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CNN's Maria Ressa reports on the latest crisis to impact Indonesia
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March 13, 1999
Web posted at: 6:16 p.m. EST (2316 GMT)

AMBON, Indonesia (CNN) -- Ambon police arrested 37 people Saturday for allegedly provoking religious strife.

Police captured the 37 Muslims outside the city with a vehicle filled with Molotov cocktails, bows and arrows and swords, as well as a map and written details of a plan to attack Christians on Saturday night.

Sectarian violence between Muslims and Christians in Ambon has claimed more than 200 lives in the past six weeks. Thousands of buildings have been burned down, and more than 30,000 people have fled.

On Thursday, the Indonesian military took command of the city, sending nearly 4,000 troops with orders to shoot rioters on sight. The soldiers have been unable to stop the clashes, which killed at least two more people Saturday.

Ambon is about 2,300 kilometers (1,440 miles) east of Jakarta, in what were called the Spice Islands during Dutch colonial times. Its 400,000 people live in a mosaic of Christian and Muslim communities, often close to one another.

Unrest has broken out in several parts of Indonesia over the past year amid the country's worst economic and political crisis in three decades.

On Saturday, trying to right the economy, the Indonesian government closed 38 private banks and took over seven others, in line with reforms mandated by the International Monetary Fund. The IMF leads a $43 billion bailout program for Indonesia.

The country's banks were devastated by the economic crisis that swept Asia in 1997. High interest rates and the dramatic plunge of the Indonesian currency, the rupiah, left many banks with little or no capital and mountains of nonperforming loans.

The country's central bank announced that all deposits in the closed private banks would be guaranteed by the government.

"This is a sweeping set of fundamental reforms designed to bring our banking system back to financial health," said Senior Economics Minister Ginandjar Kartasamita.

Two weeks ago, the government postponed the bank closures, raising concerns that it was backsliding on reforms.

Hubert Neiss, the IMF's top official in Asia, said Indonesia's new banking plan should boost the rupiah.

"This is a good package," he said. "It should strengthen confidence."

Correspondent Maria Ressa, The Associated Press and Reuters contributed to this report.

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