Indonesia's Suharto names eldest daughter and timber tycoon to Cabinet

JAKARTA, Indonesia (AP) In a move likely to alarm market traders and irk foreign lenders, President Suharto included his eldest daughter and a wealthy business partner in his new Cabinet today.

The 76-year-old Indonesian president also broadened the power of his potential successor, Vice President Bacharrudin Habibie. The post has been largely ceremonial in past years.

Facing Indonesia's gravest economic turmoil in three decades, Suharto chose an inner circle of loyalists as ministers to help him tackle it. Western governments that are lending Indonesia billions of dollars are pressing him to accelerate reforms.

Suharto was awarded a seventh five-year term as president of the world's fourth most populous nation on Tuesday by an assembly he dominates.

He ignored charges of cronyism and calls for political reform from university students who have protested his government and its handling of rising inflation and unemployment.

"I am aware that the task to be carried out by this new Cabinet is not easy," Suharto said in a speech at the presidential palace broadcast on national television.

Critics said new faces in the 36-member Cabinet, including Suharto's daughter Siti Hardiyanti Rukmana and timber tycoon Mohamad "Bob" Hasan, might only deepen the economic uncertainty.

"I don't think those two names will increase the confidence the international markets have in Indonesia," said Mochtar Buchori, former head of the Indonesian Institute of Sciences.

Rukmana, the new social affairs minister, is a 47-year-old millionaire businesswoman, member of Parliament and a senior member of the majority Golkar party.

Commonly known as Tutut, she has played a bigger public role in charity work amid criticism of the Suharto family's wealth. She has become a frequent escort for her father since his wife died in 1996.

"This cabinet smells strongly of nepotism," said Amien Rais, a government critic who heads the 28 million-member Muslim organization Muhammadiyah.

Tutut was viewed this year as a possible vice presidential candidate, though she has denied charges that her family wants to establish a dynasty.

The post went instead to Habibie, a former research and technology minister and longtime friend of Suharto whose costly, high-tech projects have unsettled market traders.

Suharto granted Habibie, who was named on Wednesday, a greater role in international affairs as well as industrial development. As concern over Suharto's age and health mount, Habibie is widely expected to succeed the president.

Hasan, the new trade minister, is a presidential golfing buddy who oversees a timber cartel to be broken up under new reforms demanded by the International Monetary Fund.

A Muslim, he is one of Indonesia's richest men and a close confidant of the president. He is the first minister of Chinese descent since Suharto took power in 1966.

Last year, Hasan defended timber companies against charges they were responsible for wildfires that spread a choking haze across much of Southeast Asia, endangering the health of millions. Many blazes were deliberately set to clear land for farming or industry.

In other appointments, Gen. Wiranto was named defense minister. He was Suharto's personal aide for several years and like many Indonesians goes by only one name.

Fuad Bawazier, taxation director, replaced Finance Minister Mar'ie Muhammad, a respected technocrat who was at the forefront of efforts to stem the drop in the value of the rupiah.

The monetary slide has pushed up prices, prompting riots that killed five people last month.

Six university students in the central Java town of Salatiga entered the second day of a hunger strike against the government and rising costs, The Jakarta Post newspaper reported today.

The IMF has suspended further installments of a $43 billion bailout package to Indonesia because of worries Suharto is backing off pledges to dismantle monopolies and tariffs that benefit his family and friends.

The lending agency had indicated it was waiting for a new Cabinet before resuming aid talks, and was sending a team to arrive in Jakarta in the coming days.

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