Keep an Eye on Indonesia

Indonesia, like China and India, is one of the world's stirring giants. With 204 million people, it's the fourth largest nation on Earth. Its economy is growing at an 8 percent yearly rate, lifting many Indonesians out of poverty.

But as the country catches the capitalist wave sweeping through Asia, large questions remain about the drag created by authoritarian government and by the rifts in Indonesian society. Recent tension over the forced displacement of opposition party leader Megawati Sukarnoputri, daughter of former President Sukarno, brought some of Indonesia's challenges into view.

Ms. Megawati's party, the Indonesian Democracy Party, is one of three officially tolerated parties. It operates under the eye of the government - and, specifically, of President Suharto, who has ruled since 1965. Clearly, Mr. Suharto wanted Megawati sidelined, perhaps in anticipation of the 1998 presidential election, which could choose his successor.

Does Megawati, whose main strength is the memory of her still-popular father, have the public backing to mount an independent political movement? For now, she is seeking redress through the courts, which aren't likely to go against Suharto's will.

But a more crucial question than her immediate political future is the country's future as a bulwark of stable economic development in Asia. Indonesia's potential fissures are many. One of them is religious: between Muslims (the overwhelming majority) and non-Muslims and between devout Muslims and nominal adherents of that faith. Another fault line divides those who favor expanded international economic ties from nationalists suspicious of Western and Japanese influence. Still another is ethnic, with some minorities, like the formerly Portuguese-ruled East Timorese, struggling for rights and freedom, as well as less obvious frictions between indigenous Indonesians and the large ethnic Chinese population. Finally, there's the socioeconomic cleft between the masses of poor and the rich, with Suharto's family prominent among the latter.

Any of these tensions could cause problems for Indonesia - as could conflict between those who want the country's opening to include greater political freedom and those happy with Suharto's brand of tight control. But none of the divisions shows immediate signs of bursting into conflict, and none is likely to alter Indonesia's present path unless the Army, a critical institution and Suharto's power base, itself begins to reflect these rifts.

Indonesia's development as an economic force and a regional power bears watching by Americans and other Westerners as well as by Asians. Why?

*Because Indonesia's rapid growth, if sustained, could turn the country into a major market for goods from America, Europe, and Japan. Western businesspeople are awakening to this. Foreign investment in Indonesia has sharply risen, with encouragement from the government. Also rising are environmental problems associated with development and conflicts with native cultures.

*Because Indonesia occupies a key strategic crossroads, connecting the Pacific and Indian Oceans and providing naval access to such hot spots as the Persian Gulf. Also, Indonesia has actively tried to harmonize relations among major players in Asia, including China. Jakarta has, for instance, led efforts to negotiate a settlement to the Spratley Islands controversy. It has also hosted consultative meetings between China and the ASEAN nations.

*Because Indonesia has the world's largest Muslim population, making it the anchor of Islam's Asian demographic center. Some observers feel Indonesia, with its multiethnic character and relatively good record on interreligious relations, could help emphasize the more tolerant, more modern facets of Islam - countering the image of radicalism and fundamentalism.

Thus Indonesia has a key role to play in smoothing relations between the developed world, notably the US, and important forces in the developing world.