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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

THOUGHTS OF ADI SASONO


Activism Pushing a "People's Economy"

Winners The top pribumi companies

Tycoon Bakrie says the poor must benefit, too

Dealmakers An M&A team gets the job done in Jakarta

Politics Factionalism is ripping Indonesia apart

AFTER MORE THAN TWO decades as a Muslim activist, ADI SASONO finally has the power to carry out his ideas on what he calls a "People's Economy." The cooperatives minister spoke with Asiaweek's Jose Manuel Tesoro and Tom McCawley.

On the "People's Economy:"
Some 0.2% [of Indonesians] control 61% of GDP. This is not healthy. You cannot build true stability on injustice. True reform means empowering the very small in order to create a strong middle class. We have to establish a set of rules so that the people's economy is based on clear and open rule of law, including anti-trust legislation. We do not want to nationalize assets. But we have to limit the degree of ownership, which can create social tension. In Kalimantan, you have one company that controls 3.6 million hectares of land, as large as the United Kingdom. This is the result of the concentration of power during Suharto's time. So we have to establish an accountable decision-making process, democracy and a free press. We have to guarantee freedom of expression.

On whether Indonesia will miss out on economies of scale by going small:
I am worried. That's why we are promoting control by small businesses of 20% [of the economy]. The remaining 80% will stay in the conventional system. I hope we can increase [the participation of small businesses in distribution] to 50% next year. That is enough to create efficiency. We are not going to take over the traditional distribution system. I only want to give people options so they don't have to depend on [monopolies] in rice, soybean, cooking oil.

On the sale of assets:
Private banks owe the government $26 billion [in cash advances]. They have four years to repay. If they cannot, the government will want to get its money back by selling the assets. If the assets go to foreigners, that is okay because we need the money. But we should treat companies on a case-by-case basis. If they took the money to send abroad, that is a crime. Some control millions of hectares. They developed or reforested 15%; the rest was used as collateral for loans. We still don't know where this money - almost $40 billion - has gone. If the companies cannot redevelop this 85%, it is up to government to take the land back.

On his critics:
This impression [that the People's Economy will not work] mostly comes from so-called economic experts. They are consultants of the big companies, so they have their own interests. And some are politically against this government. When the rupiah fell to 16,000 to the dollar, they blamed the government. When it rose to 7,500, they credited the International Monetary Fund. If the IMF is solely responsible, why have [the economies of] more than 15 countries in Africa under IMF control not improved? These critics represent the old established economic forces. They are against a new democratic society.


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