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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

Pay Up

Or face the taxman


PRESIDENT SUHARTO DOES NOT usually have to rely on public threats to get his way. But after the July 27 Jakarta riots, it is not business as usual. At the presidential palace in Bogor Sept. 14, Suharto scolded 300 of the country's business elite, among them Liem Sioe Liong and Eka Tjipta Widjaya, for neglecting the poor. Only half of them had "voluntarily" contributed 2% of their company's after-tax income to Suharto's poverty-alleviation fund. "Maybe the director-general of tax can step in and help," said the president, "but I hope that won't be necessary."

After all, Suharto reminded his guests, their good fortune is a product of the stability his 30-year rule provided. Activists could upset that stability by exploiting the wealth gap, he warned. The number of impoverished has dropped from 60% to 14% of the population under Suharto's government. But resentment over the public display of wealth by the rich still simmers.

The tycoons had agreed to contribute after a similar meeting in Bali last year. The money goes to the Self-Reliant Prosperity Fund, which is supposed to make a low-interest loan of Rp 20,000 ($8), and a Rp 2,000 (0.80 cent) donation, to every one of the nation's 13.1 million poor families. (The minimum wage is about $2 a day.) Suharto chairs the fund; his son Bambang Trihatmodjo is treasurer. So far, businesses have handed over some $128 million. No one is sure how much of that still sits in the fund's coffers.

CEOs privately complain about the new levy. "It is hard to do business in this sort of climate," grumbles one. The threat of the taxman's scrutiny, however, may oblige them to pay up.

-- Reported by Keith Loveard/Jakarta


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