Of that there can be no doubt. Sumargono and like-minded Islamists have by no means won the political debate that is now raging through Indonesia. But they believe they have a friend in the interim government of President B. J. Habibie. A fervent Muslim himself, Habibie previously led an influential group of intellectuals who worked to promote Islamic values in public policy. Now that he holds power, he has set about the massive job of making life better for millions of poor Muslims left on the sidelines during the rule of President Suharto and his cronies. That makes political sense: Habibie must face his constituents in June’s parliamentary elections, and nine out of 10 of them are at least nominally Muslim. But Habibie argues that his policies also make economic sense. ““We are not only giving people fish. We are teaching them how to fish, ’’ he told NEWSWEEK in an exclusive interview last Saturday (box).

Indonesia’s Islamic tilt is one consequence of the country’s rapid reforms. Thanks to new freedoms of speech and the press, hundreds of political parties have sprung up across the archipelago. Many have styled themselves as Islamic, and they have begun seeking votes among the newly enfranchised, very frustrated majority. Even should one of these upstarts catch on, there is nothing in Indonesia’s relaxed style of Islam to suggest that the country could become a religious state like Iran or Pakistan (accompanying story). But the political struggle itself–too often fought starkly in terms of Muslims against Christians–has sparked fearsome violence and begun to drown out the voices of reconciliation. ““Someone has to start a serious national dialogue,’’ says a Western diplomat in Jakarta, ““before the place blows up.''

An alarmist would argue that it already has. Mob violence, rare and isolated in the Suharto years, now seems to rule much of Indonesia as political, religious and even military factions raise havoc along with run-of-the-mill criminals. Early this month, thousands of people rioted in the Javan city of Karawang over rumors that a cop had roughed up a motorcyclist. In Jakarta last week, a market closed down after local thugs openly extorted money to celebrate the end of Ramadan. Crime is rampant. In the countryside, poor people raid rice fields and shrimp farms. In Jakarta, armed men rob taxis along the airport expressway–and taxi drivers sometimes mug their own passengers. Cars in the capital itself are assaulted at traffic lights by singing transvestites, guitar-playing youths and street urchins. Pay up, or lose a hubcap or sideview mirror.

Some of the most savage incidents are ignited by religious tensions. A Roman Catholic priest in Jakarta says that in the 45 years from Indonesian independence until 1990, records show that about 50 Christian churches were burned. His loose tally for 1998 alone: more than 200. In one incident late last year, a seemingly harmless street fight between Christians and Muslims in Jakarta ended up with a Christian man hacked to death and 22 churches damaged around the capital. In retaliation, Christians burned six mosques in West Timor. The burning of one church can be a spontaneous incident, says the priest. But the simultaneous destruction of numerous churches at once speaks of an organized hate crime. ““In these times of stress, despair and frustration, people become increasingly communal and primordial,’’ he says. ““The society’s capacity to handle pluralism has been lost.''

Who would want to stir up religious violence? Some Indonesians suspect Suharto’s henchmen of trying to weaken his enemies and to sabotage investigations of his massive wealth. Muslim leader Abdurrahman Wahid, a champion of democratic reform and religious moderation, blames Suharto’s loyalists for assassinating clerics of Abdurrahman’s 30 million-member religious organization, the Nahdlatul Ulama, in an attempt to foment Muslim unrest. In a recent private meeting at Suharto’s heavily guarded Jakarta residence, the blind, ailing and soft-spoken Abdurrahman urged the ex-president to rein in his followers. In return, the Muslim leader assured Suharto that he would be treated fairly and with dignity in any trial to determine whether he illegally amassed billions of dollars during his 32-year rule.

SUHARTO HAD MADE AN ART OF manipulating religious sentiments during his own tenure. He personally believes in traditional Javanese cosmology, meditating in caves and consulting soothsayers about important decisions. In the early years of his presidency, he took steps to keep Islam from emerging as a challenge to his political power. He ruled with the help of a secular army led by a Christian general, Benny Murdani. He also selected Chinese entrepreneurs–most of them Christian–as his development partners and appointed a California-educated ““Berkeley mafia’’ to look after the larger economy. Suharto declined even to attend Friday prayers at mosques, fearing that the gesture would be seen as too great a concession to Islam.

Only by the mid-1980s–20 years into his rule–did Suharto begin to get religion. Ever the expert at keeping his enemies off balance, the president’s conversion to Islamic rectitude helped dampen the growing resentment against his religious suppression. ““Like Frankenstein, I think he felt threatened by his own creation,’’ says Amien Rais, an Islamic and political leader with close ties to student groups. The new Suharto sidelined General Murdani and appointed more practicing Muslims to his cabinet. He also created an advisory Indonesian Association of Muslim Intellectuals, and put his friend Habibie in charge. Suharto suddenly began attending Friday prayers and made a pilgrimage to Mecca.

Habibie is now tapping Indonesia’s cultural energies for his own purposes. His point man is Adi Sasono, a close associate from his old Muslim group who now serves as cooperatives minister. Smart, handsome and ambitious, Sasono has launched a ““people’s economy’’ program to pump $1 billion in credits as well as technology and education into Muslim-run small enterprises. The scheme should not be seen as favoritism, he argues, but as righting a historical imbalance against Indonesia’s little guys. ““This has nothing to do with Islam, racism or the Chinese,’’ Sasono says. ““It is not a Robin Hood- or Santa Claus-style program. With the high degree of social radicalization and high crime rate, we have to address the very root of the problem, which is income disparity and injustice.’’ The scheme also has given Sasono a large, loyal following. Villagers and visitors to his Jakarta home often stoop to kiss his hand.

Habibie insists just as forcefully that his Indonesia is open to all. At the same time, however, it is clear that some of Indonesia’s most militant Muslims believe that the rise of Habibie gives them a chance to grab for the highest rungs. Last November, members of Habibie’s cabinet were said to have backed the recruitment of thousands of Islamic vigilantes who were brought into Jakarta to control student protesters. Mainly poor slum dwellers and rural toughs, the vigilantes wore white headbands, carried bamboo poles and chanted ““God is great’’ as they took on the students. Other counterdemonstrators have hoisted banners reading: ““If you’re against Habibie, you’re against Islam. And if you’re against Islam, you’re a communist.''

EVEN THE INDONESIAN Army, so recently respected as the institution holding the country together, has sunk into sectarian divisions. The commander, General Wiranto, won praise for easing Suharto out of power last year. He also succeeded in firing Suharto’s son-in-law Gen. Prabowo Subianto, whose troops had brutally suppressed separatist movements around the country and have been linked unofficially to rapacious anti-Chinese rioting in Jakarta last May. That was the high point for Wiranto.

For almost a year since, the Army commander has been enmeshed in destructive bureaucratic intrigues. Prabowo and other ““green’’ officers–those with strong Islamic leanings–had linked with Islamic groups to try to limit opportunities for Chinese and Christian officers in the Army. When Wiranto attempted to fill Prabowo’s post with a Christian officer, Johny Lumintang, the appointee lasted only 11 hours before Islamic pressure forced Wiranto to replace him with a Muslim. Earlier this month Wiranto struck back. In a shuffle of 100 senior officers, Wiranto sidelined an influential green general, Fachrul Razi, who had been in line to succeed him. Wiranto also promoted Lumintang again, this time to deputy chief of staff, and made the appointment stick. But count that as a Pyrrhic victory: Wiranto’s Army, like so many other Indonesian institutions, is now wallowing in low popularity and poor morale.

As Indonesia’s first truly contested elections in 43 years draw near, the factionalism might get even worse. Does it have to? At the root of the national identity is Pancasila, the state ideology, which stresses pluralistic tolerance and consensus throughout the diverse land–without favor to any particular religion. Leaders like Abdurrahman, who represents the largest Muslim group by far in Indonesia, follow the traditionalist branch of the nation’s style of Sunni Islam. Their roots are in the countryside, where Muslims have easily incorporated bits of Javanese spiritualism, animism and even traces of Indonesia’s early Buddhism and Hinduism. As one who has risen from such diversity, Abdurrahman takes it as his mission to thwart the rise of Islamic fundamentalism, a trend centered largely in the cities.

Abdurrahman’s political ““sister,’’ as he calls her, is another prototypical Indonesian politician, Megawati Sukarnoputri. She rose to prominence as the daughter of Sukarno, independent Indonesia’s first president and the hero of the common man. A secular Muslim, she prefers Western-style clothes, spurning the advice of aides to dress in a more Islamic fashion. And with a Hindu grandmother in her family, she is popular on islands where Hinduism, Roman Catholicism and other minority religions still flourish.

Habibie was born in South Sulawesi, out of the Javan mainstream, and his association with Suharto’s former practices of ““KKN’’ (corruption, cronyism and nepotism) will probably frustrate his continued presidential ambitions. The new generation of politicians behind him find more common ground in condemning the old KKN than in any unifying religious philosophy. That’s how Indonesia’s founding fathers intended their society to work. If their dream prevails, historians will be happy to record today’s anarchy, mob rule and sectarian strife as one ugly learning experience. But nobody is counting on such a happy outcome.

WORSHIP AND LET WORSHIP The Muslim majority thrives on diversity, rejecting the ideal of an Islamic state. RIPTIDES OF RELIGIOUS INFLUENCE Invading armies and maritime trade brought a variety of faiths to the Indonesian archipelago. Each one left its mark. Fourth century Trade with India brings Buddhism and Hinduism to a collection of islands permeated by spirit worship. Seventh century Buddhist Sriwijaya Empire rules Western Indonesia, controlling trade. Ninth century Hindu Mataram Kingdom cedes control to the Buddhist Sailendra Kingdom. 13th century Arab traders establish Islam in northern Sumatra. 14th-15th century Muslim trading ports and sultanates expand through Sumatra and Java, squeezing out Buddhist rulers and forcing Hindu leaders to retreat to Bali. 16th century Portuguese capture Malacca, control the Spice Islands and introduce Catholicism. 17th century Dutch begin to build their trading empire in Indonesia, introducing Protestant Christianity and eventually relegating the Portuguese to a colony in East Timor. 20th century In 1949, after further subjugation by Britain and Japan, Indonesia wins independence under Sukarno. A secular state is established that guarantees freedom of religion.