Questioning the business of Indonesian military

Bila ABRI Berbisnis (When the Armed Forces Goes Into Business); Indria Samego et al.; Mizan, Bandung, 1998; 220 pages; Rp 17,600.

JAKARTA (JP): After more than 30 years as part of the New Order regime, the military (the Armed Forces [ABRI]) is now criticized by many circles in the community as being only a tool of the authoritative power. Under the New Order regime, many incidents of violence, killing and human rights violations were committed by the military. As part of the New Order regime, the military impeded the progress of democracy. Therefore, the demands for the revocation of ABRI's dual function have been on the increase.

Apparently, ABRI's image has become poorer in the people's eyes. The military has been asked to return to its barracks, making itself a pure force for defense and security. Now, seemingly, the military is being penalized by history.

From the beginning, with the logic of command, hierarchy, physical force and heavy arms, the institution and character of the military have indeed been not human and not democratic. Because ABRI became a sociopolitical force, there were many incidents of violence, power abuse, monopoly, corruption and the like, in cooperation with, and even committed by, military groups. One example is in the economic field, specifically the business sector.

Bila ABRI Berbisnis clearly discloses corruption data and incidents in military circles. From the data and events we observe in this book, an analysis can be made that business in military circles, from time to time, only resulted in evil for this country, especially for its people. The business in military circles only benefits ABRI -- in a narrower sense a number of military individuals -- on the one hand, but enhances practices of corruption, collusion and monopoly on the other. It is here that the people suffer losses inflicted by the military.

In this book, quite a few incidents and events are disclosed about monopoly, corruption and collusion conducted in the business arena of the military. Collusion takes place between capital holders (economic regime), many of whom are ethnic Chinese, and the military to rake in the country's wealth. In these business episodes, ABRI also became part of the political and economic regime in this country. It is, therefore, not surprising that many high-ranking military personnel are fabulously rich, even in their retirement.

Power abuse in ABRI's business disclosed in this book includes those committed by former president Soeharto from the time he was building his career in the military world. Then he was already practicing corruption, collusion and nepotism in a cowardly way. He was caught red-handed several times and reprimanded by his military superiors. But at other times, his dishonest business practices were repeated using improved stratagems.

Since the end of the 1960s, sharp criticism started to occur on the military's involvement in business. Nusantara daily newspaper reported that ABRI's involvement in business with Chinese businesspeople only bolstered collusion in this country. Moreover, a number of state enterprises led by ABRI became bankrupt. The leaders (military) were only interested in enriching themselves (page 70).

This book states that ABRI's involvement in business has given rise to corruption in military circles, from soldiers to generals. Apparently it is not a matter of survival for the high- ranking officers, it is a matter of personal greed for wealth and power (page 135).

Military involvement in business since the beginning of independence gave birth to a type of client businesspeople. They were not the type of free and independent middle class businesspeople but a class that made facilities dependent on political patronage in the era of legislature democracy, or bureaucracy and military patronage in the subsequent periods. Therefore, it is not surprising that such practices led to expressions like pengusaha aktentas (briefcase businesspeople) and perusahaan Ali Baba (Ali Baba companies, meaning cooperation between indigenous Indonesians and ethnic Chinese businesspeople) and the comprador.

In this era, the military presence in the business sector often gives rise to high costs and the absence of a competitive climate on the one hand, and the emergence of invisible costs in development on the other. In this context, the capitalist system being built gives birth to a collaborative class between the military and the Chinese.

The tendency increased in the post 1980s with the various regulations issued by the government favoring these collusive practices. The package of economic deregulations, for example, created unwanted children subsequently called the conglomerate class. Although this helped facilitate running businesses, they sought protection from influential figures, in the government and especially in ABRI, who wanted to give a helping hand.

In the structure of business coalitions in elite circles, ABRI is seen as a supporter of ersatz capitalism, neopatrimonialism, state corporatism or a state qua state system which also contains elements like collusion, corruption and nepotism. Ersatz capitalists can, in a simple way, be seen as a group of businesspeople who are very dependent on the government and who are not able to stand on their own or do business independently without the government's support. Ersatz capitalism in this context is seen as a system that enhances a group of rent seekers.

The above model of collusion has not yielded an independent local middle class that is not only needed for economic development but also for political development in Indonesia. Therefore, the system that enhances collusion between government officials/ABRI and local and foreign businesspeople, mainly during the 32 years of the New Order regime (1966-1998), has not been able to consolidate Indonesia's economic fundamentals and allow political and economic reform.

According to this book, as long as state corporatism, state qua state system, neopatrimonialism and the various supportive elements like corruption, collusion and nepotism involving ABRI still take place, political and economic reform in Indonesia is hard to implement. Reform can be carried out only if the root of the problem is abolished, i.e. the revocation of the concept of ABRI's dual function, in this case the involvement of ABRI in business and politics (page 141).

This book, written by intellectuals and researchers from the National Institute of Sciences like Indria Samego, Riza Sihbudi, Nur Imam Subono, Sri Yanuarti and others, is apparently the first book to disclose data and incidents of irregularities in ABRI's business practices.

Compared to the incidents in reality, however, the analyses in this book still look very minimal and very limited. It also lacks sharpness and courage.

-- Arief Hakim