GJA - Suharto's Businesses in Burma

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/* Written  8:41 AM  Sep 28, 1996 by tapol in gn:act.indonesia */
/* ---------- "GJA - Suharto's Businesses in Burma" ---------- */

Sent: 	25 September 1996 8:41
Subject: 	Suharto's businesses in Burma

Another article for the Nation (Bangkok):


How the Suhartos cement their partnership with the SLORC
-- with cement, timber, telephones, explosives and oil
--------------------
George J. Aditjondro


ON Monday through Wednesday, October 7-9, 1996, more than 300 students and
others across the USA, Canada, South Africa, and Australia, will
participate in a fast sponsored by the Free Burma Coalition. One of the
themes of the fast is to support the call of Daw Aung San Suu Kyi and the
National League for Democracy (NLD) for immediate and complete withdrawal
of all foreign business from Burma.

Ironically, this call has fallen on the deaf ears of the Indonesian ruling
family, who have lately even intensified their investment and other
business deals with Burma's State Law and Order Council (SLORC). For them
it has been business as usual, as if nothing had happened on that dreadful
day on August 8, 1988, and as if the NLD had never won the election with an
overwhelming vote, two years later.

As I have written in an earlier article ("Suharto clan's global forestry
interests, The Nation , Monday, September 9, 1996), one of the first
Indonesian investors in Burma was PT Rante Mario, one of the numerous
companies under the Humpuss Group, controlled by President Suharto's
youngest son, Hutomo Mandala Putra, also known as as Tommy Suharto. Through
a joint venture with a Burmese state company, Myanmar Timber Enterprise
(MTI), PT Rante Mario is planning to build a wood processing industry with
an investment of US$ 75 million.

In the first five years (since 1994), this joint venture will only produce
logs and lumber. After that, it will go into plywood production, with a
total disregard for Burma's natural resources and beauty. According to WWF
data, Burma's natural environment is already worse off than Indonesia. As
published on page 42 in the November 20, 1995 edition of another business
journal, Warta Ekonomi , Burma has already lost 71% of its natural habitat,
compared with 49% in the case of Indonesia. Area wise, Indonesia still has
nearly 750,000 Km2 of natural habitat, while Burma only has nearly 226,000
Km2. So, one can say that to conserve Indonesia's own natural forest,
President Suharto allows his beloved youngest son to destroy a friendly
nation's forest.

This young member of Suharto's kleptocracy has not only began to do
business with Burma's forestry industry. He began his acquantance with
Burma through his familiarity with the international oil companies, which
has been a 'family business' of the Suharto clan since the boom time of
Indonesia's national oil and gas mining company, Pertamina, which was led
in the 1970s by a Suharto crony and fellow Army general, Ibnu Sutowo
(Asiaweek , May 5, 1995: 47).

Two years ago Tommy Suharto was already doing business with Unocal and
Total, two of the oil companies targeted to be boycotted by the world-wide
pro-Free Burma movement. He has a 20-year contract with Unocal and Total to
supply natural gas to Tommy's fertilizer industry in East Kalimantan, PT
Kaltim Methanol Industry (KMI).

It is still unclear where the natural gas comes from. According to Abdul
Wahab, KMI's director, the methanol will be imported, "among others,
methanol from Sabah, Malaysia, since the production of Pertamina's methanol
factory on Bunyu island in East Kalimantan, is not sufficient" (Swasembada
, February 1994). However, around the same time that he began to construct
his fertilizer factory, Tommy has also began to export explosives to Burma.
This was carried out by another of his numerous companies, PT Bina Reksa
Perdana, through a joint venture with Oiltech Service Singapore. Two years
ago, this company, in which Tommy owns 55% shares, has already received
orders amounting to more than US$ 4 million from Burma, India, Iraq, and
Australia (Tempo , June 4, 1994).

So much for Suharto's youngest son, Tommy. Meanwhile, Bambang Trihatmojo,
Suharto's second son is involved in the telecommunication industry in
Burma. PT Elektrindo Nusantara, has invested its capital in small telephone
central units for 256 subscribers in Rangoon, as a pilot project for a much
bigger deal with the SLORC. This company is 51% owned by Bambang
Trihatmojo, and forms one of the main money-makers of Bambang's
conglomerate, the Bimantara Group. One of Bambang's brothers-in-law, Indra
Rukmana, who is married to the Suhartos eldest daughter, Siti Hariyanti
Rukmana, also known as Tutut, is an old school-mate and major business
partner in Bimantara as well (Swasembada , August 1995).

As it turned out from further research in my Indonesian business data base,
Bambang has also indirectly entered Burma's forestry industry. According to
an Indonesian business magazine, Info Bisnis  of July 1884, another
Indonesian conglomerate, Barito Pacific, has also stretched its forestry
arm into Burma, apart from a multitude of other countries (Cambodia,
Malaysia, Papua New Guinea, New Zealand, Suriname, Gabon and Zaire).

What has Barito Pacific to do with Bambang Trihatmojo? A lot. Although he
controls his own business group, Bimantara, Bambang is also a major
shareholder in Barito Pacific. This group is led by a Sino-Indonesian
businessman, Prajogo Pangestu. In the group's bank, Andromeda Bank, Bambang
owns 25% shares, Prajogo 50%, and another Sino-Indonesian businessman,
Henry Pribadi, also 25%.

The third member of the extended Suharto family who plans to invest in
Burma is Hashim Djojohadikusumo. This rising star on the Indonesian
business firmament is a younger brother of Prabowo Subianto, one of
President Suharto's sons-in-law. Not only that. Prabowo's wife, Siti
Hediyati Harijadi, also known as Titiek Prabowo, is also an active partner
Hashim's numerous business enterprises. In fact, Hashim's Eka Persada Group
and Titiek Prabowo's Daya Tata Matra (Datam) Group have numerous
overlapping shareholders, including in one of Hashim's cement factories.

Last Thursday, September 19, Hashim anounced his plan to invest US$ 200
million in a new cement factory in Burma. Although he already owns three
cement factories in Indonesia, he hopes that in October he might sign a
memorandum of understanding to build that cement factory with the SLORC.
The planned company will be 70% owned by Indonesian companies, and 30% by a
Burmese state company.

With a capacity of one million tons of cement per year, Hashim hopes that
his cement factory may be able to compete with China and Thailand made
cement on the Burmese market, which still imports 1.8 million ton of cement
per year.

Another reason why Hashim for to invest in Burma is that he is optimistic
that in two years time, Burma will become a full member of the ASEAN.
Consequently, Burma will also become a member of the ASEAN Free Trade Area
(AFTA). This means that Indonesian companies will be able to market their
products freely in all ASEAN member countries, as all other ASEAN
citizens-owned companies are also free to market their products in
Indonesia (Media Indonesia , September 21, 1996).

As has happened with most of the juicy businesses of the Suharto family,
Hashim's businesses are also milking cows for the Indonesian Army. In
particular, milking cows for the most feared Army unit, Kopassus , also
known as the Red Berets. These troops, which have been involved in quelling
every major independence and other uprisings in Indonesia and East Timor,
are now commanded by Hashim's older brother, Mayor General Prabowo
Subianto. As Hashim stated in an interview with The Asian Wall Street
Journal  on February 2, 1993, "if Prabowo needs funds, as a loyal and
dutiful brother, I'll provide them. He has a lot of soldiers to take care
of."

That was when Prabowo was still a Lieutenant Colonel, and had fewer
soldiers to take care of compared with now, after he became the commander
of 3,000 Red Beret soldiers, which will soon be beefed up to 5,000 soldiers
(Straits Times , May 23, 1996). No wonder that the SLORC generals like to
do business with Hashim, who has already exported several types of
Indonesian-made medicines -- antibiotics, analgesics, and medicines for
skin diseases -- , to Burma, since three years ago (Gatra , April 29,
1995).

To avoid the confusion about the who-is-who's in the Suharto clan's
business relationship with the SLORC, let me summarize those involved as
follows. The Suharto couple have three daughters, Tutut, Titiek, and
Mamiek, and three sons, Sigit, Bambang, and Tommy. Tutut is married to
Indra Rukmana, and Titiek is married to Prabowo Subianto. Bambang and Indra
Rukmana, are involved in the Burma's telecommunication business. Bambang
himself, through his partnership in the Barito Pacific Group, is involved
in Burma's forestry business. So is Tommy, who is also involved in Burma's
mining and construction business, by supplying the dynamites and probably
be a customer of Total and Unocal's natural gas fields. Tommy's eldest
brother, Sigit Harjojudanto, as well as Sigit's son, Ari Haryo Wibowo, are
minor shareholders in Tommy's Humpuss Group. Meanwhile, Titiek, through her
partnership with her brother-in-law, Hashim Djojohadikusumo, will certainly
become involved in Burma's cement business.

Finally, with all those First Family members involved in doing business
fields with the SLORC, it is most likely that they have also been involved
in exporting PepsiCo products to Burma. Why? Because Indonesia's largest
conglomerate, the Salim Group, in which a foster brother of Suharto,
>Sudwikatmono, and two of Suharto's kids, Sigit and Tutut are involved, is
the franchise holder of PepsiCo for Indonesia (Warta Ekonomi , June 13,
1994). This might be an additional reason for a world wide boycott of
PepsiCo.

This answers the question, why Suharto is so eager to cement -- both
literally as well figuratively -- his oligarchy's partnership with the
SLORC, by endorsing the SLORC's membership in ASEAN. This also explains,
why Daw Aung San Suu Kyi's appeal to foreign companies, to cancel their
investment and trading plans with the SLORC, falls on the deaf ears of the
Suharto oligarchy. Finally, it also explains why Suharto is, apart from
Mahathir and Lee Kuan Yew, so fanatically against the European Union's
attempt to link human rights with trading interests. His standard rhetoric
is that ASEAN members should refuse "any Western interference" into their
domestic affairs.

This Suharto-Mahathir-Lee Kuan Yew rhetoric only masks the real business
interests of these ruling elites, since we all know, that the frantic
promotion of Western capitalism into the ASEAN region, has already caused a
major interference in the domestic affairs of these countries, by creating
a super rich elite with a very Western life style, who play Western golf
and fly around the globe in Western airplanes and stay in Western five star
hotels, while destroying centuries-old rice fields and indigenous
businesses, such as the traditional locally-owned textile and beverage
industries, to name just a few.

Newcastle, 22 September 1996