NATIONAL INTELLIGENCE DAILY

Created: 7/29/1996

OCR scan of the original document, errors are possible

jSh Director ofCentral Intelligence

Selected Items From the

National

Intelligence

Daily

COPY: 2AB

6

INDONESIA:

Government Crackdown Raising Political Tension (U)

extensive rioting in central Jakarta over the weekend following the police seizure of the headquarters of the opposition Indonesia Democracy Party (PDI) is likely to widen differences between President Soeharto and some of his advisers and cause more displays of public opposition to th* regime.

several

includingPresident SUlftsftoaMDefensc Ministerlast month opposed Soeharto's hcavyhanded effon to oust PDI leader Megawati Sukarnoputri, which led her supporters lo refuse to vacate party headquarters.

and public interest organizations throughout Indonesia may facilitate national reactions to events in Jakarta. I-

In the aftermath of the riots, foreign speculators may sell short-term holdings in local slock markets this week, and the government could intervene in currency markets to defend Ihe rupiah. The Jakarta stock market fell sharply in early trading, and the rupiah was hit by heavy selling, according to press reporting.

Barring widespread, sustained disturbances, foreign and local companies are unlikely to alter long-term plans to investountry *here mou analystsercent growth this year.

Original document.

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