On June 17th the Indonesian rupiah hit a new low of 16,800 to the dollar - a fall of 10% in one day, a collapse of 30% in one week. Economists are now predicting that inflation will hit 100% and the economy will contract by 20%. The rupiah has now devalued by a staggering 66% this year and more than 80% since the economic crisis began to unfold in mid-1997.
Outrageous rises in food prices have resulted in an explosion of angry protests. Decisively the heroic demonstrations of students which brought down the hated dictator Suharto are increasingly being joined by a barrage of strikes and protests by workers who are being made to pay for the bosses crisis.
The currency crisis is rapidly affecting the rest of the economy. Many of Indonesia's most labour intensive industries rely heavily on imported components, where devaluation means that prices have risen by over 500%. In addition to all their other problems, the drought means that Indonesia will have to import around 3.1 million tons of rice this year - also at exorbitantly overinflated prices, around 5000 rupiahs per kilo, while many are already struggling to find the current 1200 per kilo.
Even crises have their funny side. The sight of airlines having to cancel flights because their leased jets are being repossessed, demonstrates how ephemeral the so-called economic miracle really was.
For workers however there is nothing amusing in such an economic collapse. The national car manufacturer, Astra are suspending production unable to pay for imported components. 60% of Jakarta's public transport system is out of action, because of the soaring price of the spare parts needed to repair the city's buses. 40% of the country's 1500 chemical plants have been forced to halt production because of the soaring cost of imported raw materials.
Economists are now predicting that 60 million of the country's 200 million population will be pushed beneath the poverty line as the crisis continues unabated, with a further 30 million losing their jobs. The currency and banking crisis has even raised fears of the central bank collapsing!
This is the real explanation for the regime�s new found conversion to democracy, for them it is not a matter of principle, but a desperate attempt to restore some kind of stability to the economy.
Meanwhile a new law, originating no doubt in the office of armed forces chief General Wiranto, seeks to ban "disruptive" political rallies. A government spokesman commented that "Political parties and pressure groups are free to demonstrate but they need to get permission and give assurances they will not violate other people's freedom."
The government claims that "some might think that we are taking a step backwards in democratic reform by pushing through this law. But we are sure that many moderates will support it because they know that without stability, there will be no economic recovery - only chaos for many more months ahead." The moderates have again shown their true colours by their meek acceptance of this new attack. They have done nothing to date to disprove that they too are more concerned with "national stability," ie capitalist stability, than the conditions of the masses.
The whole purpose of the reform process is to stabilise the regime, to protect the property and profits of capitalism. It is a classic case of reform from above to prevent revolution from below. However it may prove to be a case of closing the stable door after the horse has bolted. The revolution has already begun, and now decisively the working class is moving into action.
While the moderate, 'liberal' bourgeois opposition discusses with government officials, reaction plots and manoeuvres. The warnings issuing from General Wiranto's office are ominous, "If this state of affairs is allowed to continue the nation will fall deeper into crisis in all fields, and the end result would be unavoidable internal conflicts...which will lead to the disintegration of the nation."
Sections of the military are trying to slow further the snail's pace of reform. There are reports in the newspapers of "grumblings" in the corridors about the "traitors" who brought down Suharto. The alliance between Suharto and his army chiefs, remains firmly in place, at least to protect each other from too close scrutiny. There is even talk of Suharto making a comeback in the Presidential elections. The speculation is that he has enough money to buy millions of votes. In this situation the workers and the youth must be vigilant and trust only in their own organisations to represent them. All too often in history liberal reformers, heve provided the cloak behind which reaction prepares itself.
The weakness of these reformers, calling off, or scaling down demonstrations for fear of confrontation, will only invite aggression. From the beginning of the movement the troops have shown a great deal of sympathy with the students, who instinctively fraternised with them. But that sympathy can�t turn into positive action unless the soldiers believe the movement is going to go all the way to a transformation of society.
The process is being drawn out because of the lack of a clear revolutionary leadership. Sooner or later however, if the movement is not successful, the military will intervene to restore 'order.'
The past weeks have seen a growing military build up in and around Jakarta, as strikes and demonstrations bringing together workers and youth gather pace.
Troops in tanks and on motorbikes armed with rocket launchers blockaded the University of Indonesia on Sunday June 23rd to stop a joint rally of students and factory workers.
10,000 workers were due to attend this event organised jointly by the University of Indonesia People's Struggle Command Post and the Workers Committee for Reformation Action. They were not only prevented from entering the university grounds, but were even prevented from leaving Jabotabek, the workers district outside Jakarta.
Demonstrations are spreading across the country like a prairie fire demanding the resignation of local officials tarred with Suharto's brush. In Cianjur 50 miles south of Jakarta 15,000 demonstrated demanding the resignation of the head of the district.
East Timor in particular has been the scene of growing militant protests in the last few weeks, buoyed by the sweep of the struggle across Indonesia. Student leader Antero Benedito da Silva told the June 19th South China Morning Post, "The Suharto regime has collapsed, so we have to do something in this new atmosphere....We [students] have stopped our studies. Maybe we will find a new way to learn on the streets."
So far the biggest demonstrations have been those following the shooting of 21 year old Herman Soares near the village of Manatuto, 50 kilometres east of Dili.
10,000 demonstrators led by students from the University of East Timor marched along with the car carrying his body through the streets of Dili on June 18th. The march was the biggest off-campus action to date. They proceeded first to the governor's office and then the provincial parliament, where 40 or 50 students staged a brief occupation.
On June 17th in Jakarta, 320 East Timorese students marched on the Justice Ministry, demanding the release of all political prisoners. Many of these same students had participated in the 1500 strong sit-in at the Foreign Office on June 12th which was brutally attacked by troops.
There is a seething, volcanic anger mounting, and after years of brutal repression, the people of East Timor expect something from the so-called democratisation process. Thus far it has offered them nothing new. On June 24th around 50,000 marched through the East Timorese capital. Most of these protests have been allowed to go ahead peacefully, at this stage military intervention would serve to stir up the masses still further.
Between the 27th and 29th of June, however, there were two seperate incidents of protestors being shot by security forces. Indonesia�s governor of East Timor, Jose Soares has pledged to take "strict measures against all those involved in anarchic activities." Somehow you know he isn�t referring to the actions of the police.
Rotten Indonesian capitalism can no more solve the problem of East Timor than it can provide food and work for the rest of the population.
While the government of Habibie shows a liberal face to the outside world, even meeting East Timorese leaders for talks, the military who stand behind him are concealing a far uglier one.
25,000 heavily armed troops were deployed to prevent the Indonesia Prosperity for Workers Union's plan to mobilise 10,000 workers for a march to the parliament buildings. Jakarta's military commander warned, "Anyone who wishes to disrupt security will confront my troops. I have given them orders to warn the protestors first, and then cripple them if they have to."
Soldiers stopped dozens of busloads of workers from entering the capital and prevented demonstrators gathering around the union's headquarters. About 300 managed to reach the office, but were prevented from leaving by a military cordon.
A confrontation seemed likely as the busdrivers, factory workers and unemployed labourers carrying banners and placards demanding Habibie's resignation, the release of detainees and lower prices, marched to within five yards of the soldiers. But after a two-hour stand-off, the demonstrators backed down. "The army has said they will kill us if we try and march on the House of Representatives" union spokeswoman Anti Sulaiman said, "But we will continue with our street rallies every day until Habibie steps down."
The last few days have seen a further explosion on the part of the workers. Tens of thousands are on strike and joining protests. Port workers in Surabaya, Indonesia's second largest city have been striking for a wage increase from the current 7,116 rupiah per hour to 15,000 (around $1) per hour. The management have offered 9000, but the collapse of the rupiah means this still represents a drastic pay cut. 10,000 shoe factory workers tore down branches from trees to build roadblocks on the second day of their protests demanding pay increases. The workers marched to the regional parliament building through tense streets lined with soldiers.
Major strikes have now broken out too in the factory belt surrounding Jakarta. In Karawang, 2,500 workers from PT Texmaco Perkasa Engineering walked out demanding a wage rise and improvements in overtime pay, annual holidays and food allowances. Most of the 1500 workers at the PT Kukdong factory are also on strike demanding a reduction in taxes, more holiday money and money for food and transportation. Another strike has hit the PT Sandang Mutiara Era Mulia factory where most of the workforce walked out on Monday June 22nd demanding a 30% pay rise, payment for overtime work and again better food provisions.
Workers have also been out at the government's main currency printing plant, protesting about excessive overtime and demanding higher pay and benefits. The regime�s answer to the collapse of the rupiah has been to keep the printing presses rolling.
It is in the hands of the workers and youth of Indonesia that the only solution to this crisis lies. The opportunity when it comes will not last forever and darker forces are preparing in the background to step in. That would be a new nightmare. But the mighty Indonesian working class will not allow that to happen. The working class today is far more powerful than it was thirty years ago. The new younger militant generation, armed with the ideas of Marxism would be unstoppable linking up with their brothers and sisters across South East and the whole of Asia, the roar of the revolutionary tigers would gain a ready echo from workers all over the world.