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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

'Expectations Are High'

A rare talk with tycoon Anthony Salim


THE SALIM GROUP HAS prospered mightily under mega-tycoon Liem Sioe Liong, who is an old friend of President Suharto. Now Indo-nesia's biggest conglomerate, it has a huge stake in the country staying stable. Liem's son, 47-year-old Anthony Salim, is CEO. He discussed the recent riots and related issues with Senior Correspondent Keith Loveard in a rare interview. Excerpts:

Can the problems of inequality and social jealousy be overcome?

You should not see Indonesia as a snapshot but as a motion picture. From one end to the other is a process. The most important thing is that we know how to plan a program and we know how to implement it. Inequality will always be there, but we must try to reduce it. Even in Singapore, not everyone is happy. The government provides job security, but you could see during the country's recent election that people were still not satisfied. Expectations are higher every day, and the reality always lags behind.

Will investment slow because of the riots, causing economic conditions to worsen?

I don't think so because it happens everywhere. South Korea is having the same thing. The U.S. too. These are just unhappy people in one location. You cannot generalize for all Indonesia. People are still investing, or at least I am still investing, in plantations which take 30 years to get a return.

So you look more to the economic fundamentals?

Yes. The fundamentals are not based on one issue. The economy is still there, the potential is still there, the market is still there. Then you decide.

In the second half of last year there was a lot of corporate restructuring by Indonesian groups. Was this related to the uncertain political situation, especially the lack of a clear successor to President Suharto?

I don't think so. We have been diversifying internationally since 1979, not because of other things but because it makes business sense.

So you are not dependent on the president staying in power?

The country is based on the constitution. Pak Harto is only the driver, while the country is forever. You should not consider the individuals but the total structure. We are basing our investments on current -- and future -- prosperity.

Will the 2% tax help to reduce inequality work?

We can narrow the gap. It's a continuous process. The 2% tax is one front. By making investments that are spread out geographically, we can create employment and enhance opportunities for larger numbers of people.

Effectively the tax rate has become 32%. Isn't this high compared with other countries?

We used to pay 35% -- and this is for a good cause.

How about the implementation of the 2% fund?

It will be an open book, subject to audits. There will be full accountability. You will be able to see the results -- in time.

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