Soeharto digs in with his all-crony Cabinet

What is one to make of the new Indonesian Cabinet, unveiled by a weary-looking President Soeharto as his nation grapples with its worst economic crisis in 30 years?

The incoming Minister for Social Welfare is the President's eldest daughter, Ms Siti Hardijanti Rukmana (Tutut), 49, a millionaire businesswoman who presides over a vast web of family business ventures.

The Minister for Trade and Industry is Mohammad "Bob" Hasan, 67, an ethnic Chinese timber tycoon and presidential "golfing buddy" who heads a plywood cartel that is supposed to be broken up under a sweeping International Monetary Fund (IMF) reform package.

The all-important Minister for Finance, Fuad Bawazier, 49, forged close ties with Soeharto's business-minded children during his tenure as director general for taxes, in one case approving lucrative exemptions to the "national car" project of the President's youngest son, Hutomo "Tommy" Mandala Putra.

The politically powerful Minister for Home Affairs, General Hartono, is a close friend of Tutut's. The Minister for Defence, General Wiranto, who already commands the 465,000-strong Armed Forces (ABRI), is a former Soeharto adjutant.

The Minister for Religious Affairs, Mohammad Quraish Shihab, is a close friend of the President and is sometimes depicted as his personal chaplain.

Major new powers have been conferred on the civilian Vice-President, Dr B.J. Habibie, the diminutive German-trained engineer whose palace ties are so strong that he has been dubbed Soeharto's seventh child.

The Minister for Food, Horticulture and Medicine is Haryanto Dhanutirto, a Habibie loyalist. As Transport Minister, he sacked the head of Merpati Airlines when he refused to lease planes made by Habibie from a company involving Tommy Soeharto.

Then there is the incoming Minister for Agriculture, Professor Yustika Sjarifudin Baharsjah. She is the wife of the outgoing Minister for Agriculture.

It looks, in short, like the Cabinet of a man who is pulling the wagons into a tight circle.

As he fights to redeem his reputation as the "Father of Development", Soeharto is placing his faith in his family, his friends and his long-time business associates, rewarding loyalists and brushing aside charges of cronyism and nepotism.

At a time when Indonesia faces Herculean challenges, it finds itself with what might be called a Caligulean Cabinet.

To the dismay of many, Soeharto has completed the purge of the United States-educated economists who pulled Indonesia back from the economic brink in the mid-1960s and set it on the road to 30 years of spectacular economic growth.

The new 36-member Cabinet, due to be sworn in today, will do nothing to reassure the money markets. It will do nothing to reassure the IMF or the World Bank. It will dismay the finance ministers of a dozen countries, including the US, Japan and Australia, whose goodwill is important to Indonesia.

Nor is it doing much for the President's standing at home.

"How can it be possible that a father is President and his daughter is a Cabinet minister?" asks Amien Rais, the increasingly outspoken leader of Muhammadiyah, a 28-million member association of Islamic modernists.

Tutut's appointment, he told the Associated Press, was a clear symptom of nepotism. "There are thousands who are more capable," he said. "Tutut is just average."

One of those who have done well is Habibie, who is given the job of dealing with international organisations, including the United Nations, the Non-Aligned Movement, ASEAN and APEC.

This suggests that he may travel frequently on behalf of Soeharto, who fell ill during an overseas trip late last year.

That could lead to some erosion in the position of Ali Alatas, who returns for a record third term as Foreign Minister. However, Alatas, a professional diplomat, should be able to handle that well enough.

Nor has Habibie fared too badly in Cabinet.

The Minister for Transport, Giri Suseno Hadi Harjono, is a Habibie man. So is the Minister for Research and Technology, Rahardi Ramelan. So, of course, is Food Minister Haryanto. The Co-ordinating Minister for Political and Security Affairs, General Faisal Tanjung, also has ties to Habibie.

As in the past, however, Soeharto has maintained a shrewd balance within the Cabinet, allowing no one group to predominate.

The new State Secretary, Saadilah Mursjid, who has in recent years become a close confidant of the President, is the director of a company which maintains tight control over the funding of a US$2 billion 130-seat Indonesian passenger jet, to be built by the national aircraft company.

It is widely believed that Habibie was hoping to gain direct control of this funding.

At a time when Indonesia has had outbreaks of anti-Chinese violence, it may seem a plus that Soeharto has appointed his first ethnic Chinese minister in 30 years. That may not follow.

Bob Hasan, who began as a driver, converted to Islam many years ago and has always played down his ethnic origins. Interestingly, there are three Indonesians of Arabic descent in the Cabinet - Alatas, Quraish and Fuad Bawazier.

For the Australian Government, the Cabinet will bring little joy.

Canberra may have made it clear that it wants the IMF to water down some of its more rigorous demands, particularly those involving the abolition of food and fuel subsidies, measures which directly affect the lives of the poor.

But it has insisted that Indonesia stand by the promises it made to the IMF in return for a $US43 billion rescue package.

There are not many friends of the IMF in the new Cabinet.

The Howard Government will need to keep an eye on an electorate which seems increasingly sceptical and disillusioned about developments in Indonesia.

There has been a noticeable change in public attitudes. Indonesian figures are treated increasingly as objects of mirth and derision in this country.

Newspaper columnists and cartoonists are making damaging attacks, almost on a daily basis. Criticism of corruption and nepotism in Jakarta has become a staple of popular culture, with jibes on programs like Good News Week bringing knowing, but sometimes uneasy, laughter.

This is not doing the bilateral relationship any good.

Indonesia has a leader who has achieved an extraordinary amount in 30 years and who wields immense power. Members of his new Cabinet may be able to hammer out an acceptable compromise agreement with the IMF, which has temporarily suspended aid because of its concerns that Soeharto is backtracking on reforms that affect his family and friends.

But the crisis is growing worse by the day. Time is running out.