offered a combination of financial rescue package and economic
reform program. The IMF has been criticised for applying a formula
which was inappropriate for Indonesia, was too difficult to
implement in the time allowed and did not alleviate the immediate
problems. The IMF position is that while the details of the package
can be renegotiated, such crises will recur unless Indonesia's
economic institutions are reformed.
The currency crisis has combined with the
effects of drought to produce rapid inflation, especially in the
cost of food and other essentials, and a great increase in
unemployment and underemployment (8.7 million and 18.4 million
respectively, 30 per cent of the workforce). The return of poverty
for many Indonesians and the end to short-lived affluence for
others has shattered the expectations, created by the economic
achievements of the New Order regime, that Indonesia was on the
path to continued growth and prosperity.
The New Order regime based its legitimacy on a
capacity to bring sustained improvements in the standard of living
of the mass of Indonesians and to meet the aspirations of an
expanding middle and working class. The apparent end to this
success will have grave implications for the political stability of
the Indonesian state. The crisis has been a psychological blow to
confidence that Indonesia had finally overcome its long history of
economic and political instability and was set on a long-term path
to prosperity.
Indonesia has been transformed from a country
with a tiny social elite and a mass of impoverished peasants to a
rapidly urbanising society with new social groups less willing to
trade political rights for personal prosperity. There is increasing
resentment about the domination of economic and political life by
President Soeharto and his family and the suppression of free
political expression by the Army and Government.
There appears to be a widespread feeling within
the Army that Soeharto should step down from power, but senior
officers are not yet prepared to express their feelings openly. The
new Vice-President, B. J. Habibie, is not popular with the Army and
it is an open question if the Army would support Habibie becoming
President if Soeharto were to die or retire. These doubts
underscore the uncertainty created by the question of the
transition from Soeharto's rule.
The crisis has raised the possibility that many
ordinary Indonesian people may join in spontaneous or organised
movements of mass protest, perhaps even a 'people's power' movement
like the one that toppled President Marcos of the Philippines.
Recent years have seen the growth of NGOs, labour unions and
Islamic organisations, but civil society has been stultified by
thirty years of tight New Order political control. There have been
sporadic riots and the emergence of a pro-democracy student
movement, but the Army has crushed the riots and kept student
protest confined to the universities. The outbreak of major riots
would put great pressure on the factionalised Army and would raise
the question of whether it would move against Soeharto.
The crisis in Indonesia has significant
implications for Australia because Indonesia is now a major
strategic and economic partner for Australia. Indonesia has an
important role in the Asia-Pacific region where Australia's crucial
interests lie. The Australian Government has provided emergency
assistance to Indonesia and financially supported the IMF program
as well as attempting to assist overcome disagreements between
Indonesia and the IMF.
Introduction
This year was certain to be one of some
political tension in Indonesia because the country was due to go
through the five-yearly process of selecting a President. But the
unexpected appearance of severe economic problems in Indonesia has
combined with the uncertainty caused by the presidential succession
to become a political and economic crisis of major proportions.
Even before economic troubles developed, there were clear signs of
growing discontent with President Soeharto's Government. Popular
dissatisfaction has arisen over the suppression of democratic
politics, as well as concerns, at both a popular and elite level,
about the weakness of governmental institutions under the highly
personalised rule of an aging President. A number of other
Southeast Asian countries have come under great economic stress
since mid-1997, but none have experienced a crisis like
Indonesia's, nor had their political problems exposed in such a
way. The events of recent months have revealed many of the problems
and conflicts in Indonesian society, politics and economy.
President Soeharto established his New Order
regime after a coup in 1965 and has successfully maintained
political unity in the disparate Indonesian archipelago and
presided over sustained economic growth and development. The ageing
President's unwillingness to step down from the presidency after
over thirty years in office, however, and his refusal even to
countenance any serious consideration of his eventual succession
has underscored the fact of how much the stability and growth under
the New Order regime since 1965 has depended upon Soeharto as an
individual.
Political power has been concentrated in a few
hands, mainly in the Armed Forces of Indonesia (ABRI) and a number
of civilians related to or close to President Soeharto.
Constitutional organs such as parliament are mere rubber stamps.
Similarly, the impressive economic development under the New Order
has been under the control of a small number of business
organisations dependent on the direct patronage of the President
and his extended family. The lack of progress towards the
development of political institutions has been revealed by the
Indonesian Government's seeming incapacity to respond to the
currency crisis in an effective manner.
This paper briefly examines the origins of the
currency crisis affecting a number of countries in East and
Southeast Asia and then focuses on the crisis in the Indonesian
economy and stalled efforts by the IMF to develop a program to
stabilise the Indonesian currency and reform the country's economic
institutions. The paper examines the social effects of the crisis
and the impact on the well-being of ordinary Indonesians. It
discusses the political dimensions of the crisis against the
background of concerns about the succession from President Soeharto
and the growing pressure for political liberalisation, pressure
which has in part been created by the very achievements of the New
Order since the 1960s. The paper concludes by examining the
implications of the Indonesian crisis for Australia and considers
the prospects for a resolution of Indonesia's current economic and
political turmoil. The paper can be read in conjunction withThe
Politics of Change in Indonesia: Challenges for Australia,
Parliamentary Research Service Current Issues Brief No. 3,
1996-97.
Indonesia's Economic
Crisis
The background to the major problems that have
emerged within Indonesia's finance and banking system is, of
course, the rapid fall in exchange rates in other Southeast Asian
countries such as Thailand, South Korea and Malaysia since
mid-1997. These trends have been exacerbated by continuing sluggish
growth in Japan. These events have become well known in the
Australian media under labels like the 'Asian economic crisis' or
'Asian financial meltdown'. Such descriptions are fairly
misleading, however, because the crisis has by no means affected
the whole of Asia (China, Taiwan and India have escaped serious
problems) and the effects have varied greatly throughout the
region. While the majority of commentators consider that most of
the affected countries will have returned to economic health within
one or two years, there is much less optimism about Indonesia
because the country's political weakness has meant that Jakarta has
not yet developed an effective policy response. The prospect of
political turmoil is certain to undermine foreign investor
confidence in Indonesia, deterring the inflow of the foreign
capital essential for restoring the value of Indonesia's currency,
the rupiah, and for restarting economic growth.
Origins of the Crisis
The crisis resulted from a collapse of
confidence in the ability of a number of Southeast Asian countries
to maintain their fixed exchange rates while continuing to allow
the free movement of foreign finance capital at a time of
increasing current account deficits.(1) The system of pegged
exchange rates was one of the fundamental features underpinning the
sustained economic growth in Southeast Asia during the 1980s and
1990s because it provided certainty to investors and encouraged
Japanese manufacturers to relocate to Southeast Asia to escape
competitiveness problems caused by the highly-valued yen.
Difficulties began to develop in the mid-1990s, however, when three
key currencies in the region, the US dollar, the Japanese yen and
the Chinese renminbi, underwent major shifts in their relative
value. In 1994 the Chinese currency was devalued by 50 per cent
against the dollar and between 1995 and 1996 the yen fell by 40 per
cent against the dollar.(2) This increased the competitiveness of
Chinese and Japanese goods and made exports from Southeast Asia
more expensive since their currencies were still pegged to the
rising US dollar. Exports from the region rapidly lost their
competitiveness and ceased their previous continuous growth.
Thailand, for example, went from a 25 per cent growth in
merchandise exports in 1995 to zero growth in 1996. Export growth
was also affected by economic slowdown in Europe and Japan and by
increasing US textile imports from Mexico following the signing of
the North America Free Trade Agreement (NAFTA).(3)
The first to show signs of crisis was Thailand
where the increasing current account deficit put pressure on Thai
authorities to defend the baht by greatly increasing interest
rates. This move, however, only exacerbated problems by causing the
collapse of many heavily indebted companies, particularly in the
inflated property market. This in turn worsened the problems of the
financial sector which was saddled with growing numbers of
non-performing domestic loans and huge foreign debts of short-term
or 'hot money'. With foreign currency speculators expecting the
Thai Government to devalue, there was a selling attack on the baht
in February 1997. The government responded by selling billions of
dollars in foreign exchange reserves to support the baht, a move
which was initially successful but soon faltered in the face of an
increased attack on the currency during the year. In July 1997 the
Thai Government was forced to abandon the pegged currency and by
September 1997 the baht had collapsed to 38 to the US dollar, down
from the 25 to the dollar in July.(4)
The Crisis Hits Indonesia
The Indonesian rupiah was initially not affected
by the pressure on other regional currencies in early 1997 because
it did not appear to suffer such acute problems of a large current
account deficit and high dollar-denominated foreign debt. For
several years the Indonesian central bank (Bank Indonesia) had also
allowed the rupiah to float within a range of 8 per cent, allowing
a 4-5 per cent annual depreciation from 1995. When the Thai,
Malaysian and Filipino currencies began to weaken in early July
1997, Bank Indonesia took the pre-emptive measure of increasing the
band within which the rupiah could float from 8 per cent to 12 per
cent. By the beginning of August, however, the rupiah appeared to
have caught the 'contagion' and was falling below the 12 per cent
band. Bank Indonesia was forced to allow the currency to float
freely and by the end of October it had fallen from the June 1997
rate of around 2400 to the dollar to a new low of 3600 to the
dollar.(5)
The rapid fall in the rupiah, beginning in
July-August 1997, soon revealed the underlying weakness of the
Indonesian financial sector. Panic selling of rupiah for dollars by
Indonesian companies with dollar-denominated debt showed that
private foreign debt was far higher than previously thought. Worse
still, the fact that Bank Indonesia was unaware of the extent of
the debt showed its poor capacity to oversee and regulate
Indonesia's financial markets. As in Thailand, much of the foreign
debt was short-term and due for repayment within twelve months and,
with the continuing fall in the rupiah, was increasingly difficult
to service.
The impact on many banks was rapid and
calamitous. The Government liquidated 16 private domestic banks in
November. The lack of confidence in the banking sector was
dramatically demonstrated later that month when rumours of the
death of the major shareholder of Indonesia's largest private bank,
Bank Central Asia, almost sparked off a run on the Bank.(6)
Meanwhile the rupiah continued to fall far beyond all predictions.
By the beginning of January 1998 the Indonesian currency had
tumbled to 10 000 to the dollar, a 75 per cent devaluation since
mid-1997. By the end of January the rupiah fell to its low-point of
17 000 to the dollar and has traded in the 9 000 to 10 000 range
since that time. This was also accompanied by a deep slump in the
stock market, with the index falling from 720 in July to 600 in
August and falling a total of 75 per cent by mid-December.(7)
The Government's Response-Reform and the
IMF
The Indonesian Government's initial response to
the pressure on the rupiah was generally seen by commentators and
financial analysts as pragmatic and decisive. As well as floating
the currency and increasing interest rates, a number of policy
announcements in September included plans to reorganise the banking
sector, cut some tariffs and facilitate exports, postpone or review
large capital-intensive development projects and eliminate certain
restrictions on foreign equity in Indonesian companies.(8) The
short calm soon passed by, however, with a further collapse of
confidence in regional currencies. This followed comments by
Malaysian Prime Minister, Mahathir, blaming the problem on
international financier George Soros. Confronted with a renewed
fall in the rupiah, on 8 October 1997 the Indonesian Government
approached the International Monetary Fund (IMF) for financial
support.
When approaching the IMF, President Soeharto
reportedly sought only a small financial package without conditions
attached.(9) As the magnitude of Indonesia's problems became
apparent, however, a much larger agreement was negotiated with the
IMF. On 31 October the IMF announced a $US23 billion rescue package
(with contributions from the World Bank and the Asian Development
Bank) designed to stabilise Indonesia's currency and restore
confidence in its financial markets. It also included a number of
conditions aimed at restructuring the country's financial sector
and deregulating the economy, cutting government expenditure,
reforming trade and industry policy and improving transparency in
relations between business and government.
The last condition was especially sensitive
because it involved dismantling the monopolies and special
assistance provided to businesses and projects owned by the family
and close associates of President Soeharto. Such special
concessions have been one of the main targets of popular resentment
within Indonesia and, internationally, have become the symbol of
the 'crony capitalism' which has undermined confidence in the
Indonesian economy.
A second IMF agreement in January 1998 set out
in more detail a program designed to prevent an economic
contraction, contain inflation to 20 per cent in 1998 and move the
current account from deficit into surplus. The agreement
specifically mentioned the elimination of support to the aircraft
industry and the National Car project, the restriction of the BULOG
(Indonesia's food distribution agency) trade monopoly on the import
of rice, deregulation of domestic trade in all agricultural
products, including cloves (a major ingredient of Indonesian
cigarettes) and the dissolution of cartels in the important cement,
paper and plywood industries. The Government also agreed to phase
out energy subsidies by gradually increasing the price of fuel and
electricity, but limiting price increases for kerosene used for
domestic cooking.(10)
Issues regarding implementation of the IMF
rescue package have assumed centre stage of debate about the future
of the Indonesian economy. Despite President Soeharto's public
commitment to implementing the reforms in the plan, it soon became
apparent that he was reluctant to accept their full implications.
The first sign was Soeharto's apparent desire to use the additional
$US11 billion financial assistance offered by Japan, Singapore, US,
Malaysia and Australia in October 1997 as a less conditional source
of money which might strengthen Indonesia's hand in negotiations to
soften the terms of the IMF loan. Further indications were that
Soeharto wanted to protect the monopoly of basic commodities trade
held by BULOG and to maintain funding for the heavily-subsidised
state-owned aircraft industry overseen by his closest political
associate, Habibie. The day after signing the IMF package, Soeharto
also signed a decree allowing a number of the projects postponed or
placed under review in September to proceed. Such signals of
unwillingness to carry out the intention of the IMF agreement
caused any restoration of confidence in the rupiah to be very
short-lived and to lead to its continued downward spiral. The
picture was worsened by the public refusal by certain members of
Soeharto's family to accept closure of their failed banks.(11)
The IMF formula has come under criticism, from
differing points of view, that its recommendations are
inappropriate for Indonesia's economic circumstances. Some critics
contended that providing emergency loans created 'moral hazard',
encouraging the governments of other developing countries to adopt
irresponsible economic policies with the assurance that the IMF
would come to their rescue. Others have criticised the conditions
attached to the loans, arguing that cutting government expenditure
and high interest rates has led to an unnecessarily deep recession.
The argument is that the IMF's financial stabilisation packages
tend to follow a standard formula which evolved to treat economies
experiencing hyper-inflation and bloated fiscal and current account
deficits (especially in Latin America), but which was inappropriate
for Indonesia where these problems were not significant and where
fiscal and macroeconomic policy had generally been quite orthodox.
There has also been criticism of IMF pressure for cuts to subsidies
for basic consumer commodities as worsening the plight of many
already impoverished Indonesians.
Much of the reason for controversy surrounding
the IMF program derives from its character as a combination of
financial rescue package and economic reform program. The IMF has
been criticised for using loans designed for immediate
stabilisation to force Indonesia to adopt major policy reforms, the
scope of which would be difficult for even a developed country such
as Australia to introduce in such a short time. A number of
commentators have argued that an international financial
institution has no place enforcing a program which appears to be
aimed at applying pressure for political change within Indonesia
and which, it is argued, infringes Indonesia's sovereignty. From
the point of view of the IMF, however, there is little point
providing emergency finance to stabilise the Indonesian currency if
the structural problems seen to be behind the crisis are not
ameliorated. The Fund also considers that confidence in the
Indonesian currency will not be restored unless international
investors are reassured that the Indonesian Government is prepared
to take measures which confront the structural problems in the
economy, despite the political and social pain they may
cause.(12)
With the Indonesian Government showing itself to
be increasingly uncomfortable with the IMF reform program, some
observers have seen the situation in Jakarta since late last year
as one of virtual policy paralysis. While the Indonesian Government
has been inconsistent in its commitment to implementing reform, it
has done little to develop alternative policies, even for the short
term. A proposal to introduce a Currency Board system, under which
each rupiah would be backed by US dollar reserves, was widely
criticised as unworkable and aimed at securing the assets of
powerful business interests rather than in solving the country's
currency problems. Moreover, the indecisive debate over the
proposal occupied several months of precious time, during which
Indonesia's economic difficulties have become increasingly urgent.
The Government's incapacity to come to terms with the depth of the
problems it faces was also seen to be exemplified in the Budget
delivered in late 1997 which contained completely unrealistic
estimates of the coming year's economic growth and fiscal balance
and which had to be revised drastically downwards in a new Budget
announced on 23 January 1998.
The IMF delivered the first tranche of $US3
billion in November 1997 and the second of $US3 billion was due on
15 March 1998. In the face of the Indonesian Government's apparent
unwillingness to proceed with the agreed reforms at the specified
pace, however, the IMF postponed delivery of the money. This move
was triggered by the actions of the Indonesian Government in
restructuring a number of monopolies in such a way as to preserve
the influence of key individuals and in its slowness in preceding
with other agreed reforms. Recent reports suggest that the IMF and
the Indonesian Government are moving towards developing a new
agreement. Any decision to further postpone or even withdraw
financial assistance to Indonesia would have a disastrous effect on
the Indonesian currency, with the certainty of a renewed collapse
in its exchange value.
The IMF has been confronted with a dilemma. To
continue further tranches of assistance without substantial moves
by the Indonesian Government would make a mockery of its efforts to
achieve long-term reform, but to withhold assistance and allow the
collapse of the rupiah would damage the Indonesian economy and
worsen political unrest. It would also adversely affect the
economic health of the entire region. Current Indonesian Government
economic projections for 1998 are for zero economic growth and
inflation of 20 per cent. Many economists have already concluded
that these figures are overly optimistic, with estimates of growth
(or contraction) ranging from minus 3 per cent to minus 10 per cent
and an inflation rate of up to 100 per cent. Interest rates are now
running at between 30 and 40 per cent. At the current exchange rate
of around 10 000 rupiah to the dollar, virtually every company
listed on the Indonesian stock exchange is technically bankrupt.
Only if the exchange recovered to around 5000 to the dollar would
they be able to service their foreign debt and maintain profitable
overseas trade. A continued standoff between the IMF and the
Indonesian Government would have very serious implications
indeed.
Social Effects of the
Crisis
The most immediate and widespread effect of the
economic crisis on the people of Indonesia has been accelerating
inflation. During the first half of 1997, Indonesia was
experiencing particularly low inflation (2.6 per cent), but the
price increases of the second half brought annual inflation for
1997 to 11 per cent, compared with a rate of 6.5 per cent in 1996.
Since the beginning of 1998, price increases have accelerated still
further to levels which threaten hyper-inflation. Inflation for
January and February 1998 was 20 per cent and estimates for annual
inflation for the coming year have ranged from 40-50 per cent up to
100 or even 200 per cent.(13) Prices have risen across most
sectors, but the most severe increases have been in critical areas
such as food and other essentials. Food prices increased by 30 per
cent during January and February. During the last year, rice has
increased from 1800 rupiah per kilo to 3500 ($A0.36 to $A0.70 at
April 1998 exchange rates) and cooking oil from 2000 rupiah per
litre to 5500 ($A0.40 to $A1.10). The price of protein sources such
as eggs, soy beans and chicken are rising beyond the reach of many
low-income consumers.(14)
The most serious aspect of the food situation is
that the problems caused by the falling rupiah are occurring at the
same time as Indonesia is suffering its worst drought for many
years. Rice production has already fallen by 10 per cent in the
last year due to the effects of El-Nio and there is a strong
possibility that the drought will continue into this year.
Indonesia's food distribution agency, BULOG, will be forced to
continue and increase its import of food staples to keep prices
down and maintain food distribution. BULOG has been allowed to
purchase foreign exchange at a subsidised rate of 5000 rupiah to
the dollar, the effect of which is that food imports are being
subsidised by the Central Bank at the cost of the country's already
weak foreign exchange position. If currency and drought problems
persist into the coming months, sustaining food imports will become
an increasingly difficult task.
There are also doubts about the effectiveness of
the distribution system in many areas, particularly in poor and
remote eastern regions of the country which have been particularly
affected by the drought. Shortages have been made worse in some
districts by hoarding and panic buying. Nevertheless, the food
situation in Indonesia has not reached anything approaching
disaster proportions. Immediate stocks are sufficient and BULOG has
generally proved to be effective as a food import and distribution
agency in the past. Concern will mount in the second half of 1998,
however, especially if the rains are poor.
Job Losses, Unemployment and
Underemployment
The collapse of Indonesia's currency and the
consequent exposure of the private sector to massive unrepayable
foreign debt has had a devastating impact on employment, especially
in urban areas. Accurate figures on the extent of job losses are
impossible to obtain, but most estimates put the figure at around
two million.(15) The industry which felt the most immediate effect
was construction (where an estimated one million workers have been
laid off) because much short-term foreign borrowing had been
directed into city building and infrastructure projects. There have
also been extensive lay-offs in manufacturing and in the banking
and service sector as new highly-leveraged manufacturing concerns
have gone bankrupt. The banking sector has virtually collapsed and
industries providing services to new industries and consumers have
lost their customers. Indonesia had experienced strong employment
growth for the past several years, but it is the jobs in the new
growth areas which have been most vulnerable to changed economic
circumstances.
It is often assumed that wage-workers in
developing countries can return to their villages if they lose
their city jobs and, indeed, this was often the case in the past
when the wage sector of the workforce was very small. But the
transformation of the Indonesian economy in the last two decades
has meant that rural areas can no longer function as a
'shock-absorber' for unemployment. This is particularly true of the
most populous island of Java where the majority of the workforce is
now employed in secondary industry and services, with a minority
still employed in agriculture. With the introduction of new farming
techniques and technology, agricultural productivity has greatly
increased, but modernised agriculture frequently employs fewer
people than traditional methods. In any case, productivity
increases have plateaued in recent years and there are already
large numbers of underemployed people (working only a few hours a
day or a few months each year) in rural areas. At the best of times
there are no prospects for a worker returning to the village, in
today's drought there is nothing to offer but hunger. Most
unemployed urban workers are forced to eke out an existence in the
informal sector (street hawking etc.), depend on family support or
seek work in regional towns. The lack of a state system for social
support means that official statistics greatly underestimate the
problem, but even these calculate unemployment and underemployment
to have doubled in recent months to 8.7 million and 18.4 million
respectively, figures which represent more than 30 per cent of the
workforce.(16)
An End to Affluence, a Return to
Poverty
Most industrial workers worked for low wages in
poor conditions, but in most cases city jobs represented an
improved standard of living over rural semi-employment, especially
with the steady increase in wage levels over recent years. Today,
however, job losses, falling wages and the spiralling cost of
essential commodities have thrown many urban workers back into a
struggle for basic existence. For the millions of people drawn into
employment in the modern sector of the economy in recent years, the
crisis has cut short the promise of being freed from the poverty
which had ruled their families' lives for generations.
In rural areas, drought, rice shortages and
price increases are also bringing a return to serious and
widespread poverty. World Bank estimates suggest that the number of
those below the poverty line will increase from 23 million to 40
million.(17) The breakdown of services such as public transport
(due to fuel price increases and shortage of imported spare parts)
have affected urban and rural areas alike. For the middle class and
salaried employees, the crisis has meant a sudden end to the
relative affluence which they had begun to accept as normal. Many
small business people have been bankrupted or confronted with a
drastic decline in business and salaried employees have either lost
employment or have had their often fixed salaries eroded by
inflation. These groups were also the greatest consumers of
imported goods and services and of public goods such as transport,
electricity, education and health services, all of which have
become much more expensive in the wake of the crisis.
The effects of the economic crisis in Indonesia
have clearly been felt differently by different sections of
Indonesian society. But the common impact of the crisis has been
the shattering of what appeared to most Indonesians to be the
promise of improving prosperity. Notwithstanding a number of
setbacks in the 1970s and 1980s, stemming mainly from problems in
the important oil industry, Indonesia experienced sustained
economic growth under the New Order, with an average of about 7 per
cent annual growth in the last decade. This growth created
unprecedented opportunities for large numbers of Indonesians, with
the prospect of continued improvement. The economic crisis, with
its inflation, food shortages, widespread bankruptcies and loss of
jobs, has threatened to end the recently-acquired affluence of some
Indonesians or to bring a return to poverty for many more. The
crisis has been a psychological blow to confidence that Indonesia
had finally overcome its long history of economic and political
instability and was set on a long-term path to prosperity.
The Politics of Crisis-President
Soeharto and the New Order
The New Order regime based its legitimacy on a
capacity to bring sustained improvements in the standard of living
of the mass of Indonesians and to meet the aspirations of an
expanding middle class and working class. The apparent end to this
success will have grave implications for the political stability of
the entire Indonesian state. But even before the onset of the
economic crisis, serious pressures were beginning to build up
within Indonesia about the lack of progress towards political
liberalisation. Many Indonesians were beginning to argue for the
development of institutions which might overcome the domination of
political life by a small elite around the President and the Army
and allow greater mass political participation.
From its very foundation in 1965-66, the New
Order has depended for its stability on the leadership of President
Soeharto. Soeharto's tenacious grip on the presidency has come to
symbolise the personalised nature of New Order politics and the
difficulty the regime appears to have in adapting to the changing
face of Indonesian society. Paradoxically, the pressure for change
has been created by the very success of the New Order in bringing
about three decades of economic growth. This development has
transformed Indonesia from a country with a tiny social elite and a
mass of impoverished peasants to a rapidly urbanising society with
new social groups who are gradually becoming less willing to trade
political rights for personal prosperity. There is growing
resentment about corruption in public life and the domination of
economic opportunities by a select few. This is particularly
directed against members of President Soeharto's family, most of
whom have gained tremendous private wealth from their family
connections. With the elevation of the President's daughter to the
Cabinet, they appear to be provided with privileged access to
political power as well.
There is also a feeling of exasperation that not
only does the ageing President Soeharto show no sign of retiring
from his post, but he is also unwilling to even discuss the issue
of his successor or how a transition of power might take place.
Despite the clear current of subterranean discontent, however,
there is little indication of moves within elite elements of
Indonesian society to remove President Soeharto or to press
strongly for reform. The beginnings of unrest in the streets and
universities of major cities and regional towns have yet to gain
sufficient momentum to be anything resembling a significant
challenge to the Government.
President Soeharto and the Army
Given the crucial role of the Armed Forces of
Indonesia (ABRI) as the bulwark of the New Order, much recent
commentary has focused on the possible actions of ABRI leaders as
agents for political change, either to persuade Soeharto to step
down or to oust him from power. It is unlikely, however, that ABRI
officers would move against Soeharto unless the economic or
political situation were to deteriorate drastically. While most
observers consider that most of the ABRI leadership think it is
time for Soeharto to step down, they are reluctant to express such
a view publicly because of their immense respect for Soeharto's
achievements as President and because of their close personal
relations with him. Members of the current generation of ABRI
leaders were trained and rose to prominence under Soeharto and are
personally indebted to his patronage. The recently appointed Chief
of the Armed Forces, General Wiranto, was a personal adjutant to
President Soeharto and rose from the rank of colonel to four-star
general in four years. Soeharto's son-in-law, Prabowo, was
appointed commander of the elite Strategic Reserve.
Although there have been periods of disagreement
between Soeharto and the Army, notably during the late 1980s and
early 1990s, Soeharto has since used his power to appoint ABRI
officers to ensure that his own supporters hold the key positions.
This prerogative was exercised again in February 1998 when he
reshuffled the ABRI leadership to strengthen his closest
associates. Soeharto has also skilfully manipulated rivalries
amongst the top leaders, creating such factional enmities that it
would appear to be difficult for many leading ABRI officers to
cooperate with each other in any move against the President.(18) In
any case, recent thinking amongst many ABRI officers has been
influenced by the idea that the Armed Forces should play a less
political role and be restructured for external security rather
than its traditional role in policing internal stability. Moreover,
there is little sign that ABRI leaders have alternatives to the
policies being pursued by the President. Most would also be aware
that any move by the Army against Soeharto would only weaken
international confidence in the Indonesian economy still
further.
The Vice-President and the Army
There was widespread concern amongst observers
in the international financial community when one of Soeharto's
closest confidantes, B. J. Habibie, was made Vice-President. As one
of the leading figures associated with the economic nationalist
faction of Soeharto's advisers, known for their sponsorship of
prestige high-technology projects of questionable economic benefit,
Habibie's appointment was interpreted as a sign of Soeharto's
unwillingness to reform and regularise Indonesia's economy. But
there was also consternation about the appointment within the ranks
of ABRI because, according to the Constitution, Habibie would take
over as President in the event of Soeharto's death. Habibie's
appointment was symptomatic of the relative decline of ABRI
influence compared with the situation in 1993 when the Army,
against Soeharto's wishes, was able to have its candidate for
Vice-President, General Tri Sutrisno, appointed to the office.
Habibie is unpopular amongst the ABRI leadership
because he is a rival from a technocratic rather than a military
background and because of his sponsorship of the Association of
Muslim Intellectuals (ICMI) which, as a mass organisation, gives
Habibie a potential political base outside of Army control. ABRI
has long been highly suspicious of any mass organisation and ICMI
is particularly suspect in ABRI eyes because of its Islamic
character. Habibie has also earnt the resentment of many ABRI
officers because his organisations have moved into traditional
areas of ABRI influence such as defence equipment procurement.
Habibie was the main supporter of the purchase of a number of
vessels of the former East German navy which most defence
professionals considered were inappropriate for Indonesia's
strategic requirements.
ABRI's loyalty to Soeharto has ensured that no
public criticism of Habibie's appointment has been aired, but it is
an open question whether the ABRI leadership would countenance
Habibie's assumption of the office of President should Soeharto die
or be forced to retire due to ill-health. The possibility that a
key institution such as the Army might not accept the person who,
in constitutional terms at least, seems most likely to succeed
Soeharto underscores the seriousness of the uncertainty surrounding
the transition from Soeharto's rule.
Change from Below: A People's Power
Movement?
The New Order was born out of the bloody
suppression of mass politics, with the killing of an estimated 500
000 people, mostly supporters of the then-powerful Communist
Party.(19) Since that time, any expression of popular political
will outside officially-sanctioned channels has been vigorously
repressed. The dominance of official politics has been challenged
on a few occasions, during student riots in 1974, Muslim riots in
Jakarta in 1984, workers' riots in Sumatra in 1984 and by the
clashes which followed the takeover of the headquarters of the
Indonesian Democratic Party (PDI) in July 1996, but these never
amounted to a real challenge to the status quo. Similarly, regional
secessionist movements in East Timor, Aceh and Irian Jaya have been
largely contained. There have been periods during which the
Government appeared to be loosening political control, particularly
during the period of 'openness' in the early 1990s, but these have
always been followed by a renewed crackdown on free public
expression and independent political activity. The closure of the
newsmagazine,Tempo, and the ousting of Megawati
Sukarnoputri from the leadership of the PDI (one of the three
officially-sanctioned parties) in 1996 shattered any illusions that
President Soeharto was willing to allow movement towards
democratisation. A leading dissident academic, Ikrar Musabhakti,
was recently quoted as saying:
Our openness is like a rubber ring. It can be
opened quite wide sometimes, but the Government can also close it
very quickly if it becomes dangerous.(20)
The current economic crisis and its attendant
social effects have, however, raised the possibility that many
ordinary Indonesian people may join in spontaneous or organised
movements of protest which turn out to have a major impact on the
course of Indonesian politics. There have been riots in a number of
regional towns in Indonesia, particularly in the period following
the major price increases of January 1998. Many of these riots were
directed against ethnic Chinese-owned businesses. Ethnic Chinese
make up less than 3 per cent of Indonesia's population, but are
said to control 70 per cent of private business activity.(21) Tight
control by ABRI in large urban areas has, however, kept the riots
limited in extent. There have also been a number of apparently
middle class protests in cities such as Jakarta, but these have
also been easily contained by the security apparatus.(22)
It could be argued that the most important
development has been the rise of student demonstrations calling for
democratisation and the end of President Soeharto's rule. To date,
however, riot police have prevented the students from taking
extending their movement outside the campuses or from joining
together with protests organised by middle class or labour
organisations. Nevertheless, the situation on many campuses remains
volatile and recent reports of the disappearance of students after
being beaten and arrested by police can only serve to intensify
feelings. An increase in reports of human rights abuses will also
focus international criticism on the Indonesian Government.(23)
There may be limits to the extent to which the
security forces are able (or willing) to maintain control over
popular protest, especially if the economic situation continues to
deteriorate. Urbanisation and other changes in Indonesian society
have meant that there are now many more people who could be drawn
into a mass movement than might have been the case even a decade
ago. Recent years have seen the growth of a large number of
non-government organisations (NGOs) committed to social and
political change and the emergence of independent labour unions and
farmers' organisations. Many middle class people have also been
drawn into mass Islamic cultural organisations such as Nahdlatul
Ulama (NU) and Muhammadhiya. Megawati Sukarnoputri (daughter of the
famed leader of the Indonesian independence movement, Sukarno) has,
since her ouster from the PDI, arisen as something of a symbol of
opposition to what many see as a repressive system.
Some analysts have discussed the possibility of
the emergence of some kind of 'people's power' movement in
Indonesia, along the lines of the movement responsible for the
downfall of President Marcos in the Philippines in 1986. The
situation also has parallels with the circumstances prevailing
before the overthrow of the Shah of Iran in 1979, in that a
development-oriented, economically successful regime created an
urbanised, increasingly politicised society which lost patience
with its government's capacity to guarantee prosperity or create
space for political dissent. One scenario could be a loose alliance
between Abdulrahman Wahid (leader of NU), Megawati and Amien Rais
(leader of Muhammadhiya) in a campaign to induce Soeharto to step
down or for wider political reform. Such a movement would certainly
be supported by the NGO sector and independent labour
organisations, but NU and Muhammadhiya have traditionally eschewed
oppositional politics in favour of religious and social service.
Relations between Rais and Wahid have also been strained over a
range of differences. Megawati has not yet shown herself to be
prepared to lead a major confrontation with the Government.
Notwithstanding signs of popular politicisation in recent years,
civil society in Indonesia has been stultified for three decades
under the New Order and there does not yet appear to be the
beginnings of significant organised opposition.
Once again, a great deal will depend on the
actions of the Armed Forces. If large scale rioting were to break
out in major cities and required a heavy armed response to quell,
the prospect of having to shoot people in the streets of Jakarta
might cause existing divisions within the ABRI leadership to
develop into an open split. The official ABRI position is that it
is the protector of the Indonesian state and not any existing
government, a doctrine which might make some officers recoil from a
violent crackdown if sufficient numbers of Indonesians were to take
to the streets. Such an eventuality would precipitate a political
crisis threatening the very existence of the New Order. For the
moment, however, there are no signs that the current situation has
created such pressures within ABRI or that it is having any
difficulty in controlling riots or demonstrations. But the fact
that such possibilities are even under discussion is an indication
of the potential for serious instability and conflict inherent in
the situation in Indonesia today.
The Implications for
Australia
From Weakness to Strength:
Indonesia-Australia Relations
Relations between Australia and Indonesia since
the declaration of an independent Indonesian state in 1945 have had
a rocky history, with periods of good relations broken by sometimes
open animosity. An initial period of warmth prevailed immediately
after independence because of the Australian Government's support
for Indonesia's independence struggle. The relationship soured
following the change of government in Australia in 1949 and reached
a low point in the early 1960s over the issue of Indonesia's claim
on the Dutch-held western half of the island of New Guinea (now
Irian Jaya) and over Indonesia's campaign of 'confrontation'
against Malaysia. Until the late 1980s, relations were dominated by
political and security issues in Southeast Asia played out against
the background of the Cold War. The tension which characterised
relations during the rule of Indonesia's first President, Sukarno,
disappeared with Soeharto's rise to power, but the relationship was
marked by a series of problems. The most prominent of these were
associated with the invasion of East Timor in 1975 (especially the
killing of five Australia-based journalists) and the negative
Indonesian response to aSydney Morning Herald article in
1986 detailing the business affairs of President Soeharto. Popular
perceptions reflected the mutual ignorance of two neighbouring but
very different societies, with most Indonesians hardly aware of
Australia's existence and many Australians regarding Indonesia with
fear and suspicion.(24)
Since the late 1980s, however, the efforts of
the Australian Government, accompanied by Australia's generally
increasing economic involvement in the region have facilitated the
broadening and deepening of the Indonesia-Australia relationship.
These efforts coincided well with the Indonesian Government's
desire to move its foreign relations beyond a predominant focus on
ASEAN. The predominance of politico-strategic issues has been
replaced by a broader range of trade and investment relations and
greater people-to-people links in the form of two-way tourism,
Indonesian students in Australia (in 1997 Indonesia was the
second-largest source of overseas students) and the slow
development of non-official as well as government-sponsored
cultural exchange. Australia and Indonesia are now also part of a
network of regional relationships through their common membership
of organisations such as APEC and the ASEAN Regional Forum.(25)
Until the mid-1980s trade between Australia and
Indonesia was insignificant. Since 1985, however, bilateral trade
has grown at an average rate of 19 per cent per year and Australia
is now Indonesia's sixth largest trading partner and Indonesia is
Australia's tenth most important partner. Bilateral trade reached
almost $5 billion in 1996. Accumulated Australian investment in
Indonesia has been calculated to be in the vicinity of $US6 billion
in 1997.(26) The strengthening of the official bilateral
relationship was affirmed by the signing of the Timor Gap Treaty in
1995 and the Maritime Boundary Treaty in 1997, a relationship
underpinned by regular meetings at ministerial and official level
between the two governments. The signing of the Indonesia-Australia
Agreement on Security at the end of 1995 formalised the already
well-developed defence and security ties between the two countries,
although the mixed public reaction to the Agreement symbolised
continued popular uneasiness in Australia about Indonesia.(27)
As one of Australia's closest neighbours, the
political and economic fate of Indonesia was always going to be of
direct relevance for Australia.(28) This underlying reality has
become even more obvious, given the rapid expansion in the links
between Australia and Indonesia over the last decade. Indonesia's
economic problems have meant a sudden drying up of opportunities
for the growing number of Australian businesses operating in
Indonesia and the growth in trade is likely to slump and may even
register an absolute decrease over the next year or so. Inbound
tourism has already been affected and the number of Indonesians
studying in Australia is certain to decrease. Like the overall
effects of the economic crisis in East and Southeast Asia, the
impact on Australia's trade in commodities and services and on
investment flows with Indonesia is still yet to be quantified.
Australia and the Region
There is no doubt, however, that the Australian
Government needs to be concerned about potential dangers in a
deepening political crisis in Indonesia. As the largest country in
ASEAN, Indonesia is a key strategic player in the region and has
been important in developing positions to manage issues amongst the
ASEAN countries and in developing a common ASEAN position on
relations with China, including reducing tensions over regional
territorial disputes involving China. Resolving such issues has
been a crucial element in the evolution of security arrangements in
the Asia-Pacific since the end of the Cold War.
Political uncertainty in Indonesia, especially
if it involved open conflict over the succession from President
Soeharto, would throw many of these achievements into doubt. Any
perception on the part of the Chinese Government that the
Indonesian Government was fostering or allowing animosity towards
the ethnic Chinese minority in Indonesia, for example, could
adversely affect relations with China. Tensions have emerged
between Malaysia and Indonesia over the issue of Indonesian migrant
labourers in Malaysia who have come under pressure to leave because
of Malaysia's economic problems. There have also been hints of
concern from other members of ASEAN over Indonesia's unwillingness
to take difficult decisions to reform its economy and thus find a
solution to economic problems which threaten to damage the whole
region.(29) Invidious comparisons have been made with Malaysia and
Thailand's ability to deal with its problems more effectively.
There have already been disagreements between the US and Indonesian
Governments in recent years over issues of human rights and labour
rights and the suppression of political protest in Indonesia is
likely to focus greater critical US attention on developments
inside Indonesia.
Australia has an interest in minimising such
tensions and conflicts because of its general interest in stability
in the Asia-Pacific region and because of its direct bilateral
relationship with Indonesia. In bilateral terms, of particular
concern in press and public perception is the possibility that
economic problems in Indonesia might lead to the arrival of
Indonesian refugees or illegal migrants on Australia's shores. Any
problem of this type is more likely to manifest itself as wealthy
ethnic Chinese Indonesians arriving at Perth or Sydney airport than
the stereotype of impoverished 'boat people' in Darwin harbour, but
given sensitivity on this issue within Australia, the Australian
Government will need to monitor the situation closely.
Australia's Response
The Australian Government's response to the
Indonesian crisis has been to provide direct emergency assistance
to Indonesia and to contribute, both financially and at a policy
level, to the IMF program of assistance. Since October 1997, the
Government has provided $8.8 million to a number of programs
designed to help relieve problems created by the drought,
increasing food prices and unemployment, particularly in the worst
affected areas of eastern Indonesia. Australian officials and
advisers have also been working with Indonesian agencies to develop
strategies to create employment in affected areas. In order to
provide a 'second line' of financial support for the Indonesian
currency should the IMF finance be insufficient to stabilise the
rupiah, the Australian Government made available a loan of $US1
billion, as a part of contributions from a number of regional
countries totalling $US17 billion.(30) The Government has stated
that the loan is conditional on fulfilment of the terms of the IMF
reform package.
While supporting the conditions of the IMF
package, the Australian Government has taken the view that the
implementation of reforms should be spread over a number of years,
thus enabling the second postponed tranche of the loan to be
delivered with less onerous conditions attached. In March 1998, the
Minister for Foreign Affairs, Mr Downer, visited the US and Japan
to hold talks with US and Japanese Government representatives and
officials of the IMF and World Bank with the objective of helping
to facilitate an agreement between the IMF and Indonesia. The US
Government took a similar position to Australia (notwithstanding
some controversy within Congress) and, despite some opposition
reportedly expressed by some countries of the European Union, the
IMF Managing Director, Michel Camdessus, has moved towards support
for such a position.(31) This has been the basis for the
discussions taking place between Indonesia and the IMF at the time
of writing. Australia has also been a party to World Bank talks
regarding the delivery of humanitarian assistance to Indonesia to
help deal with the problem of shortages of food and other
essentials in the coming year.(32)
Conclusion
The economic and political crisis in Indonesia
had its genesis outside the country and did not at first appear to
present major difficulties for a country whose macroeconomic
management was reputed to be generally sound. Once the uncertainty
about many Asian currencies began to affect Indonesia, however, the
major structural problems in the country's financial sector and the
real level of its private foreign debt became obvious and took the
rupiah to levels far below those of other falling currencies in the
region. Although the current exchange rate is generally regarded to
vastly exaggerate the real problems of the Indonesian economy, the
rupiah has not yet recovered because the Government's response to
the crisis has only served to undermine international confidence in
the currency. The lack of confidence also reflects deep-seated
fears about the political future of Indonesia, with an aging
President who insists on retaining power and obstructing political
change even while he appears increasingly out of touch with
international economic realities and with the feelings of many of
his own people.
At the time of writing it now appears that the
Indonesian Government and the IMF are inching towards an agreement
which would allow the recommencement of a flow of essential
financial assistance to the Indonesian economy. Without that
assistance Indonesia would be unlikely to be able to stabilise its
currency, which is essential as the first step to restoring the
viability of its financial sector and returning Indonesian
companies to solvency. Only then will Indonesia be able to take
advantage of the opportunities offered by a devalued but stable
currency in terms of improved export competitiveness and
attractiveness to foreign investors.
In the meantime, however, the social effects of
the crisis continue to bite into the living standards of the
Indonesian people, with millions of people losing their jobs and
every Indonesian suffering as a result of the spiralling cost of
basic consumer items. Estimates of the numbers of people being
thrown back below the poverty line represent a tragic reversal of
the steady progress which Indonesia had been making over the last
decades in liberating its people from generations of poverty. The
worsening effects of the crisis on the daily lives of ordinary
Indonesians threatens to bring the already growing political
dissatisfaction amongst many people into the open, whatever their
fears about Army repression.
The New Order has prevailed for thirty years
because it brought prosperity to most Indonesians, while relying on
ABRI to suppress any voices of dissent. In doing so it both
heightened expectations and fostered resentment because economic
development was matched by political liberalisation. The current
crisis has shattered expectations and brought to the surface
subterranean discontent which has long been felt about President
Soeharto's blatant favouritism and his refusal to allow any public
criticism or protest. The transformation of Indonesian society
brought about by the New Order has created new potential players
clamouring for a say about the new political realities of
Indonesia. There are also millions of jobless and underemployed
people in the cities and towns of Indonesia. Despite the absence of
any obvious individual or movement to lead them today, it is not
inconceivable that they might join into a mass movement that, as in
the Philippines in 1986 or in Iran in 1979, brings down a governing
order.
Endnotes
-
- Phil Hanratty,Economic and Financial Turmoil in South-East
Asia: Origins and Consequences, Parliamentary Library
Information and Research Services, Current Issues Brief No. 8,
1997-98.
- Leif Roderick Rosenberger, 'Southeast Asia's Currency Crisis: A
Diagnosis and Prescription',Contemporary Southeast Asia,
vol. 19, no. 3, December 1997, p. 225.
- ibid., pp. 225-26.
- ibid., pp. 228-232
- ibid., pp. 236-38.
- Oxford Analytica Daily Brief, 28 November 1997.
- Economist Intelligence Unit,Indonesia Country Report,
3rd Quarter 1997, pp.22-23.
- Ibid., pp. 19-21.
- Rosenberger, op. cit., p. 243.
- Statement by the Managing Director on the IMF Program with
Indonesia, International Monetary Fund News Brief No. 98/2, 15
January 1998.
- Sydney Morning Herald, 8 November 1997, Oxford
Analytica Daily Brief, 28 November 1997.
- International Monetary Fund News Brief No. 98/2, 15 January
1998.
- Canberra Times, 19 March 1998, p. 7.
- Asiaweek, 13 March 1998, p.26. Oxford Analytica Daily
Brief, 14 January 1998.
- Oxford Analytica Daily Brief, 14 January 1998.
- The Australian, 27 March 1998, p. 7.Sydney Morning
Herald, 1 April 1998, p. 11.
- The Australian, 27 March 1998, p. 7. Oxford Analytica
Daily Brief, 14 January 1998.
- I am grateful to Dr Harold Crouch of the Australian National
University for much of the analysis in these sections. See Harold
Crouch,The Army and Politics in Indonesia, Ithaca, 1978,
for a comprehensive study of ABRI's political role. See also Joshua
Frydenberg,The Australian, 17 February 1998, p.13.
- For an account of the violence of 1965-66 see Crouch,op.
cit, pp. 221-244.
- Canberra Times, 1 April 1998, p. 11.
- Sydney Morning Herald, 21 February 1998, p.38.
- See for example the report of a protest about price rises by a
group called 'The Voice of Concerned Mothers' in Jakarta on 23
February 1998.Canberra Times, 24 February 1998, p.6.
- Sydney Morning Herald, 6 April 1998, p.8, 7 April
1998, p.8.Canberra Times, 7 April 1998, p.8.
- For a survey of some Australians' views about Indonesia, see
Rob Goodfellow, 'Ignorant and Hostile: Australian Perceptions of
Indonesia',Inside Indonesia, September 1993, pp. 4-6.
- For a survey of Australia-Indonesia relations see B. Bishop
& D. McNamara (eds.),The Australia-Asia Survey
1997-98, Melbourne, 1997, pp. 183-211 and Dept of Foreign
Affairs and Trade,Country Economic Brief: Indonesia,
Canberra, 1997.
- Dept of Foreign Affairs and Trade,Country Economic Brief:
Indonesia, Canberra, 1997.
- For a discussion of issues surrounding the Security Agreement
see Gary Brown, Frank Frost and Stephen Sherlock,The
Australia-Indonesia Security Agreement: Issues and
Implications, Parliamentary Research Service, Research Paper
No. 25, 1995-96.
- For a discussion of the debate about policy options open to the
Australian Government when responding to political conflict and
change in Indonesia see Stephen Sherlock,The Politics of Change
in Indonesia: Challenges for Australia, Parliamentary Research
Service Current Issues Brief No. 3, 1996-97, pp.6-10.
- Asian Wall Street Journal, 27 February 1998.
- Data supplied by the Australian Agency for International
Development (AusAID).
- The Australian, 25 March 1998, p. 9.Weekend
Australian, 4 April 1998, p.7.
- Australian Financial Review, 2 April 1998, p. 12.
Appendix: Australia's Trade with
Indonesia
