BUSINESS: Abri and Business 2
Far Eastern Economic Review
Feb 5, 1998

Friends in Need
  * By Salil Tripathi
    457 Words

At a time of growing social unrest in Indonesia, some ethnic-Chinese
businessmen have found a measure of security in their business ties with
Abri. But these links potentially expose the armed forces to criticism
from those Indonesians who resent the ethnic-Chinese domination of the
country's economy.
   Many believe this dominance is preserved by a combination of
corruption and Abri support. Being seen as a partner to ethnic-Chinese
businessmen and a participant in the corruption "has eroded Abri's claim
of being the conscience of the nation, or of being the people's army,"
says an analyst who follows regional defence strategy.
 Although some generals have publicly fulminated against the
"nonindigenous population," as they call it, analysts say Abri's
reluctance to criticize business corruption stems from its links to
ethnic-Chinese tycoons.
   Over the years, these businessmen have nurtured relationships with
the military, ranging from multimillion-dollar joint ventures to more
modest connections. Abri officers under training routinely receive
support for living expenses from ethnic-Chinese grocers and traders in
the vicinity of military bases.
   Richard Lowry, an Australian graduate of the Indonesian Defence Staff
College, writes in his recent book* on Abri: "The links with Chinese
businesses benefited both sides, providing the Chinese with access to
business opportunities and protection from a resentful society, and the
military with funds to supplement their meagre official budgets and to
satisfy individual desires."
   The tradition dates back to the 1950s, when Suharto, then a colonel,
headed the Diponegero division near Jakarta. He formed business
partnerships with two entrepreneurs who today rank among the most
powerful tycoons in Indonesia -- Bob Hasan and Liem Sioe Liong. Lippo
group founder Mochtar Riady, too, had business dealings with Abri, as
did Sofjan Wanandi, the head of the Gemala group.
   The latest torchbearer of that tradition is Tomy Winata, an
ethnic-Chinese businessman who is the key player in Abri's biggest
property project, the $3 billion Sudirman complex in Jakarta. Winata and
Abri both own stakes in the property firm Jakarta International Hotel
Development, whose subsidiary Danayasa Artatama owns and manages the
Sudirman complex. (Winata declined to be interviewed for this story.)
   Business analysts say Winata's relationship with Abri goes back to
1988, when the Kalimantan-based businessman heed rescue the
army-controlled Bank Propelat. Winata bought an undisclosed chunk of the
unlisted bank, renamed it Bank Artha Graha, and quickly expanded its
branch network. Several foreign-educated children of Abri generals now
work for the bank.
   Winata paid for his share of the bank by giving Abri a 20% stake in
Satelindo, a lucrative mobile-phone company in which Suharto's second
son, Bambang Trihatmodjo, also has a stake.