The so-called "Asian crisis" is as really a capitalist crisis where the blame is being shifted from capitalist exploitation onto Asian "values". (see Class Struggle # 20). Indonesia is usually given as the worst example of what the West sees is wrong with Asia. They say the country is run by an aging dictator, whose family controls the state and owns a large chunk of the economy, and who is stubbornly opposing the IMF's rescue package for restoring the economy. We reject this argument. We oppose Suharto's dictatorship, and we do not trust him to fight the IMF's medicine which will make Indonesian workers and peasants pay a terrible price for economic stability. We make the case for a socialist plan run by and for workers and peasants as the only alternative that meets the needs of the vast majority of the 200 million Indonesians.
The phoney battle over the terms of the IMF's US$40 billion rescue package for Indonesia has been won by international capitalism. There is no way that the international banks who have $130 billion invested in Indonesia will walk away from this kind of money without a showdown. So from a position of mock defiance, Suharto has now been worn down to accept most of the IMF's terms.
These include austerity measures to balance the budget which means real impoverishment for millions of working people. It means opening up the ownership of Indonesia's state corporations to foreign investment. Suharto has agree to allow foreign shareholding in 4 out of 5 of the major state combines. It is clear that despite a great show of opposition, this was only an attempt to keep his share of the booty intact. Now Suharto has no option but to comply with the demands of international capital. The question is why?
Indonesia : a US client state
We don't have to look very hard to see why. The Indonesian economy is bankrupt. Prices have risen 400% in a few months; the rupiah is worth less than 25% of its value one year ago; 90% of companies are technically insolvent leaving 10s of millions unemployed. Neighbouring states such as Thailand and Malaysia are rounding up and repatriating Indonesian migrant workers in their thousands. Protests, rioting and unrest have reached crisis proportions. Despite an army of 300,000 soldiers, 20,000 deployed on the streets alongside 20,000 police, there is no way that Suhato can keep the lid on a mass uprising unless he deploys the aid of his main allies, US and Japanese capitalists.
In other words, Suharto has been forced to recognise that his interests, if not his skin, lies with the international capitalist class and not the Indonesian people. The IMF will call the shots, which will include economic and military sanctions if Indonesia does not repay its debts.
Suharto was appointed as a stooge for the US in 1965 when he was aided by the CIA in the slaughter of up to 1 million communists and dissidents. But he has been able to hide behind a façade of nationalism until now. Growing opposition to Suharto over the last few years is clearly opposed to his comprador role as agent of foreign capital. Not only has his family and their cronies profiteered from Indonesian working people, but he has facilitated the locking of Indonesia in to the global capitalist economy.
The popular alternative to the Suharto's oligarchy and the IMF package is the peoples' power strategy of the democratic opposition forces around Megawati Sukarnoputri. Like the recently elected President of South Korea, Kim Dae Jung, Sukarnoputri looks to "progressive" forces (including imperialist powers and puppets) outside Indonesia to bring pressure on Suharto to democratise the regime. Some of the militant unionists jailed by Suharto are appealing the IMF to withhold loans until Suharto introduces democratic reforms.
This is a tragic betrayal of Indonesian workers and peasants. It accepts that they have to pay back the debts owned to foreign banks. It sows illusions that the IMF as the economic hit-squad for US imperialism can play a progressive role. It creates a cover for US imperialism, which can get rid of Suharto and replace him with a more popular figure like Sukarnoputri, and lock into place the IMF package under the guise of 'human rights' and 'democracy'. The result would be the consigning of the masses of Indonesia's 200 million to further super-exploitation , misery and death in order to create imperialism's super-profits.
In order to overthrow Suharto revolutionaries must participate in all mass demonstrations against him trying to strengthen and radicalise them. Even though it is necessary to participate in joint demonstrations with the "democrats" (and even to do some entrist work amongst its tanks), our goal is to separate the working class from these bourgeois forces. In Indonesia it is important the call for the workers and peasant organisations to be independent from the capitalists and to establish a new party. The only way to smash the IMF and Suharto is tough mass action including a general strike and the formation of strike committees and workers and peasant councils and militias.
Workers' and poor Peasants' Power!
It is necessary to mobilise the working people around democratic and transitional demands to oppose the IMF imperialist package and to get rid of Suharto.
- Overthrow the dictatorship! Call for a Democratic Constituent Assembly.
- Build militant workers and poor peoples councils and self defence militia!
- Troops out now from east Timor and West New Guinea! Self-determination for all the nations of the archipelago!
- Repudiate the national and foreign debts! Break with the IMF!
- Nationalise landlords land under working peasant control!
- Socialise private and multinational assets under workers' control!- For a Workers' and Poor Peasants' Government! - - For a socialist federation of South East Asia!
From Class Struggle No 21 April/May 1998