"We Need Shock Therapy"

Running Indonesia—a fractious nation of 240 million people from more than 350 ethnic groups spread over some 17,500 islands—is a tough job at the best of times. But the country's new President, Susilo Bambang Yudhoyono, is taking over at a particularly difficult juncture. Terrorism is a constant threat. Among Asia's major developing economies, Indonesia's is growing the slowest. Recent years have witnessed a net outflow of foreign capital, frightened off not just by bomb blasts but corruption, red tape and a capricious legal system. The authorities have yet to resolve the stubborn separatist insurgency in the province of Aceh, and clashes...

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