Andreas Harsono, Jakarta – The talk about A takeover began to emerge among Jakarta journalists in September, after businessman Peter Gontha signed an agreement that let him take control of The Indonesian Observer and reportedly approached veteran journalists to edit the English-language newspaper.
Gontha even met and offered to give Vincent Lingga, the managing editor of Indonesia's leading English-language daily, The Jakarta Post, 300 million rupiahs, or around $140,000, if Lingga would leave the Post and edit the Observer.
"It's a kind of transfer fee," said an insider, adding that Gontha approached some other Post journalists about the offer, most of whom – including Lingga – declined to leave.
"No idealism there," the journalist quoted Lingga as saying.
Still, the unprecedented fee and Gontha's aggressive approach have sent a message to the management of the Post that a new competitor, with very powerful political connections and a big budget, has definitively arrived. It prompted Post management to raise the wages of its reporters 220 percent in December to guard against such poaching.
Gontha also approached Richard Borsuk of the Asian Wall Street Journal, one of its most senior foreign correspondents, who has been based in Jakarta for more than 10 years, to no avail.
He finally appointed Yanto Soegiarto, a former sub-editor of the Observer, to edit the newly-launched newspaper, which hit the streets in January. Soegiarto needed only three months to move his editorial office, set up a new team and relaunch the long-established newspaper.
Gontha is not an ordinary businessman. A partner to President Suharto's second son, business tycoon Bambang Trihatmojo, Gontha is widely seen as a man who has finally succeeded, sometimes by using political connections, to develop the potential of the media division of Bambang's business conglomerate, Bimantara.
"I love music very much. I love entertainment very much. It really came from the love of music and entertaining people," Gontha once said, referring to his media interests, which have included ownership of Indonesia's biggest private-owned television network, RCTI, radio stations, and the Indovision satellite television network, which airs 40 channels including news reports from CNN, BBC, ABN, cartoon network TNT, movie serial HBO, Discovery and the sports channel ESPN.
The Observer, first published more than 50 years ago by the family of journalist B.M. Diah, had gradually lost readers due to alleged mismanagement, financial difficulties and the launch of the well-read Post in 1983. Before being taken over by Gontha, the Observer's readership had dropped to just 3,000 in 1995.
Gontha's move into the newspaper business has raised lots of questions.
The first of those was, why should a figure as politically influential and economically powerful as Gontha want to publish an English-language newspaper whose revenues and audience is significantly smaller than his television network, and which may have fewer readers than his petrochemical business has employees?
The second most frequently asked questionby journalists at any rate, is whether an Establishment figure like Gontha can publish a respected and impartial newspaper that is sometimes critical of the government?
Observers here believe that the powerful Suhartos need an English-language newspaper to counter negative foreign reports on the First Family and government corruption in Indonesia, to put its own spin on the religious and political riots that have erupted here over the past year, and to answer foreign human rights critics who say the government encourages or turns a blind eye to child labor in factories that produce cheaply-priced clothes and other items for Western consumption. It is unlikely that the dealings of the billion-dollar Lippo Group of companies with the Clinton Administration which have produced so many headlines and so much investigative reporting in the American press will do so here.
"Politically it is a joke for a figure like Gontha to publish a quality paper," said a foreign observer, referring to the business practices of Bimantara, which did not hide its connection to Indonesia's number one power broker – President Suharto.
Since the controversial closure of Indonesia's three most important news weeklies, Tempo, DeTik and Editor in 1994, Jakartas ruling elite has altered its tactics in its efforts to control the media. Now, rather than closing them down and risk international condemnation, they buy a controlling interest in media businesses and control them from the inside.
Timber tycoon Mohammad "Bob" Hasan, a close associate of President Suharto, bought or established journals including the Gatra newsweekly that is an Indonesian equivalent of Time magazine.
Bambang's sister, Siti Hardiyanti Rukmana, also tightened her grip on the popular TPI television network. Two other private stations now belong to businessmen closely associated with Suharto. Bambang also controls the shares of the Media Indonesia media group, whose flagship include Media Indonesia, a major daily newspaper here.
Technology czar B.J. Habibie, a close aide to Suharto, controls the Muslim-based Republika newspaper, which has recently purchased another English-language newspaper, The Indonesia Times.
Media analysts believe that the ruling elite has to control the media in a more sophisticated approach to maintain their power in this, the world's fourth largest country. which is waiting for the aging Suharto to leave the political stage.
Most journalists said the Observer would be a more serious threat to the Post than the Times, despite agreement that the English-language newspaper market in Indonesia's 200-million population is still large enough for the three newspapers, or at least has potential for substantial growth.
An economist once stated that only one percent of the population here, or two million people, speak and read English.
But even one percent is more than enough for the three newspapers, whose current combined circulation is not more than 75,000 copies.
"The market is still open," said Susanto Pudjomartono, Editor-in-Chief of the Post. "Our readership constitutes the 'creme de la creme' of Indonesian society. Almost 90 percent of our Indonesian readers have had tertiary [college] education." Lingga, who declined to comment about Gontha's lucrative offer, did say that the arrival of the free trade era among ASEAN countries, which include Indonesia, Singapore, Malaysia, Thailand, Vietnam, Brunei and the Philippines, will boost the circulation of English-language newspapers.
"English is the official language in ASEAN. The free trade will bring together workers from all countries to cross borders, which means the usage of English will increase," he said.
Gontha shares similar optimism. "Whenever I do anything, I look five to 10 years down the road. Indonesia has 200 million people. It has billions of dollars from foreign investments. There are many expatriates living here and there are five million tourists visiting Indonesia every year."
Post editor Pudjomartono said the Post lacks a strategy for its face-off with its new competitor. "We provide news which could not be found elsewhere," he says, referring to the Bahasa Indonesia-language newspapers which reach a less educated audience and are more tightly censored by the government.
Here, as in some other developing countries, English-language newspapers tend to serve the ruling government as a sort of window dressing. They are relatively freer than colleagues publishing daily newspapers in local languages.
Pudjomartono, the Post's editor, however, doesn't deny that the Observer will put more stress than the Post does on business and economic coverage. The Observer will also expand to 16 pages on a regular basis. Until now it has varied between 12 and 16 pages.
Gontha doesn't make a secret of his effort to make the Observer a pro-government newspaper; he criticizes the Post for "just reporting, without trying to provide solutions" to the sensitive political questions, such as the growing religious tension and ethnic violence, that face Indonesia.
[Andreas Harsono reports for The American Reporter from Jakarta.]