Bali welcomes Megawati but Indonesia fears the worst

IN BALI, almost uniquely in predominantly Muslim Indonesia, there are beaches where the young foreign holidaymakers who support the island's tourist industry can sunbathe topless. Bali's discos stay open until the early morning, and the touts who linger there offer substances more potent and expensive than the standard bottles of imported beer.

The faces on the beaches are European and Japanese - the locals stick to the shade, selling cold drinks and T-shirts bearing batik motifs or pictures of Jim Morrison or Bob Marley. But last week Bali was dominated by a very different and unlikely face - that of a strong-chinned, matronly Indonesian woman of 51.

From the arrivals lounge of the airport to the resort of Sanur, she was everywhere - on flags, banners, lapel pins, badges, stickers, hats, T- shirts and bandanas. Bus stops and noodle stands had been specially repainted in her party colour, red, and decorated with her emblem - a curly-horned ox.

The shops by the beach offered tattoos bearing her image, and the bare- breasted sunbathers were outnumbered by her party delegates, most of them middle-aged Muslim men in red blazers. On Friday, a woman in a bathing costume paraglided above the beach, with a huge red banner billowing from her ankles. "Congress of the Indonesian Democratic Party (PDI)" read its slogan. "Megawati for President."

Plenty has changed in Indonesia in the five months since President Suharto was driven from office after 30 years in power, but few have experienced such a turn for the better than Megawati Sukarnoputri. In May, as massive riots erupted across Jakarta and thousands of protesting students occupied the Indonesian parliament, the deposed leader of the PDI and daughter of the founding president, Sukarno, was notable only by her absence.

The job of leading the remarkable "People Power" movement fell to Amien Rais, an articulate Muslim academic. As Mr Suharto fell, to be succeeded by his vice-president, BJ Habibie, Mrs Megawati remained silent - a woman without a party, a public profile or a voice. Her supporters said that she wanted to avoid stirring up further violence; to many people it looked as if she had simply lost her nerve. But last week in Bali, at the PDI party congress, she was back. More than 50,000 supporters turned out to hear her speak, and yesterday she was anointed as their presidential candidate.

"I give this warning to those in power," she declaimed. "Indonesia has lost its credibility over the last 30 years because sovereignty does not belong to the people. The fungus of corruption has destroyed Indonesia. Now we must destroy the fungus!"

On the face of it, Mrs Megawati's pugnacious optimism is in tune with the times. After 30 years as a corrupt dictatorship, Indonesia is transformed. Newspapers and television channels which used to be tyrannised by the government are fearless and lively. New political parties are sprouting like daisies (84 had been officially registered at the beginning of last week, 94 by Thursday). The corruption and human rights abuses of the Suharto era, including those perpetrated by the military, are being gradually investigated.

"There's a big prize to be achieved here in Indonesia," said Derek Fatchett, the Foreign Office minister, during his visit to Jakarta last week. "Two hundred and eleven million people, the world's fourth largest country - if this could be turned into a real open democracy it would ... be a real beacon through Asia."

But all this is threatened by the very force which allowed it to come into existence - the country's crippling economic crisis.Officially, the plan is clear. At a series of parliamentary sessions beginning next month, President Habibie will push through new voting laws for a free and nationwide election next spring - but even assuming that this is achieved in the time available, its results will be inconclusive.

Even Megawati's most ardent believers acknowledge that she is incapable of gaining majority support. Votes are likely to be distributed more or less evenly between four or five major parties, including that of Amien Rais, necessitating a messy round of coalition-building.

Far more alarming is the prospect of the election campaign itself. Under President Suharto, these were an elaborate fraud in which three officially sanctioned parties went through a pretence of debate and political competition - but even under these strictly controlled conditions, party rallies and marches frequently degenerated into deadly violence.

The thought of dozens of parties, some of them formed on competing ethnic or religious lines, holding mass rallies at a time of hunger and economic desperation, terrifies many Indonesians. But to postpone or cancel the elections would provoke nationwide rage and unrest.

The collapse of the Indonesian rupiah, and the subsequent bank failures, business collapses, unemployment and inflation, contributed directly to Suharto's demise. By a bitter irony, they are creating an atmosphere in which stable democracy looks almost unachievable.

"Either way we see violence and chaos," said one delegate in Bali yesterday. "I fear revolution. I fear bloodshed. This is Suharto's final joke."