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June 30, 2000 VOL. 29 NO. 25 | SEARCH ASIAWEEK

Editorial: First Things First
Indonesia needs reform more than Suharto's alleged fortune

The flip-flop was confusing. The Indonesian government, said Attorney General Marzuki Darusman last week, was negotiating with the family of Suharto over any ill-gotten wealth the former president may have amassed during his 32-year rule. Yet days later, Darusman insisted no such talks were taking place. What is going on? The one certainty is that too much attention is being given to the alleged billions Suharto may or may not have salted away. Yes, any such funds rightfully belong to the Indonesian people and, if recovered, would help ease their nation's heavy public debt. But the hunt for the elusive cash should not distract authorities from a more important task: establishing a prudent, well-managed government fiscal system and reinforcing the justice system.

Of course, Suharto's supposed fortune is of such mythic proportions that it demands some attention, especially when Indonesia urgently needs funds. According to the World Bank, the country's debt stands at $134 billion -- 83% of GDP. Interest payments alone eat up a third of tax revenues. How much Suharto has is impossible to tell, but recently a Jakarta court threw out a libel suit he had filed against Time magazine for an article that pegged his fortune at $15 billion. That alone would be over a tenth of the national debt. Still, it's no more than a tenth. Even if the money exists and Jakarta can recover it, it would not solve Indonesia's fiscal problems. Only better financial and economic management can. Besides, money hidden in foreign bank accounts may be impossible to track, and assets at home are probably worth but a fraction of their purchase prices.

That is not to say Suharto should get off scot-free. Prosecution of him, his children and his cronies would send an important signal to the Indonesian public, government officials and the world that corruption, collusion and nepotism will not be tolerated -- and that no one is above the law. But targeting past abuses while allowing new ones to flourish would make a mockery of such efforts. Indeed, it sends a message that the foibles of friends will be tolerated while scapegoats are hung out to dry. Already undermining public trust in President Abdurrahman Wahid's administration are the halting of the probe into the alleged misuse of loans to textile conglomerate Texmaco, as well as many unanswered questions about the looting of state commodities agency Bulog and Bank Bali.

Marzuki says he will bring Suharto to trial before Aug. 10. And if the former ruler is found guilty, Wahid has promised a pardon, out of consideration for his past services to Indonesia. The president has also hinted at a meal with Suharto that the latter should hand over riches he supposedly amassed in office. A pardon may be a good idea given Suharto's advanced age and deteriorating health, especially if some ill-gotten assets can be easily had in return. But immunity will not do. Justice must be seen to be served, and any recovered funds can only be a small windfall amid Jakarta's mounting fiscal woes. The money-recovery effort must not become more than the sideshow it is. Indonesia needs to focus on the main issues. One is to bring Suharto to trial, to help rehabilitate the justice system. The other: to get Jakarta's leaky and irresponsible fiscal house in order.

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