Nothing, until recently, has stood in the way of the sons and daughters of President Suharto, as they built up huge business empires through his 30-year reign. Democracy is controlled, the opposition neutered, the press harnessed. But at last something has happened to restrain them: Asia's economic crisis.
On December 5th, shortly after he returned from a long overseas trip, Mr Suharto promptly disappeared; the government said he was taking a much-needed ten-day rest at home. But within days, rumours were swirling that it was worse than that: that Mr Suharto had had a stroke, was gravely ill, or had even died. The Indonesia rupiah fell 10 per cent as the rumours intensified on December 9th. Although the wilder tales were quickly denied (a tummy bug is the latest explanation for his withdrawal, and Mr Suharto, it is promised, will be back at his desk next week) the strain of the country's financial turmoil is clearly showing on both the president and on his family.
The continuing currency crisis, which led the country to accept a $38 billion IMFsponsored rescue last month, is forcing some humbling change on the Suharto clan. The government has shut several banks owned by a son and daughter of Mr Suharto. The son, Bambang Trihatmodjo, who controls the Bimantara Group, complained that the finance minister had a hidden agenda, and did not consult his father before closing his bank; but his father did nothing to save him.
Indonesia's technocrats may be using the economic crisis as an opportunity to deregulate "taboo" sectors – shorthand for businesses owned by the family. Petrochemicals, for instance, is a sector owned largely by Mr Bambang and Sigit Harjojudanto, his eldest brother. Even so, the government recently slashed import tariffs on key products. Last month Tommy Suharto, Mr Suharto's youngest son (and reputedly his favourite) was summarily ousted from the top job at PT Timor Putra Nasional, a controversial project to build an Indonesian car. Tommy's "informal" management style and his tendency to install inexperienced friends to run the venture apparently infuriated the government. Indonesia is now facing action from the World Trade Organisation for its high import duties on competing cars.
Earlier this year, a local credit-rating agency downgraded Sempati for its "deteriorating" financial condition – a first for a firm owned by the clan. And last week Pertamina, the national oil company, made a disclosure, astonishing even by Indonesian standards, that Sempati Air, an airline in which Tommy has a big stake, owes it some $3.sm in fuel charges.
Delays on grandiose infrastructure projects have hit other members of the family. Siti Prabowo, one of the president's daughters, had a slice of a $10 billion venture linking Malaysia and Indonesia over the Malacca Straits. The project has been postponed. Her eldest sister, Siti Hardiyanti Rukmana, managed to save her own bank from liquidation, but several of her toll-road projects have been frozen. To the annoyance of the IMF, the government has revived several power projects owned by the family. But since sources of finance for such infrastructure ventures have evaporated, there is no money to continue the construction anyway.
For the First Family, the tight-fisted approach of the state banks must come as a rude shock. Before the currency collapsed in July, the Suharto clan could walk into any state bank and demand a loan at favourable terms. Now the seven state banks are under pressure from the IMF and World Bank to improve their flagging performance. In May, a consortium of state and private banks was told to put together the first $100m installment of a $690m loan for Tommy's car firm. When the loan came through last month, it was less than $25m.
As if all that were not bad enough, the Suharto family has also lost its favoured status in privatisations, the biggest contributor to its wealth in the early 1990s, when the government awarded the family juicy contracts in power generation, telecommunications and toll-roads. A new privatisation board set up under the watchful eyes of multilateral institutions to supervise future sales of state assets may spell the end of such titbits.
For all the Suharto-family businesses that have been shut down or hobbled, many more remain untouched. But the First Family has been shielded in the past from the mundane aspects of running a modern business – boring details such as cash management and stock control. Now the banks may not be willing to bail them out. Neither, it seems, is Daddy.