Indonesia - Habibie Projects.

In 1994, when Habibie demanded a $1.1 bn allocation from the budget to buy and upgrade 39 of former East Germany's old fleet of warships he was opposed by then defence and security minister Edi Sudrajat and then finance minister Mar'ie Muhammad. The military was upset about his involvement in procurement matters. (Muhammad eventually gave Habibie just $319m, in view of a tight budget situation). The ship purchase issue exploded into a scandal with publications attacking Habibie's role in mid-1994. Subsequently, Suharto came to the defence of Habibie. Of big industries created by Habibie under Suharto's encouragement, five categories stood out: (1) a rapidly growing petrochemical industry, which was to make the country self-sufficient in many fields; (2) Nurtanio which produces a twin-engined aircraft with Casa of Spain, and PT Industry Pesawat Terbang Nusantara (IPTN), a state aircraft maker which supplies components for Boeing of the US, spearheaded the aerospace business - with local production of steel, copper, aluminium and other metals expanding steadily; (3) PAL, the state shipbuilder, which aimed to produce 3,500dwt tankers, patrol boats, frigates and minesweepers and, in the long run, to compete with Far Eastern shipyards in building larger vessels; (4) Astra Int'l, which assembles various Japanese cars; and (5) Inka, the state-owned rolling stock manufacturer. Another of Habibie's pet projects was Industri Pesawat Terbang Nusantara (IPTN), the state aircraft maker of which he was the chairman. As a German- trained aeronautical engineer, he closely followed the project which launched the first Indonesian-designed aircraft, the N-250. IPTN had a plan to sell 700 planes in 20 years, and there were plans for the N-250 to be assembled in the US states of Alabama, Kansas and Arizona. IPTN already assembled fixed-wing aircraft and helicopters. In late December 1994, Habibie said Indonesia would "not be able to avoid" turning to nuclear power "at the latest by 2003 or 2004" - if it was to generate electricity on the scale needed to ensure the future progress of the country. He said geothermal and coal resources were not sufficient to meet the country's rapidly growing needs, stressing that coal would only last another 30-40 years. Indonesia, which then produced 1.55m b/d of oil and condensates, was set to become a net importer of oil within the next decade. All that was changed when Indonesia plunged into recession in 1997. But then president Suharto was determined to remain in power and prepared Habibie to become his running mate as vice president in the March 1998 election. When the recession worsened and student riots forced Suharto to step down, in May 1998, Habibie accepted the presidency. Habibie has since taken only symbolic steps against corruption. He has ignored demands to put Suharto on trial for abuse of public office. Similarly, he has failed to prosecute senior military officers for the killing of students, political activists and Muslim theologians in 1998. He has also abandoned efforts to woo students and political opponents, who wield great influence over Indonesia's restless working class. His power base is "an inner circle club", says Emil Salim, a former minister. "That is dangerous". Critics say that, if he wins the presidency in November 1999, Habibie might not be capable of delivering the strong leadership needed to bind the nation together. Yusuf Wanandi, a prominent political analyst and vocal critic of Habibie, says: "He is a survivor but he has not solved any problems". However, sources close to Habibie assert that if he wins the presidency Habibie will be able to improve the situation in Indonesia. Habibie is betting on American support for the course ahead. In an interview published in July 1998, he said he had conveyed his "dream" of visiting the US to US Deputy Secretary of the Treasury, Lawrence Summers, and the US Assistant Secretary of State for East Asian and Pacific Affairs, Stanley Roth. Habibie added: "If I ever have the chance, the first country I'm going to visit must be and will be the United States of America". He said the purpose of a visit would be "to underline how deep our gratitude is" for American economic assistance.