BUSINESS: Abri and Business 3
Far Eastern Economic Review
Feb 5, 1998

Civilian Concerns:
 Army's business operations attract criticism
  * By Salil Tripathi
    533 Words
02/05/98
p20    

 The army's forays into the world of commerce have not met with
universal approval. Many Indonesians -- civilians, politicians, even
military officers -- believe the armed forces have no business being in
business.
   Some of the most trenchant criticism of Abri's commercial ventures
comes from young generals within the army. These officers, some trained
in Western military schools, believe the military should reduce its
civilian role in order to preserve its autonomy. "Those generals are
against the manipulation of the army by the president and feel that
cutting business links will sanitize and purify the army from Suharto's
control," says a Singapore-based regional defence-strategy analyst.
 Some veterans feel the same way. Says retired Gen. Sumitro: "We
should understand the economy because of its implications on security,
not in order to become businessmen."
   Another criticism comes from the technologists, led by Technology
Minister B.J. Habibie. Adi Sasono, chairman of Habibie's think-tank, the
Centre for Information and Development Studies, said last year: "We live
in a very specialized world. Business is not the field of the military.
It should be left to businessmen."
   Of course, the technologists' criticism of Abri's commercial
ambitions may stem from vested interests. Habibie wants a bigger role in
arms acquisition, which Abri opposes. The minister is said to be highly
sensitive to criticism. Three independent Indonesian magazines were
banned in 1994 because they investigated a controversial deal in which
Habibie bought 39 second-hand vessels from the former East Germany. The
Indonesian navy wasn't happy about the deal, which senior Abri figures
saw as an attempt by Habibie to encroach on military turf.
   Then there are the technocrats, who run Indonesia's economic
ministries. Charged with making business more transparent and less
dependent on connections, they are keen to minimize Abri's role.
   Many ordinary Indonesians, too, say Abri should retreat from civilian
functions like running businesses. Abri's paramount role was acceptable
in the early days of the Suharto regime, when there was no civilian
elite, says Jakarta-based political scientist Dewi Fortuna Anwar. But
now, "there is a growing class of entrepreneurs who can compete but who
don't have the connections. Foreign investors should not have to choose
only between Abri and the president's children." If investors continue
to do business with the armed force, "they will only be prolonging
Abri's dominance of the system," she adds.
   Abri's critics say the time has come to re-evaluate the principle of
dwifungsi -- or dual function -- that has allowed the military to play a
prominent social and political role. They argue that the principle has
become an anachronism now that Indonesia's armed struggle for
independence has receded into the pages of history. "We agree with the
historical role of dwifungsi," says Dewi. "But Abri doesn't have an
answer to all our economic problems today."
   But other analysts maintain that dwifungsi is an enduring concept in
Indonesia, and that ignoring or diluting it could lead to social
disorder. Says Jakarta-based political scientist Sjamsudin Nazarudin:
"If you terminate dwifungsi, Indonesia will collapse."
   In the end, therefore, the question about the kind of role Abri
should play in business is another manifestation of a larger one: What
kind of society does Indonesia want to be?