APSN Banner

Suharto family will be hit if reforms pushed through

Source
Reuters - January 12, 1998

Raju Gopalakrishnan, Jakarta – President Suharto has ruled Indonesia with a strong and sometimes ruthless hand for more than 30 years but analysts fear his indulgence of his six children could have undermined crucial economic reforms.

Suharto's three daughters and three sons, and their spouses and kin, have built vast commercial empires, many of which are largely dependent on government patronage, a prominent Indonesian Muslim leader and analysts said Monday.

Now these empires are under threat.

Suharto's apparent unwillingness to fully implement economic reforms agreed with the IMF last October in exchange for a $43 billion bail-out plan may partly be influenced by the fact any restructuring could affect the first family, the analysts said.

"The government is ready to heed (the IMF's) requirements but the president, no, because for the president the IMF requirements will mean dismantling his own economic empire," said prominent Muslim leader Abdurrahman Wahid.

"But now, there is no other choice for him – either he has to stop or lose everything," he said in an interview.

Former cabinet minister and noted economist Sumitro Djojohadikusumo, who is related to Suharto by ties of marriage, was more guarded but nonethless trenchant in his criticism.

"There has long been a wide gap and dichotomoy between macroeconomic policies, which are by and large adequate and appropriate and microeconomic policies which are full of distortions and inconsistencies and marred by corruption and excessive protectionism," he was quoted as saying by the Jakarta Post.

Sumitro's son, Maj.-Gen. Prabowo, is married to Suharto's second daughter, a businesswoman who owns property and banks and was involved in a joint venture to construct a $1.66 billion power project until it was put on hold last week.

Another 14 projects were also delayed or set aside for review, including a power plant in which Suharto's eldest daughter Siti Hardianti Rukmana has a stake.

Last year, the government's first tentative move to follow the IMF reforms by liquidating 16 banks met with stinging criticism from the first family. Second son Bambang Trihatmodjo threatened to sue the finance ministry for closing a bank in which he had a 25 percent stake but he later withdrew the suit. He then took control of another bank and shifted assets from the closed institution.

Bambang's sister Siti Prabowo took a share in the new bank.

A Jakarta court later delayed a closure order served on a bank controlled by Suharto's half-brother Probosutedjo, saying it could only be implemented after a suit against the move was decided.

The business holdings of the first family are so diversified that it would be difficult to pinpoint any one economic reform which would not affect one or more of them, analysts said.

Following is a brief rundown on the siblings and their known business interests, which may be incomplete:

  • Eldest daughter Rukmana is considered the most politically astute among the children and is one of the seven chairpersons of the ruling Golkar party. She is best-known for her control of toll-road operator Citra Marga but also owns a slice of Bank Central Asia, headed by old family friend and Indonesia's richest man Liem Sioe Liong.
  • Other interests are diverse. She was a partner with Hong Kong's Hopewell Holdings in constructing the $1.77 billion Tanjung Jati "C" coal-fired power plant until it was put up for review Saturday. * Eldest son Sigit Hardjojudanto. A reclusive man, Sigit is best-known for his partnership with Bre-X Minerals Ltd before the Canadian firm's claim of having discovered the world's richest gold deposit this century was proved to be a fraud.

    But he also has a 10-percent stake in the Nusamba Group, which is the largest shareholder in the country's biggest automobile manufacturer Astra International and in various other key companies. Nusamba is owned 80 percent by three charities headed by Suharto while timber baron Mohammad "Bob" Hasan, another old family friend, controls the rest.

  • Second son Bambang Trihatmodjo. Perhaps the most professional entrepreneur among the siblings, Bambang has listed his holding company Bimantara Citra and has diversified from government contracts into television, banking, hotels, petrochemicals, transport and telecommunications.

  • Second daughter Siti Hediati Prabowo. In the news of late because of her interests in banks and construction, including a plan to build a bridge linking Sumatra island to peninsular Malaysia, which was put on hold because of the economic crisis.

  • Youngest son Hutomo Mandala Putra. Tommy Suharto, as he is widely known, is manufacturer of the Timor national car, which has provoked outrage from the United States, Japan and the European Union. A national car program gives Tommy's company tax and tariff benefits not given to other manufacturers.
  • He has a monopoly on distribution of cloves, an essential ingredient for Indonesia's hugely-popular kretek cigarettes. Tommy also owns a stake in domestic Sempati airlines and in Italian sports car manufacturer Lamborghini S.p.A.

    Other business interest include oil and gas exploration, timber, roads and petrochemical distribution.

  • Youngest daughter Siti Hutami Adyningsih is the baby of the family. Her only known business venture so far is a share in a land reclamation project on the Jakarta coast.
  • Country