BY MAURICE WILLIAMS
Youth and students in Indonesia have stepped up their demonstrations in response to the economic crisis racking that country and protesting austerity measures by the regime there. Meanwhile, officials from the International Monetary Fund (IMF) announced March 6 that they are delaying $3 billion in loans to the government until at least April, complaining that the government in Jakarta hasn't gone far enough in implementing "basic conditions" of austerity required from the U.S.-led $43 billion "rescue package" negotiated last October. "What Indonesia needs to do," said U.S. treasury secretary Robert Rubin, "is reestablish financial stability and be on a sustained reform program."

More than 10,000 students rallied at Gadjah Mada University in Yogyakarta in first week of March. Several days later students organized protests at campuses around the country as cops and soldiers blocked 1,500 youth from marching in Yogyakarta again March 6. That same day some 500 students rallied in Jakarta demanding lower prices. Many protesters demanded that Indonesian president Suharto step down.

The economic crisis choking Indonesia began with the wave of currency devaluations throughout the region that was triggered by the collapse of the Thai baht last July. The Indonesian rupiah has plunged an estimated 70-80 percent since then.

The cheapened currency is crippling most companies, while capitalists attempt to compensate for their sagging profits by doubling and tripling prices of goods across the country. "The devaluation is happening so fast that prices have not been able to keep up," one U.S. investor remarked. "How can you increase prices by 500 percent? People will start throwing rocks through your window. But if you don't you lose money on everything."

Indonesia faces a massive default in loans, with enterprises owing a foreign debt totaling $137 billion. Foreign banks have minimized relations with Indonesian banks, local lending has nearly halted, and business transactions are paralyzed. "Most Indonesian businesses are technically bankrupt," the February 21 Economist asserted.

Unemployment and inflation have skyrocketed, provoking food riots across the country. Government officials estimate more than 8 million workers will be jobless in 1998 - almost 10 percent of the 90 million workers in the country. "Diplomats and other economic analysts say the figure could be nearly twice as large," the Washington Post reported March 6.

"People in the countryside are being laid off," said Slamet, a 35-year-old farm worker from a village on the outskirts of Bumiayu. He traveled to Jakarta, the capital, looking for construction work, although the economic crisis has paralyzed most projects. "There's so much unemployment on the farm that people come here to get construction jobs," he continued. "If it goes on like this there could be a famine." Nearly 500,000 peasants and farm workers are expected to enter Jakarta searching for work.

In response to the simmering turmoil the regime organized "Operation Yustisia" a crackdown on migrant workers to send them back home. Jakarta also imposed a 25-day ban on mass demonstrations.

More than 35,000 troops were deployed to contain unrest March 10, when Suharto was reappointed president to a seventh five-year term by the 1,000-member People's Consultative Assembly. The day before, the assembly granted "special powers" to the president to crack down on dissent.

The Clinton administration is in a quandary over pressing Suharto into obeying imperialist dictates for the "bailout" program imposed on Indonesia - the world's fourth-largest country with more than 200 million people. Daily meetings on Indonesia have been organized in the White House that included Treasury Secretary Rubin and his financial team, State Department officials, CIA analysts, Pentagon brass, and national security advisers.

On March 2 Washington dispatched former U.S. vice president Walter Mondale to Indonesia to demand Jakarta show "strong, demonstrable commitment to full implementation of the economic reforms agreed to by the IMF." Mondale left a 90- minute meeting with Suharto almost empty-handed and "without a commitment" to the imperialists' "mandates for change," the New York Times reported March 4.

Those "mandates" include spending cuts for social programs, closing down insolvent banks, and allowing international investors to take over commercial banks and other financial institutions through mergers and acquisitions. Other measures include industrial "restructuring" that closes down debt-ridden corporations, throwing thousands of workers into the streets.

The Suharto regime has balked at implementing some of Washington's demands, including eliminating food subsidies, in face of the protest actions across the country. Indonesian state secretary Moerdiono said his government would continue subsidizing certain imported goods to meet basic needs during the economic crisis.

"Despite the fact that we already have, and started to carry out, clear and fundamental reforms and a restructuring program, there are no signs yet that the situation has improved," Suharto declared March 1, the day before Mondale's arrival. "On the contrary, the people's life is becoming more difficult."

"This is the reason why I have asked the IMF and other heads of government assist us to find a more appropriate alternative," he added, referring to this scheme as "IMF- Plus."

The "IMF-plus" would include a number of measures broader than the IMF austerity plan, such as fixing the exchange rate of the rupiah to the U.S. dollar. The regime has considered establishing a currency board scheme that replaces the central bank and peg the rupiah at around 5,500 to the dollar - currently the exchange rate is 9,000 to 10,000 to the U.S. dollar. Washington and other imperialists are opposed to a currency board in Indonesia.

With the rupiah plummeting in value since last July, many Indonesian companies cannot make payments on debts to foreign investors. This move is an attempt by the regime to stabilize the currency, halt further devaluations, head off the political instability rocking the country, and salvage the wealth of a layer of Indonesia's capitalist class.

Suharto's family has amassed more than $16 billion over the past three decades since he came to power during a massacre of workers and peasants in 1965. Between 500,000 and 1 million people died in the blood bath, executed under the pretext of crushing a supposed Communist Party coup.  
 
 
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