INDONESIA: Australia Edgy Over Spreading Unrest

By IPS Correspondents Reprint | | Print |

Analysis - Sonny Inbaraj

DARWIN, Australia, Feb 24 1998 (IPS) - Australia faces one of its greatest diplomatic challenges as fears of unrest grow in Indonesia due to the economic crisis there and its possible impact on regional security.

In the hope of averting a disastrous upsurge in civil unrest, the government of Prime Minister John Howard is considering a diplomatic push to convince the International Monetary Fund (IMF) to ease some elements of its rescue package for Jakarta.

The key to the Australian strategy is an attempt to restore the Suharto regime’s badly eroded faith in the IMF and avoid the prospect of Indonesia choosing to “go elsewhere” for solutions to its problems.

President Suharto points out that IMF measures have not stabilised Indonesia’s plummeting economy. But he does not offer any persuasive alternative, stubbornly sabotaging efforts to break up the network of corruption, cronyism and criminality that the currency crisis has exposed.

Plans by the Suharto regime to establish a currency board, which would rigidly fix the value of the Indonesian rupiah to the U.S. dollar, drew a threat from the IMF earlier this month that it would cut off bailout funds for Indonesia.

On Tuesday, reports from Jakarta indicated the government would not be pursuing the currency board proposal in the immediate future, although on record Indonesian officials said it was all up to Suharto.

US intelligence analysts warn of the implications of political unrest in Indonesia on regional stability, arguing that it would be even tougher for Suharto to organise an orderly succession if economic turmoil sparks violence in the streets.

Already, rising prices are forcing millions upon millions back into the poverty they thought they had escaped after three decades of hard work and steady economic growth.

Washington’s views are shared by Australia’s officials, including Howard. Last week, Australian Defence Forces chief Gen John Baker admitted fears over Indonesia’s “ability to cope” with the social fallout from the economic crisis.

“A pause in economic growth should not of itself be stabilising,” Defence Minister Ian McLachlan said.

“But the potential security impact of the crisis cannot be lightly dismissed. One should not overlook the possibility that the financial crisis could have a flow-on effect into political, economic and social stability,” he added.

Particularly worrying is the unleashing of ethnic scapegoating in a nation still nursing the scars of the communal massacres of 1965, which left 500,000 communist sympathisers and ethnic Chinese dead.

In dozens of towns over recent days, thousands of poor Indonesians, angered by rising prices and mass unemployment, have burnt shops and houses owned by the ethnic Chinese minority who dominate the country’s retail sector.

The New York-based Human Rights Watch has accused senior Indonesian government and military officials of fueling anti- Chinese sentiment that has resulted in the widespread rioting.

“We have some good evidence in the current wave that certain elements within the (Indonesian) government are happy to divert attention away from its own role in the economic crisis towards Chinese scapegoats,” said Gerry van Klinken of Sydney University’s School of Asian Studies.

“This way of splitting the opposition or making a point within an intra-elite conflict is callous, dangerous and irresponsible,” he said.

The questions in Canberra are obvious: How would Australia react if economically stricken Indonesia, with whom it has a security treaty and growing defence links, descended into serious social disorder that led to grave human rights violations?

What if Suharto is replaced by a more assertive military leader who decides to throw Indonesia’s weight around in the Association of South-east Asian Nations (ASEAN) and, as a result, heightens tensions with smaller neighbours like Malaysia?

Professor Carlyle Thayer of the Australian Defence Force Academy says the economic crisis has opened scenarios such as the ‘Balkanisation’ of Indonesia and conflict among ASEAN states.

An exodus of Indonesian Chinese as well as their capital to neighbouring countries, like Singapore and Malaysia, could disrupt the delicate ethnic balance there and bring to the surface latent hostility to the Chinese minority.

At the same time, boatloads of illegal migrants could strain ties with Malaysia — which already has close to a million Indonesian workers. Australian immigration officials are even looking at worst case scenarios involving the arrival of boat people and overstaying “tourists”.

Looming over this are uncertainties about China’s strategic response if it is drawn into the economic maelstrom. China could raise ethnic tensions in ASEAN by speaking out for its brethren in Indonesia, which has happened before.

In 1960, the Chinese government arranged for the repatriation of 100,000 Chinese from Indonesia back to their homeland. These Chinese were seeking refuge from the militant Islamic groups in the-then flourishing Indonesian Communist Party (PKI).

“The relative weakening of the Malaysian and Thai economies is not a good thing given that China is rising and showing leadership,” said professor Paul Dibb of the Australian National University’s Strategic and Defence Studies Centre. “This is now an urgent short-term crisis that has to be grafted onto Australia’s strategic (defence) policy.”

Australia’s biggest problem is the inadequacy of the regional security architecture to deal with immediate problems on its northern frontier.

The ASEAN Regional Forum (ARF), the security grouping of the Asia-Pacific, is in the embryonic stage. And its use of the ‘ASEAN Way’ of consensus means avoiding the creation of institutions and procedures that are too formal and legalistic, avoiding a degree of transparency and commitment among members.

Given the slash in defence budgets of ASEAN nations of up to 20 percent — in the face of the currency crisis — it is inevitable the United States will be expected to have a stronger regional presence. But there are indications, Washington insiders say, that the United States is having difficulty trying to micro-manage the economic and political changes in Indonesia.

Under these circumstances it is certainly not in Australia’s interests — if things get out of control in Indonesia — for the United States to marginalise the Suharto regime and focus only on on helping South Korea and Thailand. Unlike Jakarta, the two countries enjoy sympathy on Capitol Hill due to their democratic credentials.