UPDATE 1-Indonesia's Habibie, president during transition to democracy, dies
(Adds plan for state funeral, context)
JAKARTA, Sept 10 (Reuters) - Former Indonesian president B.J. Habibie, who came to power during the country's turbulent transition to democracy after former strongman leader Suharto stepped down in 1998, has died, his son said on Wednesday.
Habibie, 83, had been suffering heart failure, Tariq Kemal Habibie told Metro TV.
A state funeral will be held with President Joko Widodo leading the ceremony at the Kalibata Heroes Memorial Park on Thursday afternoon.
An engineer by training, Habibie succeeded Suharto as Indonesia's third president only months after becoming his deputy, just as the country sank into a spasms of rioting and economic upheaval following the Asian financial crisis.
Taking over from Suharto, who had ruled Indonesia with an iron fist for 32 years, Habibie held power for just 17 months.
It fell to Habibie to oversee unpopular economic reforms prescribed by the International Monetary Fund at the height of the financial crisis, that were needed to bring inflation down from more than 80% and stabilize a rupiah currency after its value had crashed.
Though he was a product of Suharto's "New Order" administration, which gave a strong political role to the military and stifled opponents, Habibie oversaw democratic reforms to free political prisoners and allow press freedom.
In an abrupt change to longheld policy, he also agreed to a referendum for the people of former Portuguese colony East Timor, which had been annexed in 1976 following an invasion by Indonesian troops in December 1975. The referendum in 1999 resulted in a vote for independence and unleashed a wave of violence.
Habibie also eased discriminatory policies against Indonesia's ethnic Chinese minority, including allowing the speaking and teaching of Mandarin and use of Chinese names that was previously banned by Suharto.
Habibie was also known for his quest to turn Indonesia into a technological powerhouse, including trying to develop a national aircraft industry.
Speaking at the hospital shortly after Habibie passed away, President Widodo described him as "the father of technology in Indonesia."
But for many ordinary people, however, it was the love story behind Habibie's marriage to his late wife, Hasri Ainun Habibie, that most touched their hearts, and was celebrated in two popular movies.
"His love for his wife was legendary," wrote Kornelius Purba, a senior journalist for the Jakarta Post, in a column on Thursday.
Ainun died in 2010. They are survived by two sons, neither of whom are involved in politics. (Reporting by Tabita Diela, Nilufar Rizki and Gayatri Suroyo Editing by Ed Davies and Simon Cameron-Moore)
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