Singapore: Institute of Southeast Asian Studies, 2014. xiv, 573 pp., [20] pp. of plates. (Illustrations.) US$52.90, paper. ISBN 978-981-4459-57-0.
Numerous academics and journalists have written about Liem Sioe Liong. This is because it is not possible to discuss or to understand the political and economic history of modern Indonesia without dealing with this pivotal figure. But in this book, Borsuk and Chng have drilled down deeper than others, producing an analysis that is not only forensic in its detail but rich in its picture of the life and times of Liem.
It moves from Liem’s early years in Java and then in Jakarta, tracking his beginnings as a trader and small entrepreneur and looks at how his business life was transformed in the revolution. These early chapters are evocative and read easily as we are taken into the relationships he began to develop with various generals and politicians and within the intriguing and complex world of business in Indonesia and Southeast Asia more generally. The authors paint a picture, not only of the wheeling and dealing that underpinned the rise of Liem and other Chinese Indonesian capitalists in the chaotic days following the ending of Dutch colonialism, but also of how military and political patronage and relationships with regional capitalists, including Chin Sophonpanich and Robert Kuok, became the factors of commercial success.
We are then introduced to the diverse individuals who drove Liem’s business juggernaut through the 1970s and 1980s. It is interesting that these individuals included both political and business figures and also breached the usual divisions between Chinese Indonesian and indigenous, Pribumi, business groups. And we are given the first insights into how the group began to grow beyond its early dependence on generals and politicians to a group operating more globally and which spread its wings into banking and finance, manufacturing, property, and agribusiness. The transition from a personalized operation to a more international, business-like, and complex stage is well captured by the authors in their portraits of Liem and his son, Anthony Salim.
From here, the book attempts two ambitious tasks. One is to provide a forensic analysis of the rise of Liem’s business empire. The second is to take us on a journey through the broader political and economic environment in which Liem operated. These two aspects are not only treated thoroughly but in a way that brings us close to the people, the deals and the relationships that drove the Liem story. Even though I am familiar with this terrain, the rich vein of interviews and primary sources used meant there was a lot that was new.
But the ambitious scope of the book also has its costs. On the one hand, chapters 8 to 14 are very intensive analyses of the way different companies of the group were established and run. Moving in great detail across Liem’s expanding interests in flour milling, commodity importing, cement, banking, real estate, petrochemicals, and manufacturing, the authors show how political influence, state-allocated monopolies, and credit as well as financing from international players fitted into the rise of each of the big companies.
This is an excellent assembly of data and insights that brings together an array of primary sources, interviews and other secondary material not matched elsewhere. It is a resource par excellence for researchers seeking to understand the processes of capital accumulation by Southeast Asian Chinese capitalists or for those who are familiar with the people and business groups involved. But even for someone who knows this area well, I must admit the level of detail proved exhausting.
On the other hand, the book also provides an extensive overview of the broader political and economic environment in which Liem operated. This approach is a welcome change from studies that often come out of business schools or are written by economists, where the analysis is offered in technical terms and abstracted from its broader contexts.
Borsuk and Chng show us how Liem fitted into the broader structural architecture of Indonesia’s political economy and how he had to weave his way through the crises that struck periodically, sometimes with devastating effect. We are shown how the fortunes of Liem were affected by the internal political struggles of the New Order and how he had to adjust to these. We are introduced to the threats that arose from a growing resentment of corruption and the concentration of wealth in the hands of conglomerates, which spilled over into anti-Chinese sentiment. Finally, we look at the Liem story through the devastating impact of the financial crisis and the struggle to rebuild the business and through the ultimate fall of Soeharto.
This aspect of the book brings some challenges that are the reverse of those mentioned earlier, with regard to too much detail. Here, the story often wanders away from the Liem story into a more general history. We look in much detail at Soeharto and his family and at some of the other Chinese business tycoons of the period. The financial crisis, the fall of Soeharto, and the politics of the post-Soeharto era bring with them the critical insights needed to explain the Liem story but at times tend to become stories in their own right and we sometimes lose sight of Liem.
Nevertheless, the chapters dealing with how Liem was undone by the financial crisis and how he reconstructed his empire through the complex web of asset seizures and buybacks that followed are immensely insightful. The descriptions of the chaos and violence in Jakarta and the flight of Chinese business to Singapore brought the reader into the drama.
In a sense, two books are offered here. One is a detailed explanation of the rise and transformation of a business empire. The other is a sometimes evocative story of the times of Liem.
In the latter parts of the book, the authors raise, directly or indirectly, some of the critical questions of the future that should now be the focus of scholars. To what extent has the fall of centralized authoritarian rule meant that capitalism and the capitalists of Indonesia have moved into a different phase? Is Indonesian capitalism now more thoroughly defined by the rules of global markets or have the conglomerates of modern Indonesia simply become tied into new political networks? Is the Liem experience a thing of the past?
Richard Robison
Murdoch University, Perth, Australia