Jusuf Kalla and the Chinese

Jusuf Kalla and the Chinese

Ivan Wibowo
Jakarta

From the names on the two presidential tickets in the Sept. 20
election runoff -- Susilo Bambang Yudhoyono-Jusuf Kalla and
Megawati Soekarnoputri-Hasyim Muzadi -- South Sulawesi
businessman Kalla's is the most controversial for Chinese-
Indonesians.

Rumors have been circulating among those of Chinese descent of
Kalla's anti-Chinese sentiment, despite his repeated denials. On
his official website, www.jusufkalla.com, he says, "Favoritism
for pribumi (indigenous) businessmen should be reaffirmed and
maintained."

Kalla also stated his full support for a variety of old
government policies that afforded special treatment for so-termed
indigenous businesspeople and limited the expansion of the
Chinese community.

Economic policies such as System Benteng (fortress system),
the Asaat Movement, Government Regulation No. 10/1959, credit for
small and medium-sized enterprises and controls over the
distribution of staple commodities were among his economic
beliefs.

The younger business generation of Chinese descent is not
familiar with these terms, but for their older counterparts these
policies provide bitter memories.

System Benteng was introduced in 1950 by welfare minister
Juanda to provide security for pribumi importers by giving them
special permits and other supportive treatment. In practice, it
was those of Chinese descent, ultimately, who ran businesses, as
the pribumi preferred to outsource the work instead of doing the
importing themselves. Haji Kalla and the Bakrie family were two
pribumi entrepreneurs that managed to develop their business
because of the system. The policy was stopped in 1954.

The Assaat Movement was introduced by Indonesian official
Assaat in 1956 and called for discriminatory acts against all in
the Chinese-Indonesian business community.

PP No.10/1959 stipulated that nobody of Chinese descent was
allowed to have a business beyond regental level. The armed
forces vehemently supported implementation of the regulation,
resulting in 130,000 Chinese-Indonesians leaving this country.

The KIK/KMPK, which began in 1974, was credit schemes only for
pribumi small and medium-sized enterprises. The government
stopped the scheme in 1988.

Distribution of staple commodities become a matter of hot
debate after the 1998 anti-Chinese riots in the capital that made
the Chinese take refuge. Kalla said such a policy would provide
an opportunity for the pribumi to handle distribution.

For Kalla, this series of policies amounted to affirmative
action, "to limit the expansion and existence of nonindigenous
Indonesians, and 75 percent of the distribution of staple
commodities should be in the hands of indigenous people".

He disregarded various critics who underlined the failure of
these discriminatory rulings, such as late, prominent economist
Sumitro Djojohadikusumo, who said, "Of 10 indigenous businessmen
only three managed to grow because of these affirmative policies:
The rest remained as benalu (leeches)."

Former Malaysian prime minister Mahathir Muhammad introduced
similar affirmative action, the New Economic Policy, in 1971, to
support bumiputera. However, he admitted ultimately that his
affirmative action was overdone, resulting in people who were
rather laid-back and not willing to make an effort. He admitted
that the policy failed to develop a competitive streak among
Malays.

The market mechanism will eliminate those who base their
business on political patronage rather than competitiveness.

However, it is clear that the durability, in business terms,
of traditional food stalls such as Padang restaurants and Warung
Tegal is not due to affirmative action.

These criticisms and the failure of affirmative action have
been ignored by Jusuf Kalla, who states that his own family
business is growing because of this action, disregarding the
unsuccessful stories that constitute the mainstream.

He also ignores the possibility that he was able to make it as
a businessman not due to the policies, but because he is the
distributor of Toyota in eastern Indonesia, which was owned by
Tjia Kian Liong (William Soeryadjaya).

In the wake of major industrial development in China such as
in garments, textiles, footwear and other commodities, which has
sidelined its Indonesian counterparts, it is important to muster
all resources for the sake of Motherland Indonesia against global
competition.

Indonesian textile association chairman Benny Soetrisno said
this is a battle between states, not between companies.

There is no point in creating fear among Chinese-Indonesians
in their own homeland: History has sensitized them to detect
danger from miles away, and survive.

Now is the perfect time for Jusuf Kalla to make known his
ability to build solid economic cooperation between Indonesian
entrepreneurs, disregarding race, religion or culture.

Above all, Chinese-Indonesians are also children of the
nation. It is far better to maximize their potential than
alienate them.

The writer is a lawyer. He can be reached at
ivanwibowo@hotmail.com