By Cindy Shiner
Special to The Washington Post
Tuesday, March 10, 1998; Page A11

JAKARTA, Indonesia, March 10 (Tuesday)—Indonesia's legislature appointed President Suharto, Asia's longest serving leader, to a seventh five-year term today after granting him sweeping new powers in the midst of the country's worst economic and political crisis in three decades. Suharto was elected by the largely appointed 1,000-member People's Consultative Assembly.

The text of the "special powers" decree enacted by the assembly on Monday has not been made public, but political analysts say it likely draws on a similar measure, stemming from the upheavals of the 1960s, that was shelved a few years ago. Indonesia, the world's fourth-most-populous country, with 200 million people, is suffering its worst turmoil since that turbulent period, and there have been mounting calls for Suharto to step aside.

"There's no way you can have political reform while Suharto is still in power," said one young activist leader who has been among thousands of university students demonstrating for political and economic reform in several cities since the assembly meeting began ten days ago.

He said protests will continue after the assembly ends on Wednesday, when Suharto is sworn in and the vice president is chosen. Local newspapers reported that six students were arrested on Sunday. Security forces have held back from intervening, despite a government ban on demonstrations and large gatherings during the election period.

In Washington, the crisis got an extraordinarily bleak assessment from Michel Camdessus, managing director of the International Monetary Fund, who voiced fears that Indonesia could drag down neighboring countries that have begun recovering from their own crises.

"Even if you have the impression that we have made important progress in handling the Asian crisis, even if you are under the impression that Thailand and Korea have turned the corner, we are not there by far in Indonesia," Camdessus told a luncheon during an IMF-sponsored seminar. "If this problem is not solved soon, the whole thing is at risk."

Indonesia's newly appointed armed forces chief has signaled he will be tough on protesters after demonstrations against high prices turned into riots in a number of cities last month.

"If people are hot-tempered and ready to cut down the symbols of the state, yes, I will gladly prohibit them. If they are still determined, I will be determined. The difference is they are breaking the law, I am protecting the law," Reuters news agency quoted Gen. Wiranto as saying in Forum Keadilan magazine.

There has been speculation that the special-powers decree would allow Suharto to take a harder line against his opponents in the name of preserving national unity during the current turmoil. But reformers are skeptical.

"I don't see the need of it because he has special powers already," said one Indonesian political analyst, who, like many government opponents these days, did not want to be identified.

Some analysts said the decree could allow the 76-year-old leader, who was ill late last year, to override the constitution in naming a successor. Such a move would provide fodder for those who criticize the government as feudalistic. After an outspoken and widely respected magazine last week ran a cover depicting Suharto as the King of Spades, the government took legal action against its editors.

The president's children, who have wide-reaching and lucrative business interests in Indonesia, have increasingly taken on the role of spokesmen for the administration in the political vacuum leading up to the naming of a new cabinet. The consultative assembly, which is largely appointed by Suharto, includes his relatives, friends and military representatives.

The political transition has been cited by officials from the IMF in explaining why they decided to delay the latest payment of the IMF's $43-billion bailout of Indonesia. Officials announced last week that the $3 billion slated to be paid on March 15 will be held up at least until April.

The IMF and Suharto have been locked in a standoff over the economic rescue package, with the West demanding a quick implementation of reforms and Suharto dancing around the measures he twice vowed he would carry out. He also has been dangling the idea of pegging the Indonesian rupiah to the dollar -- a plan inspired by American economist Steve H. Hanke that the IMF and Washington have warned Jakarta against.

Both IMF and Indonesian officials sought today to play down their sparring -- which has roiled Southeast Asian markets -- following comments Suharto was quoted as making over the weekend that led some analysts to fear the president had dug in his nationalist heels and decided to reject the bailout altogether.

Jusuf Syakir, chairman of the Muslim-dominated United Development Party, emerged from a meeting with Suharto on Sunday announcing that the president said the IMF reforms were "not in line" with the constitution. Specifically, Syakir quoted Suharto as saying, the reforms went against an article stipulating that the economy should be organized "based upon the principle of the family system."

Few Indonesians, foreign businessmen or diplomats missed the irony in a statement coming from a president whose family has amassed more than $16 billion over the past three decades and helped inspire the term "crony capitalism."

Today Bambang Trihatmodjo, one of Suharto's tycoon children and a senior assembly member, said the IMF agreement might have to be renegotiated, the Associated Press reported.

Staff writer Paul Blustein, in Washington, contributed to this report.