INDONESIA: South East Asia Review - Why Suharto smiles.

Indonesia has it all - oil and gas, rubber and rice, corruption and nepotism, writes Sid Astbury.

Who would have guessed, 25 years ago, that a dirt-poor country with the world's third largest Communist party would emerge in the 1990s as the darling of the World Bank, a close friend of the US and a happy hunting ground for foreign investors? Probably, quite a few. Indonesia always had rich natural endowments; now, it is Asia's only Opec member and the world's largest exporter of liquefied natural gas. It has also become a major timber exporter and the world's second largest producer of rubber.

But who spotted, say five years ago, a business boom that would propel to dizzy heights both rates and occupancy levels at Jakarta hotels, or a restructuring of the economy that would see manufactured exports overtake the value of oil shipments, or even a liberalisation programme that would see foreigners piling into the stock market to buy shares, act as brokers and set up unit trusts? Again, quite a few. Even in the late 1980s, Jakarta was pushing through a deregulation and liberalisation programme that many felt sure would jack up the per capita GNP of US$500 a year and unleash both the industrial prowess - and buying power - of a population that now numbers 180 million.