It was sometime after the Asian Financial Crisis. We had a new maid of quite pleasant character who was working outside Indonesia for the first time. After a month or so after she joined us I asked her for her views on Singapore, and how she found Singapore compared to Indonesia. She said that Singapore had many Chinese who were rich like Indonesia where the Chinese were also rich.
Sensing that she was alluding to the common Indonesian perception that it was so because the Chinese were greedy and predatory (during the Suharto era it was common for politicians in Indonesia to blame the Chinese for their country’s poverty), I said if that was the case the Indonesian themselves could have done something about it. Instead of blaming the Chinese and rioting against them once every now and then like what happened during the 1997 crisis, the Indonesians who formed more than 95% of the population could have setup their own distribution/retail businesses and boycotted the Chinese businesses. That would have been the sure-fire way for them to cut the supposedly greedy and predatory Chinese off from the whole thing and there will be no need to blame anyone.
As this maid had a secondary school education, I could see that she quickly got the logic of what I said. I proceeded to give her my views of what I thought were the real causes of her country’s poverty. The reality is not what she had been led to believe by her government and politicians. The reason why her government had not tried to cut the Chinese businessmen out of the Indonesian economy is because they were actually adding real value (granted that many Chinese businessmen were greedy and selfish but that was no different from any other Indonesian businessmen).
In contrast, the Indonesian politicians and bureaucrats preferred to take the easy route to personal riches. So instead of helping set up and promote Indonesian businesses, they preferred to steal from their own country in the form of corruption and kick backs which they often got from the Chinese businessmen in symbiotic relationships.
It is a lot more obvious to the common man that the Chinese businessmen were making money because people could see them going around doing deals and selling things. And to avoid getting entangled with the law, the Chinese (already living under constant racial threats) were more likely to declare their income more honestly to the authorities. As such their wealth was much more ‘open’ than that of their local counterparts.
In contrast, many of the richest Indonesians were corrupt government officials and politicians who had to ‘lie low’ and hide all their ill gotten wealth overseas. These figures would not get into the books of the tax authorities. It would also be stupid of them to admit to their corrupt incomes. Those were reasons why the common Indonesians do not ‘see’ the wealth of the rich Indonesians.
The young Indonesian girl gratefully thanked me for explaining things that way to her - she said she had not looked at things that way before. I was glad she understood the points I made for it will her help and those around her to better understand their country’s challenges when she return to it. (When she was about to board her flight home after her 3 years with us, I gave her an 'ang pow' of about two hundred dollars and some residual Rupiahs from my days working in Jakarta. When she arrived home she called to thank me for the gift.)
The thing that saddened me was how the Indonesian government and politicians of her time managed or tried to mislead their own people into believing things which were largely untrue.
It reminded me of an exchange I had with an officer of Bank Exim Indonesia while I was working on a project there in the mid-1980s. While having lunch together at the Bank’s canteen, I said that smoking was unhealthy. He however said that he was smoking kretek (local clove cigarette) because it was good for the local economy. Surprised, I asked for the reason.
The man explained that buying kreteks supported the Indonesian farmers who grew cloves. When I said that he could do the same by buying more local bananas or papayas he countered that cloves were different as it was ‘actively’ promoted as such by the Indonesian government! Exasperated I did not bother to continue the discussion.
It was later that I understood the reason for that non-sensical thinking. Months later I found out that the son of Suharto operated a monopoly that collected cloves from farmers throughout the country. As this was obviously good money for this fella, the name of the government was used to hoodwink its own people into smoking kreteks in the name of supporting the clove farmers!
Here is another sickening thing I learnt when I was working at Bank Exim. I had just started working then and was ‘new’ to the workings of the world. Soon after I started on the project I noticed people in the Bank & on the project saying that despite it being the 5th largest and thus smallest of the government owned banks, Bank Exim had the highest profit for the year before. Initially, I was impressed by that and thought perhaps it also explained its management’s progressiveness in employing a foreign consulting company (for so much money).
It was only later that I learnt that on that ‘good’ year the Indonesian government had devalued the Rupiah substantially and the bank had made a lot of money by taking short positions on the Rupiah before the devaluation. It was merely a case of insider trading at the expense of the millions of poor Indonesians who saw their little life savings shrunk overnight because of the devaluation!
