The IMF Waits for Habibie

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JAKARTA: Did the IMF bring down Suharto? It was the removal of fuel subsidies, demanded by the IMF's bailout program, that set the events of last week in motion. But the IMF is uncomfortable in the role of Brutus.

"They're a little sensitive about that," says TIME Washington correspondent Jay Branegan. "And for that reason, they've been very cautious about speaking up while Habibie gets settled in. But they're watching him very closely, and they're certainly not going to turn soft -- they have their own credibility to think of."

Habibie's record in economic matters does not make the IMF particularly sanguine. "He has a long history of exactly the type of vast, expensive white elephant projects that Indonesia needs to start trimming," says Branegan. But so far Habibie is making the right noises: He's dumped Suharto's eldest daughter from his cabinet, along with Mohamad "Bob" Hasan, one of Indonesia's richest men and a golfing buddy of the former president, and has pledged to follow the IMF program to the letter.

Of course, so did Suharto. But Habibie's rather tenuous grip on power -- and his early unpopularity with students and opposition leaders -- could give the IMF crucial leverage when it comes to prodding him into difficult decisions. "For now the IMF will wait a while," says Branegan, "and hope that with Suharto gone, Indonesians will be more willing to bite the bullet next time around."