Subject: US$47 billion IMF threat will plug bloodbath

Sydney Morning Herald
Friday, September 3, 1999

A$67 (US$47) billion threat will plug boodbath By DAVID JENKINS, Asia Editor in Jakarta

The Indonesian Government was in disarray yesterday over the escalating violence in East Timor, with the civilian government of President B. J. Habibie wringing its hands and hinting at a possible foreign peacekeeping force as an increasingly defiant army showed no sign it was willing to stop instigating the unrest.

It now seems that nothing short of an international threat to pull the plug on a $US43 billion ($67 billion) IMF bailout of the stricken Indonesian economy will succeed in persuading Habibie to rein in his generals, who have made it plain in private briefings that they are determined to hold on to East Timor at all costs.

A freeze on the disbursement of emergency aid could have a devastating effect on Indonesia's fragile economy, sending the rupiah into a new decline. And as East Timor edges closer to anarchy, the Indonesian Army (TNI) is looking for all the world like a runaway institution, supporting the policies of Habibie in public but working assiduously to undermine them in private. "The only way to avoid a bloodbath and end the conflict is for the world community to apply high-level economic pressure on the central government," said a Jakarta analyst with high-level army contacts.

"They will have to feel the intensity of the pressure. If it is only statements of concern they won't take it seriously. Indonesians believe in concrete things, in cash. Only if you withhold the cash and squeeze them will they listen.

"The outside world has to say we will not dispurse further credit and will advise tourists not to come to the eastern part of Indonesia, meaning Bali. It is no good threatening to send in a peacekeeping force, as New Zealand has suggested. That will produce a nationalist backlash and greater defiance." Four days after the successful United Nations ballot in East Timor, prominent members of the Jakarta foreign policy elite are expressing dismay and disbelief at the behaviour of the army and police in the territory. It is no secret in Jakarta that the army is behind the militia gangs sowing terror there.

"I just don't know what is going on," said Sabam Siagian, a former Indonesian ambassador to Australia. "On the referendum day it was quiet and in the following days one can't help get the impression that it was orchestrated. "One day the Indonesian Army and police can control the situation. The next day they either acquiesce or can't control it. "What's the political plan? It doesn't make any sense any more. From our side, what's the scenario? Just to create a mess? What for? Isn't Jakarta aware that the Western powers, especially Washington, are using East Timor as a yardstick to judge whether the Indonesian Government will adhere to an agreement?" It was plain, even from television coverage, that Indonesian security forces acquiesced in the rioting, he said.

"The question is, what's the political scenario? "While Indonesia is in dire need of international assistance that only the Western powers can provide, either bilaterally or through multilateral institutions such as the World Bank and the IMF, we are shooting ourselves in the foot. All in all, it's very disturbing."

Similar views are expressed by retired military officers, a number of whom have held key diplomatic postings.

"I don't see any strategy [behind the current violence]", said Lieutenant General Hasnan Habib, a former Indonesian ambassador in Washington and Bangkok, whose last posting was roving ambassador to the Non-Aligned Movement.

"It would have been much more logical if they had done this before the voting took place." According to a civilian adviser who has worked closely with the army on East Timor, "the current army policy is reckless. There is no advanced strategic thinking. "Three weeks ago these [top army] people said, 'There is no way we will give independence to the Timorese. If they win by the ballot, we will win by the bullet'.

"But yesterday when [UN Secretary-General] Kofi Annan and the United States and the entire world was crying out, they began to panic. They do not know what to do. But beneath the surface they are [still] instigating violence. This is all a mess. They have embarked on half-baked operations without proper planning, just emotion."

Another source in the capital said: "Many in the military don't yet comprehend that they can be told by a civilian president - a weak, illegitimate joker of a president - what to do."

The Defence Minister and armed forces chief, General Wiranto, was a weak commander, and the Foreign Minister, Ali Alatas, was "tired of Timor", the source said.