Indonesia's currency crisis, the spiraling inflation, and the accompanying steep rise in the prices of basic commodities, have led to a series of riots by ethnic Malays against ethnic Chinese shop owners, whom the crowds accuse of price gouging. Chinese make up about four per cent of Indonesia's population, yet control about 70 per cent of the economy. Many Chinese are taking whatever measures they can: sending their savings abroad, making emergency escape plans, and painting "Islam" and "Muslim" on their doors to keep rioters at bay.
The riots have claimed five lives and hundreds of serious injuries, and caused millions of dollars of property damage. Ten churches have been burned. Three hundred have been arrested. It is the worst violence Indonesia has experienced in 30 years. Obviously, a bunch of folks are running amok.
But the rioters are not alone. On Feb. 16, Indonesian police warned they would shoot rioters on sight. "Why not? That is right, shoot on sight," said Try Sutrisno, current Vice President and official police spokesman, to reporters in East Java. So the military did, killing two men dead, and shooting three others. Central Java military chief Major General Mardiyanto defended the shootings, by saying "if the rioters try to hurt my men, I will not tolerate it."
The Suharto government is using a classic policy tool to handle the crisis: denial. Sutrisno, whose term as VP is going to expire in March, denied that crime and rioting would increase with the growing unemployment rate, saying that police had not found any link between crime and unemployment. General Wiranto, the former army chief-of-staff, said "National stability is going ahead well. There have only been a few places where stability and the restoration of the economy have been disturbed. That's natural. Every nation has its problems." While it may be "natural" for some nations to enjoy daily riots, there is certainly cause for alarm when the fourth largest nation in the world is running amok.
Suharto, whose nation is struggling under the weight of strict new guidelines imposed by the IMF in return for $50 million of emergency loans, is currently entertaining some ideas to increase the economic stability of the nation. But in searching for a quick fix, he is seizing upon the wrong solution. He met on Friday the 13th with Steven Hanke, an economist from Johns Hopkins University who has been a leading advocate of currency boards. The New York Times quoted Hanke as saying after the meeting that the Indonesian leader was committed to going ahead with the plan and would continue to discuss it with the IMF.
| Here's the follow-up discussion on this article: | View all related messages |
For a complete listing of article comments, questions, and other discussions related to Jason Gottlieb's East Asian Politics topic, please visit the Discussions page.