>From Australian Financial Review 21/5/99
Post-election violence predicted for Indonesia
By Lisa Allen
London-based corporate security and crisis managers
Control Risks Group forecast a messy and violent aftermath of
Indonesia's first democratic elections in more than four decades.
Control Risks, which handles political-risk analysis
across 130 countries, is advising foreign companies still operating in
Indonesia to expect a "corrupted" election outcome next month.
At best, the respected intelligence forecaster staffed
by ex-FBI, SAS, and MI6 agents plus a slew of lawyers and accountants
asserts Indonesia can expect an ongoing medium level of unrest after
the June 7 election. At worst, the archipelago will sustain an upsurge
of violence marked by millions of protesters and the possibility of a
military-controlled government.
Clients were advised last week to "postpone all
non-essential travel to Indonesia until the volatile political
situation eases". Control Risks which is acting for at least 15
Australian companies in Indonesia forecasts large foreign companies
with high-visibility projects may sustain violence.
Caltex Indonesia's central Sumatra site was stormed by
more than 1,500 student protesters last month, resulting in widespread
damage to cars, a hotel and a club complex.
That incident, one of the first to involve a major
foreign company since the present wave of political and social unrest
began in 1998, was principally linked to domestic issues. Several
protesters were injured when security forces opened fire. "This type of
unrest, along with the religious and ethnic troubles in many parts of
the country, will be exacerbated by the upcoming elections," according
to Control Risks' analysis.
It has advised clients to expect one of three separate
election outcomes: an opposition victory, corrupted elections or a
political compromise.
Yesterday, a Sydney-based Control Risks analyst
discounted any possibility of the two Muslim parties, the PKB or the
aggressive reformist PAN, uniting against the ruling Golkar party.
"Our view is it's highly unlikely PKB and PAN will join
up because of the two different social interpretations of Islam."
But there is a possibility one them could join with
Megawati, said CRG's Sydney analyst.
Any political compromise would see a coalition between
the ruling party, Golkar, the Indonesian armed forces, TNI, the
regional and functional group representatives, plus either PKB or PAN.
If PAN joins the new government, it will be seen as
having a reasonable degree of reform credibility, according to Control
Risks.
"However, there may be a negative reaction by the
supporters of Megawati, as they have a very high expectation that she
may be part of any new government," it says.
The main threat to this scenario could stem from the
potential "instability" of this type of coalition. "There may
potentially be large-scale demonstrations by these parties, which may
increase the possibility of social unrest throughout the country,"
Control Risks says.
It predicts a period of calm lasting for weeks or even
months before the final coalition is agreed. "Once the coalition is
made public, the protests and unrest may begin to build up," it says.
The probability of an opposition victory is also ranked
"medium", but such an outcome could see the military eventually take
control of government.
In that event, Control Risks expects serious social and
political unrest on the outer islands. "As the military move closer to
taking control, the unrest may spread to the major cities on Java,
including Jakarta," it says.
An opposition victory may evoke a positive reaction by
the parties involved in the coalition and also by students, worker and
pro-reform groups. But Control Risks maintains the major problem could
be the reaction of forces in favour of the status quo, in particular,
TNI and the various paramilitary youth groups aligned with Golkar.
"These groups are capable of instigating ethnic, social
and religious violence throughout Indonesia," it says. "If they are
successful the military may be able to justify taking over the role of
government."
But Control Risks Group which has more than 3,500
corporate clients worldwide is betting on a corrupted election outcome
involving Golkar and TNI. "The reaction to this result would be
widespread discontent amongst opposition groups and political parties,"
it says.
"If opposition parties, particularly PDI, choose to
mobilise their supporters nationwide, then this would bring millions of
disgruntled Indonesians onto the streets in a show of "people power"
aimed at bringing down the Government.
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