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By Root 1816 0

market-generated economic growth of the 1980s and 1990s almost certainly left Indonesia’s roughly 200-million-strong indigenous (or pribumi, “of the soil”) majority better off, at least in terms of average income. But that was not their perception. On the contrary, there was a pervasive belief among the pribumi that Suharto’s market liberalization favored the “already rich” Sino-Indonesians at the expense of indigenous Indonesians. Even though most Chinese Indonesians are struggling and hardworking members of the middle class, with no political connections whatsoever, all the pribumi majority seemed to see in the years leading up to 1998 was a handful of brazen Chinese plutocrats accumulating immense wealth by exploiting their corrupt ties with the increasingly hated Suharto.

One of Suharto’s most prominent Chinese cronies was Liem Sioe Liong, who emigrated to Indonesia from Fujian Province, China in 1938 at the age of twenty-one. Liem started off in his uncle’s peanut oil shop in a backwater Javanese town, eventually scraping together enough savings to start his own business. Along the way he adopted the Indonesian-sounding name Sudono Salim and won the favor of an ambitious army officer named Suharto. After Suharto became president in 1966, he granted Salim lucrative franchises in banking, flour milling, and telecommunications. In return, Salim financed Suharto’s pet projects, both private and public—developing Indonesia’s steel sector, for example—while adding enormously to the personal wealth of the Suharto family. Meanwhile, by forming alliances with foreign industrial and commercial enterprises, Salim aggressively acquired technology, information, and market expertise. By 1997 the Salim Group was reportedly the world’s largest Chinese-owned conglomerate, with $20 billion in assets and some five hundred companies.

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Ethnic Chinese timber tycoon Bob Hasan was another of Suharto’s close “business associates.” In the 1980s, Hasan wielded so much influence over the president that he essentially wrote legislation favoring his own group of rattan and plywood companies.

39 Hasan’s logging companies further maximized profits by using environmentally disastrous burning methods to clear land. During the last few months of 1997, vast areas of Southeast Asia were smothered by thick smoke from massive forest fires in Indonesia. At the height of the fires, provinces in Sumatra and Kalimantan (the island formerly known as Borneo) were recording air pollution levels hazardous to human life. Eighty percent of the fires—burning 1.4 million hectares in Kalimantan alone—were caused by the deliberate action of Chinese-owned commercial entities. According to a recent, unpublished World Bank report, all of Sumatra’s lowland forests will be extinct by 2005, and Kalimantan’s by 2010.

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By the end of the 1990s the spectacle of Suharto and a handful of Chinese cronies engorging themselves at the nation’s expense had provoked massive, widespread, long suppressed hostility among the pribumi majority. Suharto’s resignation in May 1998 was accompanied by an eruption of vicious anti-Chinese violence. Even as globalization’s enthusiasts celebrated the fall of Indonesia’s dictatorship and the good judgment of global markets—“Who ousted Suharto?” Thomas Friedman would later write. “It wasn’t another state, it was the Supermarkets, by withdrawing their support for, and confidence in, the Indonesian economy”

41 —thousands of torch-carrying Indonesians headed for Jakarta’s Chinese neighborhoods.

For three long days, terrified Chinese shop owners huddled behind locked doors while screaming Muslim mobs smashed windows, looted shops, and gang-raped over 150 women, almost all of them ethnic Chinese. Salim’s Jakarta home was burned to the ground as were nearly five thousand other homes and stores owned by ethnic Chinese. In the end, over two thousand people died, including many pribumi rioters trapped in flaming shopping malls. The resulting $40 to $100 billion of capital flight, almost all Chinese-controlled, plunged the economy