As Indonesia plunged further into social, political and economic crisis, the man the western business world is trying to save was 're-elected' president for the seventh time in a row. No one stood against him for the simple reason that he wouldn't let anyone stand against him.
Why anyone would want to save President Thojib Suharto is beyond imagination. He led the military coup in 1965 that wiped out between half a million and a million Indonesians within a year. His rule over the world's fourth most populous country (200 million people) has been maintained only by the most brutal repression. All opposition political activity is banned. Peaceful protesters, trade unionists, in fact all those who try to organise independently, are routinely imprisoned, tortured, and sometimes assassinated.
In East Timor 200,000 people, one third of the population, were killed or died of starvation after the Indonesian army invaded in 1975, and massacres continue. Thousands of people in Aceh and Irian Jaya have been butchered over the years for daring to seek independence.
Suharto's government, based on his party, Golkar, and two other 'permitted' parties, is simply a cover for autocratic military rule. The army is unambiguously organised to confront domestic rather than international threats. Troops are deployed throughout the country. Everywhere, the military has authority over political, social and economic matters, as well as security.
Neither the repression nor the illegal occupation of East Timor nor the rampant corruption of Suharto's circle was of much interest to the west's rulers or their media as long as profits were being made in Indonesia. Now the economy is crumbling and Suharto is extending his autocratic behaviour to international bankers, the tune is changing. The Financial Times recently warned:
'Increasingly the assumption among both businessmen and economists is that economic collapse will provoke such severe social unrest that the army...will be forced to decide where it stands.'
Indonesia's economic problems have the same roots as those affecting all the Tiger economies rapid growth based on low wages and excessive borrowing, followed by overproduction, falling profits and debt crises. The problems have been exacerbated by Suharto's intransigence, greed and tight control of vast chunks of the country's wealth that he has stolen.
Since last July the rupiah has lost 80 percent of its value. Foreign exchange reserves have almost disappeared and the central bank is recklessly printing money, threatening hyperinflation. Most of the country's 200 commercial banks are illiquid, and some have been unable to cash cheques. Foreign debt stands at $137 billion and cannot be serviced without rescheduling. The level of domestic debt is bringing production to a standstill. For example, the massive state owned oil and gas monopoly, Pertamina, has defaulted both domestically and abroad, and has been forced to halt production.
The social consequences of this crisis are devastating. Food prices are soaring while wages have been frozen.The central bank is running out of cash to maintain the subsidies that are the difference between life and death for millions of Indonesians. Basic goods and medicines are in short supply. In February alone, more than 2 million workers lost their jobs. On top of all this, there is a crippling drought-related famine in vast areas of the country.
Last October, terrified of the knock-on effect in the region of an economic collapse in Indonesia, the IMF stepped in with a $43 billion rescue package, conditional on tough 'reforms'. But Suharto, facing mounting protests across the country, refused to implement them. In response, the IMF threatened in March to withhold $3 billion of the loan. Immediately the rupiah fell 20 percent, pushing down other Asian currencies and causing stocks to fall in South Korea, Singapore, Malaysia and the Philippines. The IMF suddenly began talking about softening the 'reforms' it had originally demanded. Britain's Foreign Office minister, Derek Fatchett, flew to Indonesia to impress on Suharto the importance of implementing the IMF's demands, which include 'an end to food and other subsidies, nepotism, monopolies and costly infrastructure projects'. His concern may have had something to do with the fact that Britain is the largest foreign investor in Indonesia. While he was there it emerged that Thames Water had just signed a deal to run the newly privatised monopoly water company in partnership with a corrupt company run by Suharto's eldest son!
The mounting popular unrest in Indonesia has taken two forms. In the first few weeks of the economic crisis much of the anger was directed at Indonesia's ethnic Chinese community, stoked up by Suharto and his cronies. Ethnic Chinese make up less than 4 percent of the population but for various historical reasons control around 70 percent of the wealth. Despite this they face oppressive discrimination by the state they cannot use the Chinese language, they are banned from joining the military or government, and cannot enter state universities. During the mass killings that followed the military coup in 1965, ethnic Chinese suffered terribly, and ever since they have been regularly used as scapegoats by the government.
In recent weeks, however, it appears that student and worker protesters have been rejecting the anti-Chinese propaganda, directing their venom instead towards the government. Despite a total ban on all meetings and protests, rioting and pro-democracy demonstrations have spread like wildfire across the 13,000 island archipelago, and strikes are being reported. In one incident, a huge crowd in Surabaya, provinicial capital of East Java, carried banners saying, 'Smash the seat of power.' Protests involving tens of thousands of students in campuses across the country are intensifying, many involving confrontations with the army.
Such activities are the latest stage in a long process of recovery for the left and organised labour, which had been virtually eliminated as a result of the disastrous politics of the Stalinist Communist Party of Indonesia (PKI) in the 1960s and the repression by Suharto.
After Indonesia gained independence in 1945, the country was led by President Achmed Sukarno, a nationalist who had little interest in socialism but was hated by the West for having declared independence from the Dutch colonialists and later for helping to found the Non- Aligned Movement in 1955. The PKI collaborated with Sukarno, accepting about 60 seats of 261 in the appointed assembly. The needs of workers were subordinated to the needs of national development and security.
The PKI had no need to sacrifice its independence it won 6 million votes in the 1955 elections and by 1965 was claiming 3 million members. If the PKI had rooted itself in the idea of the self-emancipation of workers instead of snuggling up to nationalists and capitalists, it could have led its mass following to challenge for power. Instead, it left itself vulnerable to attack. The crunch came with a small failed coup on 1 October 1965, which the military falsely blamed on the PKI. The army, under General Suharto, then organised a counter-coup with the backing of the US, Britain's Labour Party and Australia, and unleashed one of the worst massacres the world has ever seen. The PKI was unprepared and was destroyed. Hundreds of thousands of members were slaughtered, the names of many supplied by the CIA. Virtually every radical element in the country was eliminated. For millions the future was bleak and for many the name of socialism/communism was linked to collaboration and defeat.
The first signs of the revival of resistance came in 1974 when 1 million people spilled onto the streets during widespread student protests. In the 1980s workers began to stir in defiance of the ban on strikes. As the decade progressed, increasing levels of strikes brought some wage rises and a few minor reforms, and by 1990 the number of strikes had reached pre-1965 levels. Following the brutal mutilation and murder in 1993 of Marsinah, a young woman active in an industrial dispute, rolling strikes spread, building support for the recently formed independent SBSI (the Indonesian Prosperous Trade Union). In 1994 there was an explosion of strike activity. In Medan, for example, SBSI organised a virtual shutdown involving tens of thousands of workers walking out of 70 factories. Muchtar Pakphapah, SBSI's leader, was imprisoned, as many other SBSI activists have been since then. In 1995 another independent trade union, the PPBI, was formed, led by a 23 year old female worker, Dita Sari, which has organised many strikes in textile and other factories.
Another surge of activity came during the rigged 1997 parliamentary elections, which saw mass demonstrations, protesters breaking through army barricades, and rioting, particularly by the urban poor and the youth (half the population is under 20). Ever since, there have been continued protests around the country.
The legacy of the PKI experience is still clear in the weakness of the left. The most radical organisation of any size is the (PRD), which involves some socialists. It works in alliance with the Indonesian Democratic Party (PDI), which is sanctioned by Suharto, and appears to focus its efforts on the urban poor rather than organised workers. Nevertheless, it is militant (one of its slogans is 'Look for the fire, fan the fire') and, along with the KNPD (a student-worker alliance), attempts to promote struggles from below.
Hope today lies with the students and workers who are increasingly resisting the repression and building independent trade unions. Their success will depend on whether they organise independently of the reformers and adopt a socialist strategy which recognises the mistakes of the PKI and is determined not to repeat them.
In the wave of euphoria following New Labour's victory in May 1997, foreign secretary Robin Cook proudly told a packed press conference, 'We will not permit the sale of arms to regimes that might use them for internal repression'.
Many people believed that this would inevitably mean a halt of arms sales to Indonesia. After all, in 1978 Robin Cook wrote in the New Statesman, 'The current sale of Hawk aircraft to Indonesia is particularly disturbing as the purchasing regime is not only repressive but actually at war on two fronts: in East Timor... and West Papua.' Even in 1994 he was attacking the Tories on the same issue, exposing the use of Hawk aircraft for bombing raids in East Timor.
Today, the bombing raids in East Timor continue. So does the use of British Scorpion tanks to plough through pro-democracy demonstrators and British guns to shoot down peaceful protesters. And so do the sales of British weapons to Suharto. In the week that Cook announced his 'ethical' policy, the Indonesian minister for defence revealed that talks were continuing for the purchase of 18 more Hawks. The second largest British arms supplier to Indonesia, Procurement Services International, was told by Blair that 'the type of equipment the Conservatives have given export licences to will present no difficulty for the Labour government'. Sure enough, the company's record £700 million business with Suharto has continued unimpeded and is still being backed by government credit guarantees and soft loans paid for by British taxpayers.
In a pathetic attempt to defend the indefensible, Robin Cook said, 'It was not realistic or practical to revoke licences,' conveniently ignoring the relevant law which explicitly states that any licence can be revoked by the secretary of state at any time. In fact New Labour has approved at least 11 arms deals with Indonesia. They include British Aerospace Heckler & Koch machine guns that can fire 800 rounds a minute, as well as bombs and nuclear equipment.
Perhaps New Labour's behaviour should not surprise us. Since 1945 there has been no discernible difference between the foreign policies of Labour and Tory governments. In 1965 the Labour government under Harold Wilson aided the slaughter in Indonesia in order to rid the country of Communists. The first minister responsible for selling Hawks to Suharto was not a Tory, but Labour's foreign secretary, David Owen, in 1978. He justified the sale by saying that estimates of the killing in East Timor had been 'exaggerated'. Today an appropriate slogan for Blair might be, 'New Labour, old foreign policy new arms sales to dictators'.