Source: In Defence Of Marxism, May 22, 1998. Co-authored with Alan Woods.
Markup: Maarten, May 2008
The news of Suharto’s resignation hit the world like a bombshell. For thirty-two years, this bloody tyrant ruled Indonesia with a rod of iron, having come to power over the corpses of over a million people. Now he has been blown away like a dead leaf in the wind. The magnificent mass movement of the students and workers has won a great victory. To the very last minute, Suharto clung to power, threatening a bloodbath if the masses continued to defy him. But in the moment of truth the whole edifice of repression collapsed like a house of cards in the face of a popular uprising. This is the beginning of a revolution. It is like 1931, when the Spanish monarchy was deposed and the Republic proclaimed. This opened the flood-gates of revolution. Indonesia has now entered the same road.
The events in Indonesia have caused shock-waves in international capitalism. Just when things seemed to be going nicely for the bourgeoisie, the crisis in Asia struck with the devastating force of a tropical typhoon. Now the economic crisis has begun to express itself in social and political terms. The press, as usual, tries to cover up the real situation by painting a picture of chaos and anarchy. But among themselves the strategists of capital know that what is occurring in Indonesia is not just a riot. It is the beginning of a revolution. It is essential that all conscious workers are clear on what is happening in this key Asian country.
To some extent the bourgeoisie have only themselves to blame for the recent events. For decades they have looted the economies of Asia, Africa and Latin America, forcing them to open up to the big multinationals and imperialism, lower their tariffs, sell off their industries and utilities for derisory sums. The prices of the raw materials they mainly export have been pushed down while the prices of the commodities and machinery exported from the advanced countries to the Third World have constantly increased. The resulting indebtedness of the ex-colonial countries has reached astronomic proportions and will never be paid off. The crippling interest on the debt crushes their economies. And the international policemen of Capital, the IMF and World Bank, watch like hawks to see that every cent is paid, on pain of severe sanctions. Thus, world imperialism has placed two thirds of the world’s population on hunger rations.
The greed of the bourgeoisie is accompanied by gross stupidity. They believed that this merry carnival of money-making would go on forever. They had discovered the alchemists’ stone which would turn base metal into gold. The fact that this gold was coined from the blood, sweat and tears of millions of the poorest and most downtrodden people on earth was a matter of sublime indifference to them. These bloodsuckers were only interested in extracting the maximum in exchange for the minimum, and to hell with the consequences. But this ruthless squeezing of the peoples of Asia, Africa and Latin America has led to the piling up of insoluble contradictions over a period of decades. And now the day of reckoning has come.
The events in Indonesia have caught them by surprise. They try to comfort themselves with the thought that this is “just a riot.” It reminds one forcibly of the king of France in 1789, when he asked one of his courtiers whether there was a riot, and was told: “No sire, it is a revolution.” Such stupidity is typical of a doomed class that refuses to believe that the writing is on the wall for its system. There have been riots in Zimbabwe and Tanzania, provoked by the ruthlessness of the IMF. That was already a warning that the patience of the masses was reaching its limits. But the Indonesian events are qualitatively different. These are not just riots, but the beginnings of a revolution which will unfold over a period of months and years and will shake Asia and the world.
Overnight the world has “discovered” that Suharto is a bloody dictator who has slaughtered millions. The imperialists wring their hands and appeal for peace and democracy. But this is all a hypocritical farce. The West has known all along who Suharto was, and backed him to the hilt. In 1965, when he rose to power over the corpses of over a million communists, the West publicly looked the other way, but in private applauded the butchery and actively participated in it. The CIA provided the Indonesian army with the names and addresses of all known communists and sympathisers, who were then murdered. For over three decades Wall Street and the City of London have financed this mass murderer with no qualms of conscience. Western governments—including, to its shame, the present Labour government in London—have continued to sell arms and police equipment to Jakarta. Although US military aid to Indonesia has been banned since 1992, the Pentagon has conducted joint training with elite Indonesian military units under a Joint Combined Exchange and Training (JCET) program. Since 1993, the US military has conducted 41 JCET training programs with the Indonesian military at a cost of 3.4 million dollars. What did it matter as long as the money kept coming in? As the German saying goes, “money does not smell”. Suharto was the guardian of stability, and stability, as anyone will tell you, is the first condition for serious money-making. The murder of over a million men, women and children was just a little detail, which, moreover, could be justified on economic grounds. It restored “order”, albeit the order of the graveyard. Things seemed to be nicely tied up for the men of money in London and New York. Until now.
The explosion in Indonesia is not something that has come from nowhere. It is not even the result of the recent economic collapse in Asia, although that has undoubtedly acted as a powerful catalyst. It is the result of the accumulation of insoluble contradictions over decades. Indonesia, like all the other tigers, was held up as a shining example of what capitalism could achieve for formerly backward countries. In point of fact, the large infusion of foreign capital solved none of the fundamental problems of Indonesian society, but merely exacerbated them. What it did do was to strengthen the working class, the only force that can really show a way out of the impasse and bring about a thorough and progressive transformation of society.
In common with all the other bourgeoisies of the ex-colonial countries, the Indonesian bourgeoisie is rotten and corrupt to the core. It has shown its complete inability to transform Indonesian society on progressive lines. After half a century of so-called independence, it has solved not a single one of the basic problems—neither the agrarian problem, nor the national problem, neither modernisation nor democracy, nor even genuine independence has been achieved. The Indonesian bourgeoisie has arrived too late on the stage of history to play a progressive role. Weak and degenerate, it can only play the role of the local office-boy of foreign imperialism. The clearest expression of this is the plundering of the country by the Suharto family and its hangers-on who own and control a large slice of the economy. Thus, in spite of its huge natural resources, the fourth most populated country in the world has been reduced to beggary and humiliating dependence on hand-outs from the IMF. This is the end result of half a century of bourgeois “independence” in Indonesia.
The Suharto family have ruled Indonesia like a royal dynasty, or, more correctly, like robber barons, for 32 years. They own the best part of the economy which they plunder without restraint, giving an entirely new meaning to the expression “Keep it in the family.” President Suharto and his six children have an estimated net wealth of $40 billion, equal to roughly half the country’s gross domestic product. Their influence flows to nearly every capillary of Indonesian life: they control assets from oil and electricity to planes, cars, toll roads and media. Igit Harjojudanto, Suharto’s eldest son, along with Bambang largely owns petrochemical sector. Bambang Trihatmodjo, his middle son, controlled Bank Andromeda (25 per cent share), owned PT Bimanatara Citra group listed on the Jakarta stock exchange, and, in his spare time, is the treasurer of the ruling Golkar party . He also owns shares in the tanker operator Osprey Maritime and is part owner of 75 per cent of the Chandra Asri petrochemical plant. The notorious Hutomo (Tommy) Mandala Putra owns the Bank Utama jointly with Siti Hutami, runs the Timor national car project and PT Timor Putra Nasional. He also set up and controls Humpuss Group, as well as PT Humpuss Intermoda Transportasi. In addition he controlled a trade monopoly on cloves (now dismantled), and owns Goro company. So much for the sons. But the daughters did not do too badly, either. Siti Hardijanti Rukmana (Tutut), the President’s eldest daughter, controls PT Citra Marga Nusaphala Persada toll road operator, owns Bank Yama, is deputy chairman of the Golkar party, as well as welfare minister. She set up the Citra Lamtoro Gung group and jointly holds 30 per cent of shares in the Bank Central Asia, together with Sigit. Siti Hediati Harijadi Prabowo, the middle daughter, controls an 8 per cent stake in bank Industri. Siti Hutami Endang Andyningsih, the youngest daughter, is only a joint owner of Bank Utama, together with Hutomo.
This is “crony capitalism” on a vast scale, where the whole of this huge and potentially wealthy country is systematically fleeced by the Suharto clique and foreign imperialism. The simmering discontent and indignation at this state of affairs affects all classes, not just the workers and peasants, but a large number of petty bourgeois and students, creating a potentially explosive situation. For some time this was masked by economic growth which held out the prospect of future amelioration. But the crisis in Asia instantly reduced these dreams to ashes. Overnight, the Indonesian economy was plunged into crisis. the rupiah fell to 11,000 to the dollar. The bankruptcy of the economy rapidly laid bare the bankruptcy of the régime.
The Indonesian events must be seen in the context of the general crisis in Asia which has hit Indonesia particularly hard. The crisis in Asia has had a devastating effect on jobs, wages and living standards. Many workers, sacked from their jobs, are now faced with the prospect of savage increases in the price of basic necessities. Spokeswoman for The Indonesian Women’s Association for Justice (APIK) Sriwiyanti pointed out that the employers are using the worsening economic crisis to justify the current wave of lay-offs and dismissals. She added:
“‘There is no question that the crisis has led many companies to the brink of bankruptcy but a lot of companies which have not been badly affected had used the issue to dismiss employees in the name of efficiency,’ she claimed.” (Jakarta Post, 5/5/98.)
“The price rises follow lay-offs of millions of workers, caused by the collapse of the economy and the devaluation of the rupiah. Unrest is growing across the country as the Suharto Government ends subsidies on basic goods in line with the conditions imposed by the International Monetary Fund in return for its economic rescue package.” (Sydney Morning Herald, 7/5/98.)
The collapse of the rupiah from around the 2,400 level against the dollar last July plunged Indonesia into its worst economic crisis since Suharto took power in the mid-1960s. Inflation and unemployment are shooting up, most companies are in technical bankruptcy and trade has come to a virtual standstill. The increase in fuel prices were part of the IMF reform agreement, but were obviously going to cause terrible hardship in a nation dependent on transport between 17,500 islands spread for 5,000 km (3,000 miles) along the Equator. The per capita income of Indonesians as measured in US dollars has already dropped by at least 60% over the last six months. This is reflected in the inability of an increasing number of Indonesians to get access to basic commodities as prices soar. Prices of basic foodstuffs and cooking oil have increased 20 per cent. Massive hoarding has made some goods scarce, including rice. The government has been forced to announce that it will import an additional 500,000 tonnes of rice to meet demand as panic buying continues.
It is not quite true that the IMF’s measures were responsible for the explosion. They were only the spark that ignited the powder-keg. As Hegel once said, necessity expresses itself through accident. With or without the IMF’s measures, there would have been an eruption. The ground for it had been prepared by the whole of the previous period. The increase in prices of rice, cooking oil and other basic necessities of life was the last straw. As the rupiah plunged to 10,000 to the dollar, the IMF used the opportunity to force further concessions from the Suharto government. Desperate to restore some stability to the currency, Suharto was forced to accept even more stringent conditions. The new letter of intent signed between the IMF and Suharto on January 15th increased concessions on two fronts. First, the regime has had to agree to end subsidies for electricity and oil. The rise in energy prices will maintain high inflation for an extended period. The increase in fuel prices represented an average of 47%, and electricity prices by 60%. The official Suharto-IMF estimate is that inflation will be at least 20% per year for the foreseeable future, though in practice it will be more. The burden will fall disproportionately on the poorest sections of society. Increased fuel prices will especially hit the 50 million poor in Java. Since the destruction of Java’s forests and the loss of all firewood, the mass of people are dependent on kerosene for both cooking and the essential boiling of drinking water.
On Monday the fourth of May, bowing to pressure from the IMF, the Indonesian government Monday announced an increase in public transportation fares, only a few hours after it announced price hikes for fuel and electricity in accordance with an International Monetary Fund (IMF) recommendation to reduce government subsidies for the two commodities. Inflation is already running at an annual rate of close to 30 percent, with prices jumping 4.7 percent in April from a month earlier. Some fuel prices rose 71 percent The increases covered bus, train and ship transportation fares with an average increase of 65.61%, The highest increase of 100.72% were imposed on economy-class train fares, while economy-class inter-city bus fares were increased by 50 %. Fares for regular buses and minibuses, which are used daily by most commuters, were raised by 66.67% and 50% respectively—from 300 rupiahs (about 4 US cents) to 500 rupiahs for buses and from 400 rupiahs to 600 rupiahs for minibuses. Fares for diesel-powered trains were raised 72.96%, while ship fares—very important in a country made up of a large number of islands—were raised 53.33%.
The Minister of Mines and Energy Kuntoro Mangkusubroto acknowledged the price hikes would be a hardship for the public, but said the decision was “the best” from a list of “hard and bitter” choices. Leading opposition figure Megawati Sukarnoputri castigated the government for the increases, saying they showed Suharto’s administration was out of touch with the people. Just how far out of touch was immediately revealed. The “hard and bitter” choices produced a result that neither the government nor its foreign backers, nor the bourgeois opposition leaders, anticipated. There was a sudden and spontaneous explosion. Violence erupted as soon as the increase in fuel and transport prices was announced:
“‘Everybody is now complaining about the prices,’ said Yayah Syamsiah, a 40-year-old noodle vendor in Jakarta who has six children. ‘Who will listen to us? Ordinary people are crying’.” (Associated Press, 5/5/98.)
Once it began, the movement quickly acquired an all-Indonesian character. In the North Sumatra capital, Medan, the disturbances broke out on Monday the fourth, hours after the government announced sharp fuel and electricity price hikes, in line with economic reforms demanded by the International Monetary Fund. In the ensuing rampage, some 170 shops were destroyed or looted and burned in Medan while 38 cars and 21 motorcycles were also set ablaze, North Sumatra police reported. The reaction of the régime was to resort to force.
The pig-headed stupidity of the strategists of capital, and their complete indifference to the suffering of the masses, was strikingly expressed by the comments made by the IMF’s managing director, Michel Camdessus, speaking in Melbourne, Australia, after the riots had already started. He expressed “deep concern” over the rioting in Indonesia, but, with astonishing complacency, said the real cause of unrest was not price rises, but the deeper economic management problems which had led to the crisis in the first place. More incredibly still, he insisted that the 71 per cent petrol price rise which led to riots in the city of Medan was “indispensable to the country’s economic future”, and he urged Jakarta to push ahead with the tough economic programme backed by the IMF. He said the petrol price rise was part of the IMF’s agreement with Indonesia, and described IMF policies as medicine which created more pain at first, but which would lead to a more balanced economy. “Deplorable as these [riots] É can be we should always remember that our programs are not the deep origin of these problems,” Mr Camdessus said. (Sydney Morning Herald, 6/5/98.)
One feature of the riots that has been singled out by the press is attacks on Chinese shopkeepers. This is not a new phenomenon in Indonesia, where Chinese, who account for only three per cent of Indonesia’s 202 million people, dominate the commerce sector and control 80 per cent of the 163 companies listed on the Jakarta stock exchange. These have long been the targets of discrimination that occasionally erupted into violence, exacerbated by the fact that many wealthy Chinese businessmen were prominent backers of Suharto. For the mass of unemployed and hungry town dwellers, the temptation to raid the shops—almost all owned by Chinese—and carry away food and other goods, proved irresistible. Tragically, it was the small Chinese shopkeepers who were the main victims.
“It was the