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Despite the negative press given to Indonesia in the last three years--as an instigator and propellant of the Asian financial crisis, as a chaotic country torn apart by religious and ethnic intolerance, and as the oppressor of East Timorese sovereignty rights--the country is struggling to bring back stability. With the election of Abdurrahman Wahid to the presidency and the establishment of a National Unity cabinet, Indonesia is poised to undertake the deep reforms needed to become a functioning, economically viable, democratic state. Given the breadth, depth, and, most importantly, the interconnectivity of the economic, political, and security reforms, however, the likelihood of failure is high. As a result, Indonesia also sits poised to fall into chaos.
Nowhere in Indonesia are the linkages among the economic, political, cultural, and security spheres stronger than in the far northwestern region of the country in the province of Aceh (pronounced AH-chay). Sitting at the northern tip of the island of Sumatra, Aceh is, in many respects, a barometer of what is to come for the Indonesia of the next decade. If the reforms that the country must make can succeed in Aceh, they most likely can succeed on a countrywide scale. Likewise, failure in Aceh will foreshadow the republic's doom. Eyeing Indonesia through the lens of Aceh not only provides an understanding of how the interconnectivity of the problems creates the need for systemic change but also illustrates how different constituencies press for alternative solutions to the problems. Finding a way to address the grievances of the people of Aceh within the framework of a united Indonesia means that the Indonesians will need to craft both individual policies for the distinct constituencies while simultaneously e mbarking on a holistic approach. A new approach will re-conceptualize the nature of Indonesian national unity and the proper relationship of the central and provincial governments. Certainly this is a difficult task but perhaps, if handled in a creative and open-minded way, it is not an impossible one.
What Is at Stake?
If Indonesia does succeed in reforming itself, its natural resources and population could once again make the country an engine of growth for the region and a significant market for U.S. goods and services. Indonesia's gross domestic product fell by 13.7 percent in 1998. Yet, it should not be forgotten that during the period from 1966 to 1993, the economy grew by such an astronomical amount that many analysts in the early 1990s predicted that if the country's growth could be sustained for three more decades, Indonesia could become one of the world's largest economies by 2025. 
Although having basically closed in upon itself during the last three years, a reformed Indonesia could also reclaim its position as a leader in Southeast Asia. Geographically, Indonesia straddles the entire region. The country provides key shipping lanes throughout the immediate region and to the industrial economies of northeast Asia. Strategically, the country creates a natural deterrent to any hegemonic intentions of China, Russia, Japan, or India.
Finally, with the new president, Wahid, a former leader of Indonesia's largest Muslim social organization, the 40-million-member Nahdlatul Ulama (NU), Indonesia has the potential to serve as a model for how to combine religious identity and religious tolerance within a framework of political and economic liberalization. Moderate Arab Muslim leaders are looking to President Wahid to provide an example to the West, and to their own hard-line Arab brethren, that democracy and Islam need not be at odds. It is not lost on these Middle Eastern leaders that Indonesia is now the second country to be headed by a member of the 'ulama (Muslim clerical leadership). The other country is Iran.
But what if the reforms fail? Quite simply, Indonesia will be swallowed by an extinction-level event. Foreign investment, which has slowly returned to the country over the last year, will flee. Foreign donors (most notably the International Monetary Fund) will likely suspend their loans, and foreign lenders will refuse to restructure the $70 billion of sovereign debt under which Indonesia struggles. The National Unity cabinet, already showing signs of fracturing, may implode and the military, seeking an opportunity to strike back against those who humiliated it during the last two years, could try to orchestrate a coup. Into this mix, some of the outlying provinces (Aceh, Riau, and Irian Jaya) could attempt to formally secede, leading to the dissolution of the republic.
Aside from Indonesia being lost in an economic and political collapse, a black hole would be created in Southeast Asia. Indonesia, a country of 210 million people, would begin to siphon off the hopes of smaller countries in the region that wish to regain their economic prowess of the early 1990s. Foreign investors would become skittish about Indonesia exporting economic instability beyond its borders and pull their money out of the entire region. Regional governments would be destabilized by thousands, perhaps millions, of Indonesian refugees flooding the coastlines. The regional organizations established to handle problems in the area would crumble from infighting and blame-laying over who forgot to establish the contingency plan. For those who doubt this last point, post-East Timor discussions at the Association of Southeast Asian Nations (ASEAN) Regional Forum have …