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Indonesian Lawmakers Hand Suharto Emergency Powers

By David Lamb
Los Angeles Times
JAKARTA, Indonesia

President Suharto was handed sweeping emergency powers Monday that give him dictatorial authority over all national issues, from the economic crisis to social unrest.

Details of the decree adopted by the People's Consultative Assembly were not immediately disclosed, but sources said earlier that it was likely to include the rights to dissolve the assembly, abolish political organizations, name a presidential successor and arrest people without trial.

"It empowers the president to take over all state authority if the president thinks the state is in jeopardy," Arbi Sanit, a University of Indonesia political scientist, told the Jakarta Post.

Suharto, 76, who has ruled for 32 years and is scheduled to receive the assembly's endorsement Tuesday for another five-year term, asked for the powers last August, well before Indonesia fell victim to a financial crisis that is threatening to bring the country's economy to a grinding standstill.

Although human rights officials and some academics expressed concern, Suharto supporters pointed out that similar decrees have been in force during his entire reign, except since 1993. He used them only in 1965 in a bloody campaign to rid Indonesia of Communists and dissidents.

Even without the new powers, Suharto has had over the years no less authority than an ancient Javanese king. But Western and Asian economists worry that the decree is sending the wrong signal at a time when international investors' confidence in Indonesia has evaporated and university students are calling for more democratization. The local currency, the rupiah, and the Indonesian stock market both reacted negatively Monday to news of the emergency decree.

"The decree seems to suggest Suharto feels the need to move even farther along the authoritarian road than he has," said Bruce Gale, a Singapore-based economic-risk consultant. "The question is why. And the answer must be that he expects more opposition.

"But I think we're really dealing with minutiae analyzing all this. Suharto runs the country pretty much as he wants anyway. The broader question is whether he is going to implement the International Monetary Fund reforms. That is what everyone is waiting to see."

Suharto signed a 50-point, $43 billion IMF package on Jan. 15 and has repeatedly said since then that he would abide by it. But he also has hedged the particulars of the plan. He introduced his own "IMF-Plus" plan last month, and he said Sunday that the IMF plan he had signed was not in tune with the Indonesia Constitution, which stipulates that major sectors of production must be controlled by the state.

Observers believe Suharto is moving toward setting up a currency board that would peg the rupiah at a fixed rate to the U.S. dollar. Most economists say that Indonesia does not have sufficient foreign reserves or a stable enough economy to support such a move.

The IMF and several Asian heads of state have urged Suharto to abandon the idea, at least until reforms are carried out. The IMF underscored its displeasure with Suharto Friday by announcing that it was postponing for a least two weeks a $3 billion installment due to Indonesia this Sunday.

Many Indonesians - and a small but growing number of Western officials - believe the IMF has been too tough on Indonesia.

"If you look at all the IMF is demanding," a European diplomat said, "it's like the conditions the Allies demanded after the last war. "

These skeptics contend that, although Suharto has not done everything the IMF requires, he has made progress in dismantling monopolies, cutting subsidies and curbing excesses.

On Monday, Australian Prime Minister John Howard also appeared to express some reservations. "We believe," he said, "that the International Monetary Fund package must be implemented with care and sensitivity toward the impact of that package on the social stabilities and social cohesion within Indonesia.

"I hope that the IMF review can be quickly concluded so that a productive partnership with the IMF and the Indonesian government can be developed as quickly as possible."