Monday, August 30, 2004

Black May 1998: 6th Commemoration (33 of 40)

Jusuf Kalla and the Chinese, a Critique of Past Views
By Ivan Wibowo, Jakarta
The Jakarta Post - Opinion (Wednesday, August 18, 2004)

From the names on the two presidential tickets in the Sept. 20 election runoff -- Susilo Bambang Yudhoyono-Jusuf Kalla and Megawati Soekarnoputri-Hasyim Muzadi -- South Sulawesi businessman Kalla's is the most controversial for Chinese-Indonesians.

Rumors have been circulating among those of Chinese descent of Kalla's anti-Chinese sentiment, despite his repeated denials. On his official website,, he says, "Favoritism for pribumi (indigenous) businessmen should be reaffirmed and maintained."

Kalla also stated his full support for a variety of old government policies that afforded special treatment for so-termed indigenous businesspeople and limited the expansion of the Chinese community.

Economic policies such as System Benteng (fortress system), the Assaat Movement, Government Regulation No. 10/1959, credit for small and medium-sized enterprises and controls over the distribution of staple commodities were among his economic beliefs.

The younger business generation of Chinese descent is not familiar with these terms, but for their older counterparts these policies provide bitter memories.

System Benteng was introduced in 1950 by welfare minister Juanda to provide security for pribumi importers by giving them special permits and other supportive treatment. In practice, it was those of Chinese descent, ultimately, who ran businesses, as the pribumi preferred to outsource the work instead of doing the importing themselves. Haji Kalla and the Bakrie family were two pribumi entrepreneurs that managed to develop their business because of the system. The policy was stopped in 1954.

The Assaat Movement was introduced by Indonesian official Assaat in 1956 and called for discriminatory acts against all in the Chinese-Indonesian business community.

PP No.10/1959 stipulated that nobody of Chinese descent was allowed to have a business beyond regental level. The armed forces vehemently supported implementation of the regulation, resulting in 130,000 Chinese-Indonesians leaving this country.

The KIK/KMPK, which began in 1974, was credit schemes only for pribumi small and medium-sized enterprises. The government stopped the scheme in 1988.

Distribution of staple commodities become a matter of hot debate after the 1998 anti-Chinese riots in the capital that made the Chinese take refuge. Kalla said such a policy would provide an opportunity for the pribumi to handle distribution.

For Kalla, this series of policies amounted to affirmative action, "to limit the expansion and existence of nonindigenous Indonesians, and 75 percent of the distribution of staple commodities should be in the hands of indigenous people".

He disregarded various critics who underlined the failure of these discriminatory rulings, such as late, prominent economist Sumitro Djojohadikusumo, who said, "Of 10 indigenous businessmen only three managed to grow because of these affirmative policies: The rest remained as benalu (leeches)."

Former Malaysian prime minister Mahathir Muhammad introduced similar affirmative action, the New Economic Policy, in 1971, to support bumiputera. However, he admitted ultimately that his affirmative action was overdone, resulting in people who were rather laid-back and not willing to make an effort. He admitted that the policy failed to develop a competitive streak among Malays.

The market mechanism will eliminate those who base their business on political patronage rather than competitiveness.

However, it is clear that the durability, in business terms, of traditional food stalls such as Padang restaurants and Warung Tegal is not due to affirmative action.

These criticisms and the failure of affirmative action have been ignored by Jusuf Kalla, who states that his own family business is growing because of this action, disregarding the unsuccessful stories that constitute the mainstream.

He also ignores the possibility that he was able to make it as a businessman not due to the policies, but because he is the distributor of Toyota in eastern Indonesia, which was owned by Tjia Kian Liong (William Soeryadjaya).

In the wake of major industrial development in China such as in garments, textiles, footwear and other commodities, which has sidelined its Indonesian counterparts, it is important to muster all resources for the sake of Motherland Indonesia against global competition.

Indonesian textile association chairman Benny Soetrisno said this is a battle between states, not between companies.

There is no point in creating fear among Chinese-Indonesians in their own homeland: History has sensitized them to detect danger from miles away, and survive.

Now is the perfect time for Jusuf Kalla to make known his ability to build solid economic cooperation between Indonesian entrepreneurs, disregarding race, religion or culture.

Above all, Chinese-Indonesians are also children of the nation. It is far better to maximize their potential than alienate them.

The writer is a lawyer. He can be reached at

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