The Wall Street Journal-20080128-Suharto-s Legacy

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Suharto's Legacy

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Will history treat Suharto kindly? Many of his countrymen today do not. Last year, students protested in Jakarta over the government's decision not to prosecute him for corruption, even as the former Indonesian president lay on his sickbed. Abroad, too, it is fashionable to sneer. Many mention him in the same breath as Mobutu Sese Seko, another officer turned strongman, who plundered Zaire from the mid-1960s to the late 1990s. Suharto is accused of similar avarice, and vastly inflated estimates of his family fortune are blithely tossed around.

But the pendulum of condemnation has swung too far, and Suharto's death yesterday should be the impetus for a reappraisal. The positive contributions of the man who made Indonesia a respected member of the international community deserve at least equal emphasis.

Consider that when Gen. Suharto came to power after a failed communist coup in 1965, Indonesia was an economic basket case and a troublemaker in the region. The pro-communist populism of President for Life Sukarno had led the country down a dead end. Think of Sukarno as the Hugo Chavez of his era.

When Suharto stepped forward from the shadows amid the chaotic aftermath of a still-mysterious coup attempt in 1965, the little that was known about him did not suggest he would pursue more sophisticated policies. He was the son of a poor Javanese rice farmer, a career officer who spoke almost no English and had made only one short trip abroad. But President Suharto had something the egomaniacal Sukarno lacked: halus, a quality of calmness and refinement that Indonesians associate with royalty.

Instead of seeking to be a leader of the Third World, Suharto invested in his own people. He used the income from oil exports to dramatically improve health and primary education, especially for girls. Women's participation in the workforce grew. Life expectancy increased to over 70. According to one account, the honor he took the most pride in was an award for developing agriculture.

Suharto initially entrusted economic policy to a group of neoclassical economists who became known as the "Berkeley mafia," since many were trained at the University of California. He had met some of them at the army staff college in the early 1960s. Much like Augusto Pinochet's "Chicago boys" in Chile, they set fundamental policies of welcoming foreign investment and trade that sustained growth even when their influence waned and corruption grew.

Meanwhile, Indonesia became an ally of the free world and a force for peace in the region. Then Foreign Minister Adam Malik was instrumental in the 1967 founding of the Association of Southeast Asian Nations, which was a bulwark against the spread of communism. Its role gradually expanded to promoting trade and stability, and Indonesia remains the indispensable core of the group.

Suharto's biggest flaw was a virtue that he carried too far: loyalty to old friends and family. Unfortunately, as the nation became richer, some used their influence to pursue personal agendas that hurt the president and the country. By the 1990s, the ruling Golkar Party had become a cult of personality and a nascent civil society was nipped in the bud. The May 1997 elections were marred by violence as Suharto scrapped succession plans and sought a seventh five-year term in office.

But by the mid-1990s Indonesia was also booming, and it seemed like only a matter of years before, like the tiger economies of East Asia, it would become a developed country. With investment flooding in and growth rates high, Indonesia appeared ready for economic liberalization. Yet regulatory institutions didn't keep up. A flood of new banks opened, but behind the scenes they were being used as private funding vehicles for their tycoon owners. Many businesses borrowed abroad in U.S. dollars. When the 1997 Asian financial crisis hit and confidence evaporated, this rickety financial structure came tumbling down.

Ironically, had Suharto stepped down just a couple years earlier, his image as modernizer would be intact. Instead he has even been blamed for the ills brought on by the incompetence of his first three successors, Mr. Habibie, Abdurrahman Wahid and Megawati Sukarnoputri. Today, after nearly a decade of political floundering, the country is once again on the rise under the leadership of Susilo Bambang Yudhoyono. It's no surprise that his policies resemble those of the early Suharto years.

Suharto was guilty of hubris when he styled himself Bapak Pembangunan Indonesia, or father of Indonesia's development, and even had this title printed along with his portrait on the 50,000 rupiah note. But that is a pretty accurate summary of his legacy. Like Deng Xiaoping, he rescued his country from totalitarianism and poverty, and put it on the path to prosperity and a large measure of personal freedoms. For all his flaws, Suharto deserves to be remembered as one of Asia's greatest leaders.

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Mr. Restall is the editor of the Far Eastern Economic Review and a member of the editorial board of The Wall Street Journal.