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Monday, October 11, 1999 Published at 14:53 GMT 15:53 UK

World: Asia-Pacific

Crucial days ahead for Suharto

Suharto is alleged to have opened many doors for his family

By regional analyst, Francis Markus

The Indonesian Government's decision to drop corruption charges against former President Suharto due to lack of evidence comes just nine days before an electoral college is to choose the next president.

[ image: Attorney General Ismudjoko could let Suharto off]
Attorney General Ismudjoko could let Suharto off
The Indonesian Attorney General, Ismudjoko, was clear in his reasons when he made the announcement at a news conference in Jakarta.

The investigation had focused on two charitable foundations headed by Mr Suharto.

The attorney general said investigators found that the charities had lent money in what he called an irregular way to various commercial corporations.

But he said they had not broken the law, because the profits were ultimately returned to the charities and used for social work.

Likely upset for critics

The decision has caused outrage among critics of Mr Suharto, who accuse the Suharto family of milking the charities for credit to fund the business ventures of the ex-President and his six children.

They see the outcome as further evidence of the fact that Mr Suharto's cronies - among whom they include his successor President Habibie - have consistently baulked at unravelling the network of the Suharto's business interests because they themselves have too much to lose.

Habibie's role

Already, lawyers pursuing the alleged Suharto billions, have started investigating other avenues.

[ image: Suharto's son Tommy is currently on trial]
Suharto's son Tommy is currently on trial
In one case announced on 7 October, Indonesia's state-owned power company announced it was suing a private company it accuses of winning contracts during the Suharto era through favouritism and corrupt means.

And several of Mr Suharto's children are currently under investigation, with one of them, Tommy, on trial over an allegedly corrupt land deal.

But analysts say the crucial factor determining whether legal proceedings against the Suharto clan will be vigorously pursued or allowed to wither, will be the composition of Indonesia's next government.

Habibie's chances

[ image: President Habibie (right) was hand-picked as a successor]
President Habibie (right) was hand-picked as a successor
Clearly the perception that he has been soft on Suharto is doing immense damage to President Habibie.

He has already been severely weakened by Indonesia's debacle in East TImor and by an ongoing banking scandal.

Despite all this, his ruling Golkar party is saying it will stand by him as its candidate.

But the outcome of a contest on 20 October in the electoral college which chooses the next president is still far from clear.

Megawati Sukarnoputri's Indonesian Democratic Party of Struggle emerged as the biggest vote-winner in June's general elections.

But the deals being done by the major parties in the assembly now make it look increasingly uncertain whether she will be the next president.

If the horse trading results in a victory for her, or another another opposition candidate such as the Muslim leader Abdurahman Wahid, there is a greater chance of an atmosphere calling for a decisive break with the Suharto era.

But even then, much will depend on how the role of the military evolves.

The Indonesian army could prove one of the strongest forces in continuing to protect the interests of the man and his family who ruled Indonesia for more than 30 years.

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