Taking steps now to ensure stability after Suharto era

In recent years all manner of reasons have come forth from the West to explain the economic zip and political fixity of Indonesia during the 15 years under President Suharto. To many Indonesians, the answer lies in the wayang, an ancient form of shadow-puppet drama in village theater.

The mythological wayang tales from a Hindu and Javanese past provide a reflective backdrop to this large archipelago of 13,677 islands and 154 million largely rural people -- a 37-year-old Southeast Asia nation barreling along at a 7 to 8 percent economic growth rate.

''Scratch an Indonesian, and he will identify himself with a wayang character ,'' says an Asian foundation official in Jakarta, the nation's capital. The flat leather puppets, casting a shadow (wayang) on a screen, provide traits for villagers to emulate, such as being dutiful or compassionate.

Indonesia's leaders are seen by villagers as the ''virtuous knights.'' In Mr. Suharto's case, he is commonly seen as Prabu Kresna, a visionary knight, says Bambang Gunardjo, director of the Wayang Museum. In the wayang stories, the knights are always followed around by godlike clowns, depicted by a group of deformed characters.

Herein may lie a clue to modern governance in Indonesia.

''In wayang, if the knights are unwise or do wrong, the clowns will leave them, as will the people,'' says Mr. Gunardjo. ''The knights must always know what the people want. If they don't, they will be brought down.''

President Suharto, himself once a village boy on the Island of Java, cannot help but follow this lesson from the wayang, says A. M. W. Pranarka, a political observer at Indonesia's Center for Strategic and International Studies.

In large part, adds Mr. Pranarka, this explains why the Suharto regime views elections as opportunities to take the public pulse rather than verdicts on the government; and why economic development is considered more important than Islam , Indonesia's main religion, or politics.

The symbolic ''clowns'' have not left the ''new order'' government of Mr. Suharto. The ex-general, who in 1968 took over as President from the nation's founder, former President Sukarno, is almost assured re-election next March by the People's Consultative Assembly. A few weeks ago, he said his next five-year term would be his last.

If this script is followed, he will step down in 1988 after two decades as President. Given the political turmoil and economic chaos of Indonesia's first two decades under Sukarno, the country has come a long way in a short time. (There have been calls, with his nod, to declare Suharto ''the father of development.'')

Third in population among developing nations (after China and India), Indonesia has been favored with abundant oil (an estimated 50 billion barrels in recoverable reserses) and some very large natural gas bubbles. It is a member of OPEC, with about 5 percent of the group's total oil output. The resulting foreign-exchange windfall has been a mixed blessing.

It heated up inflation and overvalued the currency (rupiah) in the 1970s. Unable at times to spend all its money, the government focused on large, capital-intensive projects. It also dangerously subsidized fuel and food prices. Traditional exports were not given enough support, unemployment grew, and the tax system became distorted. As the poorest nation in OPEC, Indonesia could have severely warped its economy.

But in almost all economic indicators, reports the World Bank, Indonesia has done better than any other OPEC nation. ''Indonesia is one of the few oil-exporting developing countries which has succeeded in developing its non-oil economy to the point where the growth momentum is not immediately threatened by the current weakening of the international oil market,'' says a bank report.

The country's team of Western-educated technocrats have demonstrated prudent management of the economy. Inflation is down to 7 to 12 percent, and the growth in GDP (gross domestic product, which excludes exports) of at least seven percent in the 1970's is expected to continue. The World Bank ''graduated'' Indonesia into its middle-income category when GDP per capita reached $530 in 1979. That income level is expected to nearly double by the end of the decade.

A step that shook off much of the bad effect of the oil wealth was a large currency devaluation in 1978. In 1982 Indonesia began a ''controlled float'' of the rupiah, revamping its range of incentives and regulations for traditional export industries. Still dependent on petroleum exports for 60 percent of its revenue, the government must prepare for the day -- perhaps as soon as 1990 -- when domestic oil consumption will not leave an oil surplus for export.

Last January, to the surprise of almost everyone, domestic oil prices were raised 60 percent, the corporate income tax was increased 47 percent, sales and land taxes went up, and food subsidies were reduced sharply. It was a sign of Suharto's political confidence that this was done four months before parliamentary elections.

The country has seen outstanding rice harvests in the last two years and the beginnings of a growing entrepreneurial class of non-Chinese ''Pribumi'' (indigenous Indonesians). Resentment of the largest business class, the Chinese, has resulted in occasional rioting. Unless the Pribumis actively take on the task of starting small industries, the nation may face an explosive political problem in unemployment and underemployment.

Where there were 11 million new workers in the 1970's, there will be 20 million in this decade. Joblessness of 20- to 30-year-olds in urban areas ranges from 15 to 20 percent, the World Bank estimates.

Often cited as a model developing nation in the area of family planning, Indonesians have been surprised to learn that population growth had not slowed down as much as expected, mainly because of a large drop in mortality rates in the 1970s. A 1980 census revealed a 2.3 percent growth rate -- not 2.0 percent as hoped. The goal now is a 1.9 percent growth rate by 1990, which would put the population near the level of the United States today.

One problem still being tackled is official corruption. The 1975 debt crisis of the state oil company woke up the nation to the extent of the problem, but with government coffers brimming with oil wealth and with a cultural legacy of feudal graft, government anti-corruption campaigns have made little headway. It is impossible to measure the resulting, vast damage to development, but a 30 percent ''slippage'' in revenues is commonly cited.

If it rises, corruption could creep up as a political issue. The government's party, Golkar, took 64 percent of the vote in elections last May, up from 62 percent in 1977. Such elections are never in doubt since the two other parties, the PPP (or Muslim party) and the PNI (or Independent Democratic Party), are closely guided by the Suharto regime. The President's tight grip on the military helps him keep any demands by the Muslim majority from being carried too far. What is called democracy in Indonesia, and in many Asian nations, differs from the Western variety by forcefully seeking consensus.

Indonesia, for instance, does not allow the practice of politics between election periods. Suharto has shown an astute ability to head off most dissent. But by consolidating his power since 1967, he leaves Indonesia with the sticky problem of how to choose his successor.

The Army, known as Arbi, has resisted civilian control of the military; it even controls much of the government down to village chief. It showed its strong anticommunist concerns in 1975, when it invaded the former Portugese colony of East Timor, which was annexed to Indonesia. A resulting widespread famine, which brought rebukes from abroad, has been at least partly remedied by large-scale development in East Timor.

Military leaders from Indonesia's independence fight, refered to as the ''generation of '45'', have yet to pass on the reins of power to a younger military generation. One of Jakarta's favorite pastimes is speculating about who is ahead in the race to succeed Suharto, but that may not be clear until next year, when a new vice-president is selected.

The Army, which under Sukarno began to supplement its budget with commercial enterprises, has maintained a ''dual function'' in Indonesia: military and political. Active and retired military men now occupy over half of the 150 top positions in the central bureacracy. The younger generation has been promised that a transition of power will begin in 1983, but just how to ease out the old generals has not been resolved.

If it can be done peacefully, the development already achieved by the Suharto government should continue.