Who Is B.J. Habibie?

By Terry McCarthy/Jakarta

How do you take power from an autocrat who for 32 years has ruthlessly put down all challenges to his rule? Sometimes, as Bacharuddin Jusuf Habibie showed in Indonesia last week, by pretending until the very last minute not to want it. Habibie had been slipped into the No. 2 position of Vice President only 10 weeks ago by his patron of 24 years, the Indonesian strongman he slavishly referred to as S.G.S., Supergenius Suharto. The mere suggestion that Suharto's successor at the height of Indonesia's search for an economic bailout would be a man widely regarded as a free-spending eccentric shocked the bankrupt rupiah into a 36% crash. But Habibie (commonly referred to as B.J.) possesses the one quality Suharto needed, extreme loyalty, and continued to give it to the embattled President while students trampled their despised leader's effigy, longtime allies called for his resignation, and an emboldened press made fun of the man who had come to symbolize the systemic rot that underlies Asia's economic crisis.

Late Wednesday night, after Parliament threatened to begin impeachment proceedings and the armed forces commander, General Wiranto, paid a private visit to Suharto's residence, loyalty paid off. The old man was finally stepping down, and Habibie, 61, would take over. Yet even at Thursday morning's hasty ceremony for the handover of power, Habibie kept up his characteristic deference. After a sadly smiling Suharto apologized for his mistakes and announced his resignation, Habibie appeared to hesitate. His mentor gestured with his hand, like a father to a nervous child, and Habibie stepped forward to take the oath of office. Moments later he scuttled out of the room behind Suharto, leaving Wiranto to announce the quid pro quo. The armed forces would fully support the transfer of power to Habibie and had agreed to protect the safety of Suharto and his notoriously corrupt family members. A deal had been done.

But would it be accepted by anyone outside the presidential palace? To many of the students who celebrated Suharto's departure by dancing for joy in the fountain at the Parliament complex they had occupied for four days, Habibie was a perpetuation of the problem that brought Indonesia to its knees--the authoritarian system of crony capitalism known by its Indonesian acronym of KKN, for corruption, collusion and nepotism. Had all the riots and deaths--more than 500--given Indonesians nothing but a clone of the kleptocrat they had so painfully deposed?

The forces of change wanted to sweep away not just Suharto but also all the political and economic abuses he embodied. They were held back, in the end, by the military establishment's innate deference, caution and desire for stability. The rest of the world reacted coolly to the elevation of a Suharto confidant perceived as particularly ill equipped to rescue Indonesia from its economic ruin. In Washington, Clinton Administration officials assumed that Habibie's tenure would be short, and they hoped the country could then move on to real reform.

Even as the students who had wrought the revolution were peacefully but firmly cleared from the Parliament building in the early hours of Saturday morning, few Indonesians thought Habibie would be more than a brief tenant of the presidential office. "I don't see Habibie enjoying meaningful political support from anyone," said Sarwono Kusumaatmadja, a former Minister of Environment. "In the economic crisis we lost trust. We have to regain trust, and Habibie is not the man for that." Indonesia's transition out of the Suharto era into a modern, free-market democracy has, with his departure, just barely begun.

The past two weeks have been traumatic. Seething frustration at increased food prices and widespread layoffs provoked by the worst economic crisis in decades crystallized into the demand for Suharto's removal. Intellectuals and students extended their anger to the country's lack of real democracy in a system that not only perpetuated Suharto and the army in power but also squelched press freedom, genuine opposition parties and independent courts. But for most ordinary Indonesians it was the spiraling bus fares and price of cooking oil forced on them by corruption and malfeasance that cost Suharto his legitimacy. Much of the anger focused on the rapaciousness of his family, whose members controlled large sectors of the economy, from airlines, hotel chains and car manufacturing to a monopoly in cloves. Even as the economy was imploding, Suharto's grandson Ari Sigit was trying to set up a monopoly in school shoes.

Indonesia's problems are so difficult to solve that not even an extraordinarily clever politician bolstered by overwhelming public support would find it easy to take over. And Habibie, a man who enjoys Beethoven, motorcycles and tomes on high-tech industrial policy, seems the least likely candidate. He has no political base, nor can he necessarily count on the long-term backing of the powerful military. Economists and stock analysts around Asia question Habibie's ability to bring sensible change to Indonesia's choking economy--his big-spending statist policies are anathema to the International Monetary Fund--and politicians forecast continuing turmoil as secular and religious groups compete for influence now that Suharto's strong restraining hand has been lifted.

Suharto himself had reservations about Habibie's ability to rule on his own. On Tuesday, the President summoned a group of Islamic leaders to discuss the mounting protests. According to participant Nurcholish Madjid, a political observer from the University of Indonesia in Jakarta, when they told Suharto he could not hold on and should step down, he asked, "Can you guarantee that if Vice President Habibie becomes the President, the troubles will end?" The men in the room remained silent, says Nurcholish. "None of us wanted Habibie to be President."

What disturbs Indonesians and foreign observers alike is that Habibie's entire political career was based on by his closeness to Suharto. He is closer to the ousted leader than anyone else outside the President's immediate family. Their father-son relationship goes back to the death of Habibie's real father in 1950. Suharto, a military officer, befriended the family and closed the old man's eyes on his deathbed. Habibie, then 13, has revered his protector ever since. In his autobiography, Suharto wrote of the protege that he "regards me as his own parent. He always asks for my guidance and takes down notes on [my] philosophy."

With his shrill voice and constant gesticulating, Habibie comes across as an excitable, almost manic character. An Asian leader who has met him says, "He can't listen. He never stops talking." Newspaper publisher Aristides Katoppo remembers joining Habibie for a meeting with the Japanese Prime Minister in 1993. The meeting was supposed to last 15 minutes but dragged on for 45, as Habibie gabbed nonstop to his polite Japanese guests. After the meeting, he bragged that the extended meeting showed his importance. His self-regard is displayed on the Internet, where he maintains a home page with an exhaustive resume listing every prize and award he has received in his career, every post he has held, even details of his heart surgery. Habibie, says the site, "is the idol and dream of all parents, who wish their offspring to become another Habibie."

The man is of a complex character. He is a devout Muslim who fasts on Monday and Thursday, even when he is traveling abroad. In 1990 he founded the Indonesian Association of Muslim Intellectuals in an attempt to reach out to some of the 87% of the population, including most of the poor, who are Muslim. His religious supporters hope he will spread their dream of Islamic ascendancy for Indonesia. Yet he is a highly educated scientist and dedicated believer in the power of technology. He studied aeronautical engineering in Germany and worked his way up to a vice presidency at the aircraft makers Messerschmitt-Bolkow-Blohm before Suharto personally called him home in 1974 to help Indonesia establish an industrial base. For 20 years he served as Minister of Research and Technology, developing a string of "strategic industries" to build airplanes, steel mills, cars and ships in Indonesia.

But the bright engineer foundered when confronted with practical policy decisions. Habibie boasted of being able to "leapfrog" low-skill industries, which would have given needed employment to the country's vast mass of unskilled laborers, and move straight into expensive high-tech ventures. The billions of dollars of public money he spent on his strategic companies did little to advance industrial development. His most extravagant pet project, a $2 billion attempt to build an indigenous aircraft, the propeller-driven N-250, was deprived of state funding as a condition of IMF assistance.

Not all Habibie's business enthusiasm was lavished on the public sector. Like his mentor, he dabbled lucratively in private enterprise through his family. The Habibie clan controls two large conglomerates--the Timsco Group, named after his younger brother Timmy, and the Repindo Panca Group, headed by his second son Tareq Kamal Habibie. Many of the more than 66 companies in these two groups have fed off contracts from the state enterprises Habibie oversaw as Technology Minister, says sociologist George Aditjondro of the University of Newcastle in Australia. That does not bode well for a clean government under a Habibie presidency. "The Habibie-family companies are so deeply involved with the Suharto-family companies," says Aditjondro, that Habibie naturally "will try to protect Suharto and his family from impeachment."

Habibie's reputation for loony ideas is at its worst when it comes to economics. He is widely ridiculed for his bizarre "zig-zag theory," based on the notion that cutting interest rates, then doubling them, then slashing them again will reduce inflation. His inexperience petrifies investors. "Even if you zero out the political risk, economically you still have a mess here," says Matthew Pecot, head of research with GK Goh Securities in Jakarta. "Give it two weeks or so, and I think the students will be back out there protesting against Habibie."

In an effort to reassure the moneymen and political lenders on whom Indonesia's economic revival depends, Habibie announced a new "reform and development" Cabinet that conspicuously dropped the most prominent of Suharto's cronies, and pledged to develop a government "free of corruption, collusion and nepotism." Few of Habibie's critics were impressed. Amien Rais, who leads the 28 million-member Muhammadiyah Muslim organization and has emerged as one of the strongest opposition figures in the past two weeks, said he would "neither endorse nor oppose" the new Cabinet but doubted it would last the full term, to 2003.

Foreign investors are worried that Habibie may allow Muslim activists a greater role in society than they were permitted under Suharto. Unsettling signs appeared the day after Habibie's swearing in, when hundreds of Muslim protesters forced their way into Parliament to confront students still demonstrating for greater democratic reforms. They advanced shouting, "Muslims must support Habibie!" and "Religion and politics are one and the same!" The security forces had to intervene to prevent a serious riot from breaking out.

If--and that's a big if--Habibie's new Cabinet is able to make headway in restoring the economy, his presidency may defy expectations and last its full term, some analysts say. Even so, Indonesia will change in ways that were impossible under Suharto's centralized control. The press has thrown off self-censorship, and the next step could be the legitimization of multiparty politics to accommodate the newfound sense of "people power." John Sidel, a lecturer at the School of Oriental and African Studies in London, predicts, "You will see a great diversity in government, and all these different groups will be appealing to the people." The monopolies, nontariff barriers and nepotism that distorted the market process, says Emil Salim, a former Cabinet minister, can be countered by "empowering institutions outside the government. It will not be a smooth ride, but I think the direction is already correct for reform."

As Jakarta looked toward the long process ahead of physical and political healing, there was tense uncertainty about Habibie and how long he would hold the power that had so serendipitously devolved upon him. But deeper down, many Indonesians had a sense that a great shift was taking place in their country. "Everything is moving, the way water moves," said Ade Nasution, a businessman who turned up at the Parliament last week to support the students. "I don't think anything can stop it." Despite Habibie's accession, Suharto's departure leaves a political vacuum. Indonesians are left to wonder who or what is really going to fill it.

--Reported by John Colmey and David Liebhold/Jakarta, Jay Branegan and Douglas Waller/Washington

With reporting by John Colmey and David Liebhold/Jakarta, Jay Branegan and Douglas Waller/Washington