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  •   Suharto Resigns, Names Successor

    Suharto resigns/AP
    President Suharto announces his resignation surrounded by members of the military. (AP)
    By Keith B. Richburg
    Washington Post Foreign Service
    Thursday, May 21, 1998; Page A01

    JAKARTA, Indonesia, May 21 (Thursday)—Indonesia's beleaguered President Suharto stepped down this morning from the post he has held for 32 years, defeated by mounting popular unrest and a collapsed economy he was unable to revive. His handpicked vice president, B.J. Habibie, was immediately sworn in as head of the world's fourth most populous nation.

    "I have decided to hereby declare that I withdraw from my position as the president of the Republic of Indonesia," Suharto said, reading from a brief statement at Merdeka Palace. To his assembled cabinet ministers and aides, he said, "I express my deepest gratitude, and I express my deepest sorrow if there were mistakes, failures and shortcomings."

    Suharto's resignation brought an outpouring of joy and relief from the thousands of students who had occupied the country's parliament grounds, camping there overnight to press their demand for the president to step down. When he read the words "I withdraw," the students -- who had spearheaded this popular revolution -- screamed loudly, fell to their knees in prayer, jumped into an outdoor fountain, and threw their brightly colored school blazers into the air.

    His terse statement, read in just five minutes, marked just the second presidential transition in Indonesia's five decades as an independent state. It was an ignominious ending for Asia's longest-serving leader, who had come to personify the region's authoritarian, paternalistic leadership style.

    Suharto's departure, and the swearing-in of his longtime friend and ally Habibie, open a new and uncertain chapter in the country's history. The protesters and anti-government critics have been pressing for "reformasi," or reform, meaning a total overhaul of Suharto's regime -- and Habibie is seen as a part of that system.

    In Washington, President Clinton welcomed Suharto's decision as "an opportunity to begin a process leading to a real democratic transition for Indonesia," the White House said in a statement. Clinton urged the new Indonesian leadership "to move forward promptly with a peaceful process that enjoys broad public support."

    For most of three decades, Suharto had been credited with bringing political stability and alleviating poverty across this diverse archipelago. But lately his regime has come to be associated with worsening corruption, the predatory business dealings of his children, and the heavy-handed tactics his security forces have used to contain dissent.

    Long considered a wily political manipulator, Suharto, 76, was finally outdone by one force he could not control -- the international financial marketplace that last year ravaged his country's currency, the rupiah, and plunged the Indonesia into its worst economic crisis since Suharto took charge. The rupiah has lost 75 percent of its value since last fall, prices have spiraled, many companies here are technically bankrupt, and many Indonesians for the first time in decades have become poorer.

    Habibie, 61, a German-trained engineer with a penchant for costly, high-tech projects, is slated to serve the remainder of Suharto's term, which lasts until 2003. It was unclear today whether the protesters would continue to press their demand for an emergency session of parliament that could also force Habibie to resign and pave the way here for new, more democratic elections.

    However, Habibie -- like Suharto before him -- has the support of Indonesia's powerful military establishment. The head of the armed forces, Gen. Wiranto, said after Suharto's announcement that he backed the transition and the new president.

    Reaction from Suharto critics was muted. "It's like a drama -- there's another act," said Laksamana Sukardi, an advisor to opposition leader Megawati Sukarnoputri. "At least they should introduce a democratic process. We don't want to see another dictatorship."

    "I think Habibie is expected to have a provisional government. Maybe after three or six months at the most, Habibie has to go, too," Muslim leader Amien Rais, a key opposition figure, said in an interview on Australian Broadcasting Corporation radio from Jakarta.

    But Rais added, "I think the resistance to Habibie is not as strong as that against Suharto."

    Habibie faces a formidable task of trying to rebuild an economy that in recent days has been further devastated by rioting, looting and the exodus of thousands of foreigners and Indonesians of Chinese descent.

    Suharto's resignation announcement climaxed one of the most extraordinary 10-day periods in Indonesia's history. The dramatic and fast-moving events began Tuesday, May 12, when troops opened fire on unarmed students demonstrating at a Jakarta's prestigious Trisakti University, killing six -- and prompting an outpouring of rage in the capital's streets. More than 500 people died in rioting in the city two days later, and Suharto cut short an official visit to Cairo to return home to a country and a capital in open rebellion.

    Even as the calls for his resignation grew louder -- and with some of his own former ministers, retired generals, and longtime allies in his ruling Golkar party joining the rising chorus -- Suharto, a former general, still tried to dictate the timing and terms of his departure.

    On Tuesday, Suharto invited nine respected Muslim ulemas, or scholars, to a closed-door meeting at Merdeka Palace, and emerged 2 1/2 hours later to tell a national television audience that he was willing to step down, but only after a transition period that would begin with the establishment of a "reform council" and lead to new elections for a national parliament. That parliament would then choose a new president, and, Suharto said, he would not be a candidate.

    But rather than placating the students and opposition leaders demanding his ouster, Suharto's announcement Tuesday only fueled their calls for his immediate resignation. While many Indonesian academics and others said they viewed Suharto's offer as a reasonable compromise, his increasingly vocal critics saw it as merely a stalling tactic that would allow him to cling to office for months or years.

    But while the many voices against Suharto were united in wanting his immediate resignation, they were less focused, and largely unclear, on who they wanted to replace him.

    Few of the student protesters had bargained on a Habibie presidency. Habibie long has been viewed as one of Suharto's closest confidants, a longtime friend who refers to the president as a kind of father figure and sometimes simply as "SGS," which stands for "Super Genius Suharto." To his detractors, Habibie has come to symbolize the excesses of Suharto's rule -- favorable treatment for friends and associates, whose private business ventures have been helped to thrive.

    The unlikely friendship between Suharto and Habibie began more than four decades ago, when Suharto, as a young officer, was stationed on the Indonesian island of Sulawesi across the street from Habibie, a 13-year-old boy whose father had recently died.

    Habibie spent most of the 1960s and 1970s in Germany, working for an aircraft manufacturer, rising to the position of vice president for applied technology. When Suharto convinced him to return, he reportedly told him, "Habibie, you can do whatever you want, short of fomenting a revolution."

    Habibie instead chose the technology sphere, becoming the science and technology minister and using his proximity to Suharto to pursue pet projects, including a state aircraft-maker, a steel refinery and various defense-related industries.

    Despite Gen. Wiranto's statement of support, Habibie's links with Indonesia's powerful military are suspect. He never served in the armed forces, and he is known to have antagonized some members of the top brass in the past by using his ties to Suharto to force the armed forces to buy some of its components from his own "strategic industries."

    Critics have also questioned his grasp of economics and his commitment to an open, liberal trade regime. He has clashed with the "technocrats" around Suharto who pushed him to liberalize the country's closed economy. He has been called an economic nationalist who wants to promote the interests of the country's indigenous Indonesian population. And he recently advanced his own theory of economics called the "zigzag theory" as a means to lower Indonesia's persistently high interest rates: They should be slashed, the theory goes, pushed up again, then slashed again; the cuts would be deeper than the increases, resulting in a jagged downward trend. Many economists have challenged the theory's soundness.

    While news of Suharto's resignation was bound to being relief to jittery Asian stock and currency markets, it remained unclear how the regional financial community would respond to a Habibie presidency. In January, when Habibie's name first surfaced as Suharto's likely vice president, the rupiah plunged to its lowest point ever, more than 16,000 to the U.S. dollar -- compared to 2,500 to the dollar before the current crisis.

    Clinton administration officials in Washington said today's developments, while clearly positive, had to be viewed with some caution because it was not yet clear whether it presaged a major change in Indonesia's authoritarian system or whether Habibie would serve out the remainder of Suharto's five-year term.

    "We want to welcome this as creating the possibility for a credible transition, but we don't want to judge it as a credible transition until we know for sure," one senior U.S. official said.

    Staff writer Paul Blustein in Washington contributed to this report.

    © Copyright 1998 The Washington Post Company

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