BY MEGAN ARNEY
After weeks of mounting antigovernment protests by students throughout Indonesia, the Suharto regime's cops opened fire on 3,000 protesters in the capital city of Jakarta May 12, killing six youths and wounding at least 16 others.

The protests, which began in response to Indonesia's economic crisis, are increasingly demanding the resignation of Suharto, who has ruled with an iron fist for 32 years. A sharp hike in fuel, transportation, and electricity prices on May 1 - austerity measures dictated by the International Monetary Fund (IMF) - triggered a nationwide expansion of the demonstrations. The student movement has won widespread support from workers and peasants and has begun to establish links with them.

Meanwhile, Washington and other imperialist governments, increasingly nervous about the Indonesian powder keg, are seeking to stabilize the capitalist regime there while insisting on the very measures of economic austerity that are fueling the fires of unrest.

The May 12 killings, which occurred on a heavily trafficked road near downtown Jakarta, stunned many Indonesians. According to witnesses, police fired continuously for several minutes on unarmed students, first with rubber bullets and then with live ammunition, as well as beating and kicking protesters.

"The police went crazy. They beat us up. They chased everybody while others were firing," said Iwan Karimun, an economics student. The assault came after students, who until then had generally kept their protests on campus as demanded by the regime, marched into the streets of the capital.

Student leaders in Jakarta and other cities have vowed large-scale protests in response to the killings. Tens of thousands of students have been protesting since February against the Indonesian government and IMF-imposed austerity measures, which includes increased prices of food and basic necessities and layoffs. Daily demonstrations escalated after May 1 price hikes.

The students have begun to gain support from labor unions, farmers, women's groups, and others. At demonstrations in Medan, students were joined by young unemployed workers, while doctors and nurses joined protests in the capital city of Jakarta. On May 1, representatives of 30 workers' groups in Greater Jakarta held a four-hour meeting with students at the University of Indonesia campus in Depok. Student-worker links are also being forged in the cities of Bandung and Surabaya.

Students are organizing forums, drawing representatives from around the country, at many campuses. A national student conference was held in Bogor in April demanding the resignation of Suharto, lower prices on basic necessities, and a series of political changes. Even before the May 12 massacre, students had called for mass rallies on May 20, Indonesia's "Day of National Resurgence," which commemorates the fight against Dutch colonial rule.

Austerity measures from IMF bailout
Indonesia has been shaken by its worst economic and political crisis in three decades since the wave of currency devaluations throughout much of Asia triggered by the collapse of the Thai baht last July. The Indonesian rupiah has plunged an estimated 80 percent since then.

In an effort to stem the financial turmoil engulfing Asia, Washington has engineered loans totaling more than $100 billion as "rescue packages" for south Korea, Thailand, and Indonesia. The loan arrangements - all with belt- tightening conditions attached -are aimed at maintaining the flow of money into the coffers of U.S. banks and other imperialist financial institutions.

The IMF "rescue" plan for Indonesia is $43 billion. This program is coupled with demands for "economic reforms" such as ending state monopolies to open up the country's markets in sugar, wheat, and soybeans to foreign investors.

In 1997 Indonesia was Asia's largest producer of natural gas, the second-largest producer of palm oil, and among the top five producers of coffee. It is also a major exporter of gold, tin, copper, cocoa, and vanilla, with the world's largest single copper and gold mine operating on the island of Irian-Jaya.

The so-called bailout is one of the largest of such efforts since Washington spearheaded the $50 billion loan to Mexico in 1994, after the peso plunged 40 percent and imperialists feared the Mexican government could default on interest payments on the country's huge foreign debt. After cobbling together a "rescue package," the U.S. rulers forced the Mexican government to sell off much of the national patrimony and implement austerity measures on workers and farmers there.

The cuts in government subsidies, decreed in response to IMF demands, led to a 70 percent hike in oil prices; a 60 percent increase in electricity rates by the end of the year, and sharp rises in transportation costs. The IMF has also called for cuts in social programs, closing down insolvent banks, allowing international investors to take over commercial banks and other financial institutions, and closing down debt-ridden companies, the result of which is throwing thousands of workers into the streets.

The cheapened currency is crippling most Indonesian companies, while capitalists attempt to compensate for their sagging profits by doubling and tripling prices of domestic goods.

Jakarta raised interest rates in early May in order to prop up the plunging rupiah. This has weakened the already feeble banking system, as industrial bosses find it more difficult to borrow capital to pay their foreign debt, now estimated at $80 billion. This in turn has hampered domestic investment in production, feeding unemployment.

According to the Wall Street Journal, "most of Indonesia's 220 banks are out of cash, and only a dozen or so are expected to survive as an estimated 50% to 70% of the nation's loans turn bad this year. Financing for trade has all but dried up."

Meanwhile, Indonesia's debt to international banks has ballooned - from $21 billion in 1980 to $108 billion in 1995.

On May 8 Washington allocated another $1 billion to Indonesia in guaranteed loans.

The economic crisis has ravaged working people in Indonesia. The International Labor Organization recently predicted that unemployment will rise as high as 10 percent this year from 5 percent in 1996. Job cuts, which put 420,000 workers onto the streets last year, are expected to skyrocket this year. The prices of basic foods such as sugar, wheat flour, and soybeans could jump 250-500 percent if the government eliminates subsidies for these staples. Poultry, meat, and egg production have slowed dramatically from a lack of imported feed.

The Group of Seven industrialized nations - Washington, London, Tokyo, Paris, Rome, Ottawa, Bonn, plus Moscow - met in Birmingham, England, on the weekend of May 11. There, the government representatives fretted about how to protect imperialist investments in Indonesia. U.S. treasury secretary Robert Rubin announced U.S. big-business's plan as "the best path is to implement the IMF program." Earlier Rubin commented, "The best protection against a political breakdown is the restoration of financial stability."

Circles in Washington and other imperialist governments, as well as some in the Indonesian bourgeoisie, have begun to debate whether the Suharto regime still remains more of an asset than a liability for capitalist interests. "What the government is experiencing now is not just a loss of credibility, but a loss of legitimacy," said Umar Juoro, an economist at the Center for Information and Development Studies in Jakarta.

There are, however, problems with getting rid of Suharto, a longtime pillar of imperialist interests in the region. Suharto, his relatives, and close friends are among the wealthiest of Indonesian capitalists, with an estimated fortune of $30 billion. Suharto's son, Bambang Triahadmodjo, holds 25 percent of the bank of Andromeda and, with others, owns 75 percent of a petrochemical plant. Ousting President Suharto, then, would have bigger implications than simply replacing a president.

Besides the May 12 assault, the Suharto regime has used its repressive forces against a number of other mass protests around the country. In early May, troops were sent in to quell rebellions in the city of Medan. Police fired live ammunition, tear gas, and plastic bullets at the protesters. In February and March alone, 12 student leaders of the student movement have been kidnapped or "disappeared."

During the rebellion in Medan, several stores were destroyed, many of which are owned by ethnic Chinese merchants. The big-business media has portrayed the rebellion in Medan as anti-Chinese. Although Chinese make up only about 3 percent of Indonesia's population, local Chinese businessmen control a much larger proportion of the country's commodities trade.

There is undoubtedly an element of scapegoating of Chinese merchants for the economic crisis. However, according to Efendi Panjaitan, who works with a local "nongovernmental" organization in Medan, the targeting of Chinese-owned businesses "is not against the people, but their things."

Recently, Washington has probed using its military might for maintaining stability. Since May 1, U.S. troops had been conducting joint military maneuvers as part of a five-year plan. With the explosion of antigovernment protests, the White House announced May 9 that joint military exercises with Indonesia would be stayed for the moment. The canceled exercise would have been the fourth this year and six more are scheduled.

Since 1993, the U.S. armed forces has held 41 training exercises with the Indonesian military, many of them involving the notorious Kopassus commando force, which has tortured and killed civilians. The Kopassus troops, which include Red Berets trained by the Pentagon, have been deployed in recent months against the student protesters in Jakarta.  
 
 
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