Big Step in East Timor

Indonesia's new leader is showing a welcome capacity for fresh thinking. Nowhere is this more evident than in the brightened prospects for resolving the long-simmering East Timor conflict.

That territory, occupying half the island of Timor, has been an unwilling part of Indonesia since it was seized in 1975 following the end of Portuguese colonial rule. Independence has been the goal of East Timorese activists, but their movement has been held in check, often brutally, by thousands of Indonesian troops.

President B.J. Habibie has withdrawn 1,300 of those soldiers (nearly 11,000 remain) in the last few weeks. Last week his envoys met with Portuguese diplomats to discuss an autonomy plan for East Timor. The Indonesians propose self-rule in all areas except foreign affairs, defense, and some monetary policy. Those are big exceptions, but this offer is a giant step beyond past Indonesian refusals to even discuss the subject.

It's crucial, now, that the talks build momentum and that the East Timorese themselves become active participants. Key figures in the independence movement, such as Bishop Carlos Ximenes Belo and Jos Ramos Horta, have acknowledged the Indonesian proposal, with reservations. Mr. Horta says he will not join talks until imprisoned resistance leader Xanana Gusmao is released.

Freeing the popular Mr. Gusmao would seal Mr. Habibie's commitment to a peace process. It ought to be done now, not after a deal is signed, as Jakarta has stipulated.

Economic recovery and political change move best in tandem. Habibie's readiness to ease tensions in East Timor portend improved stability and a better setting for commerce.