Friday, December 17, 2010

Indonesia's richest men, and what it says about the country

I don't really know jack about economics, but I my attention was drawn to Forbes magazine recently as it released its list of the 40 richest Indonesians.
Here's the top 10:
1. R Budi and Michael Hartono : US$11 billion
2. Susilo Wonowidjojo : US$8 billion
3. Eka Tjipta Widjaja : US$6 billion
4. Martua Sitorus : US$3,2 billion
5. Anthoni Salim : US$3 billion
6. Sri Prakash Lohia : US$2,65 billion
7. Low Tuck Kwong : US$2,6 billion
8. Peter Sondakh : US$2,3 billion
9. Putra Sampoerna : US$2,3 billion
10. Aburizal Bakrie : US$2,1 billion

Now, I don't necessarily begrudge anyone making lots of money, but HOW they make their money is sometimes a problem. Indonesia being what it is, undoubtedly most or all of those men have had to do a little dirt along the way to making their fortune; bribery and corruption have simply become a regrettable fact of life. But that aside, a perusal of the industries themselves that many of these men profit from reveals what else is killing Indonesia.

Here is how the top 4 made their fortunes:

#1) clove cigarettes and palm oil plantations
#2) clove cigarettes and palm oil plantations
#3) palm oil plantations
#4) palm oil plantations

and so on. Palm oil is the main reason that Indonesia has the 3rd highest rate of deforestation in the world (only Brazil and DPR Congo, which are much larger in size, are worse). And while palm oil kills the Indonesian environment, clove cigarettes kill the Indonesian people. Almost 70% of Indonesian men smoke, and the numbing, sweetening presence of cloves in the popular kretek brands (Gudang Garam, Sampoerna, etc) must surely be a factor, since it disguises the harshness that dissuades many youngsters who try cigarettes for the first time.
This doesn't mean that those millionaires and billionaires who made their fortune this way have done anything wrong per se. And no doubt their industries have created numerous jobs, so valuable in this poor country. But it's a shame that the great bringers of wealth and prosperity in Indonesia are the same things that are slowly killing Indonesia at the same time.

Interestingly, #6 is actually an Indian who has adopted Indonesian citizenship (I believe he's also India's 62nd richest man). The majority of the top 40 are also Indonesians of Chinese origin (it's hard to tell with many since they have adopted Indonesian names). This is not a bad thing - it's reflective of the Chinese drive to succeed in business - but with ethnic Chinese making up only around 3% of Indonesia's population, it's not hard to see why many resentment still festers towards the Chinese minority amongst pribumi ("native" Indonesians).

(Hat tip: Unspun)

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