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REUTERS, Monday October 29, 2001 9:59 AM

Megawati says Indonesia could become another Balkans

JAKARTA (Reuters) - President Megawati Sukarnoputri has warned Indonesia could disintegrate and become the Balkans of the East if religious and communal conflict was not brought under control, the official Antara news agency reported.

In a bleak speech marking a national youth day on Sunday, Megawati bemoaned the breakdown in law and order across the country, the extent of graft and the prospect some foreign investors wanted to give up on Indonesia.

She demanded an end to the religious, ethnic and separatist violence that has hobbled the world's fourth most populous country for several years and said security had to be guaranteed for all Indonesians and foreigners.

"(If not) we will become the Balkans of the Eastern hemisphere," Antara quoted Megawati as saying.

Megawati's comments after nearly 100 days in office underline her frustration at the lack of reform on all fronts -- which analysts partly blame on her unwillingness to upset vested political interests and tackle key problems head on.

After a promising start, Megawati's government has become bogged down in the enormity of the country's challenges.

The devastating hijack attacks on the United States last month and the rise in anti-American sentiment that has followed U.S.-led strikes on Afghanistan have also buffeted the economy, scaring some foreign investors and frightening off tourists.

But few foreign analysts believe Indonesia, despite violence along its outer reaches in recent years, will break up, as only two provinces, Aceh and remote Papua, formerly called Irian Jaya, have serious separatist movements.

In their country's messy transition to democracy, one thing most Indonesians outside Aceh and Papua agree on is that all parts of the multi-ethnic former Dutch colony must hold together.

Irian was officially renamed last week in line with a new law giving the resource-rich province more autonomy.

JUSTICE

Megawati also said those involved in corruption had to be brought to justice.

"The violation of regulations is regarded as normal, moreover is frequently done with pride and no feeling whatsoever of guilt," she said, referring to the widespread practice that has made Indonesia one of the world's most corrupt nations.

She said the country needed foreign investment to restore the rapid economic growth experienced for decades before the Asian financial crisis of the 1990s. But that would not happen until foreign investors felt safe, she added.

"Now, it is not only the arrival of foreign companies which is very small, moreover some companies that are already here are getting ready to leave us," Megawati said.

Some analysts have criticised Megawati for failing to quickly address recent street protests by radical Muslim groups against the U.S.-led strikes on Afghanistan, which while small were vocal and included threats against Western interests in Indonesia.

There have been no reports of violence against foreigners in major cities over the U.S.-led attacks.

Most Indonesians oppose the campaign against Islamic Afghanistan but not at the expense of the country's economy.


Copyright © 2001 Reuters Limited. All rights reserved.

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