Robert Garran – Former Indonesian president Suharto is likely to emerge as one of the most prominent corporate players in Indonesia in coming years, thanks in part to political protection from President B.J. Habibie, a new book claims.
Michael Backman, a business consultant and former Foreign Affairs Department economist, said yesterday it was likely that the Suharto conglomerates were in better shape now than most other Indonesian companies.
They rarely paid for what they acquired and had low US dollar debts relative to their assets, Mr Backman said at the launch of his book, Asian Eclipse: Exposing the Dark Side of Business in Asia.
A significant proportion of the Suharto family wealth was given to it by foreign investors, Mr Backman says in his book. He says he has identified 1251 Indonesian companies in which Suharto family members have a significant interest.
"The Suhartos probably aren't unusually nepotistic; it's simply that they had greater opportunities than most," Mr Backman writes.
"Using one's public position to provide private benefits to oneself and one's immediate family is a fundamental part of what Indonesia is today."
He says this is the result of absurdly low civil service salaries, a culture that encourages such practices and the lack of a well-resourced political opposition.
Two investigations of Suharto family wealth by the Habibie Government had revealed little, Mr Backman says, in part because the Suhartos had been careful to link up with as many foreign businesses as possible.
"Seizing the assets of the Suhartos would also have meant seizing the assets of foreign investors" and doing so would have been "lethal" for the Government, Mr Backman says.
He lists 66 major US, Australian, European, Japanese and Korean companies that have joint ventures with the Suharto family. Among Australian companies with Suharto links is Indochina Goldfields, owned by Suharto's middle son, Bambang Trihatmodjo, which in turn has a controlling stake in the Australian-listed Emperor Mines.
Bambang also has a joint venture with listed company Cityview Energy Corporation, and their jointly owned Western Simenggaris Petroleum is registered in Western Australia.
A director of the company for almost a year until last June was Bul Bul Salim, the Suharto family driver.
Sudwikatmono, a cousin of Suharto, also has interests here through his part-ownership of the Hong Kong-based First Pacific Group, which owns Australian real estate company First Pacific Davies.