The December of Indonesia’s Patriarch

The théâtre de mort of Suharto’s last throes now being performed in Jakarta’s Pertamina Hospital has been pregnant with farce and hypocrisy.

There was farce when Indonesian officials issued press passes to a funeral for someone who isn’t dead yet. It was admirable efficiency, even vision, in a country that doesn’t often display it, and while it made sense to the army of reporters camped out at the hospital, and their impatient editors, it outraged the ex-dictator’s posse of supporters and family, who’ve maintained a long vigil at the hospital, Jakarta’s best.

"We are anticipating all possibilities," said Dodi Sumantyawan, the policeman who will steward the funeral at the family’s mausoleum outside the aristocratic city of Solo, the last rites of the “Grand General (Retired) HM Suharto,” as the press pass describes him.

Hangers-on at the hospital had been betting that Haji Mohamed Suharto’s final day would be last Thursday, the first day of Muharram, the Islamic New Year and regarded as an auspicious occasion for the old crook to bow out, if bowing is possible when strapped unconscious to a ventilator and various drips. But he gasped his way into the Muslim holy day of Friday, when farce gave way to drama after a visit from Attorney-General Hendarman Supandji, who is generally regarded as bersih (clean). Was this yet another in the long procession of notables passing by his bedside?

Yes and no. After paying his respects, Supandji told the Suharto relatives they shouldn’t think dad’s demise meant that their legal troubles over their father’s graft would end. The announcement that same day that Jakarta would continue to pursue the family’s billions in the civil courts raised questions about who was making the call about keeping Suharto alive. The family, as normal procedure in such matters would have it? Or is it the government, for maximum leverage? It certainly suits President Susilo Bambang Yudhoyono, elected in 2004 on an anti-graft ticket and keen to be re-elected next year, to be subtly seen to be going after Suharto, all the while suggesting forgiveness for his “mistakes.”

It was perhaps the most gripping episode of this 10-day 24 hour sinetron, as Indonesian soap operas are known. The billionaire’s kids said they’d settle out of court, insisting it was their idea, then later backed away from the idea of a settlement.

Singapore’s Lee Kuan Yew provided the hypocrisy. This is the “minister mentor” who has virtually created a leadership cult from his aversion to corruption, a man of famously high morals who encouraged pursuit of an opposition leader to bankruptcy for his alleged abuse of $140 worth of university postage. And yet here he was rushing to the deathbed of a political contemporary regarded as the 20th century’s biggest thief, who the World Bank and UN said stole as much as $35 billion, more than $1 billion for each of his 32 years in power in one of the world’s poorest countries.

"I feel sad to see a very old friend with whom I had worked closely over the last 30 years not really getting the honours that he deserves,” said Lee, who at 84 to Suharto’s 86 is perhaps sensing his own mortality. “He deserves recognition for what he did,” he told the Singapore media at the republic’s embassy. “That's why I came here to visit him.”

After visiting the old man’s bedside, Lee clarified his position on the morality of theft: “What’s a few billion dollars lost in bad excesses?” he told reporters, comparing Suharto favorably to Ne Win of Burma, who took power three years before Suharto and drove his country to absolute penury. “He built hundreds of billions of dollars worth of assets.”

Lee, a member of JP Morgan Chase’s international advisory board, earlier had a unique take on Indonesia’s economic ills.

"From '67 when he became president right up to '97, the economy grew and Indonesia was on the point of taking off the economy. (That) it didn't take off (is) not because of his fault (but) because Bank Indonesia's interest rate was too high, and so the companies borrowed in US dollars for low interest rates.”

“When confidence was lost after the Thai baht crisis and people wanted to pull their money out, the whole thing collapsed. It was not his fault."

Much of that is nonsense. Suharto’s legacy was a collapsed economy, utterly dysfunctional state institutions, a putrid judiciary, radicalized mosques, a nation in an advanced state of break-up and a culture of corruption so deeply inculcated, indeed so normal to many Indonesians, that it will take generations to properly cleanse. It is bizarre to suggest that the mid-1990s financial crisis was caused by Bank Indonesia’s interest rate policy as if it was somehow independent of the palace.

Economic policy in Suharto’s Indonesia, particularly in its wildly-grasping latter days (remember the Bre-X mining scandal?), was led by his closest cronies and his avaricious family, some of whom he’d placed in his cabinet, presiding over ministries directly related to their business empires, which were broad. Rates responded to the mismanagement of the day, and the bank’s – and for this read every prominent institution ‑ powers as a regulator of the economy were neutered by the pillaging palace.

Suharto ran it all as a mafia don, by fiat. Indeed, it is notable that the primary civil case against Suharto being pursued by the government centers on $1.55 billion being channelled through the central bank and ending up, unaccounted for, in a Suharto-related “charity.” The Asian financial crisis simply exposed what a corrupt mismanaged mess it all was, and to some extent still is, and that things were not at all what they had appeared when Suharto and family were courting big international money through the 1980s and into the 1990s.

In attempting to set the tone of eulogies for his old friend and occasional sparring partner, the octogenarian Lee showed how out of touch he is, if, charitably, that’s what it is. He seems to have forgotten that Suharto’s corruption also cost his beloved Singapore billions after Indonesia’s economy collapsed in 1997-98. Singapore was hammered by the contagion, falling into recession but it also committed US$5 billion to the IMF-led bailout.

Since then Singapore’s institutions have periodically chimed into Indonesia to execute what has often appeared to be a prop-up, notably in 2001-02 at the depths of the Megawati experiment when Indonesia was beset by Islamist terror bombings, which fretted vulnerable Singaporeans. That’s when state-owned Temasek and the Government Investment Corp pumped billions into strategic Indonesian assets at a time when few foreign investors would dare touch the poisonous place.

It looked a lot like an attempt to keep the neighbor afloat, lest its problems wash over into the city-state. And Indonesia’s ailments have been politically useful; underpinning every Singapore “election” is the ill-concealed notion that democracy brings chaos. For Singapore, that’s balanced to some degree by the billions salted in local banks belonging to various Indonesia miscreants that Singapore seems reluctant to give up to Jakarta, and the multiples made by those Temasek investments, particularly in telecoms (though this current government seems intent on unwinding those deals).

But there is no reliable way to quantify the opportunity losses in regional investment from the Suharto wash-up. Indonesia has always been the elephant in ASEAN’s room and as Jakarta gamely dealt with the mess Suharto left behind, ASEAN went from being a global economic hothouse, commanding the sort of attention China and India now enjoy, to being a backwater afterthought, the image not helped in places that don’t easily distinguish national differences by the billions lost in failed Indonesian companies.

One area has been commodities. Indonesia has lot of them, the stuff China and India need. But although Indonesia’s minerals were notionally cheaper than Canadian, Chilean and Australian, it has been those expensive developed countries that have prospered from the mighty China-led resources boom because they can guarantee supply without too many backhanders, something the appalling infrastructure and corruption left by Suharto’s legacy cannot.