Louise Williams, Jakarta – The Indonesian Chamber of Commerce and Industry has proposed a new economic policy to support indigenous entrepreneurs.
The move is an attempt to reduce the overwhelming power of the country's small groups of ethnic Chinese businessmen and defuse potentially explosive racial tensions.
The chairman of the chamber, Mr Aburizal Bakrie, pointed to Malaysia's affirmative action program to boost indigenous entrepreneurs and the range of restrictions on Malaysia's Chinese minority in company ownership, management, access to government contracts and financing.
Indonesia's ethnic Chinese make up about 5 per cent of the population but control about 60 per cent of the national economy, an imbalance which has recently fuelled several anti-Chinese riots causing property damage, injuries and deaths.
Unlike Malaysia, which has a Chinese minority of 35 per cent, Indonesia has made few adjustments to correct the racial imbalance of economic power.
"Our economic condition is far from balanced. That is why we need a new economic, political policy to correct the situation," said Mr Bakrie, one of Indonesia's handful of powerful indigenous entrepreneurs.
He said an affirmative action program must be put in place for indigenous people "before more political explosions occur".
The issue is extremely sensitive for the Soeharto Government and the many foreign investors in joint ventures with Indonesian Chinese. The Soeharto Government has actively bolstered the big corporate empires of the leading Chinese in exchange for their support, business expertise and, in some cases, a share of the profits for family members.
Under President Soeharto's Government a new indigenous business class has emerged, but it is a class with political power such as the President's children and members and relatives of the ruling political elite.
The Soeharto Government, however, has been under increasing pressure to adjust the balance - particularly from the majority Muslim lobby, which wants more economic power for the country's 85 per cent indigenous Muslims.
Mr Bakrie cited Malaysia's 1970 New Economic Policy which stipulated that 30 per cent of the economy must return to Malay hands, effectively forcing ethnic Chinese businesses to sell 30 per cent of their stock at discount prices to qualified indigenous Malaysians.
However, despite the widespread recognition of the ethnic imbalance in the Indonesian economy, analysts have pointed to lack of economic management expertise within the indigenous community. Historically, indigenous Indonesians were banned from doing business during Dutch colonial rule and were limited to working on plantations while the Chinese minority established local business empires.