Suharto's Fantasy Island

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In the midst of Indonesia’s economic free fall last week, Bill Clinton, in New York City for a fundraiser, delayed Air Force One’s takeoff from a fog-shrouded Kennedy Airport to read the riot act to Indonesia’s strongman, Suharto.

The two leaders spent what must have been an uncomfortable 25 minutes on the phone as translators relayed Clinton’s demand that Suharto immediately implement an International Monetary Fund austerity program that Indonesia agreed to last October. Earlier, Suharto had seemed oblivious to the crisis when he sparked panic by announcing a budget woven of pure fantasy. The job of leaning on Indonesia now falls to Deputy Treasury Secretary Larry Summers and Defense Secretary William Cohen, who both visit Jakarta and other Asian capitals this week, along with a senior IMF delegation.

If Suharto falls into line, the IMF could accelerate the release of $3 billion in additional funds. And if he doesn’t? The market slide seems sure to continue, and rumors of a military coup, already rife in Jakarta, could move a step closer to reality.