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Western economic policies behind Indonesian violence

Headlines declare that the recent massacres on Indonesia’s Maluku Islands are the result of religious battles. In scenes distressingly reminiscent of the bloody anarchy that broke out during East Timor’s drive for independence last year, an estimated 3,000 have died in the sectarian fighting that has raged in the Maluku Islands since January 1999.

The sectarian violence is real, a part of Indonesia’s history, and apparently is growing in magnitude and intensity as extreme Islamic factions gain adherents throughout the country.

At the moment, President Abdurrahman Wahid, a moderate Muslim, is determined to keep religion and politics separate. But the growing extremism in the Muslim community and the spread of the machete-wielding “defenders of Islam,” who roam the capital of Jakarta, threaten to divide all Indonesian society and undermine its secular institutions.

There is a perception among some Muslims that the international community’s support last year for the independence of overwhelmingly Catholic East Timor was evidence of a conspiracy to Christianize Indonesia. For those who hold this view, the growing sense of Wahid’s moderation sets up explosive possibilities.

Only attention and great pressure from the outside can help Wahid maintain balance. That is the inescapable reality. It also could be, however, a dangerous prescription. In recent years Western nations have contributed in a significant way to Indonesia’s troubles. The problem is only partly due to sectarian differences. Economics and Indonesia’s growing poverty play a key role.

What happened in Asia in 1997-98 began in Mexico. The United States bailed out U.S. investors (mainly banks and big financial institutions) by giving a $40 billion loan to Mexico when the peso went into a free fall. Speculators presumed the U.S. government would continue bailing out countries where U.S. investment was heavy, and fixed on Thailand.

The collapse of Thailand’s baht triggered the Asia crisis that crippled the arrogant, overborrowed, booming Asian economies. All countries were badly damaged. Indonesia, in what proved to be the last days of dictator Suharto, was driven into ruin.

The current violence in Indonesia, the largest Muslim country in the world, can be traced in large measure to Indonesia’s financial ruin, the result of First World speculation and First World economic policy.

After three years of hunger and economic devastation, Indonesians thrown out of work and out of hope have given the country’s radical Islamic elements the support they need to lash out wherever they find victims on whom to vent their wrath.

When a nation plunges overnight into poverty, turmoil follows. Sending in the International Monetary Fund to exacerbate that poverty guarantees social upheaval and violence. The statistics tell the tale. In 1995 the Indonesian economy -- corrupt and inefficient though it was -- was growing by 8.2 percent a year. In 1998 it shrank by 13.7 percent. And it is still sliding. Wahid’s ascendancy and the nation’s tender experiment in democracy have yet to yield benefits for the country’s poor.

True, the West doesn’t carry all the blame -- the Asian financial crisis of 1997-98 highlighted the structural weaknesses of many Asian Tigers. But that cannot disguise the fact that major blunders were committed by the United States.

It may seem at times that those recently protesting at meetings of the World Trade Organization and World Bank were striking out at any globalization ideas that moved. And that may have been the case.

At the same time, a wish for a more discerning or sophisticated discussion of world economics is hardly advanced by ignoring the immense ills that have been visited on the likes of the poor of Indonesia and the social upheaval that is left in the wake of international finance decisions that have their beginnings continents away.

Indonesia’s immediate crisis deserves the attention of the rest of the world right away. If the world’s attention stops at emergency treatment, however, the simmering hatreds will boil over, and the societal divisions will become deeper and wider.

National Catholic Reporter, July 28, 2000