Suharto to stand again for president

With their currency plummeting and prices soaring, some Indonesians have begun speaking openly about a change of leadership. But, reports Richard Lloyd Parry in Banyuwangi, East Java, President Suharto has announced he is to stand again.

The Indonesian government's inability to reform itself was confirmed again yesterday when President Suharto announced, as expected, that he will stand once again for re-election.

The announcement was made in Jakarta yesterday by Harmoko, the head of the Indonesian ruling party. The Indonesian rupiah, which has tumbled to a quarter of its value since last summer, sank further to 10,600 rupiah to the US dollar, just five days after a new agreement with the International Monetary Fund designed to stabilise the financial markets. The key index of the Jakarta Stock Exchange rose by two per cent, however, closing up for the second successive day.

"President Suharto will accept the people's trust," said Harmoko, who was accompanied during a meeting with the president by the Interior Minister, Yogie Mehmet, and the head of the armed forces, General Feisal Tanjung. Their presence suggests that President Suharto has the backing of the political and military establishment, and after 30 years and six terms in office, he remains without a credible successor.

The majority of the assembly which will "elect" the president is appointed by Suharto himself, and he has never failed to win. Barring illness or political collapse, it now seems inevitable that he will be reaffirmed as president in March.

In the last three weeks, the country's financial and economic crisis has quickly become a political one as Indonesians have begun to speak with unprecedented openness about the need for a new leader to deal with the country's plummeting currency and soaring prices. At 76, and in uncertain health, President Suharto is the object of increasingly direct criticism about his mishandling of the economy, his tolerance of corruption, and the business favours which he bestows on his family.

As the rupiah has shrunk in value, increasing numbers of companies have begun to default on their loans from foreign banks - according to some analysts most Indonesian firms are now technically bankrupt. And last week came the first signs of social unrest caused by the economic crisis, as shops in the province of East Java were attacked and burned by crowds demonstrating against the rising cost of rice, sugar and cooking oil.

But Suharto's most important loss of support appears to be among ordinary Indonesians. Now he seems helpless - the spectacle of the aged leader watched over by the IMF chief, Michel Camdessus, as he signed last week's agreement, was symbolic of his loss of authority. Numerous public figures, including the deposed opposition leader, Megawati Sukarnoputri, have called for him to step down.