17 - Götterdämmerung of the New Order

Summary

On 4 May 1998, Liem left for Hong Kong enroute to the United States, where he was scheduled to undergo cataract surgery. A couple of days earlier, he stopped by Jalan Cendana, to inform Suharto about his departure, as was customary before he made any extended overseas trips. The political tension was palpable in recent weeks; the IMF was just about to reopen the critical money tap but the economy was in dire straits while calls for Suharto's resignation were getting more strident. Despite signs that all hell could break loose, Suharto maintained a typically calm Javanese demeanour. “He said to me, ‘semua beres’ [everything's in order],” the cukong recounted. He said the president told him he was leaving for a trip himself — to Cairo. (Suharto was scheduled to attend the eighth Summit of the Group of 15.) But the president added as an afterthought that it was probably a good idea for his old friend to be away for a while as even he “was unable to protect me”.2 Little did the two men know that they would not see each other for years, and when they met again, Suharto was no longer president and Liem was no longer living in Indonesia.

MAY “MADNESS”

Even with the IMF back on board, the picture in Indonesia was far from in order. To get the IMF money flowing again, Suharto made additional concessions in late April, including consenting to raise domestic energy prices to cut the state subsidies that had kept fuel prices among the lowest in the world. On 30 April, Coordinating Minister for the Economy Ginandjar Kartasasmita said that energy prices would rise by early June “at the latest”. In fact, action came faster than the IMF asked for or expected. On the afternoon of 4 May, Suharto directed his energy minister, Kuntoro Mangkusubroto, to announce whopping price rises effective at midnight. Petrol was jacked up a massive 71 per cent. The percentage increase for kerosene, the fuel most used by poor Indonesians, was smaller, but still a painful 25 per cent. Jakarta bus fares were raised 67 per cent, to Rp500. Although that seemed paltry, equivalent then to about 6 U.S. cents, it was a hardship for the growing numbers of poor struggling to feed their families.