Foreign Aid

It pays to think big: history favors dictators who take billions, not millions

Jeffrey Winters
Time Asia
May 24, 1999

President Suharto opened his 1989 autobiography with memories of his simple childhood bathing in muddy canals in Java. “My roots are in the village,” he wrote. From the start of his dictatorship in 1966, Suharto carefully cultivated an image not just of humble origins but of lifelong simplicity. He claimed to be a common farm boy with common values, who rose without ambition to a position of dominance over one of the largest countries in the world, and who ruled in the best interests of the nation.

Eager supporters at home and abroad swallowed that line whole. One American ambassador to Indonesia in the 1960s described Suharto as a man of “sincerity and humble courage.” What better man to lead Indonesia out of the Third World? President Richard Nixon told Suharto upon landing in Jakarta in July 1969, “The People of the United States wish to share with you in this adventure in progress.” In 1986, at the height of Suharto’s military-backed rule, President Ronald Reagan spoke in Indonesia of the “winds of freedom” blowing through the region. Throughout his more than three decades of rapacious dictatorship, Suharto’s public image served the important political function of deflecting criticism and seeding disbelief that he could be capable of all that his critics would later claim.

In the early years of Suharto’s New Order government, his greedy wife Madam Tien took most of the heat. Then it was Ibnu Sutowo, head of the state oil company Pertamina, who nearly bankrupted Indonesia in the mid-1970s by borrowing billions of dollars that were used in part by Suharto for political and personal ends. When Suharto’s children came of age in the 1980s and his grandchildren in the 1990s, they became the focus of resentment. All along, the dictator himself managed to maintain his Teflon coating. Even as evidence now mounts of Suharto’s staggering personal wealth, he can still step up to a microphone and declare flatly, as he did last September, that he doesn’t have a single cent in holdings abroad.

When leaders commit crimes, one lesson from history is that it helps to transgress on such a massive scale that few will believe the deed possible. The theft of mere hundreds of millions of dollars is entirely believable–that’s what landed the powerful Salinas family of Mexico in deep trouble. A much better strategy is to steal billions, preferably tens of billions, just to be on the safe side. The sheer size and incomprehensibility of the corruption buys a degree of security from prosecution. For a leader like Suharto, the formula works even better if disbelief of scale blends seamlessly with a personal image of impeccable simplicity.

But the reason it has been so difficult even to mount an official investigation of Suharto goes much deeper than psychology. From the start, Suharto’s New Order benefited from an international banking system that favors kleptocrats by offering no strong rules or norms that can act as a counterpoint to bank secrecy. The banks themselves, along with the money handlers who labor to make ill-gotten wealth so hard to track and recover, profit handsomely for their services and from the deposits they take in. When the fortunes of dictators get stored abroad in secret accounts for decades with the complicity of foreign banks and friendly governments, international actors grow deeply reluctant to have that history of collusion or indifference exposed. At a minimum, it makes finger wagging at declining dictators and their corrupt governments much harder because the clear line separating “them” from “us” breaks down.

The task of charging dictators with crimes, the crucial first step in going after their assets, is much easier if the ruler gets pushed not only out of office but also out of the country. Unlike the Shah of Iran, Duvalier in Haiti, Somoza of Nicaragua, Mobutu of Congo and Marcos in the Philippines, Suharto of Indonesia remains in a country where his influence is still formidable. This leads to truly absurd political maneuvering by officials to protect their fallen leader. Attorney General Andi Muhammad Ghalib, for instance, faces an almost daily barrage of foreign and domestic press reports of Suharto family wealth, all of which he has refused to investigate aggressively. Instead he talks about how unreliable press reports can be and suggests repeatedly that it is the accusers’ responsibility to come forward with the whole corruption case solved and ready for court action. This would be high comedy if the political and economic stakes for Indonesians were not so high.

If the Marcos case is any guide, Indonesians should brace themselves for some big disappointments. The Filipinos were quick off the blocks: they exiled Marcos immediately and froze assets around the globe. Yet after nearly 14 years and many millions in legal and forensic accounting fees, they have recovered only a small portion of Marcos’ fortune. The Indonesians started slowly, have neither charged the Suhartos with anything nor attempted to locate or freeze foreign assets. Instead, the Habibie government stalled long enough to allow the Suhartos to hide and protect the assets abroad–so even if action is finally taken, Indonesians will get back almost nothing.

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