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STRATFOR.COM Global Intelligence Update
December 9, 1999


Federalism Splits Indonesia's Government


Summary

Just months after East Timor's independence vote, President
Abdurrahman Wahid's Cabinet of National Unity is divided on how to
quell urgent separatist movements in the restive provinces,
particularly Aceh, that threaten to rip the country apart. Now, a
growing debate over Wahid's proposed solution - turning highly
centralized Indonesia into a federal system - divides his three-
month old government. Ultimately, Wahid may find his power and
agenda checked by a union of nationalists that recalls the days of
Sukarno: a union of Vice President Megawati Sukarnoputri and the
armed forces.


Analysis

On Dec. 7, Indonesian Defense Minister Juwono Sudarsono joined the
raging debate in the government concerning the merits of
transforming Indonesia into a federalist system as the solution to
its widespread separatist problems. He echoed the position of many
Indonesians by saying that federalism is the "first step toward
uncontrollable separatism."

The debate over transforming unitary Indonesia into a group of
federated states - an idea championed by President Abdurrahman
Wahid himself - has struck at the heart of nationalist sentiment in
Indonesia. It has created deep rifts in the president's Cabinet of
National Unity
[
http://www.stratfor.com/asia/countries/indonesia/Elections/indonesianewcabinet
.htm ],
which now prevent it from being the "government of
national reconciliation" that Wahid had intended. More dangerously,
it has allied two powerful nationalist forces that stand firmly
opposed to federalism: Vice President Megawati Sukarnoputri, whose
party has the largest presence in the legislature, and the
Indonesian armed forces, which still wields substantial control
over the country. As a result, Wahid may soon be forced to abandon
his own agenda for national reconciliation.

Wahid first initiated the controversy when he suggested federalism
- a collection of relatively autonomous states organized around a
central government in Jakarta - as a possible compromise to calls
for independence in Aceh. As a Nov. 29 Jakarta Post editorial
pointed out, federalism is still a "dirty word" to many
Indonesians, whose constitution calls for a highly centralized
government, a unitary state.

Along with former rival Amien Rais, Wahid apparently believes that
federalism is now the only recourse to safeguarding unity and
stability. Rais, chairman of National Mandate Party (PAN), leads
the "axis force," the coalition that helped bring together Wahid's
current government. Both men are the former heads of the two
largest Muslim groups in Indonesia.

The decision by these two formal rivals to pursue federalism may be
driven by a desire to break up the old Sukarno and Suharto empires,
both of which lie in the rich natural resources in the provinces.
Federalism would give the provinces significant control over these
resources and effectively redistribute the country's wealth.
Opponents of such redistribution include conservative elements of
the Golkar Party, Megawati and her Indonesian Democratic Struggle
Party (PDI-P) and the Indonesian armed forces.

All Wahid's opponents are linked to the old regimes and advocate
keeping power concentrated in Jakarta for good reason: they do not
want to lose the wealth they amassed during the Sukarno and Suharto
eras. As well, Megawati is a fervent nationalist. She is the
daughter of former President Sukarno, the founding father of
unified Indonesia.

Wahid's Cabinet is now falling apart, deeply divided by disparate
visions of the future of Indonesian unity. Many signs of turmoil
have emerged in the past weeks. For example, members of the United
Development Party (PPP), the largest party in the axis coalition,
have accused Megawati's PDI-P of attempting to undermine the
coalition and discredit the government.

Not surprisingly, Megawati's party seems to be at the center of the
disturbance. In recent weeks, her party has sought to censure Amien
Rais, specifically because he supports federalism. In a formal
request to the Indonesian Congress (DPR), the PDI-P faction argued,
"Amien Rais's statement on federalism is against his official oath
as the people's representative which requires him to remain loyal
to the Pancasila (the state ideology) and the Unitary State of the
Republic of Indonesia." The PDI-P also emphasized that it would
defend the Unitary State "at all cost."

But Wahid's calls for federalism have ruffled the feathers of a far
more powerful bird: the military, which exerts a great deal of
influence over the government. Under both Sukarno and Suharto, the
military was set up specifically to be the backbone of a unitary
Indonesia; federalism is directly at odds with its job description.
Many of its members hold official government positions. As well,
former armed forces chief Wiranto, now coordinating minister for
political affairs and security, takes an authoritative role in
cabinet meetings. According to Defense Minister Sudarsono in a Dec.
3 Washington Post interview, "Wiranto on occasion becomes
effectively the president and the vice president as the same time."

With powerful forces aligning against him, Wahid is struggling to
maintain unity among the elite. First, he has attempted to regain
control of his Cabinet, recently pushing for the resignation of
several members who may be linked to corruption or party
factionalism, possibly planning to replace them with political
unknowns who also support federalism. He has used the calls for
resignation to attack Golkar, one element of the anti-federalism
opposition. Golkar is an easy target, due to its links to the old
regime. Although he has still not announced the names of those
targeted, numerous reports in Indonesian media suggest that they
are Golkar members. However, this will not solve his problems,
since his stronger foes remain almost untouchable. Megawati's
popular support is too strong to attack; meanwhile, the military
would not hesitate to respond to threats with force.

As such, Wahid and elements close to him have made efforts to
placate the military. Most recently, his Foreign Minister Alwi
Shihab said the government would not hand over any generals to the
United Nations to be tried for human rights abuses in East Timor.
Defense Minister Sudarsono has also defended the generals, saying,
"We can't go up into the high ranks, as they were just carrying out
state policy."

Wahid is clearly under pressure, and may be forced to retreat from
the controversial issues of federalism in order to hold together
the disintegrating unity of the elite. He may have one card to play
in response to pressure from the nationalists: the Muslims.
Although Wahid's recent attempts to re-establish ties with Israel
have upset many Muslims, his role as a great Muslim leader -
coupled with that of Rais, his partner in the federalism debate -
could help check waning political sway.

Yet Wahid's recent actions suggest he is not confident in his
position, whether he holds the Muslim card or not. The wheels of
dissent are already turning, and will accelerate as the country's
provinces continue to assert themselves.

Meanwhile, the influence of Megawati will continue to grow. Her
party is capable of exerting significant influence: PDI-P holds
several key Cabinet positions, and the largest number of votes in
the legislature. The disintegration of the Cabinet will only
strengthen her position. With the military already holding
significant power over the government, the alliance of the two
could completely undermine Wahid's influence. Bound together by
nationalism and a determination to protect Sukarno's Unitary State
of Indonesia, Megawati and the military could soon dominate the
government.



(c) 1999, Stratfor, Inc. http://www.stratfor.com/




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