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Like Marcos, Dictator Suharto Might Keep Billions

by Johanna Son and Kafil Yamin


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on the pursuit of Suharto's fortune
(IPS) MANILA/JAKARTA -- Impatient calls are rising for an inquiry into the wealth of President Suharto and his kin, but the Philippine experience shows that going after a dictator's business empire is bound to be a slow, political and legal maze.

Indonesian officials have said they will look into Suharto and his family and friends' businesses, which flourished through special breaks and favors from the government during Suharto's 32-year rule.

On June 1, attorney general Atmonegoro said the government will look into the "wealth of state officials" -- an indirect but clear reference to the Suhartos.

"His (Suharto's) wealth which had been gained by illegal means should be returned to the state," said Muslim leader Amien Rais, who says the ex-president should not be allowed to leave Indonesia. "But we can forgive his past mistakes and let him lead a peaceful life at his twilight."

For their part, student activists want no less than a trial of Suharto -- whom Forbes magazine says is the world's 16th richest person with a net worth of $16 billion.


12 years later, the Philippines has yet to recover assets from Marcos
Similar calls were heard 12 years ago in the Philippines, where a common slogan against dictator Ferdinand Marcos had been that "stolen wealth should be returned to the nation."

So Indonesians may want to take some lessons from the Philippines, which after the 1986 revolution sought to recover billions of dollars alleged to have been looted by Marcos, his family and associates during his 20-year rule.

But 12 years after the "People Power" revolution, the Philippines has yet to make a full recovery of worldwide assets of the Marcoses, which had been estimated at anywhere from $5 - $10 billion.

Only recently, after years of legal wrangling, did Manila actually receive more than $300 million that the Marcoses had stashed in Swiss bank accounts.

Freezing assets or shares in firms believed to have been owned by the Marcoses or through dummies proved to be an uphill, sensitive process, one rich in opportunities for corruption.

In the heady days after the 1986 revolt, the government of Corazon Aquino created a "presidential commission on good government" to recover the Marcos wealth. But what was meant to be a temporary body has had to be extended because of legal difficulties it encountered.

While there are key differences between the Marcoses' wealth and the Suharto business empire, the point is that efforts to pinpoint and recover a dictator's corrupt wealth is no simple task.

The Indonesian Business Data Center estimates the wealth of Suharto and his family at some $20 billion. If only half this amount were funneled back into state coffers, Indonesia would be better able to weather its economic crisis, especially food shortages, said center head Christianto Wibisono.

"Getting rid of Suharto the politician might well have been the easy part. Getting rid of Suharto the businessman will prove much more difficult," said Michael Backman, author of an upcoming book on Asian corporate governance.

While the Marcoses often limited themselves to "large passive shareholdings" in firms and stashing gold and cash overseas, "the Suharto assets are very different," Backman said in a published commentary.

The Suhartos have been integral to the founding and management of many firms, from cars to cloves to toll roads to taxicab firms. Backman has identified more than 1,000 local companies where members of the Suharto family have "significant shares. "

Because of their reach into the economy, "ridding Indonesia's economy of the Suhartos simply will not be a matter of transferring their equity," he explained.


Habibie and other officials have private family interests
Popular anger at the Suhartos is already moving way ahead of official moves toward a scrutiny of their wealth. Weeks ago, riots targeted businesses where Suharto relatives have stakes. Runs are hitting a bank owned by Suharto friend Liem Sieo Liong.

But Indonesians are also saying a witch hunt would scare investors and hurt efforts toward economic stability.

Attorney general Soedjono urged Indonesians to avoid "too much distrust and slandering" in the Suharto probe, pledging to be thorough and accurate. He said the Suhartos were ready to be questioned and would "never leave this beloved country."

Senior economist Frans Seda cautioned that the tracing of Suharto's wealth may easily turn into "revenge." "The wealth assessment should be based on effort to uphold the law," he said.

While focusing on Suharto is important for accountability, it is equally important to look out for signs of change in the cozy political-business ties in place in Indonesia for decades.

Backman argues that Habibie and other officials have private family interests that flourished under Suharto's rule too, and is thus skeptical of change in how the elite protects its interests.

It is probably too early to judge whether there has been real change in the political culture in Indonesia, but observers will be watching how it sustains a public commitment to hold the Suhartos accountable for the wealth they accumulated.

As in the Philippines, the results of this effort will rely on financial resources, sustained legal weaponry and ultimately, political will.

Ironically, Filipino plaintiffs won their the biggest legal victory against the Marcos estate in 1993, not at home but from a Hawaii court. A group of 10,000 human rights victims won $1.2 billion in damages, but are locked in struggle with the Manila government over who has first claim on the Marcos money.

Marcos' widow, Imelda, was convicted by a Philippine court for graft in September 1993 but is out on bail. She and the Marcos children face more than 100 court cases, pending to this day. But while the legal effort to recover the Marcoses' ill-gotten wealth plods on, much of the momentum has slowed since 1986.

Two recent developments show how the political lines drawn in 1986 have changed -- some argue they are proof of Filipinos' short political memories, or even failures of the People Power revolution.

First, the president-elect Joseph Estrada, a political ally of the Marcoses, has said he will abolish the commission on good government tasked to recover Marcos' wealth after he assumes office later this month.

He has also hinted he's willing to grant Mrs Marcos, whose case is on appeal with the Supreme Court, presidential pardon.

Second, two Marcos children won local seats in the May national polls, making it harder for suits for them to be resolved quickly.

In contrast, post-Suharto Indonesia is at the very early stage of shaping the gains from the collapse of the old order. But the future will show if Indonesians have learned from the mistakes made in the wake of the People Power revolution they have drawn much inspiration from.


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Albion Monitor June 19, 1998 (http://www.monitor.net/monitor)

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