Indonesia prepares to enter a new era

IN A startlingly swift reaction to the economic and political crisis engulfing Indonesia, President BJ Habibie yesterday promised to release political prisoners, hold early elections, and comprehensively overhaul his country's discredited legal and political systems.

In a televised cabinet meeting, his third speech to the nation within five days of taking office, Mr Habibie set out a programme which, if implemented, would dismantle the apparatus of 32 years of repression under President Suharto in the space of a year.

The President's speech was the latest in a series of gestures designed to convince both Indonesians and the outside world that the new government is genuinely intent on reforming Indonesia after months of vociferous student demonstrations and riots which killed 500 people in Jakarta and lead to the sudden resignation of President Suharto last week.

In the afternoon, the new justice minister, Muladi, appeared on the balcony of Jakarta's Cipinang Jail to confirm that some of the country's thousands of political prisoners would be released, beginning tomorrow.

The chief of the armed forces, General Wiranto, widely suspected of being the real power behind the new government, made his own gesture of openness with the announcement of a report into the incident which sparked last week's uprising in Jakarta: the deaths of six university students, shot by military snipers during a peaceful demonstration at Jakarta's elite Trisakti University.

"Eight armed forces soldiers are suspected of shooting the students," he said. "Also six officers are suspected of supporting the incident through unprocedural and undisciplined actions."

In the last few days, General Wiranto has consolidated his hold on the military by purging a number of senior officers including the former president's ambitious son-in-law, Lieutenant-General Prabowo Subianto. He also announced that his wife and daughter had resigned their seats in the People's Consultative Assembly, a parliamentary assembly derided as a forum for Suharto cronies.

In another grim portent for the former regime, the government announced a review of contracts with companies associated with members of Mr Suharto's family. The energy minister said he would review contracts between the state oil company Pertamina and its affiliates Perta and Permindo, controlled by Suharto's sons, Tommy and Bambang. The city of Jakarta announced a review of deals with foreign companies, including Thames Water, and a son and business associate of the former president.

Many Indonesians are sceptical of the sincerity of Mr Habibie's intentions, and his promises yesterday did little to stir the beleaguered rupiah or the Jakarta share market which closed down 1.26 per cent at 440 points. This morning, the International Monetary Fund's Asia Director, Hubert Neiss will arrive to resume negotiations on the IMF's aid package which was repeatedly derailed by Mr Suharto's changes of mind.

"We must honestly admit that our success in overcoming the economic crisis depends largely on foreign loans, especially to finance imports of raw material and spare parts," President Habibie said yesterday.

As the economic crisis worsens, there is rising concern about hunger in the country of 202 million people.