Far Eastern Economic Review

By Margot Cohen in Bandung, Solo and Jakarta

"Do you want to be safe from rape?" asks an advertisement in the July 15 edition of the Bisnis Indonesia newspaper. On offer: a chastity belt of stainless steel and leather, complete with tiny key, that's being marketed by an Indonesian-Chinese entrepreneur.

Hundreds of orders have flowed in from Indonesian-Chinese around the country. Customers range from skittish secretaries to anxious husbands and fathers horrified by reports of gang rapes of ethnic-Chinese women during the mid-May rioting that led to President Suharto's resignation.

The growth of this bizarre new business underscores the profound sense of vulnerability engulfing Indonesia's Chinese community of 6 million. The Chinese, who make up 3.5% of the country's 202 million people but control much of its wealth, have been targets of arson,

looting and beatings in years past. But the sheer scale of the May violence, including the widely publicized rapes, has turned their world upside down. It is forcing the Indonesian-Chinese to ask themselves a simple question, but one that will determine Indonesia's fate as

well: Do they have a future in their homeland?

The answer is "no" for the tens of thousands who have already fled abroad. Many more are considering flight. "If the situation is like this, we have to leave whether we like it or not. We have to think of the next generation," says a Bandung businessman who is thinking of moving his family abroad. With each departure, Indonesia loses more of the entrepreneurial skills and capital that is vital to rebuilding the economy. However, the urge to flee is matched by an equally powerful urge: to stand firm and fight for the civil rights denied them by Suharto's New Order government.

For every Indonesian-Chinese who has left, hundreds more--the vast majority--remain. And, in a surprising development, many of them are joining a budding civil-rights movement to demand the lifting of restrictions on their political and cultural activities. After three decades of virtual silence on the subject, the emancipation of the ethnic-Chinese community is being discussed openly in public seminars and the press, in new political parties and mixed-race

community groups, as part of the post-Suharto era of reformasi.

Many indigenous Indonesians, known as pribumis, see reformasi as a time to restructure the economy, using affirmative action to help pribumi businesses. They want the ethnic Chinese to teach them business know-how and help them develop a greater economic role.

Many ethnic Chinese are open to this idea, as long as the rules are transparent. They are staking their future on the hope that in return for sharing their economic skills and assets with the pribumis, they will be allowed to participate fully in Indonesian society and national life. Whether that trade-off can work will determine whether the Indonesian-Chinese continue to flee, or stay to help rescue their country.

It's a trade-off that will be difficult to pull off. First, mutual demands will be hard to meet in the miserable economic climate. Government proposals to recapitalize pribumi cooperatives will require vast amounts of credit at a time when Indonesia's banking system is paralyzed. But perhaps more daunting is overcoming the mutual suspicion between the pribumi and the ethnic Chinese inculcated since the Dutch colonial era. Because of this history, and the recent

anti-Chinese violence, accommodating each other's needs will have to go hand-in-hand with reconciliation.

The early signs are mixed--partly because President B.J. Habibie appears ambivalent about his ethnic-Chinese citizens. Habibie visited riot victims in Jakarta's Chinatown within a week of taking over as president, but on some occasions, he seems less than concerned by the loss of ethnic Chinese fleeing abroad. "But do you really think that we will then die" if they don't return, he said in a recent interview with The Washington Post. "Their place will be taken over by others."

Both pribumis and ethnic Chinese maintain that they cannot forge a new partnership until the government aggressively investigates the riots and the alleged role of high-ranking military officers in instigating the violence. Evidence that the rapes and other acts of brutality were

carried out by organized gangs has severely eroded trust in the government. Indonesian-Chinese are demanding that the culprits be identified and the punishment fit the crime. Until then, plane tickets and passports lie ready.

Many are already long gone. Business leaders estimate 30,000 or so have gone since mid-May, with no intention of returning soon. Another exodus appears imminent: Middle-class and wealthier families are attempting to sell their homes, liquidate their businesses, and obtain visas. Young professionals also are scouting for jobs abroad. Those who cannot afford to move overseas are heading to perceived domestic safe havens such as the islands of Kalimantan and Bali.

Fear of further violence is palpable wherever there are ethnic Chinese.

Take, for example, the dimly lit shops lining the streets of Bandung in west Java. While May's rioting did not spread to this city, many in the local Chinese community believe their turn is about to come--a suspicion strengthened by a flurry of flyers exhorting people to ransack Chinese businesses.

Scattered rapes of young Chinese women are still being reported in Bandung and Solo. "It's a sin to have children. They'll just be hunted down," mutters shopkeeper Sigit Sugiharja, 42, the father of two small boys. Like most Indonesian-Chinese, he says he doesn't have the money or the connections to go abroad, and won't abandon his elderly parents. He's heard that the army did little to prevent the riots in Jakarta. "What do we pay taxes for?" he asks bitterly.

Across town, another shopkeeper in his early 40s sits in an electronics store stuffed with appliances gathering dust. In June, he attended the funeral in Jakarta of a 14-year-old distant relative who he says was gang-raped in front of her parents. The rapists mutilated her genitals with a broken bottle, and she later committed suicide by drinking rat poison.

The shopkeeper (who requested anonymity) has sent his own 18-year-old daughter to safety in China. For now, his 16-year-old son remains at home, where the shopkeeper has prepared an arsenal of knives and clubs if the mob arrives. "They can take our property, but not our honour," he says, referring to the rapes. He admits that his family may ultimately follow the daughter to China or possibly move to Thailand or Malaysia. He says he's just "killing time" in his store, where business has plunged more than 90%. When he makes his move, he says, he won't even try to sell the shop, as some of his fellow Chinese are attempting in Jakarta. He'll just lock the gates, and slip away.

Unlike Bandung, the central Java city of Solo was racked by rioting in May that left 450 billion rupiah ($173 million at the July 1997 exchange rate) in damage. Half the shops remain closed, windows shattered; charred buildings gape onto streets where the traffic

lights are dead. An estimated 600 families have fled, roughly 10% of the city's ethnic-Chinese population. But those who stay are defiant, not defeatist, and losing no time in rebuilding their livelihoods.

One of the organizations aiding the rebuilding is Sarana Surakarta Ventura. It is the only venture-capital firm in Solo, set up in 1996 to help both pribumi and Chinese-owned businesses. By August, the firm plans to disburse money to 150 businesses. It's not just a matter of charity. "These people have experience, they have a market, they have connections," says the firm's director, Wymbo Widjaksono.

"We expect a quick return, with good long-term prospects."

While waiting for aid or insurance money to come through, some Indonesian-Chinese are reviving their businesses by relying on longstanding relationships to obtain goods on consignment. Others are collecting money owed by loyal customers. Setyowati, 37, lost 1.5 billion rupiah ($578,000 at the July 1997 rate) when the mob torched her motorcycle shop and three-storey house. But her customers sought her out after the riots to make good on their monthly payments. Now she's starting to rebuild on the same spot.

"Wherever I move, it will be the same," she says matter-of-factly.

Nine weeks after the riots, victims continue to stream into the Perkumpulan Masyarakat Surakarta, a social-welfare organization established primarily by local Chinese in the 1930s. They come for sympathy and financial aid. Shortly after the riots, PMS teams fanned out to impoverished Chinese neighbourhoods, distributing 100,000 rupiah per person to cover basic needs for a month. To small retailers ready to resume their businesses, PMS doled out grants of 5 million-7 million rupiah. All told, it has disbursed 400 million rupiah so far, relying on its own coffers as well as contributions.

However, the volunteers at PMS are doing more than help pick up the pieces. They are among the many ethnic Chinese who realize that repairing the economy is no longer enough to secure their place in Indonesia. To ensure a stable future, they must break with the past.

Specifically, they want to reverse three decades of depoliticization that was ostensibly enforced to prevent a resurgence in the influence of communist China, which was accused of meddling in Indonesian politics in the 1950s and 60s. Barred from government leadership, the

civil service and military rank, the Indonesian-Chinese were left to concentrate on business--and many did so brilliantly, without a second thought. But economic success "lulled us fast asleep," says Rachmat Santoso, 60, a PMS leader. "People felt satisfied. They forgot about defending their rights." He adds: "Now, whether we like it or not, we're forced to wake up. If we keep quiet, like before, we'll be trampled completely."

Other PMS volunteers chime in with a long list of complaints: The cumbersome documentation required to process identity cards and citizenship papers, despite the fact that their families have lived in Indonesia for generations. Unofficial quotas to enter state schools and universities. Restrictions on celebrations of festivals and Chinese-language instruction.

Indonesian-Chinese are now trying to redress these grievances and work with their fellow citizens through the new forums that are springing up in many cities. Take the Partai Reformasi Tionghoa Indonesia, a new political party aimed at "harmonizing" relations between ethnic Chinese and pribumis. Party leaders take pains to distance themselves from the likes of Liem Sioe Liong and other ethnic-Chinese tycoons and conglomerates which lived off the largesse of Suharto, perhaps less than 5% of the ethnic-Chinese population.

"We condemn the conglomerates--even though they are Chinese people--who colluded with the government," declares party activist Ponijan Liaw. The party's economic proposals include establishing cooperatives and holding companies involving both Chinese and

pribumis. These would be vehicles for transferring business skills to pribumis, for example through apprenticeship and mentoring programmes.

Some Indonesian-Chinese prefer to devote their energies to new non-governmental organizations, such as Solidaritas Nusa Bangsa, which is lobbying for an anti-discrimination bill. The group has also filed a class-action suit against the government and the military,

seeking damages for victims of the riots.

All this pressure may be starting to pay off. On July 15, President Habibie finally issued a statement of deep regret over the rapes and sexual assaults. The Jakarta administration has announced that it has abolished the hated special codes on identity cards for Indonesian-Chinese, which made them easy targets for corrupt officials. Most encouraging to the community is the fact that the armed-forces commander, Gen. Wiranto, is pressing ahead with a formal inquiry into the role of Lt.-Gen. Prabowo Subianto, Suharto's son-in-law. For now, the inquiry focuses on the kidnapping and torture of anti-Suharto activists, but many Indonesian-Chinese hope it will also shed light on the riots.

The PMS volunteers are not sure whether the most effective route to political clout is through the newly minted political parties, the NGOs, or the discussion groups forming in Jakarta. But now that the minority's consciousness-raising process has begun, Rachmat says, "it won't be difficult to advise them to rise up."

The key question is how the government and the majority pribumis respond. Their main concern is a more equitable distribution of wealth that may eventually make them the boss of the economy. Such thoughts used to be whispered during the Suharto era; now they're pronounced openly. The Habibie administration clearly favours pro-pribumi economic policies, such as directing more credit to indigenous businessmen or stimulating cooperatives run by them. "It will be strongly urged by us that the pribumis will be given more opportunities in the future," Coordinating Minister Ginandjar Kartasasmita told the REVIEW.

The government is looking at how neighbouring countries have dealt with their economically powerful minorities. In Malaysia, the affirmative-action New Economic Policy has raised the corporate assets of Malays and lowered racial tensions. In Thailand and the Philippines, assimilation has created a vibrant ethnic-Chinese business community. In Burma, expulsion of the Indians and Chinese has brought economic ruin.

In Indonesia, government contracts would seem the obvious place to start. Adi Sasono, the minister for cooperatives and small- and medium-enterprises, is lobbying for a bigger role for pribumi cooperatives in the vast distribution network. But his proposal would cost 25 trillion rupiah, the respected business magazine SWA pointed out. "This could be a good idea, but it's not realistic," the magazine demurred.

A cheaper, if more disruptive, option is suggested by leaders of the Jakarta-based Islamic Youth Movement. Assistant Secretary-General Bambang Parmadi says his group favours the enforcement of a 1964 law barring the Chinese from trading at the village level, restricting

them to the towns and the cities. "The pribumis lose out in the competition with the Chinese," he says. "If the pribumis only compete among themselves, it's healthier."

The ethnic-Chinese domination of distribution became a particularly sensitive issue following the riots. Based on statements issued by pribumi conglomerate Aburizal Bakrie and others, it was widely reported that goods were scarce because the distribution network had broken down. In early July, President Habibie threatened to replace distributors who had fled unless they returned within two weeks.

On July 14, Steve Sondakh, the pribumi president of the Indonesian Association of Retailers, finally informed Habibie that, in fact, there had been no substantial breakdown in distribution. Goods were scarce due to a decline in production. This was confirmed by Beddu Amang, chairman of the national logistics agency. "The rural Chinese are still there and they're still doing their job," he says. "I don't believe that now there's a crisis in distribution."

While pribumis say they will work with the Chinese to rebuild the economy, they are also eager to seize opportunities to take a bigger slice of the economic pie. "If, at a later time, they don't reopen their stores, we have agreed to take over," says the chairman of Solo's chamber of commerce and industry, Suyatno Luhur Perwiro. "We have to encourage our members to fill the void. This means diversification for us." Suyatno, a pribumi active in the ruling

Golkar party, adds: "Frankly, the Chinese are clever in paying off officials for permits. They use collusion. The Javanese had no chance. Now, the Javanese have to be ready to move in."

Clearly it will take sustained effort to overcome Indonesia's racial divide. The gulf between the two communities is illustrated by Partiman, a pribumi who was left with no work after a mob attacked the Chinese-owned gold shop in Solo where he used to fashion rings.

His modest home, on the outskirts of Solo, is bare. His wife, Umiyati, has sold their furniture, television and even crockery to buy rice and keep three children in school. Partiman says he cannot understand why the ethnic Chinese are not considered pribumi since they were born here. But asked whether he feels sorry for his Chinese employer, he says: "How can I feel pity for him, when my own situation is like this?" In fact, he does not even know his employer

by name. "Usually, with the Chinese, I don't know their names," he replies. "I just call them 'boss.'"

Many Indonesian-Chinese are acutely aware of the hostility they provoke. "If we don't want to be discriminated against, we must not discriminate against other people," says Michael Utama Pernama, an executive at a major candy firm. He advises other ethnic-Chinese businessmen: "Please try to be humane to your maid, to your workers, to your labourers."

Pernama can afford to flee, but he prefers to stay. The same goes for 31-year-old financial consultant Daniel Budiman, who has an MBA from Harvard and a resume that includes Merrill Lynch and Procter & Gamble. "My greatest fear is not being able to live in my own

country," says the Jakarta native. But he quickly adds: "I feel invigorated that we will probably be allowed to participate in all aspects of life in Indonesia." That belief in a better future may ultimately prove to be Indonesia's greatest hope.