Wednesday, November 28, 2007

Unease grows between Jakarta and Singapore

By Eric Ellis (South-East Asia correspondent for Fortune magazine)

Resentment and envy still appear to underpin a testy relationship, writes Eric Ellis.


ASIDE from Bali and the brothels and business parks bordering Singapore, the city-state's investors, like Australians, have never felt particularly comfortable in Indonesia.

While its bankers shelter billions in Indonesian loot from prying Jakarta investigators, it is generally regarded as a country best avoided, a corrupt swamp of intrigues on Singapore's pristine doorstep.

And Indonesians return the suspicion with scorn. Former president B.J.Habibie once described Singapore as a Chinese "red dot" in an Islamic archipelago, a toy-town so insignificant that were it to suddenly vanish, Jakarta would not notice it missing.

That was 1998, and Indonesia was in no state to be patronising. The rupiah had lost 80% of its value, collapsing the economy. The post-Soeharto political vacuum was being exploited by religious extremists and - as Indonesian nationalists see it - by Singaporean Government funds in a $2 billion bottom-fishing trip accumulating
state assets on the cheap: major banks, marquee property and, most controversially, Indonesia's two leading mobile phone carriers.

Nine years and several presidents on, a nasty fight between Jakarta and Singapore over those telcos suggests resentment, or envy, still informs the relationship, while raising questions about how economies manage the investments of sovereign wealth funds.

Much bitterness bubbles around Telkomsel and Indosat, the carriers that control 80% of Indonesia's mobile phones market. Offshoots of Singapore's Temasek Holdings bought in soon after Megawati Soekarnoputri became president in mid-2001, when Indonesia was on its knees.

Temasek's state backing gave the deals a foreign policy hue, while Indonesia was consumed by terror, and the Bali-bombing terrorists threatening to absorb skittish Singapore into its Islamist caliphate. But Temasek's boldness has been rewarded. Its 56%-owned SingTel Optus owns a 35% share of Telkomsel, now worth an estimated four or five times its original investment, while its 100%-owned STT Telemedia controls 42% of Indosat, with a similar multiple. SingTel gets 20% of its profits from Indonesia.

But perhaps not for much longer. After a long probe into the mobiles market, measured per user as one of the world's biggest and, with margins approaching 60%, most lucrative, Indonesia's anti-monopoly agency this week demanded Temasek sell at least one of the two interests. It fined eight Singaporean affiliates and demanded tariffs
be slashed after accusing both operators of fixing prices.

It is the second time in a year that Temasek's deal making has upset a powerful neighbour, prompting a coup in Thailand last year after taking then prime minister Thaksin Shinawatra out of his family business. The huge paper losses there stained the reputation of Temasek's technocratic chief executive Ho Ching, wife of Singapore
Prime Minister Lee Hsien Loong.

As in Bangkok, Temasek denies wrongdoing in Jakarta, and is challenging the ruling in court.

Singapore's official broadcaster described the ruling as a "foregone conclusion that had left political watchers, businessmen and international investors shaking their heads over the unpredictable nature of doing business in Indonesia".

Disagreeable though it is for Singapore Inc, tussles between business and regulators are inevitable. As Richard Pratt and Amcor doubtless rue, troubles are inescapable when governments decree functioning and consumer-friendly competitive markets.

Moreover, the very existence of "independent" institutions such as the KPPU, the Bahasa acronym for Jakarta's competition commission, was what investors demanded Indonesia create to rid itself of corruption and cronyism, and the policy-by-personal-fiat that marked Soeharto's 30-year kleptocracy. (Indeed, were the KPPU's rulings on cross-ownership applied in Singapore itself, state-owned Temasek might be in a pickle there, too. Temasek companies control Singapore's two leading mobile operators, and have a substantial stake in the third. But the same Government that owns Temasek only instituted a competition commission less than three years ago, after Indonesia, and insists it provides full and fair competition.)

But this being Indonesia, where few things are ever as they appear, there are intrigues and wrinkles.

The KPPU ruling was light on detail, and comes amid unresolved diplomatic dramas that have poisoned bilateral affairs. The most contentious has been Jakarta's desire to extradite errant businessmenfrom legal exile in Singapore.

Merrill Lynch found recently that 33% of Singapore's 55,000 millionaires were Indonesians controlling $US87 billion ($A98.78 billion) in assets on the island, fuelling a colossal property boom.

Jakarta sees an extradition treaty with a reluctant Singapore as essential to its anti-corruption effort, so it can go after corrupt officials and businessmen who have salted ill-gotten gains in Singapore banks.

Jakarta is also miffed that Singapore is extending its borders, demanding that traders stop shipping Indonesian sand for Singaporean reclamations. With the economy doing well, Indonesia is confidently reforming itself into one of Asia's most robust democracies. From environment policy to Middle East peace prospects, Jakarta is again
projecting authority as an Asian power.

There have been intrigues aplenty during the KPPU drama. This week I was handed a document that purports to be a working brief for a Russian oligarch's plan to buy Temasek's Indosat share, citing the connivance of two Indonesian cabinet ministers and their staff, known collegiately by the Russians as "teams". Parts of the "Project
Indosat" document seem a nod to Le Carre. It describes a stage-managed campaign of protests, financed by the Russians, against the Singaporean ownership of Indosat to force its divestment. Naturally, millions would be paid to named government officials whose lobbying and influence would nail the deal.

The document's veracity is impossible to establish, but there is a PhotoShop feel about it, which has not stopped the Temasek-friendly Singapore media reporting slabs of it.

The fact that it is being proferred by Singapore-friendly backroom "consultants" skilled in "the dark arts" suggests scepticism is the best policy. But the fact that it is being whizzed into Jakarta inboxes is eloquent testimony of the battle's nastiness.

Another intrigue concerns Indonesian Welfare Minister Aburizal Bakrie, a great survivor from the Soeharto era. He is not mentioned in the document, but lobbyists point out that a junior telco owned by his family has big expansion plans.

Indonesia has one-third the mobile penetration of Singapore, suggesting much room for new players, but the inference is clear. A lobbyist told me that some KPPU members are close to Indonesian Vice-President Jusuf Kalla, whose family business had a 10-year joint venture with SingTel in a struggling telco centred on Bali and
Indonesia's eastern islands. Kalla's group recently bought out SingTel, which lost money on the deal. Kalla is seen as the champion ridding Indonesian telcos of their Singapore partners. He is also contemplating a tilt at the presidency in 2009.

Alongside the legal campaign, Singapore has - untypically for the reclusive Temasek group - mounted a public relations blitz. Its lavish lunch briefings of the past year are famous among Jakarta's poorly paid local scribes.

But in arguing that Temasek's offshoots operate independently of the Government and the parent and that there is no conflicts of interest, the Singaporeans sometimes shoot themselves in the foot. A lawyer insisting on this independence is a director of another Temasek company and a member of Parliament representing the long-ruling party.

The Singaporean campaign claims the ruling will backfire on Indonesia's foreign investment aspirations, describing it as a politically inspired legal travesty. This may well be right - Indonesia's legal system is light years from perfect and rumours swirl around some KPPU commissioners.

But that is also a self-serving argument as Indonesia enjoys its highest foreign investment since the mid-'90s, mostly in the resources sector where the law is as quixotic as ever.

Still, the matter is shaping as a test case for Indonesia's evolving institutions, and a setback for Singapore's efforts to spread beyond its mature economy.

President Susilo Bambang Yudhoyono pledged not to intervene, and underlined the KPPU's independence. But it is clear among the ruling elite that Singapore Inc is no longer so welcome in Indonesia - Temasek is also being pressured over two banks in which it has invested - and as the deadline nears, its exit from not-so-happy investments will probably come down to price.

The proceeds will end up in places such as Australia, where the welcome mat, and the legal system, are not so soiled.

Eric Ellis is South-East Asia correspondent for Fortune magazine

A Time to Kill, And a Time to Heal

In his job as an Israeli pediatrician, Yuval saves the lives of Palestinian children. But the father of three also takes Palestinian lives as an attack helicopter pilot patrolling Gaza.

By Laura Blumenfeld

Washington Post Staff Writer
Sunday, November 25, 2007; Page A01

HOLON, Israel
-- The 2-year-old's flawed heart beat backward, pumping blue blood to his lips and inking rings around his eyes.

Ahmad edged across his hospital bed, toward his mother, Nasima Abu Hamed. Nasima, a Palestinian from Gaza had brought Ahmad to Israel for an operation. She moved uneasily through hospital halls decked with

Israeli flags -- but the Jewish doctors could save her son.

A pediatrician named Yuval walked in wearing a white coat. Nasima smiled. Yuval high-fived Ahmad, who was wearing toddler-size army fatigues. Yuval said in Arabic, "How's he doing?"

Nasima shrugged and asked, "When is the surgery?"

Nasima was eager to return to Gaza. There was trouble at home, clashes with Israeli soldiers. Fear had kept her family up all night, the chop of hostile helicopters. Two years ago, a missile fired from a helicopter had killed two cousins. If Nasima ever met an Israeli pilot, "I would faint and die from fear."

Yuval patted Ahmad on the head. The surgery would be soon. Later, Nasima called Yuval "our savior of the children."

Yuval is a savior of children. He is also an attack helicopter pilot. It was Yuval in his Cobra -- though Nasima didn't know it -- hovering over her town, as Israeli troops battled armed Palestinians. By day, Yuval works as a pediatrician. By night, he fires missiles for the air force.

One of Yuval's supervisors, physician Sion Houri, sees no contradiction between Yuval's two jobs. "There's reality A; there's reality B. It's not a dichotomy -- it's us," said Houri. "It's our life as Israelis."

After decades of war, what might be madness in another society passes for normal in Israel. As negotiators meet this week in Annapolis to try to resolve the Middle East conflict, Israelis find ways to resolve the conflict in their own lives. In the Bible, Ecclesiastes declares: "There is . . . a time to kill, and a time to heal." Yuval is doing both, at the same time.

*'It Sounds Like a Conflict'*

Yuval walked through the door, home from work. His little girl toddled over. "I missed you!" Yuval said, kissing his daughter as she peeled off his Velcro name patch and bit it. Yuval's mother-in-law, Nitzan, who was babysitting, said: "So, Yuval, are you a pilot or a doctor today?"

Yuval, a 40-year-old major in the air force, is prohibited by the military from giving his last name. He lives with his wife, two sons and a daughter on Palmachim air base, north of the Gaza Strip. The military has allowed Yuval to study medicine while he serves. When he isn't flying, Yuval treats children as a resident at a nearby civilian hospital.

"He's never home," his mother-in-law said. He's either on alert or on call. He's either dressed in a flight suit, carrying a ruler to calculate firing positions, or he's dressed in scrubs, carrying a measuring tape to gauge baby skulls.

"It sounds like a conflict, but he knows he's protecting us," Nitzan said. "You don't want to kill people, right, Yuval?"

Yuval didn't hear his mother-in-law because he was running his daughter's bath.

Nitzan said, "Look, our situation is intolerable."

"Situation" is Israeli shorthand for the country's relationship with Arabs. It wasn't always intolerable, Yuval said. He grew up on a farm, where on Saturdays at 7:30 a.m., his father revved up the tractor. All day, Yuval picked oranges with Palestinians from Gaza. For lunch, Yuval brought bread and cheese; Palestinians boiled Arabic coffee. They became, Yuval thought, friends.

"Now it seems like ancient history," Yuval said, splashing his daughter's curls, so immersed in memories he didn't notice she had her socks on in the tub.

Yuval's oldest son was born in the 1990s, after the Oslo accords. He dreamed that his son wouldn't be drafted. Then, in 2000, the second Palestinian intifada erupted. Suicide bombers blew up Israeli discos and cafes. Israelis responded with force. Palestinians from Gaza were banned, including the men who labored with Yuval. Yuval flew targeted assassination missions, killing some 15 intifada members, he said. After a strike, Yuval said, he would emerge from his cockpit successful, yet feeling bad, his hair wet with sweat, his neck reddened with tension.

Some pilots quit. They criticized the military. Yuval called them "unforgivable." As he snapped pink pajamas on his daughter, Yuval said,"If you think you're more moral, stay in and fight the battle the way you think it should be fought." Yuval's wife, Tamar, and their two sons came home. After dinner, the boys slid under Peter Rabbit sheets.

"Who's waiting for their 'kiss of protection'?" Yuval asked.

"Me!" said Imry, their 5-year-old. The kiss banishes bad dreams.

"About witches," the boy explained. "Dragons and ghosts."

Yuval started to smile, but then Imry added, "And the warriors, who
me to die."


At 2:30 a.m., air force sirens woke Yuval. Tamar didn't stir as Yuval leapt from their warm sheets, they recalled in interviews about that night in October.

"Is it the mission we briefed for?" Yuval whispered into his phone.

"Something else," a voice said from headquarters. "You're going south."

Yuval shot into the hallway in his underwear. He had 15 minutes until

Every movement, every zip and shiver, from Yuval's pillow to his Cobra had been timed. Two seconds to rinse with mouthwash. Forty-five seconds to pull on his flight suit and boots. Ten seconds to sprint to the car,parked nose-out. Six minutes to drive to the airfield, including swerves, in case a jackal crossed the road.

By the time Yuval reached his helicopter, four wire-guided missiles had been loaded. The crows roosting on the rotor blades had flown. Yuval strapped on his helmet and plugged into the cockpit radio. He recalled hearing:

"Your mission is to attack a group of terrorists. They launched a Qassam rocket at Israel and they're about to launch again."

In the past four months, the army says, more than 1,000 rockets and shells have been launched against Israel. On this night, the army said, four men from Islamic Jihad were attacking. Yuval entered the coordinates -- northeast Gaza, four miles from the Israeli town of Sderot -- into his electronic map.

The radio said: "All four are approved for targeting."

Yuval's heart, already beating fast, began to pound, he recalled. Usually, Yuval fired warning shots, or destroyed the launchers. Now Yuval and his wingman were supposed to take out a whole squad, he said.

Kill four men, or be a failure.

"Ready for takeoff," Yuval said. It had been 12 minutes, almost 13, since the sirens had woken him. As the light of the helicopter lifted through the humid air, it looked to Yuval like he was rising inside a pitcher of milk.

The flight to Gaza took five minutes. Sometimes when targeting a Palestinian, Yuval flew for hours without firing. Once, Yuval circled a building every day for a month -- in his helicopter with the white, open-jawed snake painted on the side -- waiting until civilians cleared.

One day, a boy sat on the roof. Another day, the target's secretary walked into his office. Finally, the Palestinian was alone. One, two, three missiles killed him.

On this night over Gaza though, there could be no delays. Yuval pictured an Israeli bedroom, exploding. He approached the launch zone tense and tenser, leaning toward the screen of his heat-sensitive targeting system. The rocket squad had crept into an orchard near a house. Yuval adjusted the contrast knobs, trying to coax four figures from the shadows, he recalled. Trees were gray. A house was white. The men were
black hot.

"It's a terrible thought," Yuval said later, but it had occurred to him many times: The children of the Palestinians he had picked oranges with in his father's orchard were now launching rockets. "I'm sure I know some of them. You can't recognize them from the air."

All Yuval could see now were small, dark movements. Two figures behind a tree. A person crouching.

"This is it," Yuval recalled thinking. Yuval placed his cross in the middle of a thin, black figure. "I'm looking at someone whose role in life is to kill, and I have to stop him," he thought. "Now, now, now." Yuval's adrenaline surged.

His thumb pressed the red button hard. Yuval held his breath, hoping that "nothing comes into the cross, like another person."

But instead of turning the Palestinian into a black-hot burst, the missile thudded into the sand. His ammunition had malfunctioned, a dud.

"No!" Yuval recalled thinking. He fired again. "Good hit," said ground troops, spotting for him. But by then, the two remaining rocket squad members had crawled close to the house.

Yuval had to decide: fly away and spare the civilians or fire again and fulfill his mission?

"Not good," Yuval said to his wingman, as they turned back.


After he landed, he tiptoed into his house and lay next to his wife. It was 5:30 a.m. Tamar rolled over: "Did you fly?"

Yuval said bitterly, "No, I went out with my buddies."

He lay there, he later recalled, so wrung out that he felt like he'd lost 20 pounds. He thought: "I have to wake up in two hours and go to the hospital."

*Brotherly Therapy at Week's End*

On Fridays, Yuval drives his family to his parents' farm on Tranquility Street.

"He hardly ate! You ate nothing," said Yuval's mother, also named Tamar, on a recent Friday evening.

Yuval's mother said having a doctor for a son was "the ultimate nachas." But a pilot? "Too much worry," she said. "I'd rather not know."

Yuval's two brothers are also pilots. Michael flies an F-16 fighter jet, and Ori, a reconnaissance plane.

"On Friday night, we debrief here," Yuval said.

"They talk among themselves," said Yuval's father, Ron. "We just eavesdrop."

For Michael, who had tried to kill Hezbollah leader Hasan Nasrallah, their conversations were a form of brotherly therapy: "We talk about our failures, because the successes don't weigh on our hearts."

Yuval confided to Michael about his mission in Gaza. "You don't get so involved in what's happening on the ground," Yuval told him.

"My fight is more sterile," said Michael, who operates at 20,000 feet. Michael shoots autonomous "fire-and-forget missiles," which allow him to jet away.

"When you put the cross on someone running, it's more difficult," Yuval said later. And back at the squadron, he said, "you see the video again and again, and the black dot goes down, and he doesn't move anymore -- it's difficult. You think not as a pilot, but as a human being." In the cockpit, though, "I don't let my head go there. I don't allow myself to think about a target's mother."

At dinner, Yuval's mother said, "You try very hard not to hurt people, right, uv-ik?"

Yuval squeezed the stem of his wineglass. Efrat, Michael's girlfriend, teasingly called Yuval "Dr. Jekyll and Mr. Hyde." They cleared away their dishes, the wineglasses last. They had clinked the glasses earlier, with a toast: "To life!"

*When All Seems Possible*

The baby's heart stopped. She lay on her hospital bed -- 10 pounds at 4 1/2 months -- her chest deathly still.Yuval was working in the emergency room when a nurse called out, "We need you, quick!"

Two brooding days had passed since Yuval's mission to kill four men. Now it was up to Yuval to save an Arab life.

The Arab baby, Tara, had four heart defects. Tara had come to Israel through Save a Child's Heart, a program that sponsors surgery for children from poor areas. Doctors had inserted a shunt in Tara's heart.

Eight stitches threaded down her chest. Tubes emerged from her ribs, from her clavicle, from her hand.

Through all the wires, Yuval could see that Tara was "innocent, untouched."

"When they come from Gaza at age 3 or 4, they have that look in their eyes," he later recalled. "That 'I know the dangers, don't get too close to me.' "

As Yuval bent over Tara, the monitors beeped alarms. Tara's lungs had filled with fluid. "It was horrible to think this little girl was going to go," recalled the nurse, Svetlana Kakazanov.

"Adrenaline," Yuval ordered. He felt for the center of Tara's chest with his thumbs, and pumped.

It was sad for Yuval, but he often thought that the Gaza children had "a 90 percent chance of becoming terrorists. But mainly it's not their fault, it's 'the situation's' fault. And I'm not treating 'the situation.' I'm treating the child."

In the ICU, "the situation" would disappear, if sometimes only for moments. Yuval had sat night after night with a father from Gaza whose son had a hole in his heart. They talked for hours, as the boy struggled, intubated, under a pale blue blanket. Yuval recalled: "I'm looking at this father, how normal it seems, like me and my friend. But he tells me his uncle was killed in Gaza, and I feel maybe I was even
involved. It's strange."

In the air, while flying at night, in serene, misleading moments, "the situation" would disappear as well. Usually Arab lights glowed pink, and Israeli lights burned white. But when Yuval wore night-vision goggles along the Syrian border, the lights of Damascus shone as green as Tel Aviv. "You don't think, 'Wow, there's my enemy.' " The differences disappeared.

Now in the ICU, as Yuval ordered a second shot of adrenaline for Tara, as her lungs were being puffed manually, Yuval felt the differences disappear again. So what if she was from Gaza? "All that mattered was that she's blue, and she has to be pink."

Yuval kept pumping the baby's heart. Five minutes passed. He stopped to listen for a beat, but every time he stopped, the blip of the monitor's green cardiac line went flat.

"Third dose of adrenaline," Yuval ordered. He wiped his brow. He thought, "She has no reason for dying. She's going to come back. She has got to come back."

Sometimes, Yuval said later, "I can see the children that died while I was trying to resuscitate them." The blond 9-year-old boy, crushed by a car. The green-black baby born at 23 weeks.

There were also the faces Yuval didn't see: "the small, dark image -- I don't visualize the face behind it -- of the terrorist I was ordered to fire on."

He couldn't let Tara's face join the others. He had to breathe her back into improbable existence. Things that seemed impossible, he said -- peace for Israelis, for Palestinians -- Yuval still believed could be true.

He pressed his stethoscope to Tara's ribs. The irregular blip of her heart steadied, and leveled, to 120 beats. He could hear the exquisite swish of her circulating blood.

Tara's chest was rising. He said, "We got her back."

*A Wish for a Change of Heart*

Yuval slumped into a chair. He was on the night shift in the neonatal unit. He felt sick. A fever and chills.

"This past week has been too much for me," Yuval said. The mission to kill the four-man rocket squad in Gaza. Tara's cardiac arrest. He could feel the pressure rising behind his eyes.

"My oath as a doctor is primo no nocere, do no harm," he said. Even as a pilot, when he's ordered to kill, "I try to think of it as -- I'm helping to save lives, and not hurting lives." In Gaza, flying over the orchard, he had killed two men, but let the other two go, he said. The risk of hitting civilians was too high, he said.

"We failed."

As an officer, he berated himself for failing his assignment. As a citizen, he doubted the efficacy of killing anyone. Yuval said: "Maybe because I killed those two, their brother and uncles will launch Qassams in revenge, and kill two Jewish children. So did I do a good thing? I don't know. I don't know if it served my country in the long run, but I know what I had to do that night. That's part of the problem: We need people on both sides to stand up and look 20 years ahead."

Yuval said he knows that Arabs and Jews can get along. "I know it's possible. I see it in the hospital."

When Yuval sees Nasima Abu Hamed, the mother from Gaza, holding Ahmad, her blue-lipped 2-year-old, waiting for his surgery, "my wish is his generation will have a change of heart. That something will change for Ahmad, that he will live differently. But I don't think doing a transposition of the great arteries will do it."

Yuval had visited the wards to check on baby Tara. The mothers were gathered, talking. Tara's mother, Huda Isstefou, greeted Yuval. Yuval hadn't known it when he saved Tara's life, but the tiny girl wasn't from Gaza. She was from Iraq.

"When I told friends I was going to Israel, they said, 'Be careful, Israelis are very dangerous humans,' " Huda said. "But I said, 'They save my child.' "

"An excellent doctor," Nasima said, cradling Ahmad.

"What a nice doctor," said another mother, Majdi Assassa.

Yuval bent over and felt Tara's tummy. "Shalom!" he said in a high-pitched voice. As Yuval listened to Tara's heart beat, she grasped his thumb, his missile-trigger finger, and stared up into his eyes. (*)

Tuesday, November 27, 2007

Commanding yet isolated, Suharto fades away

By Seth Mydans
Published: October 31, 2007

Nearly 10 years after the tumult of his ouster, the old dictator spends his days alone in his sitting room, one friend says, inviting few visitors, making no public statements, eating carefully to avoid hurting his stomach.

As he did during his 32 years as Indonesia's president, Suharto, 86, often offers an enigmatic smile when asked a pointed question, the friend says, but now it is sometimes a smile of bafflement as his mind slips away.

These are the impressions of Retnowati Abdulgani-Knapp, the author of a recent sympathetic biography who continues to visit Suharto in the modest home to which he retreated in May 1998 and has rarely left since.

The crowds chanting, "Hang Suharto!" have long since disappeared, the nation has hurried ahead without him, and fewer people really care what happens to the man who once towered over them.

It is a strange, muted fate for a deposed strongman, neither fleeing nor being vigorously pursued, a quiet, defeated presence in a quiet neighborhood in the middle of the bustling city.

"To me, it's self-punishment because he's doing that of his own will," said Abdulgani-Knapp, though it was not clear what might be causing him remorse.

"Why does he stay in that house all the time?" she asked. "He just wants to be alone to punish himself to prepare himself for the next life, I really believe so."

But there is still the question of money.

In September the United Nations and the World Bank put Suharto at the top of a new list of the world's most audacious embezzlers. They quoted an estimate by Transparency International that he stole $15 billion to $35 billion in state assets while in power.

Whatever the actual sum, in a decade of legal fits and starts Indonesia has recovered none of it. In fact, bombarded by doctors' notes saying he is too sick to attend hearings, the courts seem almost relieved not to have to push too hard.

A criminal case against him was dropped in 2000, after doctors reported that his mind had been weakened by a series of strokes. (Commentators note that he becomes well again when there is a family wedding or birthday party to attend.)

Now he is facing a civil suit that charges him with embezzling $1.5 billion from a charitable foundation he created. That case is stumbling forward, but, to nobody's real surprise, crucial financial documents have disappeared from the attorney general's office and cannot be found, according to local news reports.

In what might seem an unexpected twist, the only legal victory so far involving Suharto's wealth went his way. In September he was awarded one trillion rupiah, or $109 million, in a libel suit against Time Asia magazine for a 1999 article that said he and his family had amassed a fortune of around $15 billion. The magazine is appealing the verdict.

The government's half-hearted pursuit of Suharto says a good deal about the aura he has maintained even as his political and financial power has disappeared.

Many of those who hold that power today were once beholden to him, the patron without whose blessing it was impossible to rise high in politics, business, the military or public life.

"Of course, he did a lot of great things for Indonesia and most of the people who are now in power basically grew up under him," said Dewi Fortuna Anwar, a political scientist. "There is still personally enormous respect toward Suharto, at least among the establishment, and still a strong resistance to see him hauled in front of a court."

Given that lingering stature, the weekly magazine Tempo said the attempts to put him on trial were "like a dog barking at an elephant."

Powerful figures still pay their respects at his residence on his birthday and at the end of the holy month of Ramadan - some perhaps out of curiosity, but others out of deference.

President Susilo Bambang Yudhoyono, who was a rising general in Suharto's military-dominated government, still refers to him as "my senior" and visited him in the hospital in 2005 when he had severe gastrointestinal bleeding.

Many of those who grew wealthy through their connections with him remain among the country's richest people. These include his six children, who still control major enterprises that were counted as part of the Suharto wealth.

One son, Hutomo Mandala Putra, known as Tommy, 44, has been convicted of a crime - arranging the murder of a judge who had ruled against him in a corruption case. What is notable about the 15-year sentence he received was that he served just one-third of it and was set free last year.

Suharto himself, on the other hand, seems to have placed himself under a sort of voluntary house arrest, said Abdulgani-Knapp, whose book is titled "Soeharto: The Life and Legacy of Indonesia's Second President."

"Can you imagine, it's like an internal prison," she said. "That's what he does the whole day. He just stays in one room, behind the room where he dines. He never eats with anybody except on Saturday, when I understand a few of his children visit him."

They watch his diet carefully, she said, "but sometimes, when he wants to eat something good, they let him."

If indeed Suharto is punishing himself, he has never voiced public remorse for the deeds that have darkened his legacy - the corruption, the repressive militarized rule or the deaths of at least half a million people in a mass bloodletting when he took power in 1965.

His regret, as Abdulgani-Knapp describes it, is that he misread the public mood and overstayed his welcome in office.

His surprise resignation followed an economic collapse, then huge riots in which hundreds of people were killed, then a student uprising, and finally rejection by the military and his own cabinet.

"I used to tell him, 'Bapak, you should have followed your instinct and stepped down earlier,' " she said, using an Indonesian term of respect. "And he smiled and said, 'You are right.' This is something he regretted."

Bowring: The invisible giant of Southeast Asia

'We have to be brave enough to ask: What would the world do without Indonesia?" When she recently posed this question to her compatriots, Indonesia's trade minister, Mari Pangestu, had in mind the country's role as premier global supplier of various important commodities.

But the question could as well have been asked about Indonesia's wider relevance to the world. Boastful it might sound, but the remark offered a counterpoint to the nation's extremely low international visibility, a result of the mix of deference, inward looking politics and persistent lack of leaders willing to make an articulate stand on the world stage.

Indonesia is about to become the president of the UN Security Council. That is unlikely to alter its international profile, but it does provide occasion to look at why Indonesia is rather more important than it usually appears, and at why it fails to leave much of a mark.

Indonesia is the world's fourth most populous nation, the largest predominantly Muslim country, the third largest (after India and the United States) democratic country, a 3,000-mile-wide archipelago dominating key international waterways - the Malacca, Sunda Lombok and Makassar straits.

But Indonesia is not taken very seriously as a Muslim country. Though the Muslims of the Middle East and Arab world in particular have much to learn from the tradition of religious tolerance at the heart of the Indonesian state, the Muslims of west Asia, and the Arabs who claim some special status as source of the religion, have scant interest in learning from the East.

While the outside world gets excited over the economic rise of China and India, it seldom stops to notice the equally remarkable transformation of Indonesian politics in the 10 years since the downfall of the 30-year authoritarian rule of President Suharto.

It now has the most open, extensive, decentralized democratic system in all of Southeast Asia, achieved possibly at some cost to economic growth but with little localized disorder, and with settlements of the Aceh and Timor Leste issues to its credit.

It is also a remarkably plural society to which the position of Pangestu, a woman, and ethnic Chinese and a Christian attests, and a cultural vitality that puts much of a money-obsessed region to shame. It is of course not without communal tensions and occasional bloodshed. But it provides a salutary contrast to its small higher profile, wealthy neighbors, Malaysia, a country of growing religious intolerance and deepening racial divide and Singapore, a state whose social and political development lags far behind its foreign investment-driven economy.

Yet despite its attributes and size, Indonesia's influence is slight. Its efforts at being a player have been half-hearted, and even its national airline does not fly to Europe. It should be the natural leader of Jakarta-headquartered Association of South East Asian Nations (Asean), this year celebrating its 40th birthday. But Indonesia's diplomatic voice is almost silent.

If any Asean country has a chance of persuading the Burmese junta to change its ways, to democratize gradually without falling apart, it should be Indonesia. It has made such a transition, albeit from a very different and more successful type of authoritarian government.

Unlike Singapore, Thailand and Malaysia, it does not have local commercial interests dictating policy to Burma. But a reluctance to stand up, to divert from a Suharto-era doctrine of "non-interference," to seize Asean leadership rather than be player in a leaderless team, has left the running on Asean's approach to Burma to the likes of Singapore, home from home for the Burmese generals and their wives.

Likewise with its economy. Indonesia may never has been a "tiger" economy and suffered more than any country from the Asian crisis. It may still have more problems with corruption and bureaucracy than its major Asian competitors. It even has had the temerity not to succumb to every foreign investor demand by providing levels of employment protection unheard of in China. Nor does it enrich its politicians as does China's Communist party. On a longer view, the 40 years since China and Indonesia were both traumatized in the mid-1960s, it has done creditably.

Foreign eyes may be on China and India. But looking ahead natural resources are likely to be scarcer than the cheap labor of those two countries. It is also less dependent, at least than China, on Western demand for Asian manufactures. Indonesia's mix of resource, base, attractive demographics, vibrant culture and domestic demand potential have mostly gone unsung, not least by a government so focused on domestic issues and local politics.

In short, Indonesia and the rest of the world could benefit much from knowing each other better.