World on Fire - Brownstein, Michael [72]
Post-Suharto Indonesia:
Markets Plus Democracy Equals Ethnic Confiscation
As discussed earlier, market-oriented policies in Indonesia during the 1980s and 1990s led to the astounding economic dominance of the country’s 3 percent Chinese minority along with widespread, seething hostility among the pribumi majority against both General Suharto and the country’s “greedy Chinese locusts.”
After Suharto’s fall, Indonesians were euphoric. After the words “free and fair elections” hit the U.S. headlines, Americans were euphoric. Democratic elections, it was thought, would finally bring to Indonesia the kind of peace and legitimacy perfect for sustaining free markets. Indeed, Thomas Friedman has suggested that this is “one of the real lessons of globalization’s first decade”—that democratic processes give the public a sense of ownership in market reforms, thus making the majority more patient and tolerant of the inevitable “pain of globalization reforms.”
16
That’s not what happened in Indonesia. The fall of Suharto’s autocracy was accompanied by an eruption of ferocious anti-Chinese violence in which delirious, mass-supported Muslim mobs burned, looted, and killed anything Chinese, ultimately leaving two thousand people dead. (Many of the dead were non-Chinese Indonesians trapped in blazing shopping malls.) Overnight democratization in the midst of all this naturally gave rise to ethnic scapegoating and demagoguery by opportunistic, vote-seeking politicians. The Islamic right, recalls Clifford Geertz, attacked the frontrunner candidate Megawati Sukarnoputri “as not really a Muslim but some sort of Javanist Hindu, beholden to Christians and Chinese. . . .” Megawati, meanwhile, assured frenzied crowds that she was speaking daily with her dead father, Indonesia’s nationalist hero and founding president, Sukarno.
17
Tarred by having been Suharto’s vice president, presidential candidate and interim president Bucharuddin Jusuf Habibie played brilliantly on both anti-market and anti-Chinese sentiment. To screaming crowds, Habibie and his right-hand man Adi Sasono preached their vision of a New Deal for Indonesia: a true “people’s economy” to be achieved by breaking up Chinese conglomerates and redistributing them to “the long suffering masses” in the form of indigenous cooperatives. “It’s a matter of economic justice,” Sasono declared. “One race cannot control 90 percent of the economy!” yelled adulating supporters.
18
While president, Habibie expropriated the Chinese-controlled rice industry by canceling rice distribution contracts with hundreds of ethnic Chinese businessmen and awarding them instead to members of the Indonesian majority—most of whom hadn’t the foggiest idea what to do. The results were disastrous, part of a food crisis in which tens of millions of Indonesians were at one time reportedly eating only one meal a day. The new state-run rice cooperatives were immediately saturated with corruption, inefficiency, and scandal (one official was accused of trying to export illegally nineteen hundred tons of rice to Malaysia while his own constituents were starving). Predictably, indigenous officials and businessmen began to secretly subcontract work out to Chinese traders again. Still, the anti-Chinese and anti-market campaign rhetoric continued—and didn’t stop until most of the wealthiest Chinese Indonesians had left the country, along with $40 to $100 billion of Chinese-controlled capital. It was only when the World Bank and IMF realized that this capital was gone that they started to be concerned about ethnic conflict in Southeast Asia and to urge the Indonesian government to come to an “accommodation” with the country’s Chinese business community.
19
Today—as a result of what one Jakarta-based consultant calls “Asia’s largest