From Third World to First The Singapore Story pdfdrive com

Asian Wall
Street Journal
(4 August 1998) he described his working style as “parallel
processing on 10 to 20 issues”, comparing himself to a computer. He also
complained that when he took office on 21 May 1998 he received
congratulations from many nations by the next day, but Singapore did not send
theirs until “almost June, very late. [Singapore had sent its congratulations on 25
May.] It’s OK with me, but there are 211 million people [in Indonesia]. Look at
the map. All the green [area] is Indonesia. And that red dot is Singapore. Look at
that.” A few days later Prime Minister Goh responded in his National Day Rally
speech that Singapore had only the resources of three million people and there
were limits to what “a little red dot” like Singapore could do for its neighbours.
We knew Habibie well because he had been in charge of Batam’s
cooperation with Singapore. He was against the Chinese Indonesians and by
extension against Singapore with its Chinese majority. He wanted to treat us as
he did his Chinese Indonesian 
cukong
, to be pressured and milked. This would
change the basis upon which Suharto and I had cooperated as equal, independent
states to an 
abang-adik
(big brother and little brother) relationship. But privately,
Habibie sent repeated messages to the prime minister to visit him in Jakarta and
also invited Loong (the deputy prime minister) and his wife for dinner. He
wanted Singapore’s leaders to be seen to support him, in the belief, we were
told, that Chinese Indonesian business leaders would then have confidence in
him and invest. We did not see how that would result from such visits.
Two days after his reported outburst, he gave an 80-minute lecture to Teo
Chee Hean, our minister for education and second minister for defence. Teo had
delivered humanitarian aid to Jakarta, to General Wiranto, the Indonesian armed
forces commander. In Teo’s words:
“Habibie was animated, his arms waving about as the expression on his
face and the tone of his voice changed rapidly. He could hardly sit still,

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sounding passionate and looking agitated. Habibie alternated between
highlighting his achievements, his special qualities, and making thinly
veiled threats against Singapore. He recounted that he had lived for 25
years in Europe, from the age of 18, and had acquired values such as
‘democracy and human rights’.
“Habibie wanted Singapore to know its place and realise its
vulnerability. So he proceeded to point out how ‘Singapore lies inside
(Indonesia)’. Jumping up from his seat to dash over to the map on the
wall, he stretched out both arms to emphasise the green expanse of
Indonesia surrounding the ‘red dot’ that was Singapore.”
On the night of 27 January 1999, as I was leaving for Davos, I was startled to
hear the news on radio that Habibie had decided East Timor would be given the
right to choose between full autonomy and independence. It was a sudden
reversal of a policy Indonesia had strenuously upheld since 1976, that the
incorporation of East Timor into Indonesia was irreversible.
In Davos I met Stanley Roth, the shrewd, constantly travelling and
indefatigable US assistant secretary of state for East Asian and Pacific Affairs.
We agreed that Habibie’s offer, once made, had permanently changed the
equation, and independence for East Timor could be expected. Roth’s dry
comment was that prime ministers should not be so free in writing letters,
especially to a president like Habibie. (Both of us had read reports that Habibie’s
decision had been triggered off by a letter from Australian Prime Minister John
Howard, proposing a referendum for the East Timorese to decide their future.)
Shortly after this announcement on East Timor, on 4 February 1999, Mah
Bow Tan, our minister for communications, called on Habibie who recounted
how the Australian ambassador had informed him of the “New Caledonia”
approach: to organise a referendum and be prepared to grant independence after
a 15-year period of preparation. Habibie had told the Australian ambassador that
Indonesia was not prepared for this approach. It had gained nothing in terms of
natural resources, human resources or gold from East Timor, and the Australians
did not have the right to insist that Indonesia grant autonomy or the right of self-
determination to East Timor.
“The world doesn’t understand and always character-assassinates us,”
Habibie said to Mah. He was “fed up and tired” of this and had asked his cabinet
to study the possibility of releasing East Timor – give them a choice, autonomy
or independence. Should they refuse to accept autonomy but at the same time

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seek Indonesian help to prepare for independence, then he would have to say
“sorry”. He was not prepared to be East Timor’s “rich uncle”. He had asked the
ambassador to convey this to Australian Prime Minister John Howard. Hence the
letter from Howard to him in January 1999 had contained Habibie’s ideas on
East Timor. When he received it, he had immediately scribbled at the sides of
the relevant paragraphs commending the idea to his cabinet. Thus was set in
motion a chain of events that marked a turning point in the history of Indonesia.
I had confirmation of the manner in which he decided on East Timor when I
met Ginandjar Kartasasmita, the able Indonesian coordinating minister for
economic affairs, on an aircraft from Singapore to Zurich, the night of the
announcement. We were seated across the aisle from each other, both headed for
the World Economic Forum in Davos, and got into an hour-long discussion of
economic and political developments in Indonesia. But uppermost on his mind
was East Timor. He recounted how the decision had been taken after the matter
was raised for the first time in cabinet only that afternoon, based on Habibie’s
memo. The discussion lasted two hours after which all ministers including
General Wiranto, the defence minister, agreed to the president’s proposal. He
asked with a trace of anxiety in his voice if it would have other consequences for
Indonesia. I replied diplomatically that I could not say for sure but that it was a
most significant policy change.
Habibie’s advisers had believed this offer of autonomy or independence to
East Timor would win him financial support from the IMF and the World Bank,
and acclaim in the United States and the European Union as a democrat and a
reformer. This would help his re-election. In fact he had agitated his generals,
many of whom had spent years pacifying East Timor. Ginandjar told Prime
Minister Goh in Auckland during an APEC (Asia Pacific Economic
Cooperation) meeting in August that they had made a mistake in February 1999
in arming the militias. The intention had been to “persuade” the East Timorese
not to vote for independence. When the East Timorese did so by an
overwhelming majority of 80 per cent out of nearly 99 per cent of votes cast,
East Timor was torched and devastated, ostensibly by the militias. Habibie’s
standing as an Indonesian nationalist was damaged, and the reputation of the
Indonesian armed forces and the government suffered.
To help Habibie win re-election, his team of advisers had presented him as a
reformer who wanted a break with the past. He released political detainees. He
allowed over 50 political parties to be registered instead of the three under
Suharto. He also met the press frequently and spoke freely, too freely. His

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choreographers reined him in and put him on a tight leash, stopping him from
ad-libbing. He needed money to get support. Officials expected major changes
after the elections. Fearful of being transferred out to jobs with fewer
opportunities for bribes, they made the most of this interregnum. There was
more corruption at all levels than during the worst of the Suharto years. The
opportunities for graft were immense because many banks and large companies
were insolvent and depended on government rescue schemes, opening them to
pressure. One of these was Bank Bali where some US$70 million had been
siphoned off by Habibie’s closest associates. The IMF and the World Bank
withheld funds for Indonesia until a thorough audit had been made and the
wrongdoers punished. Habibie blocked the publication of the auditor’s report on
the grounds that it breached Indonesia’s banking secrecy rules. The Indonesian
media reported that the money had been traced to members of his family.
Nevertheless, for his presidential bid he mobilised all the support his Muslim
reputation and presidential patronage could muster. He had aides who put a spin
on his wobbly performance. He refused to give up in spite of pressure from the
media, leaders of opposition political parties and his own Golkar party. He said
he was not a coward. He would only withdraw when he was rejected by the
MPR (People’s Consultative Assembly). He was. In the early hours of 20
October the MPR rejected his accountability speech by 355 votes to 322. Those
familiar with wheeling and dealing in Indonesian politics told me that they had
never seen so much money pass to so many MPR representatives in so short a
time. Habibie gave up the fight.
Habibie’s withdrawal from the contest led to dramatic last-minute changes in
alliances that affected the fortunes of the two main contenders for the
presidency, Abdurrahman Wahid, or Gus Dur (elder brother Dur) as his
followers affectionately called him, and Megawati Sukarnoputri. Gus Dur is the
leader of the Nahdlatul Ulama, a traditional rural-based Muslim organisation
with 30 million members. His PKB (National Awakening Party) had won 12.6
per cent of the votes in the June election. Megawati, daughter of President
Sukarno, led the PDI-P (Indonesian Democratic Party-Struggle) at tumultuous
mass rallies to win the largest single block of 34 per cent of the votes, beating
Habibie (Golkar) by a wide margin. However, in the People’s Consultative
Assembly of 695 (of whom 200 were not elected by the electorate), at 4:00 pm
on 20 October, Gus Dur was declared the president, winning by 373 against

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Megawati’s 313 votes. Frenetic political manoeuvring began and ended only at
3:00 pm the following day when the assembly started to vote for the vice-
president. Three candidates, Akbar Tanjung of Golkar, Wiranto, chief of the
Indonesian armed forces, the TNI (Tentera Nasional Indonesia), and Hamzah
Haz of the Islamic coalition had entered the contest. Megawati was reluctant to
stand, fearing another humiliation. Gus Dur spent much time to persuade her and
finally assured her of the support of enough parties to win. He needed her as
vice-president to establish his legitimacy as president. Meanwhile, violence and
arson had broken out in several cities in Java and Bali where she had won nearly
all the votes.
Fortuitously Stanley Roth was in Singapore at that time to address a meeting
of the World Economic Forum. He met Prime Minister Goh and me at 8:00 pm,
hours after Gus Dur had been elected president. We were as convinced as he was
that Indonesia could not avoid bloodshed and more turmoil if Megawati was
cheated of the vice-presidency by political chicanery in the People’s
Consultative Assembly. Both sides resolved to do what we could to let the key
Indonesian players know the effect on international investor confidence if this
should happen.
On 22 October the