Indonesia Engulfed in Crisis

Night after night for months, the world watched an Indonesia in tumult. Protesting the country's worst economic crisis in decades, students faced off with police using tear gas and water cannon.

In May, riots swept the big cities: stores were trashed and burned, ethnic Chinese assaulted and raped. By the time the violence abated, some 1,200 had been killed and the president was forced from office after 32 years of authoritarian rule.

Now uncertainty hangs over Indonesia as former president Suharto's hand-picked successor, B.J. Habibie, faces a clamor for new elections, broad democratic reforms, and reconstruction of a shattered economic system.

The current crisis poses major worries for countries with financial or security interests in the region. It holds importance too for the United Methodist Church in Indonesia in its efforts to establish churches and improve living conditions.

The Republic of Indonesia consists of more than 1,300 tropical islands in an archipelago stretching 3,200 miles across the Pacific, south of Malaysia and the Philippines and north of Australia. Its population is the world's fourth-largest at more than 200 million. It has the world's biggest Muslim population.

Indonesia's crisis began in July 1997 when the national currency, the rupiah, nosedived after Thailand's currency, the baht, fell sharply. Since the crisis began a year ago the rupiah has lost more than 80 percent of its value.

In October, Indonesia sought help from the International Monetary Fund (IMF), which drew up a financial bailout worth $43 billion. But the accord pledged Indonesia to a schedule of Spartan economic reforms.

When in May the government announced price hikes on fuel, electricity and transit fares in order to meet IMF austerity targets, riots erupted the next day. People of Chinese ethnicity were a specific target of the mobs. Ethnic Chinese make up about four percent of Indonesia's population, but they dominate its commerce and industry.

When Suharto announced under mounting pressures that he'd resign, he was replaced by Habibie, his vice-president and long-time crony.

Indonesia's latest short-term economic forecast is bleak: economic growth is expected to shrink by 13 percent this year. Inflation will probably climb to 80 percent. Close to one-fifth of the nation's labor force will probably be jobless.

Aid workers and others fear that with millions of impoverished Indonesians facing food shortages, starvation may soon stalk the archipelago. Foreign governments are sending food.

The IMF Executive Board on July 16th okayed the immediate release to Indonesia of the next $1 billion in scheduled loans. The Board also increased the amount it would allow Indonesia in a separate loan category called stand-by, to $11 billion from a previously allotted $9.7 billion. The Board saw the extra funds as necessary for Indonesia to keep up its drive toward recovery, said an IMF spokesman.

Meanwhile, Indonesia's political condition is scarcely more settled than its economy. Pressure continues for an investigation of the Suharto fortune, which runs to billions of dollars. The Suharto family is one of the world's richest. Suharto has denied any wrongdoing.

Independence movements have recently grown more aggressive on East Timor and in Irian Jaya, both former European colonies which Indonesia later annexed.

Human rights groups are awaiting the outcome of several government investigations into the anti-Chinese violence of May. On July 15th Habibie ordered that a commission be set up to look into mayhem, and called the rapes "the most inhuman event in the history of the nation." The military and other state authorities are also running investigations.

Methodists in Indonesia share with their compatriots the effects of the economic collapse: income now carries less purchasing power and food shortages loom, most acutely in rural areas. The Methodist Church in the country is called Gereja Methodist Indonesia, or GMI, with headquarters in Medan on North Sumatra.

Despite the economic distress, GMI has not had to curtail social programs, like those that bring clean water to villages or build homes for the poor, according to David Kho, conference treasurer with GMI in Medan. "We can carry on because the money comes," Kho said. "Because the help is from America. We don't suspend anything."

One aspect of the crisis, inflation, did present a close call. Officials at the Methodist seminary at Bandar Baru considered closing the school because of big price increases for rice and cooking oil. But the head of GMI, Bishop H. Doloksaribu, asked for help this spring from the directors of the United Methodist Church General Board of Global Ministries (GBGM) in New York, according to Dr. David C. Wu, assistant general secretary for connectional relations at GBGM. The board sent $10,000, part of which will help the seminary stay open another year. The rest will help pastors "who have lost most of their income overnight," said Wu.

The United Methodist Committee on Relief, (UMCOR) will send a team to Indonesia this August to determine what plan might help the church weather the crisis, Wu said. UMCOR recently sent an additional $10,000 of aid.

" We hope the emergency situation will turn around in two or three years," said Wu. "The challenge is so vast and what we can do with our resources is so little in comparison to that vast demand."

July 16, 1998