Joining Thuggery and Profits: the Legacy of Suharto's Indonesia

Former Indonesian ruler Suharto died last month a very wealthy man. In 1999, a year after he stepped down as Indonesia's second president, Time magazine reported his wealth at US$15 billion.

"Not bad for a man whose presidential salary was $1,764 a month when he left office," the magazine reported.

And not bad for a peasant boy born in 1921 in Kemusuk, a small Javanese village, during Dutch colonial control. Suharto's route to power and wealth was through the military. In 1954, he took a new job in Semarang, on the north coast of Java, only a three-hour drive from his military base in Jogjakarta. It thrust the 33-year-old Javanese officer into a totally different world.

Before the 1954 promotion, Suharto had been a field commander. Now, as head of the Diponegoro military command in Semarang, his immediate job was not to lead military operations, but to feed the thousands of troops under him. His new division consisted of an assortment of thugs and soldiers, bandits and militias. And like most post-independence armies, it was poorly funded.

If Suharto was to succeed in the new Indonesia that was emerging after World War II, he would have to find ways to keep the army in food and equipment. He looked to the example of his wife, Siti Hartinah. Although she came from Javanese aristocracy, she was supporting the family, which already had three young children, with the small garment trade she had started.

Suharto, too, turned to business -- mainly smuggling such consumer goods as sugar and rice between Singapore and Java. He defended running a business out of the army as essential to feeding his men.

Key to his operations from the start were two men who would remain his business associates for almost half a century. Suharto's tie to Liem Sioe Liong, a Fujian-born Chinese merchant who had migrated to Java in 1938, was to become one of the most important alliances in his New Order regime. Suharto also befriended sportsman-cum-businessman Bob Hasan, whose godfather was an army general.

The relationships were mutually beneficial. Suharto used his troops and position to protect the lucrative smuggling; Liem and Hasan helped supply the troops and provide Suharto with business opportunities.

According to George J. Aditjondro, a corruption researcher who spent two decades tracing the Suhartos' fortune, Suharto basically built his "business model" in the city of Semarang and gradually expanded it, enlisting other officers and businessmen along the way.

In 1956-1957, his Diponegoro operations came crashing down. Suharto was found guilty of smuggling, and army head Colonel Abdul Harris Nasution tried to remove him. But Bob Hasan's godfather, Colonel Gatot Subroto, defended his protégé. Army headquarters defused the scandal by sending Suharto to an officer-training program in Bandung, in West Java.

Within two years, he bounced back, won another promotion, and took command of the Kostrad army reserve in Jakarta. The problem of supplying troops remained the same, as did Suharto's solution of choice. He bought his business partners along with him to Jakarta.

Suharto's political career took another turn on September 30, 1965, when hundreds of army officers kidnapped and killed several generals. Suharto knew of the plan in advance since most of the kidnappers were his Diponegoro colleagues. They reportedly planned to bring the generals, including Nasution, who had allegedly planned a coup, to face President Sukarno.

The next day, Suharto decided to move against his former colleagues. Blaming the communists, his troops began a slow purge against Sukarno, Indonesia's first president. The ensuing maelstrom of violence killed three million people between October 1965 and March 1966, according to one of his officers, Major General Sarwo Edhie Wibowo.