The national car

In February last year the Soeharto Government awarded exclusive tax and tariff privileges to Timor Putra Nasional, a company controlled by President Soeharto's son, Hutomo "Tommy" Mandala Putra, to produce a national car. About $US750 million ($1.07 billion) was obtained by the Government from local banks to finance the company's first assembly plant.

In June this year, the Government announced that the "Timor" would become the official car for all government departments and state-owned companies. The tax breaks given to the company are said to be in exchange for a commitment on local content - 60 per cent within three years.

However, the Timors on the road now are manufactured in South Korea in partnership with Timor Kia Motors. In Korea, Kia has recently been placed in receivership. The Timor models are selling poorly in Indonesia, despite being almost half the price of similar sedans.

Japan, the US and the EU have taken Indonesia to the World Trade Organisation over the issue, claiming unfair trading. The national car has become a symbol of favouritism and nepotism in business.

The national jet

A multi-billion dollar aircraft development program controlled by Technology Minister, Dr Jusuf Habibie. About $US1.2billion provided through state banks to finance the production of a twin-prop aircraft, currently operating on domestic routes, in both a civilian and military version.

More than $US100 million has been diverted from the reforestation fund to the project, with payments due only when aircraft are sold. No Indonesian-manufactured aircraft have been sold in Western markets. A new company was established earlier this year to raise $US2 billion to develop a jet.

Import monopolies

Rice, rice flour, sugar, wheat and wheat flour, soybeans, onions, shallots, garlic, leaks etc. Indonesians pay 58 per cent above world prices for sugar and sugar income is a source of patronage funds for the civilian and military leadership as well as a means of subsidising the price of rice, the most politically sensitive crop.

Wheat is also linked to the political elite. The Government sells wheat at a subsidised price to the Salim group, controlled by a Soeharto ally, Mr Liem Sioe Liong, which grinds it into flour and sells it back to the Government, adding a 30 per cent margin which is passed onto consumers. Wheat was targeted for deregulation this year until officials were reminded that President Soeharto's daughter Siti Hardyanti "Tutut" Rukmana also owns a flour mill.

Fertiliser subsidies

In June this year, Indonesia's chief auditor told Parliament the Government had spent $US6.1 million in subsidies and excess payments to an agro-technology company, Ariyo Seto Wijoyo, which has a monopoly on urea pellets. The company's chairman is President Soeharto's eldest son, Sigit Harjojudanta. Farmers were so unhappy about the heavy-handed efforts to get them to use the pellets that three village co-operatives in east Java were burnt down in protest. Eventually the Government bought all the pellets consumers refused to purchase.