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Friday, February 20, 1998 Published at 15:08 GMT

World: Asia-Pacific

Habibie set to be Indonesia's Vice President
image: [ Habibie: predilection for quirky economic theories ]
Habibie: predilection for quirky economic theories

Bacharuddin Habibie's nomination as Vice President of Indonesia has been endorsed by the country's military, making him almost certain to be selected.

He is a long time friend and associate of President Suharto, who backed him for the post, and is now his potential successor.

Mr Suharto, 76, has governed for 32 years and is Asia's longest serving leader.

With this latest endorsement, all five factions in the 1,000 member People's Consultative Assembly unanimously back Habibie alongside Suharto in the elections due in early March.

IMF collision course

This vote of confidence comes in spite of misgivings in the financial community.

The BBC's South Asia correspondent, Simon Ingram, says they fear Mr Habibie's "predilection for quirky economic theories and extravagant prestige projects."

The rupiah dived to a record low of 17,000 against the dollar when his name came to the forefront last month.

A more immediate concern however is the growing conviction that the government is poised to announce the introduction of a currency board system pegging the value of the embattled rupiah to the US dollar.

The IMF has warned that such a measure would lead to the suspension of its multi-billion dollar economic rescue package for Indonesia but all the signs are that President Suharto has lost faith in the IMF recipe and sees the currency board as the only means of economic salvation open to him.

No split

Before the armed forces announced their support for Mr Habibie, there were rumours of a split in the military but the out-going commander-in-chief, Feisal Tanjung, denied them.

"Don't make up such assumptions," he said to a reporter. He also said that market opposition to Mr Habibie had "nothing to do with anything."

Other front-runners for the job were thought to have been the National Development Planning Minister, Ginandjar Kartasasmita, and the Information Minister, Raden Hartono.

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