A fascinating recent addition to the literature on New Order-era Indonesia is Liem Sioe Liong’s Salim Group: The Business Pillar of Suharto’s Indonesia, which I recently reviewed for the Asian Review of Books. The full review follows below.
Liem Sioe Liong’s Salim Group: The Business Pillar of Suharto’s Indonesia
Richard Borsuk and Nancy Chng
Institute of Southeast Asian Studies, 2014
The cukong is a potent and often troubling figure in the recent history of Indonesia. Based on the Hokkien word for “boss”, the term refers to a businessman, of Chinese origin and astronomical wealth, who enjoys a symbiotic relationship with some powerful military or government personage. The one provides the finances to fund official projects, to bail out crumbling state enterprises, or simply in the form of lavish “gifts”; the other provides patronage and protection.
Cukongs were particularly associated with the cronyism of Suharto’s New Order regime, which ruled Indonesia until the 1990s, and Suharto’s personal “cukong extraordinaire” was Liem Sioe Liong, head of the vast Salim Group, one of Southeast Asia’s biggest conglomerates.
Liem’s rise and not-quite-fall, and the convoluted history of his business empire and its role in New Order Indonesia, has now been thoroughly explored by Richard Borsuk and Nancy Chng in Liem Sioe Liong’s Salim Group: The Business Pillar of Suharto’s Indonesia.
Born in an impoverished village in Fujiang, China, in 1917, Liem’s story is the classic tale of the Chinese emigrant made good. At the age of 21, he sailed for Java in what was then the Dutch East Indies. After starting out selling clothes from the back of a bicycle, he moved into coffee production and dabbled in various other trades. But it was the rise of Suharto in the late 1960s that provided untold opportunities for Liem. The two men became firm friends with very obvious benefits. As the authors report one of his cukong compatriots saying, “up until when Suharto came to power, Liem was nobody—he was small fry.”
The book charts, in quite staggering detail, Liem’s journey from small fry to big fish over the course of Suharto’s three-decade rule. Beginning in the late 1960s, his Salim Group swiftly expanded until its vast portfolio included everything from pig farms to hotels—though its essential pillars were banking, construction materials, and food.
After sketching the story of Liem’s early years, the book examines each of the Salim Group’s main facets in turn—a chapter on banking, a chapter on its hugely successful Indofood arm, and so on. With a group so large and so diverse—the authors point out that not even Liem himself ever really knew how many individual businesses he owned—this is the only feasible approach. But it does sometimes leave the chronology a little blurred in the midriff of the book. For a casual reader, however, it is worth sticking it out, for in Chapter 15 a genuinely gripping narrative emerges as the 1990s get underway and the fatal cracks begin to show in the New Order.
Liem Sioe Liong’s Salim Group is essentially a scholarly book, and as a resource on both the economic history of the New Order in general, and the story of the Salim Group in particular it is of enormous value. The authors have pulled together a vast amount of contextual information, and then threaded through it the product of detailed personal interviews with Liem himself—carried out before his death at the age of 95 in 2012—and with his son and current Salim Group helmsman Anthony Salim.
But Borsuk and Chng are both sometime journalists as well as scholars, and they bring a marked journalistic sharpness of prose to the dense economic history. In this Liem Sioe Liong’s Salim Group sits comfortably alongside other big, scholarly, but thoroughly accessible books on New Order Indonesia, in particular Adam Schwarz’s A Nation in Waiting. At times in the story there are flashes of Tom Wolfe’s epic novels of American capitalism, and it’s perhaps no coincidence that the authors cite an analogy from Wolfe’s The Bonfire of the Vanities at one point.
Of course, in a Wolfe novel, Liem’s rise would be followed by some sort of humbling fall, but that’s not quite what happened here. When the Indonesian economy collapsed in 1997/1998 and Suharto was finally pushed from power, the extent of the Salim Group’s links with the regime—through partnerships with Suharto’s children, through bailouts that at different times flowed in different directions, from the state to Salim businesses and from Salim’s BCA bank to struggling government projects—came into critical focus, as did some significant breaches of banking regulations.
But while the banking arm and several other Salim businesses were eventually wrested from their control, under the canny command of Anthony Salim the group held on to its food production sector (their Indomie noodles are now found everywhere from Nigeria to Syria), and proceeded to expand into other international markets.
It is in the story of the Salim Group’s survival that a slightly uncomfortable element of the book becomes evident. In the preface the authors are at pains to explain that their work was neither authorized nor financed by the group or the family.
It is obvious, however, that it could never have been written without the cooperation of Liem and Anthony Salim, and it is perhaps the debt of gratitude that leads to an occasional lack of criticism where criticism is due. Rumours of Liem’s shadier dealings are sometimes mentioned in passing without investigation, and a sterner take on BCA Bank’s excesses in the 1990s might have been warranted. The portrayal of “Ferrari-engined executive” Anthony Salim, meanwhile, is very warm indeed, and the final chapter on Liem himself reads like a eulogy.
None of this in any way diminishes the enormous value of the book, but it might raise the occasional eyebrow, given that these are men still regarded by some Indonesians as the worst sort of New Order crony.
As well as being a book about Liem Sioe Long, this is also in some ways about the story of Indonesia’s Chinese community.
Indonesia has been home to Chinese settlers for many centuries, and their position has often been a tenuous one. Perceived as disproportionately wealthy, they have been subject to discrimination and sporadic mob violence at least since colonial times.
In the postcolonial era, their loyalty to the new nation was sometimes called into question, even as the Indonesian authorities made it difficult for ethnic Chinese residents to obtain Indonesian citizenship. Indeed, it was the tenuous position of the wealthy Chinese that made them so attractive as collaborators to Suharto. Borsuk and Chng write:
Suharto skilfully used Chinese businessmen like Liem as he did not trust their pribumi [indigenous Indonesian] counterparts, who might use accumulated wealth to build a political base. Liem posed zero political threat as the Chinese were excluded from politics in the New Order.
The stereotypical view of Indonesian Chinese—that they are all rich, clannish, and with more affection for their ancestral homeland than for the country in which they live—is grossly unfair, ignoring the quiet majority whose ancestors may have been in Southeast Asia for centuries and whose own circumstances are decidedly modest. But it is a view that has at times been given credence by the prominence of cukongs, and this is an element of Liem Sioe Liong’s story that Borsuk and Chng perhaps should have given more attention (though they do report Anthony Salim’s claim that his father secretly interceded with Suharto on behalf of thousands of stateless Chinese Indonesians).
After 1998, Liem Sioe Liong never lived in Indonesia, spending his final years in neighbouring Singapore. The authors assert on several occasions that he always thought of Indonesia as home. But they also note that, starting in the 1980s, Liem and fellow cukong Djuhar Sutanto lavished vast donations on his home Chinese province of Fujian, funding reservoirs and irrigation projects, and laying paved roads to his ancestral village. When he visited he was hailed a hero, with flag-waving school children greeting his arrival. Unsurprisingly, the authors note, this was “a taboo subject back in Jakarta”:
[T]he philanthropists preferred not to reveal the extent of their money pumped into China, but reports estimate the amount to be well over RMB400 million.
In their meetings with Liem in old age, the authors report that he did talk fondly of Indonesia,
as it had offered great business opportunities. For making money, he commented, Indonesia was ‘Number 1’.
Cukongs like Liem Sioe Liong were essential to bolster Suharto’s three-decade rule in Indonesia. Without their economic wherewithal, the New Order would probably not have managed the real developmental progress it achieved for ordinary Indonesians in the 1970s and 1980s.
But they were also an intrinsic part of the cronyism that eventually brought down the regime. And the popular perception of the billionaire cukong still plays into old prejudices and hatreds.
The lot of ordinary Chinese Indonesians has improved in recent years, but they are still all too often objects of jealousy and suspicion. During the unrest of 1998 Chinese properties and Chinese people suffered much violence (part of Liem’s own Jakarta home was destroyed by a mob, though he was in California at the time), and should troubled times come again there is every chance that the mobs will turn once more against those local Chinese who have no friends in high places, no private jet waiting to whisk them to safety in Singapore, and whose own business empires stretch no further than a single shop-house.
© Tim Hannigan 2015