In a speech to the nation on Tuesday morning, Indonesian dictator General Suharto refused to bow to demands for his resignation, but instead pledged to stand aside after an indefinite "transitional" period.
Backed by military chiefs, Suharto declared he would use his presidential powers to establish a "reform council", reshuffle his cabinet and convene elections for a new national assembly to choose his replacement, as well as an alternative vice president.
Suharto stated that he would not stand again for the post, yet is desperately clinging to power and attempting to keep the basic structures of his 32-year military dictatorship in place. He declared that his proposal was essential to "avoid unrest" and ensure that reforms were implemented in a "sensible and orderly way".
Suharto, who seized power in a bloody US-backed military coup in 1965, stated that unless he preserved the "unity of the nation," conflicts could lead to civil war. He said a transitional phase was needed to overcome the monetary collapse and crisis of confidence that had caused "enormous damage over recent days".
The dictator gave no details of his proposed council, no election date and no outline of what form the election would take. Under his regime, elections have been mere formalities, with most candidates selected by the military and the ruling party, Golkar.
As he spoke, students protested outside the assembly building, some climbing on its roof, demanding Suharto's immediate resignation. Tanks had been called to the location.
The previous day, the Speaker of Indonesia's national assembly had appealed for Suharto to stand aside, but within hours the armed forces commander and Defence Minister, General Wiranto, called a press conference to support Suharto's plan for a reshuffling of the cabinet that would leave the regime intact.
At the same time, however, Wiranto indicated the military might support a call for Suharto's resignation if it came from a plenary session of the assembly. He also called for the establishment of a reform council, which would include government ministers, campus dissidents and elements of the bourgeois opposition.
Wiranto's statements reflected the overriding concern within the Indonesian ruling class, as well as the major capitalist powers internationally, that a new regime, better able to impose the harsh economic measures demanded by the International Monetary Fund, be installed in such a way as to minimize the risk of an uncontrollable social upheaval.
Soon after Wiranto's statement, US President Clinton endorsed the proposed reform council. At the same time, the capitalist lending institutions stepped up their pressure on Suharto, virtually announcing their lack of confidence in his regime. This came in the form of a declaration from the World Bank postponing indefinitely payment of a $1.2 billion installment on previously agreed-to loans.
Wiranto began his remarks to the press with a warning to students and oppositionists planning mass demonstrations for Wednesday, May 20 in Jakarta and other cities. He alleged that "saboteurs" and "provocateurs" had infiltrated the groups organizing the demonstrations. It was a thinly veiled threat of military repression.
Both the regime and figures within the bourgeois opposition have expressed fears that the marches could encourage another outpouring of unrest in the working class and slum districts. Wiranto urged that the protests be called off, but Amien Rais, head of the Islamic Muhammadiyah movement, said the actions would proceed as planned.
Assembly Speaker Harmoko made his statement calling on Suharto to resign after some 200 retired generals, ex-cabinet ministers, senior academics, student leaders and trade union officials travelled in a bus convoy to the parliament house on Monday to appeal for Suharto's replacement.
The high-level delegation set out from the University of Indonesia, a home of the political establishment, to present petitions calling on the assembly to devise a constitutional means to dump Suharto. Harmoko stopped short of calling a meeting of the assembly, where a formal vote demanding Suharto's resignation could be taken. Instead he appealed to Suharto to step down "for the sake of national unity". His announcement reportedly followed talks between military chiefs and the ruling Golkar party, whose representatives jointly dominate the hand-picked assembly.
These elements are seeking a means of heading off the social explosion among workers and the poor that began to erupt in last week's rioting and looting, which left 5,000 banks, supermarkets, homes and other buildings burnt in Jakarta and at least 500 dead.
Many in the bourgeois opposition, as well as media commentators in the West, have proposed General Wiranto as the most trustworthy figure to replace Suharto. A spokesman from the delegation that lobbied the assembly on Monday told a television reporter for the Australian Broadcasting Commission that Wiranto was a "figure of hope". Wiranto would "hold things together and pave the way for reform," he said.
Amien Rais, just returned from high-level talks in Washington, was part of the delegation. He has committed himself to administer the IMF program. Speaking to the international media, he stated his readiness to assume the post of president.
The bus convoy to the assembly was carefully planned to avoid any march on the streets that could trigger a repeat of last week's riots. Along the way, marines raised their fists in support, an early indication of military support. Outside the assembly itself, soldiers allowed an estimated 1,000 students to gather, singing and chanting to the effect that Suharto should be hung as a dog and a thief.
Meanwhile, funeral processions were underway to mass burial grounds on the outskirts of the city, where the bodies of hundreds of the victims of last Thursday's fires were dumped. The victims were predominantly poor, trapped in infernos that the regime allowed to burn without any mobilization of fire fighters.