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This is an archive article published on June 13, 1998

The Indonesian jinx

Thousands of East Timorese protested against Indonesian President B.J. Habibie's latest plan for the territory, while dozens of demonstratio...

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Thousands of East Timorese protested against Indonesian President B.J. Habibie’s latest plan for the territory, while dozens of demonstrations occurred across Indonesia against continuing corruption and the government’s failure to halt the economy collapse. In the capital Jakarta hundreds of armed troops were on the streets as thousands demonstrated throughout the city after the rupiah currency hit a four-month low of 13,000 to the United States dollar, a depreciation of 80 per cent since the economic crisis began last July.

Towns across the country also witnessed rallies by people frustrated at rising prices and unemployment. However, the country’s second city, Surabaya, was quiet after two days of clashes between police and tens of thousands of low-paid factory workers seeking better working conditions.

Sporadic social unrest is beginning again after two weeks of relative calm following Suharto’s resignation on May 21. In the central Java town of Tegal, hundreds of people rioted on Tuesday, stoningbanks, offices and car showrooms.

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Everyone agrees a recovery is dependent on the International Monetary Fund disbursing its second tranche of a $26 billion bailout in return for sweeping economic reforms. But the IMF’s Asia-Pacific director, Hubert Neiss, arrived in Jakarta and said any release of the funds was weeks away.

“The IMF’s money is only the start of a very long process,” a foreign businessman warned. “This country needs foreign investment desperately, but I would not recommend it until there is a new government in place that is elected democratically.”

Habibie has scheduled elections for next May at the earliest. “That is 11 months away,” the businessman said. “Look what has happened in the last 11 months. It is clear the situation here is going to get much, much worse, both economically and socially, before it gets better.”

The Observer News Service

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