Monday, August 30, 2004

Black May 1998: 6th Commemoration (34 of 40)

Susilo Denies Anti-Chinese Economic Policy
By Tiarma Siboro, Jakarta
The Jakarta Post (Friday, August 20, 2004)

Leading presidential candidate Susilo Bambang Yudhoyono denied accusations that he and his running mate Jusuf Kalla were discriminatory against Chinese-Indonesian businesspeople, saying his future government would foster unity for the good of the country.

"I'm not in power, so how could they accuse me of not being cooperative with the ethnic Chinese?" Susilo questioned during a press conference at his private residence in Bogor.

"I do not discriminate against anyone... all elements of this country should join hands and work together for a better future in Indonesia."

Susilo was responding to criticism aired by a number of Chinese-Indonesian businesspeople against statements made by his running mate, who on several occasions said he would fully support the policies of past governments, which put a great emphasis on assisting indigenous businesspeople and putting certain limits on the ethnic Chinese community.

On Kalla's official website,, he says: "Favoritism for pribumi (indigenous) businessmen should be reaffirmed and maintained."

Born in Makassar, South Sulawesi, Kalla was raised in a family who successfully expanded to many lucrative sectors, including engineering, infrastructure, automotive and transportation.

The Kalla family has focused on doing business in the eastern regions of the country and they have become one of few major indigenous business conglomerates that are able to compete with Chinese-Indonesian businesspeople.

Critics said Kalla wanted to emulate the discriminatory policies under founding president Sukarno, known as Sistem Benteng (fortress system) that provided privileges for indigenous businesspeople in the form of loans for small- and medium-sized enterprises and gave them control over the distribution of staple commodities.

Under the system, which took effect in 1959, Chinese-Indonesians were barred from expanding their businesses beyond the regency level, which prompted some 130,000 Chinese-Indonesians to leave the country.

Only a few of them survived and were then able to develop a good relationship with Soeharto, an Army general who seized power from Sukarno in 1966.

During his tenure, Soeharto became allies with a small clique of ethnic-Chinese businesspeople who enjoyed certain privileges, particularly loans, to expand their businesses, which ranged from the timber industry and banks to automobiles and basic commodities.

A select group of Chinese-Indonesian businesspeople also built relationships and later business partnerships with the military.

At the peak of the economic crisis in early 1998, Soeharto's administration provided more than Rp 138 trillion in emergency bail-out loans for a number of banks, many of which were owned by Chinese-Indonesians.

The worsened economic situation led to massive and violent street demonstrations and eventually forced Soeharto to step down in disgrace. Hundreds of Chinese-Indonesians and their shops were targeted and fell victim in mass riots that preceded the fall of Soeharto.

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