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Encyclopedia of World Biography on Bacharuddin Jusuf Habibie
An aeronautical engineer who became Indonesia's minister of technical development and eventually its president, B.J. Habibie (born 1936) was a lifelong devotee of Indonesian dictator Suharto. When student riots and economic turmoil forced Suharto from office, he named Habibie as his successor.
Known as a big-government free-spender and a proponent of bizarre economic theories, Habibie seemed an unlikely candidate to bail out Indonesia from its severe economic crisis of the late 1990s. He was closely identified with Suharto's corrupt policies and distrusted by students, the military, and foreign investors. Yet he instituted reforms and steered the country toward free elections, remaining in power longer than most observers expected.
Bacharuddin Jusuf Habibie was born on June 25, 1936 in the sleepy seaside town of Pare Pare in the Indonesian state of South Sulawesi. The fourth of eight children, he was nicknamed "Rudy" at an early age. His father, Alwi Abdul Jalil Habibie, was a government agricultural official who promoted the cultivation of cloves and peanuts. His grandfather was a Muslim leader and an affluent landowner.
As a child Habibie liked swimming, reading, singing, riding his father's racehorses, and building model airplanes. In 1950, when Rudy was 13, his father suffered a heart attack and died. Suharto, then a young military officer billeted across the street, was present at his father's deathbed and became Habibie's protector and substitute father. Habibie later wrote of Suharto: "I regarded him as an idol, who could serve as an example for all people ... a young, taciturn brigade commander, with great humane feelings, and a fierce fighting spirit." Suharto's autobiography said Habibie "regards me as his own parent. He always asks for my guidance and takes down notes on philosophy."
Habibie's interest in building model planes continued while he excelled in science and mathematics at the Bandung Institute of Technology. His mother, R.A. Tuti Marini Habibie, arranged for him to continue his studies in Germany. At the Technische Hochschule of Aachen, Habibie studied aircraft construction engineering.
In 1962, on a visit home to Indonesia, he married H. Hasri Ainun Besari, a doctor. They had two children, Ilham Akbar and Thareq Kemal, both born in Germany. While Habibie was abroad, Suharto, who had become a general, succeeded General Sukarno as Indonesia's ruler in 1966.
After graduating with a doctoral degree from the Aachen Institute in 1965, Habibie joined the aircraft manufacturing firm Messerschmitt-Boelkow-Bluhm, rising to the rank of vice-president. As a research scientist and aeronautical engineer, he helped design several planes, including the DO-31, an innovative vertical takeoff and landing craft. He specialized in solutions for aircraft cracking, gaining the nickname "Mr. Crack" as one of the first scientists to calculate the dynamics of random crack propagation. He also became involved in international aircraft marketing activities and NATO's defense and economic development.
Indonesia's Technology Czar
In 1974, Suharto asked Habibie to return to Indonesia to help establish an industrial base. Habibie jump-started an aircraft construction industry and a state airline company. Soon he became Suharto's chief advisor for high-technology development. Habibie exploited the relationships he had developed in Germany and NATO to engineer a myriad of controversial deals involving aircraft, ships, heavy industry, and economic development.
As minister of research and technology, Habibie promoted the importation of high-tech goods and services. He liked to "" over low-skill industries and move straight into high-tech ventures, spurning the basic development which might have brought needed employment to Indonesia's low-skilled masses. Habibie spent billions in public money on his strategic companies. His pet project was a national airplane, the propeller-driven N-250. Its producer was IPTN, a state company whose vice-president was Habibie's son. The national airplane venture consumed $2 billion in public funds, diverted from a project to save Indonesian forests.
Habibie often used his influence with Suharto to broker favorable deals for his family companies. For example, he pressured Merpati Airlines to buy 16 of IPTN's CN-235 airplanes, which were so poorly built they could fly for only an hour with a full load. Never popular with the military, Habibie angered officials by buying 100 German naval vessels without consulting top brass; the ships needed $1 billion in repairs.
For two decades, Habibie was a top insider in Suharto's corrupt, nepotistic regime. Like Suharto, whose family controlled much of Indonesia's economy, Habibie's relatives had their own business monopolies, often in partnership with Suharto's children. According toPhiladelphia Inquirer reporter Trudy Rubin, "The state set up Habibie's 'strategic industries' in fields such as steel, shipbuilding and, especially, aircraft manufacture. His relatives were all involved as middlemen, agents, and suppliers." Habibie's family came to control two conglomerates - the Timsco Group, named after his brother Timmy, and the Repindo Panca Group, headed by his second son, Tareq Kamal Habibie. The conglomerate's 66 companies benefited from lucrative government contracts awarded by minister Habibie.
Habibie was widely known as a free-spending eccentric and an advocate of expensive government programs. His high-tech ventures failed to strengthen Indonesia's economy. Many of his projects lost millions of dollars. A relentless self-promoter, Habibie was known for talking endlessly in shrill tones while gesturing wildly. When he visited Tokyo to talk to Japanese bankers about refinancing Indonesia's $80 billion debt, he lectured them for two hours about what was wrong with the Japanese economy and came home empty-handed.
A small, wiry man, Habibie enjoyed classical music, motorcycle riding and swimming in his pool at his home on Jalan Cibubur. A devout Muslim, he founded the Indonesian Association of Muslim Intellectuals in 1990.
Throughout his long tenure as technology minister, Habibie remained slavishly loyal to Suharto, and Suharto considered him his most reliable supporter. Habibie told Newsweek that Suharto was his "close friend" who "treated me like his own brother." Habibie often called the dictator "SGS," for "Super-Genius Suharto."
Eventually, Suharto's policies brought Indonesia's economy to the brink of disaster. In March 1998, as student demonstrations and civil unrest increased in intensity, Suharto installed Habibie as vice-president. As the economy collapsed, bloody student riots led to increasing calls from international allies for Suharto's resignation. Hundreds died in the civil unrest that finally forced Suharto from office in May 1998. Before he left the presidential palace, Suharto installed Habibie as his hand-picked successor.
The appointment of Habibie to head the troubled country seemed to appease no one. Protesters saw him as firmly tied to Suharto's system. Even after Suharto stepped down, the general's family members still controlled commerce and industry in the country. Foreign investors worried that Habibie's free-spending policies would exacerbate Indonesia's problems. The military distrusted him because, unlike previous Indonesian presidents, Habibie did not rise through their ranks.
On taking power, Habibie tried to distance himself somewhat from his lifelong idol. He pledged to build "a clean government, free from inefficiency, corruption, collusion, and nepotism." Soon after, Habibie's brother resigned from his leadership of an industrial development authority. He also freed high-profile political prisoners; lifted controls on the press, political parties and labor unions, and pledged negotiations to end the long conflict in the Indonesian state of East Timor.
Most observers doubted he could retain his power for several reasons. His reputation for wild spending came at a time when the failing Indonesian economy needed a bailout. The bankrupt Indonesian currency, the rupiah, fell in value by 36 percent when Habibie took office. Most of the country identified him closely with Suharto's regime and its policies, which had brought unbearable hyper-inflation and food lines.
"Indonesia's problems are so difficult to solve that not even an extraordinarily clever politician bolstered by overwhelming public support would find it easy to take over," observed Time magazine. "And Habibie ... seems the least likely candidate. He has no political base, nor can he necessarily count on the long-term backing of the powerful military. Economists and stock analysts around Asia question Habibie's ability to bring sensible change to Indonesia's choking economy..."
Many foreign investors found a Habibie presidency frightening. One reason was Habibie's advocacy of a strange "zig-zag theory" of economics. He believed that cutting interest rates, then doubling them, then slashing them again, would reduce inflation. Critics scoffed at his abilities. "He is a clown, a joker, an entertainer," said Jusuf Wanandi, director of the Centre for Strategic and International Studies in Jakarta. Yet Habibie managed to consolidate his control over the country, primarily because the opposition was fragmented and frequently squabbling. The military, involved in government at every level, was deeply divided. Never modest, Habibie told Time: "There are two ways of making history: from within the elite - or from the outside. Being inside doesn't mean you're a puppet."
As Habibie maintained a grip on power, the economic decline of his country worsened, with one-fifth of the work force unemployed by the end of 1998. Unrest continued, and there were reports of the torture of dissidents by the military and new assaults on rebel sympathizers in East Timor. During renewed demonstrations by student protesters against the government in November 1998, 16 people died. Habibie enraged students by arresting a small group of dissidents and blaming them for provoking soldiers. Protesters demanded that Habibie step down. The armed forces insisted only rubber bullets and blanks had been used against protesters, but it was discovered that at least one student had been killed by live ammunition, a "dum-dum" bullet outlawed under the Geneva Convention's international rules of warfare. The military then tried to appease the protesters by announcing prosecutions of 163 soldiers and police. Habibie tried to downplay the conflict. "Our society still has not had the chance to live under the rule of law," Habibie told Newsweek. "The police do not understand the limits, though they are learning."
Renewed hostilities by Islamic militants against Indonesia's ethnic Chinese Christian minority raised questions about Habibie's goals. His religious supporters dreamed of him instituting a fundamentalist Muslim state. But Habibie told Newsweek: "The burning of churches and mosques is a criminal act we all condemn. ... As a religious and intellectual man, I will be among the first who will fight against any attempt to make this country a religious state." Asked about Chinese Indonesians who feared an Islamic wave of repression, Habibie replied: "I wish we could change that like turning off the light. But it's not that easy. ... The Chinese, I love them as I love the others. I only hate criminals."
Against all odds, Habibie retained power. He vowed to continue investigating Suharto and his dealings. He also promised to hold parliamentary and presidential elections in the spring and summer of 1999. A popular Indonesian magazine, Tempo, showed only seven percent of those polled would vote for Habibie.
Displaying for the world his high self-regard, Habibie opened his own web site on the Internet, including an extensive list of awards and personal achievements. In a fawning account posted site, B.J. Habibie: His Life and Career, biographer A. Makmur Makka wrote: "He is the idol and the dream of all parents, who wish their offspring to become another Habibie. ... He is an intelligent person, even a genius, and out of the 190 million inhabitants, there is only one B.J. Habibie." Makka also wrote: "B.J. Habibie seemed to possess supernatural power, which made him succeed in everything he did."
In October of 1999, after enduring months of personal attacks, corruption scandals and splits within his own party in a battle for his political future, Habibie stepped down as the Golkar (Golongan Karya, Functional Groups) presidential candidate and later overturned the Presidency to the elected candidate. In 2002, he underwent questioning for a $5.3 million graft case but maintained his innocence in the case. The accusation of corruption weakened his party.