Monday, 7 September 2009

The Makings of a Superpower & Indonesia's Dollar Trillions

The Makings of a Superpower & Indonesia's Dollar Trillions

Potentials of a World Superpower: Industrial Nations Will Not “Punish” Indonesia Like Kosovo & Iraq Because Indonesian-owned Financial Assets Propping Up Industrial Economies Will Be In Jeopardy

By Lena Soares & Associates. September 19th., 1999 – updated 28th. January, 2001

There are several reasons why the major industrial nations will hesitate to militarily attack Indonesia, a scenario once touted in the international press by Australian P.M. Howard in the event Indonesia attacks East Timor, a former province, a scenario that happened in Iraq or Kosovo. Nor will nations boycott Indonesian products, withhold loans, or apply other forms of “punishment” towards Indonesia, demanded by foreign protests which Iraq, Iran and Libya are subjected to. Boycots, when it happens, is only a token and usually for their domestic consumption, not the kind that can destroy a country or bring sufferings to its people like in Iraq. [Click here for an example of a British fighter aircraft export scenario]
The industrialized nations will not attack, or retaliate on anyone’s behalf (e.g. a scenario when Iraq attacked its neighbor bringing retaliatory action by the U.S. and other countries known as the Gulf War), because Indonesia has large amounts of collateral in 93 countries, and therefore financial clout.
Even if Indonesia attacks east Timor, which is not likely, and past events showed that Indonesia has not, Indonesians consider the east Timorese as saudara kita or “our relatives”.
The validity of the information contained herein is very much dependent on one’s knowledge base that enables one to verify this information and make sense out of it. If one did not have this knowledge base, this information is far fetched. Neither is this disinformation much like the CIA’s campaigns (Please click here what the Los Angeles Times has to say). If so, what is the motive for this disinformation? What will this achieve? It will not change anything either historically, or the past events recorded in the international media many of which are quoted supporting the information contained herein. [See also British Foreign Office article on British disinformation at the sidebar below]. However, if one were to use one’s common sense and logic, much of this information will make sense even without this knowledge base. Please click here on how these articles were born.
Those With Access to Funds – a combination of present day financial institutions and historical assets of 1,500 years ago
There are two main Indonesian groups which have access to these collaterals and therefore the funds derived from collaterals. The first is the Government which obtain funds from its economy, taxation, etc. and inter-government loans and institutions like the IMF, World Bank and Asian Development Bank (ADB).
The second is the Indonesian private sector. This private sector is divided into two distinct groups. The first group comes from the corrupt, (former president) Soeharto's New-Order supported businesses which still dominate the present economic environment, even during the present Gus Dur's democratically elected presidency. This first group derived most of its funds from government corruption, which in turn is derived from international assistance by international finance institutions like the IMF, World Bank, etc.
The World Bank, whether it was through ineptitude or just plain inexperience, in turn condoned this corruption. Click here for more on this.
The second private group is the low-lying, low-profile royal collateral owners. It is this group, because of ownership and control of their privately owned assets, which has the financial clout. These “royal collaterals” came from former sultanate kingdoms in existence over 1,500 years ago, e.g. the Sriwidjaya Empire (7th. to 13th. centuries based in Palembang, Sumatra, and the 11th. century Majapahit Empire based in west Java which extended throughout all of south east Asia).
The last major economic entity was in cooperation with what was known as The Netherlands East Indies, a Dutch based economic empire after the years 1550 occupying what is now Indonesian territory which existed prior to the establishment of the Indonesian Republic in 1945.
The Dutch entity occupied these areas for about 350 years. They managed to do this through the old “divide & conquer” tactics, playing one kingdom against another. During the 1930s, leaders led by Soekarno and Mohamad Hatta, put the different areas together, and in August 1945 declared the area as the Republic of Indonesia against Dutch wishes.
Spice trading: historically commodities were more valuable than gold
Many of these kingdoms of over 1,000 years ago traded their spices with European and Asian (northern and southern Chinese kingdoms), Japanese, South American and some African kingdoms. Indonesian traders ventured, seeded and left their imprints in many parts of the globe, including South America (Suriname), Africa (Madagascar and South Africa) the Pacific Islands, and New Zealand all the way to Hawaii. Only a few of these countries are named because remnants of the Indonesian Malay language and culture still exist in their present day indigenous societies as proof of former Javanese presence.
Spices during their times were as valuable as and even more valuable than gold. It was these south east Asian kingdoms, especially the 125 sultanates in what is now Indonesia, that introduced coffee, tobacco, chocolate, cocoa, and other spices over the last 2,000 years (hence the phrase a cup of Java [coffee], for example), and introduced rice in the 1600s to what is now the U.S.A. through Madagascar. The Swiss, famous for its chocolate, do not produce this commodity incountry, likewise the Germans with their well-known German coffee and German cigarettes.
These commodities have now become the world’s basic commodities, are internationalized, and are now taken for granted as they are available all over the world. Like noodles that originally came from China and adopted by the Italians as spaghetti their national food, pizza which originally came from Italy and popularized by the Americans through pizza chains like Pizza Hut, and Americans have said that the best apple pie, a traditional American dish, they ever tasted was baked by a non-American in Jakarta, are no longer attributable to any specific nation.
This latter “royal” group of 125 different royal families accumulated collateral in gold bullion and other valuables derived from hundreds of years of foreign spice trading. For hundreds of years both principals and interests accumulated interests over interests, making these assets the largest group of collaterals in the whole world. For details on this, please click here.
The Indonesian royals, provided collateral to Indonesia’s first president Soekarno (referred to as “Soekarno’s gold” in international news media). These collaterals then found its way to Soeharto, the nation’s second president, who with the cooperation of the foreign royals have been feeding the international lending institutions like the IMF, the World Bank, Asian Development Bank, the IGGI and CGI, with collateral to enable the Soeharto New Order government to exist and fund economic development.
Indonesian royals cooperated with their foreign counterparts
These Indonesian royals in cooperation with their foreign royal counterparts have kept their collateral in the vaults of these foreign nations, much like an Indonesian has a $10,000 deposit at Citibank, in New York, or United Overseas Bank in Singapore.
The majority of these depository banks hundreds of years later have now become the central banks of many nations. But the collaterals in the bank and a large amount of them are owned by the original Indonesian depositors, and will remain so as long as that depository bank exists.
But with the Indonesian royals, there is the element of personal relationships with the foreign royals going back over several hundreds of years. As everyone knows a personal relationship going back for hundreds of years, especially one involving large amounts of assets, is quiet a different thing than a strictly business relationship that ties the depositor with Citibank or UOB.

One of these royals, a former kingdom in central Java not named here to keep their identity secure, was asked by Indonesian co-founding father Soekarno in 1935 to assist and back up the revolution and war of independence against the Dutch occupying authorities. This king then asked his counterpart in The Netherlands to release a given amount. The Dutch ruler complied because it did belong to this Javanese king, and provided collateral as per the Javanese king’s request. That 1935 collateral valued in 1997’s terms is the equivalent of US$ 7 trillion, or seven thousand billion dollars.
This $ 7 trillion is also a part of “Soekarno’s Gold”. Soekarno who was in power 20 years, was never known as a corrupter or stole from his people. The new Indonesian Republic was starting and its government did not have any funds to steal from.
Soekarno got his gold not only from the contributions of several Javanese kings, but also from the Arabs, the Chinese in China and Taiwan, and from salvaged sunken Japanese gold shipments during WW II, among other sources. There were historical, and logical, reasons why these leaders gave a part of their gold to Soekarno. The main one was because he was the acknowledged leader and engine of the non-aligned movement. The Japanese intending to make S.E. Asia a Japanese empire, shipped huge amounts of gold bullion (some forcibly taken from mainland China) to several parts of S.E. Asia as part of their plans, but was stopped by the Allies during WW II through bombings in S.E. Asia and later the two atom bombs in Japan. This is recorded in history.
This $ 7 trillion is still “small” compared to this king’s total assets which is not only kept in The Netherlands but also in other countries. And this $ 7 trillion which belongs to one kingdom is still a small part of the overall total of all the other 125 kings’ assets kept in foreign central banks in 93 countries.
This then led to the founding of the Indonesian nation in 1945. Reading about Indonesian history, one will recall what Soekarno had once publicly stated: “We shall set up our own non-aligned United Nations ... ”. Other events of a similar nature were sprinkled throughout his 20-year administration. This included withdrawing Indonesia from the United Nations in the ‘50s and plans to start the non-aligned version of the U.N. which did not materialize.
Mr. Soekarno was a highly intelligent person, appealed to the masses and proved his capability of putting a nation together out of hundreds of diverse cultures and languages, was highly respected by the leaders of the non-aligned nations, which were virtually all the other world nations except the U.S. and western Europe, respected by the Arab nations (especially since Indonesia was the largest Moslem nation), the communist and non-communist Chinese (because the Taiwanese wanted to decrease communist China’s influence in Indonesia while the mainland Chinese wanted to maintain the status quo). Such a person does not publicly proclaim plans without sufficient funding backup.
Why were these collaterals kept abroad?
One main reason was because these Indonesian kingdoms several hundred years ago did not have what we now call banks. While abroad the concept of banking (and insurance, Lloyd’s, which first started at Lloyds Coffee House, the world’s first and oldest insurer, in the City of London), or institutions which can be referred to as a banking and profit-making system were beginning to rise. The kings of yesteryear knew only trading. In addition, the industrial revolution was about to begin, new discoveries were being made, and it was good sense to keep their collaterals where these collaterals were “manufactured” as bullion. Besides, the technology of producing highly refined gold and platinum ingots was available only in those countries, and not in what was to be the future republic of Indonesia.
It was ironic that it was these same collateral that provided funds that led to the eventual war in the early 1940s and declaration of independence on August 17th. 1945 and expulsion and acceptance of Indonesian independence by the Dutch authorities in 1949.
It was also ironic that while the Soeharto government took over east Timor with the prodding and consent of the U.S. because the communist leaning Fretilin was gaining ground, Portugal broke off diplomatic relations with Indonesia. But royalty wise, the Indonesian and Portuguese royalty still kept in touch and, in fact, Portuguese trustees (persons who manage collateral in international prime banks) co-managed Indonesian owned royal collaterals on behalf of their Indonesian owners even during the most bitter mud slinging match between Indonesia and Portugal. Therefore, what appears in international media is not necessarily the truth as far as Portuguese and Indonesians are concerned, or is the whole story of a deeper relations between these two peoples.
While most present-day nations no longer have kings and queens like Indonesia, Germany, France, Portugal, China, and Russia, but these royal descendants still exist to this present day.
How did these collaterals and its resulting funding end up in the hands of Soeharto?
It is also these Indonesian royal collaterals that inadvertently fed the corruption rampant during Soeharto’s rule from 1966 to 1998. It was also these funds that also was the source of western governments’ contention with the Indonesian government under Soeharto, although the World Bank exacerbated these corruptions through its close relations with the Soeharto government. Please click here for more.
How Soeharto attempted to claim assets
Government officials, especially on the higher up levels, know of the existence of these assets and are therefore shamelessly trying to get as much of it as possible with the attitude that “it’s our money anyway”. This was once expressed in the mass media by the then Bank Indonesia Central Bank governor in 1997, when the World Bank criticized the Indonesian government for its financial performance which, in the eyes of assets owners is not justified.
The attempt to change ownerships of assets and to give it a semblance of legality, was displayed in the appointment of Minister of Information, Harmoko, by then president Soeharto through the formation of a new ministerial post called “Minister for Special Affairs” (Menteri Khusus) but was never publicly revealed what these special duties were. Mrs. Harmoko is reputedly related to the late Mrs. Tien Soeharto and as such was a trusted member of the Soeharto family. During that period of Indonesian political development, no one dared question Soeharto's decisions, unlike present political conditions where they now caricature Gus Dur or any political figure. No one at present is immune from the wrath of the press.
This Menteri Khusus post lasted less than a year, everyone was in the dark on the purpose of this post, and Harmoko was then re-appointed as House Speaker until Soeharto was forced to resign.
The duties and intent of the Menteri Khusus, although never stated in public, were to claim some of these royal assets on behalf of the then Soeharto government as “its legitimate owner ”. Soeharto proclaiming himself as representing the people felt he had the rights to them.
Soeharto becomes more and more removed from realities as years went by
Mr. Soeharto and his presidential administration seem to be so removed from the realities of financial transactions, that his aides although highly educated in U.S. and European universities and experienced with running a government, do not realize that these assets are privately owned. It is no different than a person who owns a gold watch in his bank vault. No amount of presidential authority can dislodge this gold watch from that bank vault, unless the country had become completely lawless.
As government they legitimized themselves as representing the people. This team, some of them members in Indonesia’s presently elected parliamentarians of October 1999, then went to several foreign banks, notably in Switzerland, to claim these assets. These officials were saved from arrest by the authorities there because of the diplomatic immunity which these officials enjoyed.
Anyone going to these foreign bankers, or to any bank in Indonesia for that matter, claiming rights over assets without being registered in banks’ files, or do not carry a confirmed power of attorney from its owner(s), face a criminal charges and arrest, just as if someone brings someone else’s $10,000 deposit certificate and claims ownership or rights to withdraw this $10,000.
If they bring an original, without the authority of a power of attorney from its owner, they face fraud and theft charges. If they bring a copy, copies are not legitimate bank instruments, and their bringing in a copy without the owner’s written authority can be liability to other criminal charges.
In 1997 alone, some 560 persons went abroad to claim some of the known assets, 94 of them never heard of again, according to those who monitor these events, many from Indonesian diplomatic missions abroad.
Indonesian citizens, and less so reporters who have no direct rights, do not have access to its details. Like in any banking scenario, bankers will not divulge the existence of these assets - and even less likely to divulge the names and owners of these assets, unless one is himself is an “owner” and is registered in the files of these prime banks and western nations’ central banks. Only a registered owner will have access, and information, to these assets–and only to his assets, not assets belonging to other Indonesians.
The Myth of Chinese Economic Domination
The economic sector grew an average of some 8% annually for about 2 decades. But contrary to belief, the Indonesian economic sector was not dominated by the private Chinese sector; nor did Chinese money and investments did anything for the country.
What was seen was “the surface” of economic growth. Not “where” and “how” did this investment and the resulting growth came from. This Chinese minority is made up of less than 5%, or less than 10 million people out of the overall population of 215 million people.
Furthermore, the nation’s economic sector – like all national economic sectors – is made up of two sectors, the private and the public (government) sectors. The Chinese minority did not dominate the private and government sectors.
“Chinese domination” was domination of a part of the private sector, that is the trading and distribution sectors. Not all private sectors, and certainly not the government or public sector.
This was a misconception touted, and held as a belief, in the international press, and by many “experts” in many countries including Singapore, Hong Kong, Australia, and even Indonesian economic “experts” who, many times, playback the words of their foreign colleagues because of the tendency of some Indonesians who think that because it is touted by foreigners, it should be true.
The “private distribution sector” is small compared to the overall public sector – unlike the U.S. private and distribution sectors, which provides the U.S. government’s economic clout through taxation. The public sector is telecommunications, power, fuels, transportation, banking, weapons, taxation, utilities and other sectors that are dominated by dozens of government monopolies. Their total turnover is in the hundreds of billions.
The “how” and “where” of the trading and distribution sectors cannot exist without the part of the private and public sector which is owned by the indigenous members of society. For example, the telecommunications equipment distribution, or electric power and its distribution, cannot exist without the operating companies which are all owned by the indigenous members of society and government.
People see the handphone sets carried by everyone (distributed by the Chinese trading sector) and assume because they are mainly (and visually) sold by Chinese businesses the Chinese dominance is unquestionable. But not realizing that all those handphones do not work without the half a dozen systems that make them work which are owned by the private indigenous entities and the government.
There are 3 GSM nationwide systems, 2 CDMAs and 3 AMPS systems in Java, Bali, Sulawesi and Sumatra, and 1 GSM combined with satellite phone, the first in the world, that covers all of S.E. Asia, part of northern Australia, all the way north towards China, Japan, and northwest towards the Middle East. When a user is in a noncoms coverage area (in the middle of the Indian Ocean, for example), the system automatically transfer the signal into the satellite. When the subscriber enters into a GSM area in Beijing, China, for example, the subscriber’s handphone automatically enters into GSM mode where the satellite operator, Pacific Satellite Nusantara, an Indonesian owned joint venture company with Hughes, the maker of the satellite system, transfers the signal through the Chinese system where PSN has a roaming agreement. Signal transfer from satellite to GSM mode and vice versa is seamless.
Besides, the sole agencies of the larger trademarks like Motorola, Siemens, Philips and Nokia, categorized as the trading and distribution sectors, are held by the indigenous members of society in cooperation with their factories. The total handheld telephone lines is close to some 2.5 million at the end of 2000 (estimated to exceed 3 million to 4 million by the year 2001. The total handphones in circulation far exceeds that because people have more than one handphone for the same number (by transfering the SIM card into another phone).
The income from handphone sales is small compared to the overall income received by the operators/ system providers. The systems operators invest tens and even hundreds of millions of dollars, while the investments in the sales of handphones do not reach tens of millions of dollars.
But their distributions (dealers with their sales and service outlets throughout the nation) are determined by the indigenous members of society as holders of the sole agencies and given in the majority to the minority Chinese business community.
This type of arrangement is representative of how the whole Chinese business community operates, be this the distribution of handphones, or the much larger multi-million (and multi billion) conglomerates.
No large business in whatever field can exist without the participation of the exclusive Soeharto family. Or without the participation of those members of indigenous society (corrupt government officials) who are in the position to give the business operating licenses.
It was the indegenous members of society who awarded all the licenses, be they multi-billion conglomerates or pop-and-mom businesses. Not the Chinese minority.
But the players in the economy who are members of the indigenous society and who determine who gets what, specifically during the anti Chinese riots in 1998 when several malls and hundreds of Chinese businesses were burnt by elements who were paid to create chaos, were beginning to ask themselves when sales were slowing down: who is dominating who? “If these guys (their distributors and service agents) do not show up for work, we’ll give the dealerships to someone else!” And there would be many takers.
Facts like these are disregarded by the analysts who generally sit at a desk, skim over the surface of business realities, and view the economy from afar. They are not the players within the economy, were not those who had to participate in these activities, did not have to go through the do or die landmines of busines realities in Indonesia, or make choices – many of which they would rather not but many times had to, otherwise they would be killed businesswise. The perspectives from those in the ground playing the field, and experiencing the game that determined the “true Indonesian economy” is vastly different than those at the sidelines. Many times these analysts, including Indonesian non-players, misinterpret the events that are taking place in the field. It is somewhat similar to orally describe to a first timer how to drive a car, and when he sits at the wheel, the experience of actually driving the car is vastly different than just hearing about it.
Telecommunications is de jure no longer a monopoly as of September 8th., 2000, but by de facto government is still a player and operator, and is still the sole determinator of the tarif structure.
While the economy did lapse and slowed down (some people say it stopped) when there were anti Chinese sentiments in 1998, this “economy” was mainly the economics of distribution of goods. It was more difficult to find paint, handphones, automobile spareparts, or other daily necessities for example. But the phone, electric and other systems that enabled one to live and function, continued to work.
Food distribution or the distribution of the 9 basic food commodities (sugar, rice, etc.), continued because it was controlled by the government. When these commodities were difficult to find because their distribution was not functioning, the government imported and distributed them direct without using the traditional distribution infrastructure, negating difficulties that ensued during the riots.
The food distribution sector, also dominated by the Chinese, was the center of predatory practices, inflated prices and bane of the small man. For example, oranges from South Africa and apples from Washington state, U.S.A., are cheaper than similar locally produced fruits. But the typical Chinese distributor cannot be blamed for these predatory practices because the indegenous officials giving them their business licenses always insisted on a cut of their profits, aritificially inflating prices.
In recognition of the minority Chinese community, president Abdurrahman allowed Chinese writings to appear. Now we have Chinese publications and Chinese television programs.
Why is Chinese economic domination a myth?
The myth developed over the 32 years of Soeharto’s administration because his government gave preferences to a select members of the Chinese community. It did not give all members of the Chinese community preferences.
These select members of the Chinese community were relatives and close friends of the Soeharto family. Mr. Soeharto is reputedly half Chinese, fathered by a Mr. Liem senior who came from mainland China, and the union of Javanese woman who worked in his household staff (some say “the maid”).
Mr. Liem senior had a younger brother who was the father of Mr. Sudono Salim, the Indonesian name for Mr. Liem Siou Liong, making the latter Mr. Soeharto’s first cousin.
The select members of this Chinese community extends to Soeharto’s first cousins, down on to second, third cousins, and relatives of cousins, and on down to friends of the immediate family and friends of their cousins.
The younger Mr. Liem until 1999 previously owned the all encompassing Astra Group of companies (assemblers and distributors for Toyota, BMW, Peugeot [but not necessarily the sole agents, e.g. the BMW sole agency is held by another indigenous company], and several other large brand names), while his other relative, Mr. Willem Suryadjaya, held Xerox as Astra Xerox. This conglomeration is just a tip of the iceberg. These and other major Indonesian companies have now being taken over by the government and its assets redistributed by tender to various members of society because of huge debts owed to the government banks.
To say the Chinese dominated a part private economic sector is incorrect; but to say the Soeharto Chinese associates dominated that part of the private economic sectors was more correct.
The indigenous members of society venting their anger during the 1998 riots on the ordinary Chinese was misplaced. Most of these Chinese members of the community did not corrupt, steal or did anything wrong. They were ordinary people like everyone else, minding their own business, and not even knowing those Chinese who know and associate with the Soeharto family. But they became the brunt of anti Chinese demonstrations when it was revealed that “Chinese” stole from the country.
There are Chinese beggars, and Chinese living in slums in different parts of the country just like the other members of the community. The percentage Chinese well to do and who are poor, compared to other members of society, is about equal (i.e. there are less Chinese beggars, and less Chinesewell-to-do because the number of Chinese population is less). As per the Javanese low profile nature, and the low profile adopted by the rich government officials who are not supposed to be wealthy, we have a scenario where the indegenous members of society do not show off their wealth.
Banking as the vehicle for theft
The vehicle for this so-called Chinese economic domination of the economy was through the licensing of hundreds of private banks, mainly owned by the Chinese. These banks in turn funded thousands of companies, mainly Chinese owned. The funding of these banks to associated companies that also own the banks violated the laws on banking. In the meanwhile inspectors from the Bank Indonesia central bank, the Department of Finance and related insitutions that are suppose to guard against these malpractices closed an eye.
While there are many more privately owned Chinese banks than indigenous or publicly (state) owned banks which shot up in numbers during the 1988 period onwards, the reality is the government or the public sector funded these banks. When the economic crises loomed and became part of the disastrous economic reality, the government had to bail out these private Chinese banks.
66 banks that were unsalvageable were closed down. 13 others too big to be shut down were nationalized. These were (BCA [which claims an unbelievable 250,000 new accounts each day as of December 2000 that new BCA customers had to increase their initial account opening deposit from the traditional Rp 50,000 or US$ 5.25 to Rp 500,000]; Bank Danamon, Bank Lippo [parent of Bank of China in Hong Kong], Bank Niaga [indigenously owned], Bank Internasional Indonesia [BII], among others) were bailed out.
The assets, debts and obligations of these closed and seized private banks were then taken over by the government because these Chinese banks were funded with public money through a mechanism called bank liquidity credit funded by the Bank Indonesia (BI) central bank. An agency called the Indonesian Bank Restructuring Agency (IBRA) was then set up to deal with this particular problem.
As of December, 2000, none of the formerly owned Chinese banks that mushroomed during the Soeharto regime, specifically during the periods in 1988 until 1997 when anyone can set up banks, were no longer owned by their original owners. They failed to repay the debts to BI they accumulated, totaling some say up to US$ 150 billion.
Many of these bankers had absconded with their client’s money who put them in foreign accounts in Singapore, Hong Kong, Taiwan, Australia, China, London and the U.S.A. In the meanwhile the Indonesian government was left holding the bag and obligated to repay the deposits of their public.
The 1998-2000 economic crises, placed 132 of their owners under criminal investigation and placing many of them under a foreign travel ban. Some of them got away, e.g. the owner of Bank Harapan Santoso (BHS Bank) who is now under arrest in Australia.
These funds also became “seed money” which funded other loans, many procured internationally, and others through joint ventures with foreign multi-nationals. A startup company does this by providing this seed money anywhere from 5% to 30% to start a national or international based joint venture, the remaining 95% to 65% provided by banks or multi nationals based abroad.
Without any exception, all the banks gave birth to associated and subsidiary companies varying from 5 to over 265 companies per bank. In addition to their own subsidiaries, they financed other Chinese businesses. All of them violated the laws of a banks’ legal lending limit, a basis for the government’s investigation and criminal indictments against bank owners.
In total, these Chinese owned banks financed literally thousands of businesses ranging from small mom & pop ones to international conglomerates where many of them dominate and took over foreign companies all over the world and, as reported in U.S. news media, also sponsored a part of Bill Clinton’s re-election campaign funding through the son of Lippo’s group chairman.
Several of these multi-nationals are now stuck with this scenario. They, too, are demanding the Indonesian government be responsible for the acquired debts. The American companies are using the U.S. government to pressure the Indonesian government. The IMF has now jumped into the bandwagon, and they, too, are dictating terms and conditions prior to the release of their scheduled loans to assist the nation in this time of economic crises. For an on the ground layman’s perspective how this minority was able to dominate the private sector please click here.
While the hundreds of companies, many owned by the Chinese minority funded by their recently founded banks – which were in turn funded by the Bank Indonesia central bank using public funds – go around trumpeting they are wealthy, and the Indonesian nation cannot survive without them because they are the pillars of the nation’s economy.
This myth is then adopted by everyone in the Asian financial circles, and eventually everyone from TV commentators, the press and the public, including the Indonesian public, specifically Mr. B.J. Habibie Indonesia’s third president, and now incumbent president Abdurrahman Wahid, believed in this myth.
The proliferation of Chinese banks from less than 1 dozen to over 200 banks was possible because the corrupt Soeharto bank officials, led by the Bank Indonesia central bank and the 7 state-owned banks fed them with funds and allowed them to proliferate.
The motive for this was either kickbacks, or a minority shareholding, usually in the names of either government bank officials’ sons, daughters, wives, or other close trusted relatives, even their mistresses. In other cases, a phone call from the Soeharto presidential palace or a hand scribbled note from persons known to be close to the palace, gave the banking license. These indigenous officials preferred to deal with the Chinese because over the years, the Chinese minority was traditionally close-mouthed about their business dealings. Officials can count on them to keep their mouths shut in the event things went wrong.
But the ongoing televised news, with the evidence, facts and figures supported by either national or internationally well known public accounting firm figures aired over TV, published in the news media, the travel ban on 132 bank executives, and the arrest or indictment of these bankers destroyed this myth.
These facts were also publicly televised in Parliament for hours and days on end by no less than a Chinese, Kwik Kian Gie, who was then the Coordinating Minister for Economy & Finance. (A coordinating minister is a senior minister who oversees other ministries and their cabinet ministers under his category of duty, e.g. the Finance, Industry Ministries, etc.).
He named names, named companies, which company owed how much, what bank owners owned which companies, which national and international public accounting firms provided what figures, and so on for hours on end lasting several days. Figures were provided by the State Audit Board, the Ministerial Audit Board of the relevant ministries, the Inspector General Office of the several ministries concerned, and several national and well known international accounting firms.
These facts and figures were very revealing, and displayed how deep the roots of corruption permeated all layers of central government, down to the provincial, and even village levels which concerned mainly the confiscation of huge tracts of land all over the country for industries, and even tracts of land for useless golf and luxurious hotels, while the local populace were simmering with hate and revenge for the unlawful confiscation of their lands, 90% of them unpaid for.
One of the major causes of people’s unhappiness in the countryside
Indonesia is basically an agricultural country. The majority of its people till the land and are dependent on properties handed down through generations for their daily needs. If the major cities experience an economic crises, the coutryside is not too affected by it. This is the norm, and was recently established as a fact whenever the economic down turn in cities shot up to 16 to 20%, the countryside remained at a calm 3 to 5%. When an industrial concern decided to set up a large business, the land would be purchased from the local populace. Many times, the local population was forced to sell their land, while income from it would not be enough to continue their modest way of life. Hence, they head for the cities causing problems of unemployment for the cities, and problems for these unskilled workers.
It was the Soeharto cronies’ tactics to offer to purchase a tract of land. 10% of the agreed price was paid with the intent to pay for the remaining 90%. The owner submits the original land papers to the notary for transfer of ownership. When ownership was transferred and when the time came to pay for the rest, it was not paid. As notary publics were official government witnesses acting on behalf of the government, such notary publics were forced to comply with government, lest they loose their license. There is no legal recourse as these people do not have the funds to legally battle the better-off opponents. See the giant Caltex oil company story at the sidebar.
If the typical villager protests (See Caltex side bar story), he is arrested not by the police but by the military for causing a disturbance (e.g. protesting about land which “no longer belonged to him”). While this constitute abuse by government at the provincial or village levels, to the villager the government deprived him of what was rightfully his.
Many areas in Jakarta, e.g. the Central Business District (CBD), the Soekarno-Hatta airport, the Taman Mini Indonesia Indah (TMII), parts of Jalan Sudirman (the main artery between central Jakarta and the south Jakarta Kebayoran suburbs), Soeharto’s ranch in Bogor, west Java, and many other areas of conflict throughout the country were subjected to these abuses.
Buying property in these areas in Jakarta, or other properties that belonged to Soeharto and his business associates anywhere in the country, means chancing the risk of a legal battle with former land owners. Former landowners are now in legal battles with multi-national companies (whose property acquisitions were previously sponsored by Soeharto’s people), with government institutions including the airforce (because of forced appropriation), and private companies which were previously owned by the Soeharto circle.
The people in villages are now demanding justice, and are no longer afraid against whom they confront, including the previously feared armed services. When they are advised to legally pursue the matter, many of them take this advice, but more often they know it is an uphill battle. They are aware that they will loose even before they begin because they know the legal system is corrupt. Their recourse, after years of frustration, and even useless spending on legal battles of trying to recover their land (which had become a golf course, a luxurious resort hotel, or other businesses), end many times by burning their occupier’s vehicles, buildings, even killing armed services personnel, during the last 2 years. See side bar article
It was this abuse of power and injustice, fueld either by unfair land appropriations and other reasons, and mostly solved by sending in armed personnel in Indonesian provinces in Irian (Papua), Kalimantan and other areas which caused demands for independence from the Indonesian nation.
Mr. Kwik revealed that if the legal authorities did their work properly, “upwards of 85% of all government civil servants, and 75% of all business conglomerates would end up in jail. “If this happened,” he said in the televised Parliamentary hearings, “there will be no one left to run the country.” (75% business conglomerates he referred to do not include the ordinary, or mom-and-pop, businesses).
Mr. Kwik was later fired by President Abdurrahman Wahid because, as some people say, he revealed too many things, too soon, and to touching individuals who have contributed to Abdurrahman’s presidency.
In the meanwhile the former Habibie and present Gus Dur governments are trying to persuade “foreign investors” to return to Indonesia, not realizing that some 75% of these “foreign investors” are actually Indonesian-owned, many funded by corrupted funds sourced from Indonesian officials, others funded by stolen money provided by owners of these banks all disguised as foreign owned, and managed by Indonesian paid foreign employees.
The nation’s presidents did not come from the business sector, nor had the experience the businessman would have to go through to get to the top. Former president Habibie as an aircraft engineer, and as the former president of the state IPTN aircraft manufacturing company, a presidential appointment, was accused in Parliament of squandering billions of dollars, a demonstration of his lack of business expertise. Therefore, these presidents could not be blamed if they are ignorant of the nuances of business in general, particularly Indonesian business.
Running the Presidency into the ground
During his one year period, Indonesia’s fourth president Gus Dur (since the nation’s independence in 1945) showed how not to run a presidency and drive it to the ground. What had become a hope for 215 million Indonesians when students forced Soeharto from office in 1998, had suddenly become a disaster.
Not only is Gus Dur now involved in several alleged financial scandals, e.g. Bulogate, Bruneigate, Aryantigate (a reference to his alleged mistress), Baligate and Tommygate (the disappearance of former president Soeharto’s son when the Supreme Court declared Tommy guilty of a land scam against the state with allegations that Mr. Wahid received Rp 1 trillion [equivalent to US$ 110 million] when Wahid and Tommy secretly met in the Borobudur 5-star hotel). Abdurrahman Wahid is also suspected of other not so well known scandals.
Mr. Abdurrahman jumps from one publicly expressed contradiction to another, and denies he ever made them although publicly shown video recordings showed that he did make those statements. He insults the intelligence of the common people, lost their support, and even the support of his own Islamic party. Lately he insulted his hosts in Singapore, while in Singapore, by threatening to cut off their water supply which is just a bluff because Indonesia has not even installed the system yet, and even made noises to withdraw from the 30-year old ASEAN (Association of South East Asian Nations) of which Indonesia is a pillar and co-founding member.
Mr. Abdurrahman stated publicly that the country’s 3 top private debtors and conglomerate owners who owed several tens of billions of dollars, be “exempt” from criminal investigation, at least for the next two years to allow them “the time to run their companies because they contributed to Indonesia’s exports.
Needless to say, this revealed how naive, and how unqualified he is as the Indonesian president on the workings of businesses which is an important factor in contributing to a nation’s prosperity.
This brought down harsh criticisms from all layers of society and Parliament on president Abdurrahman Wahid, and their suspicions that he got paid off. This added ammunition to his detractors to bring impeachment proceedings against him. A special committee or Pansus, beginning January 2001 is being formulated to investigate several of the scandals that has been attributed to him.
He brings shame and humiliation to the Indonesian people because separatist movements are increasing, the economy is becoming worse, publicly supports 3 conglomerate owners under criminal indictment for stealing billions of dollars, while none of the domestic problems are being solved because he prefers to go adventuring abroad with the reasoning that he “is promoting foreign investments abroad”. After all his adventuring, foreign investments did not increase; in fact, they even decreased, because investors are scared that the law would never be upheld as long as Abdurrahman is still president and as long as he publicly protects indicted criminals.
A president should lead,” commented a sidewalk cigarette vendor, “not be led” in reference to hand holding by his military adjutants because of Mr. Wahid’s near total blindness. “Surely we must have more than enough qualified people in this country of 200-million plus people,” commented another.
This also placed Bank Governor, Syahril Sabirin, under a 5 month criminal detention and a criminal suspect in the Bank Bali scandal since October, 2000. President Abdurrahman had an alleged disagreement with Syahril before his indictment, that is, resign as bank governor, be assigned as ambassador, or be indicted for criminal charges, implying to the people that an ambassadorial posting is no longer honourable, but has become a trash can.
(Bank Governor Sabirin refused to resign because Parliament now has the authority to appoint the Bank Governor. It is no longer the prerogative of the president. Sabirin took over what was a corrupt and predatory Bank Indonesia central bank system; he did not cause it. Mr. Sabirin was initially appointed governor when Soeharto was still president).
Foreign Investments Owned By Foreigners Did NOT Develop the country
It was not foreign investors which invested in the country, but “foreign corporations” owned by Indonesians, or their foreign proxies.
It is a public secret among experienced top level business circles who are players in top level businesses (and therefore are aware of what is going on as they themselves participate in these events) that whenever a foreign corporation invests in Indonesia, including the well known global corporations, the funding is actually owned by Indonesians.
How was this done? Instead of investing in the New York or London Stock Exchanges, for example, funds originating from corruption are reinvested back into Indonesia, disguised as “foreign investments” through foreign based proxies, either individuals or corporations.
As an example, a well-known foreign construction firm (so well known, in fact, that anybody in large construction businesses have heard of them) is approached and given promises of lucrative contracts in Indonesia.
This company, let us say, was reluctant to invest. But this major multi-national company is chosen because its size and reputation necessitates their participation, as it is in line with a major multi-million and multi-billion project to be developed.
The Indonesian entity provides this investment funds in the name of that foreign corporation. It is a safe way to hide ill gotten funds.
The corporate recipient is not a nation’s department of justice, or a morality agency, so is not too particular where these funds come from. Most corporations stop at narcotic sourced funding. Additional investment funds enhances its image, so as far as that recipient is concerned it is to their benefit. There are variations to this, but overall this is to the benefit of the recipient and its shareholders. Also, it is an opportunity to be “sponsored” by the players of Indonesian business society who can get them all the things they need, saving them time and effort.
The foreign corporation, with the cooperation of his Indonesian client, is promised “special treatments” such as exclusivity (in reality an illegal monopoly), and other promises which would be too good to miss. The Indonesian entity with access to corrupted and stolen funds has certainly the access to provide these special incentives.
The foreign corporation invests, but is not actually using its own funds sourced from its home shareholders. To make this set up legal in the eyes of the foreign government where this company is based, it is not a problem for their lawyers to make the necessary arrangements, for example, with the issuance of special shares to cater to this scenario.
Or with the formation of a local Indonesian-based company, using the foreign multinational's name under a foreign PMA investment, but the share ownership is majority-owned by either a foreign sounding name (who is actually a proxy of the Indonesian entity), or directly owned by an Indonesian name. This Indonesian entity is obviously unknown and unheard of, but is in reality a relative of that Indonesian entity who arranged the whole scenario. The whole scenario was in turn legally arranged by smart, highly paid foreign multi national lawyers and their Indonesian counterparts.
Money buys the best multi-national lawyers
Bear in mind also that individuals with hundreds of millions and billions of dollars have the same capacity as the next Mafia, or narcotics boss, to hire the best multi-national lawyers money can buy who can show their Indonesian clients all the international financial and corporate tricks in the book. This includes the buying of existing banks in tax free areas in the western and eastern hemispheres, including the better known areas like Switzerland, England and the U.S.A.
Many private Indonesian entities have done this, including the Bank Indonesia, which purchased the Andover Bank in The Netherlands (but are now trying to sell it).
Large ill gotten funds can be deposited in unknown banks, especially in tax free havens where reporting to the authorities is not required, and where international authorities or national governments have a hard time finding and examining these deposits. The Union Bank of Switzerland, UBS now one of the largest world prime banks, in 1950 was a small one room bank. But Soekarno changed all that when he deposited huge amounts of collateral in their bank.
Indeed, there are foreign investors, 100% owned by foreign entities. But by and large out of a total of 100%, it is safe to say that at least 75% of all total foreign investments are owned by Indonesians, or a Mr. John Mcarthy (or any other foreign sounding name), with a fancy title of chairman of the board of a New York corporation, for example, but who is actually an employee of an Indonesian entity.
Whenever necessary for the convenience of the funds owner, a foreign based company can be bought, its management retained, but ownership has changed without awareness of the public.
If this company is listed in a stock exchange, the public is bought off, listing is withdrawn, and this company is no longer required to divulge its activities. But in the main, funders wo want to hide their ill gotten funds, do not attract attention by going through this method.
The investments in P.T. Telkom Indonesia (the national telecoms monopoly) by “foreign” entities which invest through the NYSE and London Stock Exchange, for example, are in reality funded by Indonesian investors through foreign proxies. The majority of these funds came from corrupted funds obtained through the IMF, the World Bank and other international institutions.
Facts available in the financial news show the Indonesian private sector through both PMA foreign and PMDN domestic ventures coordinated by the BKPM Investment Board, invest anywhere from US$20 billion to $40 billion annually for the last two decades, US$ 33 billion in 1997-98 and $ 13 billion in 1998-99 a drastic reduction because of the Asian economic crisis which hit Indonesia the hardest.
Almost always, Indonesian domestic PMDN investors (domestic-owned funds sourced incountry or abroad) are the majority investors, sometimes up to 90% of both PMA and PMDN annual investment, but usually averaging 60% over the decades.
Hence, an annual investment of both PMA and PMDN of US$ 30 billion, let us say, 60% of the total or $ 18 billion is domestically owned, while the remaining $12 billion is foreign sourced, or owned by foreign entities. Although it is “foreign owned”, it is estimated that some 75% of this $12 billion, or $9 billion is actually owned by Indonesians but represented through foreign proxies.
It is incorrect foreign owned funds built Indonesia in 1966 when Soeharto took over to what it is today.
In addition, there are investments by local businesses not registered using the domestic BKPM Investment Board averaging 30% to 60% of a particular annual PMDN and PMA total. This is because these particular group of investors do not receive any significant benefits under either domestic or foreign BKPM Investment Board facilities, for example tax or equipment exemptions, and therefore do not register their investments in either the domestic or foreign BKPM. These non-BKPM investments are the formation of new companies all over the country represented as an ordinary P.T. (perusahaan terbatas or limited company).
Where do these funds come from? Definitely from international funders and bankers. But international funders almost always require bankable collateral. The key word here is “bankable” collateral. The other source is seed money described above, sourced from corrupted or stolen funds.
These collaterals, owned by members of the royal families, are comprised of gold and platinum ingots, some diamonds and jade. They are ‘bankable’ collateral, and are kept in the vaults of government central banks in 93 countries and 113 major prime banks described above.
They have nothing to do with corrupted or stolen funds as they were in existence several hundred years ago. But are in fact collateral which provided the funds given by the international lending agencies (IMF, the World Bank, etc.) to the Indonesian government within their loan programs which are then corrupted by members of Soeharto’s government over the past 32 years.
Those authorized with its access in the international prime banks are registered in these prime banks.
Note also that those “with access” are not necessarily “the owners” of these assets. This situation is similar to a depositor who owns a $10,000 deposit, but the original $10,000 certificate is held by someone else, and this someone else has the relevant documentation authorizing him to hold the original documentation (otherwise possession without the relevant documentation can be construed as theft).
To be able to liquidate the principal, or to liquidate its interests, or to use these assets as a collateral in a loan, or to use either the collateral or interests in a hi-yield and roll over investment program, both the holder of the original certificate and its registered owner must appear at the bank where this deposit is held.
This is further complicated because many of these assets are owned by now deceased people, their descendants do not always have easy access to their inheritance. The banks (many in Switzerland) holding these assets are also not making life easy for these descendants. For descendants to have access to their inheritance, they must have their names, their signatures, frontal and side photos, finger and palm prints registered at the depository bank where their inheritance is located. If the original assets owner neglected to fulfill these conditions, his inheritors might as well forget that such an inheritance ever existed. As long as these bank documentation – as determined by that particular bank – are not available in their bank files, no amount of notarized documentation or birth certificates will release those assets.
Note, too, that Mr. Soeharto once went to a 3-day trip in Germany with his protégé Dr. B.J. Habibie, ostensibly for a medical checkup. Unknown to the public, however, the Swiss embassy in Jakarta also issued visas for Mr. Soeharto, all his children and all his grandchildren and that during this particular period the Soeharto family all journeyed to Switzerland. Why? To fulfill these banking conditions, because no one takes all his descendants for a medical checkup.
The longer these banks hold on to these assets, the better off they are. This is the fact of life in banking: a bonus for the bank when a substantial deposit is not claimed by its owners or descendants. Such a bank is in no hurry to search for its inheritors and rightful owners.
Coal, oil, gold or forestry products in the ground are not bankable. It is not within the scope of this page to dwell into this, but suffice it to say private Indonesian investors are getting funding from somewhere, and had this ability at least for the last 25 years enabling it to develop Indonesia into one of the world’s fastest growing economy after China. The Government was merely a vehicle to maintain control and coordinate activities. Government was not the investor, with the exception of infrastructures where they got funding from taxes and inter-government loans.
In spite of the east Timorese and other crisis which evoked protests from the international community to withhold funding to Indonesia, international bankers who hold private bankable collateral on behalf of their Indonesian owners, are still pouring in funds for its Indonesian owners, a lot of this is kept abroad.
As these funds are derived from privately owned collaterals, they have nothing at all to do with a government’s performance. It is no different than one’s own personal $10,000 deposit which is not subject to government performance, and one can do anything as the owner pleases – keep it for himself, or contribute to his government, or pay off soldiers of fortune to create havoc – except that this deposit is much larger and can sway and had become a part of the economies of the industrialized nations. It is also fortunate that the owners of these huge collaterals – like the typical owner of the $10,000 – do not choose to buy weapons as it is their right to do with their private funds. Acknowledged by the IMF
Acknowledging the existence of these vast amounts of assets belonging to Indonesia, IMF’s head, Micheal Camdessus, in a press briefing in Washington, D.C. (when the value of the rupiah plummeted from Rp 2,000 to the U.S. dollar down to Rp 18,000) said: bilateral donors Australia, China, Hong Kong, Japan, Malaysia, Singapore and the U.S.A. in addition to the IMF, the World Bank, the Asian Development Bank, intend to correct “the excessive depreciation of the Rupiah, and they would act again if needed”.
In addition, he stated, Indonesia is “to use its own substantial external assets”. (Italics were his exact words, quoted from the IMF managing director in press briefings and other agency reports dated 31st. October, 1st. November, and 10th. November, 1997).
“Substantial” in IMF speak is not tens or even hundreds of billions of dollars because Indonesia in 1991 already owed more than US$ 100 billion, but more in the region of trillions of dollars. Not only that, it is doubtful whether the IMF and other multi-national lending institutions are aware of the total of all Indonesian-owned assets, because many of these assets are in countries where it is not a member of the IMF, e.g. Libya and Iraq.
The World Bank, as its name states, is exactly that: a bank, and is a repository for funds and collateral. The IMF is exactly that: a funds manager, responsible for the distribution of funds on behalf of recipients. The IMF is dominated by the U.S. and there are countries which have negative sentiments towards the U.S. and opt to stay away from U.S.-dominated institutions. For more on the World Bank and IMF, please click here.
Individuals with a deposit of more than US$ 1 billion may open an account in these two institutions, and just like in any banking institution, must have a sponsor to have his account opened.
Difference Between ‘government’ and ‘People’ of Indonesia
Indonesia, more accurately the 215 million Indonesian people – not Government which is made up only 5 million – own these “substantial” assets (represented by the various kingdoms). This differentiates between “government” and “people” where the individuals in the former change, while in the latter it does not.
Owners these multi-billion assets are low profile
As the majority of these huge (substantial) assets are owned by the Javanese, and the Javanese by nature are low profile, modest and not trumpeting their clout towards their own kind and other members of Indonesian society – and even less so in the international financial scene – it is no surprise, therefore, that this is news for the majority of the international community.
However, thousands of expatriate financial lawyers, bankers, financial consultants, gold buyers, funders from all the industrialized nations, even from countries with economic difficulties like Cambodia for example, many representing known bona fide entities, and plain businessmen with no specific business associations, are aware of the existence of these assets.
Some of them give erroneous information, e.g. these assets are controlled by a specific individual from Cambodia; or only a handful hold the “key” to these assets. No specific individual holds the key because the playing field is much larger than they would ever imagine. If there are individuals who hold the key, there are approximately a total of 97 individuals. But these 97 people are associated with Soekarno’s gold; not with the assets owned by other kingdoms.
These expatriates have descended for up 2 to 3 months each time to Jakarta’s 5-star hotels since the mid '80s (popular amongst them are the Shangrila Hotel [co-funded by the BNI state bank and stands on BNI property], the Mandarin, Grand Hyatt, Hilton and the Meridien), returning again and again for 2-3 month periods carrying with them this knowledge and hope of making money.
These expatriates, specifically bank and collateral trustees from the U.S., also state that Microsoft’s Bill Gates and his US$ 90 billion holdings (prior to the latest U.S. court decision to possibly breakup his company) is a “pauper” compared to these assets holders.
Bill Gates is wealthy in the public eyes because his share ownership is public, his company Microsoft is publicly co-owned, and part of the SEC (Securities Exchange Commission the federal agency that regulates the U.S. stock markets) requirements to divulge all information on public companies.
These asset owners wealth is not publicly owned and therefore do not require public declaration. There are Americans and Europeans (and Indonesians) who are trillionaires, these expatriates claim, but no one has even heard of them, even if their names were divulged. Besides, why would they want the whole world to know they are wealthy and then be subjected to kidnapping and other physical threats to their families?
How did these assets enter into the world’s financial system?
Historically when the Indonesian royals first deposited their wealth from their trading in many nations over a thousand years ago, the institutions where they were deposited later became that nation’s central bank. Their deposits remained within that central bank, and during modern times, these assets became an inherent part of that nation’s assets. Indonesian (Javanese) traders seeded many areas of the world, and left behind their Javanese culture, proof of their previous journeys all over the world.
It is much like if a depositor deposits his £ 10,000 in Barclays Bank in the year 2000, and later on let us say in the year 2500, five hundred years later, Barclays becomes England’s central bank. That £10,000 which has become much larger through interest paid over interests, is still owned by the original depositor; not by the central bank of England, nor does it belong to the King of England.
To ensure that it remains in the name of the original depositor, newer institutions like The International Court of Justice is made aware of this fact. Whatever the English nation wants, as long as it requires the use of these collaterals, the owner and descendants of these collaterals have to be advised of the intent first.
How did these collateral enter into the world’s financial system? For example one owns 10 kilos of gold bars inherited from ancestors. These bars are kept in the vaults of a bank. But it is not recorded as part of the bank’s assets, like a $ 1 million personal diamond ring kept in a safe deposit box is not recorded as part of a bank's assets. This is a fact of banking life.
If the amount is large enough, say 1 million kilos, the bank will ask its owners if they may use it as collateral to borrow money from other banks or their central bank. This then is recorded as part of the bank’s assets. A bank “safe keeping receipt” is issued which, in effect, acknowledges the bank’s responsibility to keep this asset safe.
The larger the assets involved, the more careful the assets owner must be towards that bank. Why? Because banks, including the well known ones, are many times naughty and behave no differently than a mafia boss. If in this “safe keeping receipt” the bank does not specify that it is responsible for keeping it safe, and so specified in writing, in the event something happens to this asset, the bank will balk and find some legal excuse to avoid this responsibility. While most people assume that a safe keeping receipt is precisely that, i.e. to keep it safe, the banks do not necessarily view it as that. That is why many times banks are no different than the mafia.
If and when the bank uses this asset, it must again formally ask its owner to use it, a separate agreement is drafted and signed. The bank calculates its value to the ongoing price of a troy ounce of gold. Interest is then paid to the assets owner. A bank’s wealth, as everyone knows, is very much dependent on the number and wealth of its depositors. The larger depositors obviously receive priority over those whose turnover is only US$ 1,000 monthly.
The banks in compensation to its assets owners will pay interests in like form, i.e. if gold is deposited, interest payment will be in gold. Banks which specialize in this are bullion banks and cooperate with their central and domestic and international prime banks.
However, if the amount is larger, say 100 million kilos, the country's central bank will ask its owners to use it to expand their economy through 101 different methods, including the printing of more money because the additional cash in circulation is backed up with collateral. It is as if, magically, that nation’s taxpayers doubled and tripled overnight. This then gives that country new found financial clout to develop new research, and new everything including military clout.
Because sums involved are huge, the collateral owner in the end owns accumulated “interests paid over interests” paid by the borrowing institutions very much like the common depositor who deposits $10,000 for a 12 months period but does not take his interests “rolling them” (his principal and accrued interests) over many years, further enlarging his deposit, and eventually his clout over the bank.
Because the assets are rolled over and create even larger funds, this in turn requires the assets owners to set up a funding program. When one owns a lot of money and does not need to think of his grocery, electricity and utility bills, s/he will begin to think of helping out, usually for the benefit of people. This is executed through the services of financial institutions where the fund recipients are subject to the terms of financial institutions managing the program.
When recipients receive funds, there are usually conditions attached to them. For example, the funds cannot be used to buy weapons or narcotics, the standard criteria for funds recipients.
How a large depositor can wobble a bank & everything else associated with it
If in a scenario this assets owner has placed a substantial asset at a bank and that bank is using this collateral, suddenly informs his bank that he wants to withdraw his collateral from circulation before the agreed period, this would cause chaos to the bank, and possibly bring it down and other institution associated with it which were recipients of these collaterals and its funds.
Even though the collateral owner and the bank have an agreement, the bank’s recourse would be to calculate a fine deducted from the collateral, much like when this $10,000 depositor withdraws his money before the agreed 12 months deposit period. This fine does not exceed a single digit. But this fine is nothing compared to bringing the bank down through the withdrawal of assets.
The gold bar owners, as are owners of any commodity like the owners of an apartment block, for example, are in the position to determine where, or how, or by whom his commodity may, or may not, be used.
As any banker will confirm, if one is a large depositor – large being relative to the size of that bank – and this depositor wants money delivered to his home at 2:30 a.m. Sunday morning (an example of an unreasonable instruction, unlike the reasonable directive that funds be used for moral purposes only), that bank will deliver it exactly at 2:30 Sunday morning. That bank cannot afford the displeasure of violating their large client’s strange directive. This is the facts of life in a banking scenario, and is equally applicable be this bank a small village bank, a large multi-billion prime bank, or the IMF and World Bank.
However, while this knowledge of Indonesia’s vast inherent “bankable” wealth may evoke disbelieve, certain events that happened which do not make sense, illuminate these behind the scenes events that support these scenarios, but are usually misinterpreted, or not understood by the common public. In many cases these events just pass by the the attention of the general public without a second thought. Some of these, which were in the international news, are illustrated below.
What events proved the Nation's financial clout?
Two to three weeks prior to Soeharto's resignation May 21st., 1998, central bank governors and finance ministers of the 5 major industrial countries including Japan and U.S., and a former U.S. vice-president bringing a personal message from president Bill Clinton, descended to Jakarta for a one-day to 2 day meeting ostensibly with the Government. In actual fact they had discussions with the assets owners and its representatives.
The message these central bank governors and U.S. vice-president conveyed to the assets owners was to the effect: do not withdraw, or disallow use, of your assets because of your economic downturn. Withdrawing it will destroy our economies and this in turn unable us to help Indonesia with cash funds.
While this seems ridiculously outrageous to those who take pride in the accomplishments of their advanced industrialized multi-trillion dollar economies, and to those who underestimate and view Indonesia as a basket case and beggar, the fact is their knowledge base of these scenarios is non-existent.
One may disbelieve this because it is based on their “logic”. Their logic in turn was derived from their interaction, experience and input over the years. Likewise, the logic of a “business man with 40 years experience as a bank manager” (whose age would be in the region of 65 years) is not a criteria to be knowledgeable about all areas of banking or all areas of financing. Even less the “politics of financing”. Particularly when they concerns state secrets when they may undermine the confidence its populace has in its government.
Further, one’s logic is derived from knowledge, or more correctly the lack of knowledge and lack of experience in this particular field. If knowledge is accrued from negative experiences in this field, or is based on erroneous political reporting on Indonesia (erroneous information that a nation of 215 million people are “killers” is a good example), this then gives credence to the possibility of like erroneous financial comprehension and eventually erroneous interpretation. This then becomes the basis for incorrect deductions. This in turn becomes the basis for incorrect political decisions by political leaders who are not aware of the true elements of a given situation. Mr. Howard, the Australian P.M. seems to be such a person. The fact that he is a prime minister, does not make him privy to all facets of Indonesia’s true financial capabilities.
A non-existent knowledge base is not a criteria for questioning claims on a subject which require knowledge and experience not within the scope of knowledge of the critic, just like a medical doctor who has no knowledge of the functioning of nerves in the brain although he is a medical doctor, would not be in a position to criticize neurosurgeons who have operated on the brain. This is applicable to all fields, be this in the financial, medical, or any fields.
World’s 3rd. domestic satellite system
Why was it that when the Indonesian government was technically bankrupt in 1965-1971 owning money left and right, and the new Soeharto government could not even pay a loan of US$ 50 million after the shift from the Sukarno to the Soeharto regimes, the country was instead able in 1971-72 to install a US$350 million domestic satellite system (a value close to nearly $1,000 million in today’s money), which was the world’s third system (after the U.S. and Canada) at that time, while the rest of the world did not own such a sophisticated system that covered S.E. Asia, south China, India and Australia?
At that time Indonesia, rife with economic chaos and hunger was a school 3rd. grader in its economy, that then-president Soekarno had to persuade his people to eat maize because rice was scarce. Even worse the country was still an infant in modern state of the art communications and satellite technology. But with the possession of the world’s 3rd. domestic satellite system, it was akin to being catapulted to a professor status in the latest state-of-the-art technology which Europe did not possess.
Even America’s European allies and partners in several wars in Europe and Asia did not merit nor receive this sophisticated communications technology.
But Indonesia did – and Indonesia received this system which was at that time highly sophisticated in the military domain category akin to receiving stealth fighter bombers which only the U.S. at this present time is holding close to its chest, not even allowing its allies in Europe to own.
Even the Soviet Union which could have had this technology for their far flung Soviet Union did not possess this ultra-sophisticated domestic satellite system even though it was one of the two world’s arms and space technology leader capable of launching the world’s first satellite Sputnik.
Even more strange and contrary to expectations, Indonesia and the U.S. during the 1960s were not great friends because of former president Soekarno’s penchant for verbally attacking the U.S.A. and all things “western” during his 21-year presidency, and his declared statement to the U.S. of “Go to hell with your aid”. Why?
It was certainly the most useless thing a bankrupt, debt-ridden, starving nation could have.
And who paid for it? Obviously, the U.S. But why? What was the history and scenario behind this satellite system when Soeharto took over in 1966-67? There must be a history, a reason for all this especially as it is contrary to expected norms.
In a nutshell, U.S. President J.F. Kennedy asked Soekarno in the mid 1950s to assist him with collateral because the U.S. was humiliated by the Soviet Union when the latter launched its Sputnik in its space race in the 1950s. Soekarno journeyed to the U.S. in a landmark visit in the mid ‘50s and provided this collateral sourced partly from royal collaterals and other sources, after the European and Arab nations (newly rich through the ARAMCO [Arab-American Oil Companies] oil discoveries) whom JFK also requested, did not come up with it. Kennedy asked the European nations, but they said no because Europe was rebuilding and needed all the collateral they had to fund their reconstruction.
JFK then used the funds from Soekarno’s collateral for NASA enabling the U.S. to catch up with the Russians, and then become the world leader in space.
When the then newly appointed President Soeharto needed funds in the late ’60s and early ’70s, he asked the U.S. to pay these collaterals back so that the Indonesian president could develop and feed his nation.
Like one’s solid gold watch, or a house in Beverly Hills or London’s Regent Park, these collaterals cannot pay for the utility or phone bills. They have to be converted into cash first. The art of conversion means its owner must have the “connection” to change it into useable cash, and must have a favourable relationship with those banks that can provide the cash. Hence, Soeharto’s demands for the return of these collaterals.
The U.S. could not return these borrowed collaterals because by then they were re-distributed by the Federal Reserve in its banking system, in U.S. and foreign based commercial banks who are associated with U.S. banks, and became an integral part of, and the dominance of the U.S. monetary system around the world. (There are many countries in the world which have their own monetary system, but when it comes to substantial transactions, including private ones, they are conducted in U.S. dollars).
The U.S. then offered to pay some of it in the form of a sophisticated satellite system. Not in the form of aid or financial loan as the U.S. Congress would have to approve it first and what with the previous unfriendly relationship with Soekarno it would take too long. Indonesia as the world’s 3rd. satellite system owner is recorded in the news, is confirmed by the U.S. government and Hughes, the maker of the system.
With huge collaterals, Soekarno, Soeharto or anyone, cannot just go to ask Barclays Bank or Citibank for cash. The collateral owner must go to a nation’s central bank. Any bank, Citibank for example, is subject to the regulations of the country they are located in. As Citibank’s headquarters is in New York, it follows that even if Soekarno or Soeharto requested cash from them, this request would be redirected to the U.S. Federal Reserve (the U.S.’s central bank). Borrowing $10 billion is quiet a different thing than borrowing $10,000 which can be done at any bank.
Besides, the majority of U.S. congressmen and representatives were not privy to this situation, except then-President Kennedy. The late president’s brother, Senator Kennedy, during the mid and late 1990s was a vociferous critic of Indonesia and its human rights records and many times threatened to withhold “aid”. But in 1999, there was no longer a peep out of him. Presumably those in the know in the U.S. probably told him not to be so vociferous towards Indonesia, lest they (Indonesia) get upset.
Kennedy also used these collateral sourced funds to threaten Cuba when Soviet ships started to bring in their missiles. Arms for this was not purchased in the U.S., but in Europe where European manufacturers, owned by the Mafia, provided these arms. Data on these are available in several publications in Europe, Singapore and Australia. Their data are based on released C.I.A. documents after the 30 year time limit, and other non-CIA related documentation.
One should not assume the Mafia as portrayed in films. They are dressed in expensive suits, do not carry guns like hoodlums of the old days. They own large legitimate businesses, often legitimately purchased from their founders, even international prime banks, and nearly all kinds of large multi national businesses. The majority of their management are not aware that the companies they are working for is actually Mafia funded, or Mafia owned.
Registered in the International Court of Justice
Until today in the year 2001, Indonesian-owned collateral is a part of the Federal Reserves, and unknown to the U.S. public, the United States government is still paying – in installments and not necessarily in cash, but in the forms of economic cooperation, military programs (and in the early ‘70s, the world’s 3rd. domestic satellite system), etc.– accumulated interests totaling some US$ 3 trillion. This responsibility falls on the shoulder of the incumbent U.S. president.
As these collaterals are also registered in The International Court of Justice, the U.S. government cannot just forget about it, or pretend they do not exist. It would be better for everybody involved just “to keep the peace”, not rock the boat, nor shock the American populace that their monetary system is also dependent on some developing nation ... and, ofcourse, not to upset Indonesia its owners (through boycotting Indonesian products, bombing the nation, or other practices applied to Iran, Libya, Serbia and Iraq).
Samples of verbal noises versus realities
Hence, there are a lot of verbal noises from the U.S., British and other industrialized nations’ congresses and parliaments (that once committed barbaric atrocities killing millions of civilians under the pretext of WW I, WW II, Vietnam, etc.) ... criticizing and complaining about Indonesian alleged human rights violations, or lack of police protection in some riots taking place in Indonesia for their domestic consumption ... but on the side training Indonesian soldiers, gleaned from the Vietnam war experience, on how to become murderers in east Timor, sending weapons, and even warplanes, like the British are sending 12 of their Hawk fighter planes. Two days later the same international media carried stories on the shipment of 1 dozen British fighter aircraft in April 2000. The shipment of these aircrafts in disassembled form in containers (probably not to attract attention because normally they are flown) was twice carried by international news agencies.
Canceling the IGGI multi national lending agency
Why did Soeharto in 1991 suddenly cancel and disband the IGGI (Inter-Governmental Group of Indonesia), a group of 13 rich donor nations which included the U.S. – to the surprise, without any forewarning, and to the dismay of all IGGI nations – and within 4 weeks replaced it with the CGI led by the World Bank which provided a loan of some US$ 3.8 billion comprised of the same nations, minus The Netherlands?
Indonesia at that time in 1991 still owed over US$ 100 billion! This was again in the international news.
It is unheard when a multi-lateral lending agency is “disbanded” by the debtor – worse by not even forewarning the donor nations, a dismay as expressed in various capitals in international news – and then the debtor sets up another multi-nation lending agency and gets another loan.
It was akin to a country borrowing US$ 100 billion from the IMF, and then have the clout to disband and replacing it with another institution because the debtor was displeased. In the meanwhile all parties concerned did not protest, or make any noise about the event?
The debtor, Indonesia, that is then President Soeharto, was displeased because IGGI’s chairman J. Pronk from The Netherlands, kept criticizing Indonesia’s poor human rights records and Soeharto was fed up with the criticisms.
There are obviously reasons behind these actions unknown to the general public that enabled Soeharto to do as he pleased. The cancellation and non-active status of the IGGI and immediate formation of the CGI were also in the international news.
Any new and inexperienced businessman, or even a household person whose main duty is to take care of household chores, knows all too well that if one borrows money, one must return it. Never mind disbanding the bank that lent the money. It is impossible, and unheard of. But Soeharto did it.
But if one understood business common sense, and business common sense is just plain common sense, this analogy applies: if one owed a debt of $ 1 million, but had a total worth of US$ 1,000 million ($1 billion), and had $10 million each in 100 banks, it is not difficult to change banks, get another loan, even prod the top management of that bank to fire the top executive responsible for displeasing the depositor, without even repaying the lending bank. The other 99 banks would be more than willing to take over the role of that lending bank which lost its customer – even to the extent of promising to pay the unpaid $ 1 million debt to that lending bank. This analogy applies to Soeharto government’s disbanding the IGGI.
Why did the industrialized financial bosses & a U.S. vice President go to Jakarta in the midst of a financial crisis?
Why did central bank governors of the 5 industrialized nations, and a former U.S. vice-president, descend into Jakarta in mid 1998 in the middle of a financial crisis when its rupiah monetary valued went downhill from Rp 2,200 down to Rp 18,000 to the US$ dollar?
They feared a repeat of the 1991 IGGI scenario which in 1998 onwards would have disastrous global after effects, especially during the Asian economic crisis, because it was followed by the Russian financial crisis.
In a banking scenario, be this private or government, the debtor travels to the banks’ offices. It is unheard of when the banks’ bosses descend into the home of the debtor? Why?
Their visits were also in international news, ostensibly to assist Indonesia, which was not incorrect. When Russia and other nations needed financing during their financial crises which came in the heels of the Asian crises, the western nations’ central bankers did not descend into the applicants’ capitals, but rather the debtor’s finance minister arrived at the donor’s capital. This is the norm between debtor and creditor.
Indonesia, obviously, possesses “something” which the industrial world needs which is then manifested in the installation of a domestic satellite system in the early ’70s, the disbanding of IGGI in 1991, the descent of the 5 industrialized central bankers in 1997, and other events in international news not described here.
What reasons could they be?
Huge Indonesian owned assets (“substantial external assets”, as mentioned by IMF’s chief), accumulated over thousands years, deposited in many national central and commercial prime banks.
Unknown relations with the international Jewish community
Unknown to many, Indonesia’s royals still cooperate with the (now defunct) Portuguese and German royal families to name a few. While their governments are at odds with each other, but in personal terms Indonesia and Portuguese (former) royals are pals and Portuguese financial experts (called trustees in the financial world as they represent European royal families and Indonesian collateral owners) co-participate in the management of Indonesian assets.
Unknown to many also, personal relationships with political and financial leaders of the Jewish community in Israel and the U.S. are very much alive with Indonesian Moslems, including Gus Dur and Amien Rais although Indonesia politically disparages the Jewish race and does not recognize Israel, very similar to Iran which recognized Israel under the Shah, and disparages the Israel nation under the present Iranian government.
Why maintan any relationship at all with the world’s largest Moslem nation? The Jewish community have their reasons (as executors of Indonesian owned finances and assets), while the Indonesian Moslem nation have theirs (also as executors of Indonesian owned finances and assets, and providers of financial contacts), not realized by the ordinary Moslem in the typical Indonesian community.
It was only after Gus Dur’s election as Indonesia's 4th. president that it was revealed the Indonesian Moslem leaders had anything to do with the Jewish nation. This is again another demonstration of what is going on in the political arena between sovereign states without the awareness of the common public.
Nation still need the western nations’ strong economic engines
The Indonesian royals keeping their assets in foreign banks for hundreds of years earning interests over interests, are no different than the typical, private, modern depositor keeping his money in his local bank. Bear in mind these collaterals are privately owned and are not subjected to any scrutiny by anyone, especially as they existed prior to the formation of governments which are using them (prior to the formation of American president George Bush’s government in the year 2001, for example).
Does Indonesia, specifically its people, still need these foreign bankers, the “producers” of stable currencies–the US dollar, Pound sterling, Francs, D. Marks, Yen, etc.?
Definitely, because one cannot use these assets to buy a meal, or goods and services. It can only be used as collateral and be converted into cash (or credit, or letters of credit, bank guarantees, and similar banking instruments) for Indonesia’s needs.
In short, the industrialized nations need these assets to maintain their economic leadership and therefore military clout; while Indonesia needs the cash to gradually develop its economy because too much cash destroys a nation, and instead needs to gradually develop its economy, especially as Indonesian government officials are still rife with corruption and it needs time for the nation to grow up. Hence it is a two-way mutually beneficial relationship.
Western nations will choose Indonesia
Bombing Indonesia as per the Australian premier Howard’s scenario if Indonesia attacks E. Timor, which Indonesia will not, and demonstrated it has not, or hurting Indonesia militarily, is going to destroy this financial relationship with the world’s leading industrialized nations which include Japan, and is veryunlikely to happen.
If it came down to it – to choose between Australia and Indonesia – the western industrialized nations will opt for Indonesia.
First, it is the world’s 4th. largest nation with implications of a huge potential market of 215 million (more than 10 times Australia’s 20 million) for western industries and their products.
Second, it has vast natural resources. Third, it is potentially a “ground floor opportunity” for anyone accustomed to large scale opportunities. Indonesia is very much like the U.S.A. of the 1900s.
Fourth, Indonesia’s geographical area is vast. It is not Serbia, Iraq, Vietnam or Libya. The U.S. will not commit its armed forces to such a vast area, equivalent to an area between England, through western and eastern Europe to the Middle East. It nearly drowned in Vietnam, and that area is much smaller than Indonesia.
The western nations prefer to be friends with Indonesia, rather than become its enemy. If nations like Australia do not play the superpower’s game, their CIA equivalents will tell Australian leaders who do not play ball to move off, or be moved forcibly. It is very likely Australia’s P.M. Howard will obey their U.S. master. At least, that is what Mr. Howard had once admitted: that Australia is the America’s “watchdog”, probably rather insulting for most Australians to be called some other nation’s tail.
But since October, 2000, Australia’s P.M. Howard has already started to make amends to its much larger neighbor, probably already forewarned by the U.S. to start mending fences. In the meanwhile, Indonesia’s president, typical towards his own people, said, I’ll go to Australia tomorrow; no, I changed my mind, I’ll go next week, then changing his mind again, let’s wait until next year, keeping the Australians waiting.
Previous to P.M. Howard, Australian heads of state visited Indonesia 11 times, while Indonesian leaders never visited Australia even once. It is reasonable therefore to ask an Indonesian leader to visit Australia just once.
But 11 visits versus none already shows there is something not balanced in this relationship. One can make one’s own deductions of who is what based on these past events.
Because of the Australian experience, the present – and future – Indonesian leaders will bear in mind that Indonesia must increase its armed capabilities to precisely counter threats as allegedly voiced by a small neighbouring country.
It is not that Indonesia is a bully; but more because some nations need visual proof of another nation’s armed forces capabilities. That is why many nations, including the former Soviet Union, India and China, for instance, have an annual demonstration of their armed capabilities to psyche out their potential adversaries.
The Indonesian nation has to visually enforce its presence, and everything else that comes with being the world’s 4th. largest nation – its economic prowess, the self development of its own huge consumers market without total dependency on exports, and its justice system that will stimulate the feeling of being safe, and hence stimulate social and economic well being for everyone.
Indonesia’s next president as foretold by the Javanese version of Nostradamus, the seer
Short of China and India, especially China, one can count on Indonesia’s next president that over the next two decades Indonesia will increase its armed capabilities commensurate to the size of the nation of over 215 million by at least 1%, or an armed force of some 2 million to 2.5 million people.
Indonesia’s next president in the year 2004, hopefully, has the physical bearing, speaks English properly so he can counter preconceived negative international media reports expounded in international forums. Nor be steered by their questions which have negatively driven the international community; understands foreign cultures and therefore capable of bridging any misunderstandings, is descended from a king, above all is on his own very, very rich (wealth derived from his Javanese royal ancestors, not from corruption), and honest so he won’t steal from his people.
The Javanese version of Nostradamus the European seer, Rondjo Warsito & King Joyoboyo, already correctly predicted the past 400 years the events that have passed in Indonesia, including the 3 decade domination of the nation by a yellow skinned man wearing green (a reference to Mr. Soeharto’s Chinese heritage and green army uniform).
His last prediction was Indonesia’s 5th. president would be the ratu adil (translated roughly into Queen of Justice); he is an unknown (not a public figure). This means he was not associated with either the Soeharto or Abdurrahman’s governments; and does not owe any favors to any political parties who are known to think of their own narrow interests many of whom were former Soeharto Golkar members who dominated the elections for the past 30 years. Or, owes anything to the present business conglomerates, who by and large owed their wealth to corrupted and stolen funds.
Based on the known present political realities, he will most likely be elected directly by the people, not through Parliament, a political scenario already being considered by the MPR since 2000. He is a descendant of a Javanese king, he will bring justice and prosperity to the nation, and make this nation a mercu suar (a beacon) to the rest of the world, this seer foretold.
The financial clout to become a superpower
The nation has the financial clout to become a world superpower, as well as a world military power. The western nations do not have exclusive dominance or use of these assets. Nor can the U.S. – the only remaining superpower – freeze these assets if events develop in Indonesia not to their liking, like the freezing of Libyan or Iranian assets, because they are spread all over the world in 93 countries.
Technologically, many nations – including the traditional U.S. and British allies – as has been proven, are more than willing to provide the technology and sell their products that will bring Indonesia into the realm of a superpower.
It boils down to the profit motive, the motive of providing work for the industrialized nations and their allies, and not the fear of Indonesia which is populated by 215 million gentle people becoming a major military superpower.
And every national leader is aware that if his nation does not provide these requirements, someone else will – especially when Indonesia can pay for them.
Not only that but they are aware that to be friendly with Indonesia means allowing these foreign industries in, and market to Indonesia’s 215 million population and grow with the world’s 4th. largest nation.
In the end driven by their own long terms interests, the traditionally advanced western nations are better off to cooperate with and be friends with Indonesia – faults and all, rather than bomb Indonesia because some small nation demanded it and risk becoming an enemy of the Indonesian people.
The likelihood of western governments violating the integrity of the supremacy of the law and rights of the Indonesian people, like some Indonesian officials were and are now doing, are very minimal. These collaterals are therefore under the protection of western law (The International Court of Justice), western concepts of right and wrong, and the western nations belief to be the guardians of civilized law.
The Indonesian people, or more accurately those royal Indonesians who control ownership of these assets, and the banks and the international lending institutions which manage the assets and control cash disbursement, some through international lending agencies and others through commercial institutions, do not condone misuse of funds collateralized with these assets through corruption or the killings of fellow Indonesians (just as the apartment block owner will not condone murder on his property).
Reflecting the wishes of the people
Hence, the IMF’s threat to delay further loans in reality reflect the wishes of Indonesian owners of these assets: that funds managed by these funds manager whether called IMF, World Bank or whatever, not be used to kill innocent (Indonesian) victims.
It is not a foreign directive dictated by U.S. congressmen, British MPs or other foreign entities, but by directives of the Indonesian collateral owners. This directive, includes forbidding the purchase of arms and narcotics, and forbidding the creation of conflicts, apply globally not only to Indonesian citizens but wherever the funds are used. To these assets owners, Timorese east or west, as it is in the eyes of the Indonesian nation, are all Indonesians.
The existence of these assets, and hence the availability of funds, is contingent on the correct moral use of funds, just as the owner of the apartment block will insist that his apartments be used for moral purposes only, not for committing murder, rape and other atrocities. Those who determine it are assets owners, people of integrity who follow moral norms; not the managers (bankers) of the funds, who like in modern banking institutions, follow the wishes of their large depositors.
Senior American government officials, including a former U.S. Ambassador to Indonesia and former Undersecretary of Defence stated as much: Indonesia is not bowing to foreign pressure, but because the demands of its own people. Click here for their comments.
Although Timor Leste (east Timor) is now formally no longer Indonesian territory, but blood relationships with many Indonesians from other islands still exist. As far as the ordinary people are concerned whatever citizen one is now, what is relevant is that they are related by blood.
On the delay of IMF loans pending solution of the Baligate scandal, the outstanding security concerns, and so on, the assets owners likewise agree that funds for the development of the Indonesian nation not be sucked dry by corrupt officials. This virtually all Indonesian citizens agree with.
International societies do not monopolize decency
Unknown to these international societies who think they monopolize decency, Indonesian society also despises violations on freedom of speech, freedom of movements, and human rights violations, more so than even the most negative televised complaints by non Indonesians as carried by international news media.
If Indonesian children die for these causes, one can be sure that parents and grandparents will not tolerate violations of decency. Assets holders are all grandparents many times over.
Therefore, views held by those not in the know in the international community, withhold funding from the Government is not going to work. First, it is morally indecent to hold a whole nation of 215 million hostage and responsible for the atrocities of a handful, driving them further into economic and financial difficulties; second, the Indonesian people own these assets that enabled the nation’s government to borrow. It is akin to people demonstrating against the use of your own money.
While it it is owned by the Indonesian nation, but funds managers have directives given by Indonesian assets owners of certain conditions. If the Indonesian government or its officials violate these directives, the Indonesian nation as a whole will suffer.
It is a fact of life that although Indonesia's leaders have changed and are led by those who have a higher sense of moral rights and wrongs, but the middle management level in virtually all government institutions all the way down to the provincial and village head levels, are still infected with the corrupt virus. They still blatantly commit moral crimes in front of their constituents, many times forcing its local populace to take the law in their own hands. Nearly every day we read, see on TV and hear of people taking the law in their own hands against some local authority because of the alleged violations of local authorities.
The Indonesian nation, unfortunately, is right now under the authority of a Government which comprise of 5 million people including the armed forces and is an arm of its people, and is not a very good one at that.
Ridiculously silly for Horta and such people to “demand” anything
It is utterly ridiculous day dreaming for the likes of José Ramos Horta to “demand” the international community to “withhold loans” to Indonesia, not realizing that these loans – like in any commercial bank loan – are collateralized several hundred times the sum of the loan, enabling Soeharto (with the prior permission of the royal owners) to disband the IGGI at will without even forewarning the IGGI countries.
While Horta may have won the Nobel Peace Prize, this prize seems irrelevant and showed the Nobel’s weaknesses in their Nobel awards. The Nobel Peace prize is not the word of the Bible, that is, it is not infallible. It is full of holes, and in Horta’s award full of pre-conceived prejudices which are unsubstantiated.
The Nobel Committee are humans after all, have never thoroughly investigated their Peace recipients, did not read any of the comments from responsible and believable international news media which gained their reports in the field where it is all happening, and which disagreed that Horta be a recipient.
The Nobel awards committee instead easily succumbed to irresponsible journalism and off the cuff testimonies by NGOs which could not afford to send their representatives to the field and verify what they alleged as the deaths of “300,000” people in east Timor. Who did these Nobel committee give their peace prizes to when they referred to deaths of 2.3 million Vietnamese and 6 million Jews?
Lenders have motives
The lenders, be they international institutions, individuals and private entities, prime banks – whatever they are, have a motive. As long as it is called a “loan”, even if the loan period is 25 to 30 years, interest at 2% annually with a 5 to 10 year grace period (the criteria accepted by Indonesia), there are string attached to them. It is not given for free. Loans are not “gifts”, or aid programs that do not have to be returned.
Furthermore, loans are never given to recipients that the lenders feel they cannot return. They are never given to beggars, much like a commercial bank will never lend to a beggar.
The potentials of return from this loan (and it is not in the form of interests because it is minuscule), but more importantly the goodwill by the recipient of the loan at some future date, is the motive to give a loan. Out of this goodwill by the recipient is probably his nation stands at a strategic location; the nation has vast amounts of natural deposits which other nations can use to further their industrial clout; that nation has a huge population that can potentially benefit the lender’s industries as new consumers, and a host of other factors that is of benefit to the lender and his interests.
Indonesia is that kind of nation with vast natural resources, and the vast potentials of its youthful consumers markets. The lenders, be they the international institutions or world governments, have always a motive, and knows Indonesia fulfills all these criteria!
On top of it all, Indonesia has the collateral. And this collateral is also used by the industrialized nations to further their own particular interests.
Protesters do not realize the facts of life are dominated by money. Weapons of death are governed by economics and the profit motive; that the political interests of superpower nations want their status as a minimum to remain as they are, and if possible, to expand their influence and to promote their way of life, and that is: they remain a superpower.
Not the interests of protesters who cannot contribute anything of substance to the betterment of the problem at hand, except to make a lot of noise and hot air, useless to solve the atrocities that take place everywhere, except perhaps to inflate their egos and pretend they are doing something of importance.
The superpowers want their interests to stay intact because at the end of their motive is their economic interests which means “their way of life”. If protesters like Ramos Horta, some ignorant news editor, or some misdirected NGOs who do not know the roots of the problem facing Indonesia, and then make this and that demand, their protests and self-righteous posturing are not going to change what is Indonesia, its 215 million population and what the country stands for. They can protest and inflate their egos until blue in the face.
Indonesia as a nation does not intentionally violate human norms, just as the American nation did not intentionally kill 2.3 million people in Vietnam, nor the Germans as a nation did not intentionally kill 6 million Jews. A very small number of these people killed them; not the whole American and German nations.
One cannot really believe that a whole nation of Americans, or the whole nation of Germans are barbarians living in the stone age. Believe therefore that the Indonesian nation is no different.

Soekarno’s Gold
President Soekarno was in power for 21 years during a time when the Indonesian Republic had just begun. Soekarno was not known as a corrupter, or stole from the people. The government had nothing to steal from. If he had a reputation, it was the reputation of being a woman’s man.
However, over the years Mr. Soekarno was known as someone who had access to huge amounts of gold and platinum and other riches.
Soekarno got his gold not only from the contributions of several Javanese kings, but also from the Arabs, the Chinese in China and Taiwan, and from salvaged sunken Japanese gold shipments during WW II, among other sources. There were historical, and logical, reasons why these leaders gave a part of their gold to Soekarno. The main one was because he was the acknowledged leader and engine of the non-aligned movement. The Japanese intending to make S.E. Asia a Japanese empire, shipped huge amounts of gold bullion (some forcibly taken from mainland China) to several parts of S.E. Asia as part of their plans, but was stopped by the Allies during WW II through bombings in S.E. Asia and later the two atom bombs in Japan. This is recorded in history.
The royals did not accumulate these collaterals for hundreds of years for their own personal use, but rather for the kingdoms in which they reigned. The “will” of the royals, carried on by generations of their descendants, stated these collaterals are to be “used for the benefit of the people”.
While Mr. Soekarno has been willed a part these collaterals, they are not personally owned by him. They are owned by the people, but “lent” to him. He, or anyone else who intends to use them, is subject to this condition: he has access only if they are to be used for the welfare of the people.
Therefore, Megawati Soekarnoputri, Soekarno’s oldest daughter (or her other siblings) and present vice president of the nation, do not automatically inherit Mr. Soekarno’s collateral. She is also not wealthy, nor are her other siblings, and live modestly like other middle class members of society.
Likewise, persons who claim to be Mr. Soekarno “brother”, “half-brother”, “an unknown son”, and therefore claim rights to these assets, and there are many of them, are only attempts to defraud people who are sponsoring their efforts to liquidate these assets.
The 113 different banks who keep these assets know exactly who are entitled to these assets, who can use them to create bank instruments, and who can liquidate them. Persons who have rights to collaterals are periodically advised in writing the status of their collateral by the banks managing them, no different than a bank which advises their $10,000 depositor of the status of their deposits. If persons who claim to have rights do not have these periodic reports, it can be assumed they have no rights to these assets

*Hank Beachell quickly learned the rich history of rice in the Americas. He was intrigued by the story of Carolina Gold, the first rice variety to be commercially grown in what is now the United States. A small bag of rice seeds was brought into the Carolinas in the late 1600s on a ship from Madagascar, Beachell says. From it, Carolina Gold was selected. The golden fields of rice gave the Gold Coast of South Carolina and Georgia its name. (Dr. Henry M. "Hank" Beachell, together with Dr. Gurdev Khush, won the World Food Prize-the equivalent of a Nobel Prize for Agriculture--in 1996. The Legacy of Hank Beachell: Part III, Indonesia, RiceTec. Beachell spent 10 years in Indonesia developing rice)


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Sultan Sepuh XIV Pangeran Raja Arief Natadiningrat :

"Kami berharap, negara ini tidak melupakan sejarah. Dulu sebelum kemerdekaan Bung Karno meminta dukungan keraton untuk bisa membuat NKRI terwujud, karena saat itu tak ada dana untuk mendirikan negara. Saat itu keraton-keraton menyerahkan harta yang mereka punya untuk kemerdekaan negara ini,"