Suharto Poses Dilemma for U.S.

House Republicans are questioning whether to approve an $18 billion U.S. contribution to the Asian bailout following President Suharto's defiance of the International Monetary Fund over currency regulations. But playing hardball with Suharto remains a tough call for Washington, says TIME U.N. correspondent William Dowell. "It's hard to see what Washington can do except withhold money, and that would only make the situation worse in Indonesia," says Dowell. "Suharto is the most important U.S. ally in the region. He was the one who brought Asian leaders into APEC and convinced them to stand up to China."

The succession of the 76-year-old strongman is further cause for anxiety. By appointing the unpopular B. J. Habibie as his vice president, Suharto has set the stage for a power struggle after he leaves office, says Dowell. And investors remember that the last power struggle in Indonesia -- which brought Suharto to power three decades ago -- saw hundreds of thousands killed.