Lessons of Empire: India, 60 Years After Independence

Lessons of Empire: India, 60 Years After Independence

by Nick Robins and Pratap Chatterjee, Special to CorpWatch August 14th, 2007

Two villagers who left their mud and wood huts last month to travel to London -- Kumuti Majhi and Phulme Majhi -- were a stark contrast to the 212,000 wealthy Indians who visited Britain last year on shopping expeditions where they outspent Japanese tourists. The villagers' mission, rather than the acquisition of designer clothing or the latest electronics, was to try to save the livelihoods of their small tribe that grows millet, fruit and spices in the lushly-forested Niyamgiri hills in eastern India. On August 1, 2007, the Majhis spoke out at the annual general meeting of Vedanta Resources PLC, a British multinational that is poised to dig a new bauxite mine that threatens the village of Jaganathpur. While Vedanta is incorporated in Britain, it is owned by Anil Agarwal, the world's 230th richest man according to the Forbes 2007 list, a former scrap metal merchant who was born in eastern India. (See Vedanta Undermines Indian Communities, by Nityanand Jayaraman.) The timing of the Mahji’s trip to Britain and the protests back in India have a much wider significance. 2007 is marked by a trinity of anniversaries that recall India’s conquest, first struggles and eventual liberation from British rule. On August 15th, India celebrates 60 years of independence. Earlier in the year, commemorations took place for the 150th anniversary of the great rebellion against British rule in 1857 -– known in the UK as the ‘mutiny’ and on the sub-continent as the ‘first war of independence.’ This trinity of historic milestones is completed with the 250th anniversary of the pivotal battle of Plassey in June 1757, when the private army of Britain’s East India Company (which was often referred to simply as the “Company”) defeated the forces of the Nawab (ruler) of Bengal (in eastern India), ushering in first corporate and then imperial domination. It is this legacy of collusion between global corporations and the expansionist state that makes this year so poignant and full of enduring lessons. Its history provides timeless lessons on how (and how not) to confront corporate power with protest, litigation, regulation, rebellion and, ultimately, corporate redesign. Many of today’s corporate struggles are prefigured in the resistance to the Company’s rise to power. Again and again, "the return of the East India Company" is used as a catch-phrase to describe the recent influx of multinationals into India, whether global mining corporations or foreign business more generally. And the Mahji’s journey follows in the footsteps of others who have travelled to London to seek redress from corporate abuse. In August 1769, for example, two Armenian merchants, Johannes Rafael and Gregore Cojamaul arrived at London’s docks. The two were rich men and had made their fortunes in India’s most prosperous region, Bengal. However, Rafael, Cojamaul and two others had been summarily arrested by the Company’s chief executive in Bengal, Harry Verelst, who then held them for more than five months under guard. When they were released, they found that the Company had pressured its puppet, the Nawab of Bengal, to change the rules of the game and ban all Armenians from the Bengal market. Sailing around the world to where the Company was headquartered, Rafael and Cojamaul appealed to its board of directors, complaining of their “cruel and inhuman” treatment. The striking continuity of protest over the centuries is largely buried in today’s celebration of India's surge to economic prominence. Tata’s acquisition of Anglo-Dutch steel group Corus earlier in the year has been seen by many as symbolizing the end of Britain’s era of industrial supremacy. Tata had already bagged the UK’s iconic tea blend, Tetley, and its automotive arm may be lining up a bid for Land Rover. Writing recently in the Financial Times, Malvinder Hohan Singh, the chief executive of Indian pharmaceutical company Ranbaxy, caught the mood: "500 years ago, a company was formed in London that directly led to British rule in India [and] there appears to be some concern that there is evidence of a reverse trend." This theme of reversal has also influenced India's popular media, most strikingly in a TV advertisement for Rajnigandha pan masala. Set in London, the ad shows an Indian tycoon stopping his car in front of the East India Company's headquarters and announcing to his secretary that he wants to buy the firm: "They ruled us for 200 years, and now it's our turn." But while the media celebrates India's rise as the new economic emperors, they would also do well to reflect on the history of the world's first major multinational. Down with the East India Company! Established on a cold New Year’s Eve in 1600, Britain’s East India Company is unarguably the mother of the modern corporation. In a career spanning almost three centuries, the Company bridged the mercantilist world of chartered monopolies and the industrial age of corporations accountable solely to shareholders. The Company’s establishment by royal charter, its monopoly of all trade between Britain and Asia and its semi-sovereign privileges to rule territories and raise armies certainly mark it out as a corporate institution from another time. Yet in its financing, structures of governance and business dynamics, the Company was undeniably modern. It may have referred to its staff as servants rather than executives, and communicated by quill pen rather than email, but the key features of the shareholder-owned corporation are there for all to see. Beyond its status as a corporate pioneer, the sheer size of its operations makes the Company historically significant on a global scale. At its height, the Company’s empire of commerce stretched from Britain across the Atlantic and around the Cape to the Gulf and on to India. From its headquarters at East India House on London’s Leadenhall Street, the Company managed an extensive import-export business. Trading posts were established at St. Helena in the mid-Atlantic, where Napoleon drank Company coffee in exile. ‘Factories’ were also established at Basra and Bandar Abbas in the Middle East. But it was in India that the Company’s impacts were most profound. Some of India’s major cities grew on the back of the Company’s trade, not least Bombay (Mumbai), Calcutta (Kolkata) and Madras (Chennai). Beyond these coastal ports, the Company established a huge land empire, first as an opportunistic quest for extra revenues and later as an end in itself. Always with an eye to the share price and their own executive perks, the Company’s executives in India combined economic muscle with its small, but effective private army to establish a corporate state across large parts of the sub-continent. Plassey was the turning point when the Company’s forces defeated the Nawab of Bengal and placed its puppet on the throne. This is often regarded as the contest that founded the British empire in India. But it is perhaps better viewed as the Company’s most successful business deal, generating a windfall profit of £2.5 million for the Company and £234,000 for Robert Clive, the chief architect of the acquisition. Today, this would be equivalent to a £232 million corporate windfall and a cool £22 million success fee for Clive. Yet, the Company’s footprint did not stop there, but stretched on to South-East Asia and beyond to China and Japan. Penang and Singapore were both ports purchased by the Company in an age when territories could be bought and sold like commodities. And if India was the site of the Company’s first commercial triumphs, it was in China that it made its second fortune. The Company’s ‘factory’ at Canton was the funnel through which millions of pounds of Bohea, Congo, Souchon and Pekoe teas flowed west to Britain, Europe and the Americas. In the other direction came first silver and later a flood of Indian-grown opium, smuggled in chests proudly bearing the Company chop (or logo). From the beginning, the Company’s monopoly control over trade with Asia had been disputed by its competitors back in Britain. But it was with the Company’s acquisition of unprecedented economic power following Plassey that it came to be seen as a more structural threat to political liberty back home. For the editor of London’s Gentleman’s Magazine, by April 1767 it had become the ‘imperious company of East India merchants.’ For this normally sedate magazine, the prospect was bleak and boiled down to “whether the freedom or the slavery of this island will result.” Not surprisingly, perhaps, this fiery article was concluded with a defiant cry -- “down with that rump of unconstitutional power, the East India Company.” Six years later, as American patriots organised to counter the threat of the Company’s newly won monopoly of the Atlantic tea trade, Rusticus’ writing in east coast newspaper, The Alarm, also made clear his opposition: “Their conduct in Asia, for some Years past, has given simple Proof, how little they regard the Laws of Nature, the Rights, Liberties or Lives of Men.” Looking back, the uprising that eventually led to America's independence was sparked as much by hostility to corporate monopoly as it was to taxation without representation. The Company’s malpractice also featured heavily in Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776. Written in the wake of the Company’s speculative ‘Bengal Bubble,’ Smith dissected the corporation as an institution and evaluated the factors that led to its own particular crisis. Uniquely, Smith was emphatic in downplaying the actions of individuals as the root cause of the problems. ‘I mean not to throw any odious imputation upon the general character of the servants of the East India Company,’ he wrote, stressing that ‘it is the system of government, the situation in which they are placed, that I mean to censure.’ The problem was one of corporate design. For Smith, the Company held the secret to one of the greatest puzzles of his time: explaining the distribution of benefits from the rapidly increasing integration of the world economy. “The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope,” argued Smith “are the two greatest and most important events recorded in the history of mankind.” Smith’s belief was that the full potential of this dramatic opening had not been realized, owing to a combination of colonies and corporations. For the natives of both the East and West Indies, “all the commercial benefits have been sunk and lost” in a series of “dreadful misfortunes.” In Asia, the agents of this pain were the Dutch and British East India Companies, monopoly corporations that he condemned as “nuisances in every respect.” Not only did people pay for "all the extraordinary profits which the company may have made," argued Smith, but they also suffered from "all the extraordinary waste which the fraud and abuse, inseparable from the management of the affairs of so great a company, must necessarily have occasioned." Smith was certainly an enemy of the over-mighty state, but he was also opposed to the over-mighty corporation, arguing strongly against the market power of monopolies and the speculative dynamics of stock-market listed firms. Perhaps what infuriated the Company’s contemporaries most through the seventeenth, eighteenth and nineteenth centuries was its impunity, its ability to shrug off the consequences of its actions. For an insidious corollary to the Company’s speculative drive for market dominion was its willingness to engage in immense crimes safe in the knowledge that domestic and international remedies were not in place. A large part of the problem lay in the legal void of the time, with courts in both Europe and Asia wholly ill-equipped for bringing corporations and their executives to account. This did not stop the Company’s contemporaries from trying, most notably Adam Smith’s friend, Edmund Burke. It was Burke who first exposed how the Company had ‘radically and irretrievably ruined’ India through its ‘continual Drain’ of wealth -- a phrase that would haunt the next 150 years of British presence in India. In 1783, Burke introduced to make the Company accountable to the British Parliament, arguing that its corporate charter carried intrinsic duties: "this nation never did give a power without imposing a proportionable degree of responsibility." It is said that when one of the Company’s oldest Directors, William James, read Burke’s bill, he died of shock. When Burke's measure failed as a result of an unholy alliance of Court and City, he took up a hopeless struggle to impeach the Company's most senior executive in India, the former governor-general, Warren Hastings. Burke was merciless in his critique, on one occasion describing how Bengali women had been violated by the Company’s tax collectors: "They were dragged out, naked and exposed to the public view, and scourged before all the peoples they put the nipples of the women into the sharp edges of split bamboos and tore them from their bodies." For seven long years, the trial continued, ending as expected with a grateful House of Lords acquitting Hastings of "high crimes and misdemeanours." To get the founder of liberal economics and the father of modern conservatism both struggling to tame the Company says something for the bipartisan threat that the corporation posed to Britain during the Enlightenment. And Smith and Burke were joined by many others -- poets, playwrights and pamphleteers -- who expected future generations to take a similarly hard look at the Company's performance. "Historians of other nations (if not our own)," wrote the poet Richard Clarke in 1773, "will do justice to the oppressed of India and will hand down the Memory of the Oppressors to the latest Posterity." In the introduction to his long satire, The Nabob, or Asiatic Plunders, Clarke urged his countrymen "to perpetuate an honest indignation against these enemies of mankind." A Legacy of Loot Yet, in spite of Smith's profound analysis and Burke's passionate rhetoric, imperial interests won out against principle, consigning India to an empire of scorn and extraction. The drain of wealth was simply too attractive to renounce -- even though one lone MP did call for Britain to withdraw from India back in the 1780s. Combining commercial domination with control over Bengal’s tax system, the Company was able to restructure the richest province of what had once been the Mughal Empire for its own ends. Textiles were shipped back to London, paid for by Bengal’s own taxes, and peasants were forced to grow opium to be sold exclusively at below-cost prices to the Company, who then engineered its illegal export into China. If force and fraud were the tools by which the Company turned the terms of trade in its favour in India, it was opium that eventually had the same effect with the Qing Empire. For millennia, Europe had exported bullion to Asia in return for luxury goods, and when the Company was formed in 1600, Britain accounted for a paltry 2 percent of global output, compared with India's 22 percent and China’s 29 percent. By the time Britain finally departed India's shores three and a half centuries later, its national income was more than 50 percent greater than that of its former colony. And it was the East India Company that acted as one of the chief agents in engineering this great switch in global development. "What is happening today with the rise of India and China is not some miraculous novelty -- as it is usually depicted in the Western press," writes historian William Dalrymple in the August 2nd issue of Time magazine, "so much as a return to the traditional pattern of global trade in the medieval and ancient world, where gold drained from West to East in payment for silks and spices and all manner of luxuries undreamed of in the relatively primitive capitals of Europe." Centuries after the Company's demise, its physical presence in India continues to impress: Its remains stretch from ruins of its fort at the pepper port of Tellicherrry on the west coast, to the grandeur of Chennai's Fort St. George on India's eastern shore. The mark is greatest in Kolkata, a "company town" of immense proportions. But the Company's powerful legacy also endures in India's public memory as an inspiration to the nationalist struggle for independence. For India's first prime minister, Jawaharlal Nehru, the Company lay at the root of the oppression that he fought. "The corruption, venality, nepotism, violence and greed of money of these early generations of British rule in India," Nehru thundered in The Discovery of India, "is something which passes comprehension." Looking back at the Company's conquest of India, Nehru noted "it is significant that one of the Hindustani words which has become part of the English language is loot." Traditions of Domination and Resistance Today, after a decade of economic liberalization in India, this critical analysis continues to lie close to the surface. For many Indians, the Company's story has two profound morals: first, that multinational companies want not just trade, but power, and second, that division and betrayal among Indians enables foreign rule. The East India Company was a profit-making company that generated not only great wealth, but immense suffering, most notably in the horrific Bengal famine of 1769-70. Just as corporations today should be judged by the impacts of their core business rather than their often peripheral donations to cultural events, so the East India Company has to be assessed on the basis of its underlying activities rather than the occasional philanthropy of its executives. Far from being a dusty relic, the East India Company exemplifies the constant battle within corporations between the logic of exchange and the desire for domination. Two centuries on, it demonstrates that the quest for corporate accountability is a perpetual exercise in directing the energies of merchants and entrepreneurs so that their private passions do not undermine the public interest. The lesson from Smith is the imperative to keep corporate size in check while globalization is fostering ever-increasing commercial concentration. And from Burke, we can take the essential importance of placing corporate conduct within a framework of justice, establishing legal mechanisms to hold corporations to account. At its heart, the Company's business model combined speculation at home with aggression abroad. It was Karl Marx, writing in the 1850s as the Company limped towards its end, who pithily captured the drive that lay behind its remorseless rise to power. It was not any imperial project that had led it on, he wrote, but rather the Company had "conquered India to make money out of it." Just as in the days of the Company, India remains the place where corporate practice meets strong resistance, such as ongoing protests to bring justice for the thousands who were poisoned or killed in the 1984 deadly gas leak at Union Carbide's Bhopal factory, or the movement in the 1990s to prevent Enron's Dabhol natural gas power project in Maharashtra from going on-line. Challenges to multinational projects continue across the country today: In March 2007, after police shot to death 14 people protesting against investment plans of the Salim Group of Indonesia, the chemical hub in West Bengal Nandigram was cancelled. Nor is it just foreign companies that have faced fierce resistance. Protesters have targeted India-based billionaires including the Tatas who planned to set up a major car factory in Singur, West Bengal. And like the Company, corporate impunity remains a constant concern. Roger Moody, a British campaigner from Mines and Communities, notes that Vedanta's subsidiary, Sterlite Gold, stands accused of a raft of criminal acts in Armenia, including mining more gold than permitted by the government, deliberately under-valuing its reserves, and failing to properly dispose of mine wastes. Last November, in Zambia, Vedanta was indicted for willfully using a defective pipeline to dispose of highly toxic tailings from the country's largest copper mine, KCM, which it purchased two years earlier. It had also been constructing Zambia's premier copper smelter without obtaining official permission from the Zambian government. Last week, the Majhis took home a small concession from London. A Vedanta spokesperson said the company's chairman, Anil Agarwal, would be "very happy" to visit the controversial area with the villagers. But, the villagers understood that would not be enough. "We are not going to allow this [destruction] to happen," Kumuti Majhi told a news conference in New Delhi. "We have been living in this mountain range for generations, and we worship Niyamgiri as a living god." Warm words were equally insufficient for Rafael and the other Armenian merchants back in the time of the East India Company. When the Company’s directors arrogantly brushed them aside, they went to court, suing the Company’s chief executive in the region, Harry Verelst, for damages. An intense legal battle then unfolded with claim and counter-claim lasting until 1777, when the courts found Verlest guilty of “oppression, false imprisonment and singular depredations.” The Armenians won a total of £9,700 in compensation -- over £800,000 in today’s money. Thousands of miles away from the scene of the crime, the principle of extraterritorial liability for corporate malpractice had been established in Georgian London. Will Vedanta and others repeat the excesses of the British East India Company, or can systems of accountability finally be established that protect the rights of the weakest -- just as Burke hoped for centuries ago? Much depends on what investors, regulators and society learn from the lessons of the past. Corporations, like people, have life spans. The British East India Company is long dead, but the quest for wealth it embodied endures. So, too -- as evidenced by popular movements and persistent campaigners like Kumuti Majhi and Phulme Majhi -- does resistance.

* Nick Robins is author of The Corporation that Changed the World: How the East India Company Shaped the Modern Multinational (Pluto, 2006)

Burying Indonesia’s Millions: The Legacy of Suharto

Burying Indonesia’s Millions: The Legacy of Suharto

by Andreas Harsono, Special to CorpWatch February 15th, 2008
Former Indonesian ruler Suharto died last month a very wealthy man. In 1999, a year after he stepped down as Indonesia's second president, Time magazine reported his wealth at US$15 billion. "Not bad for a man whose presidential salary was $1,764 a month when he left office," the magazine reported. And not bad for a peasant boy born in 1921 in Kemusuk, a small Javanese village, during Dutch colonial control. Suharto's route to power and wealth was through the military. In 1954, he took a new job in Semarang, on the north coast of Java, only a three-hour drive from his military base in Jogjakarta. It thrust the 33-year-old Javanese officer into a totally different world. Before the 1954 promotion, Suharto had been a field commander. Now, as head of the Diponegoro military command in Semarang, his immediate job was not to lead military operations, but to feed the thousands of troops under him. His new division consisted of an assortment of thugs and soldiers, bandits and militias. And like most post-independence armies, it was poorly funded. If Suharto was to succeed in the new Indonesia that was emerging after World War II, he would have to find ways to keep the army in food and equipment. He looked to the example of his wife, Siti Hartinah. Although she came from Javanese aristocracy, she was supporting the family, which already had three young children, with the small garment trade she had started. Suharto, too, turned to business -- mainly smuggling such consumer goods as sugar and rice between Singapore and Java. He defended running a business out of the army as essential to feeding his men. Key to his operations from the start were two men who would remain his business associates for almost half a century. Suharto's tie to Liem Sioe Liong, a Fujian-born Chinese merchant who had migrated to Java in 1938, was to become one of the most important alliances in his New Order regime. Suharto also befriended sportsman-cum-businessman Bob Hasan, whose godfather was an army general. The relationships were mutually beneficial. Suharto used his troops and position to protect the lucrative smuggling; Liem and Hasan helped supply the troops and provide Suharto with business opportunities. According to George J. Aditjondro, a corruption researcher who spent two decades tracing the Suhartos' fortune, Suharto basically built his "business model" in the city of Semarang and gradually expanded it, enlisting other officers and businessmen along the way. In 1956-1957, his Diponegoro operations came crashing down. Suharto was found guilty of smuggling, and army head Colonel Abdul Harris Nasution tried to remove him. But Bob Hasan's godfather, Colonel Gatot Subroto, defended his protégé. Army headquarters defused the scandal by sending Suharto to an officer-training program in Bandung, in West Java. Within two years, he bounced back, won another promotion, and took command of the Kostrad army reserve in Jakarta. The problem of supplying troops remained the same, as did Suharto's solution of choice. He bought his business partners along with him to Jakarta. Suharto's political career took another turn on September 30, 1965, when hundreds of army officers kidnapped and killed several generals. Suharto knew of the plan in advance since most of the kidnappers were his Diponegoro colleagues. They reportedly planned to bring the generals, including Nasution, who had allegedly planned a coup, to face President Sukarno. The next day, Suharto decided to move against his former colleagues. Blaming the communists, his troops began a slow purge against Sukarno, Indonesia's first president. The ensuing maelstrom of violence killed three million people between October 1965 and March 1966, according to one of his officers, Major General Sarwo Edhie Wibowo. By 1968, at 47 years old, Suharto had emerged as Indonesia's number one man. He sidelined Sukarno and ruled the country with an iron fist for the next 30 years. Human Rights Suharto has been accused of a wide variety of human rights abuses. In 1975, he ordered his troops to invade East Timor. The estimated death toll included up to 200,000 East Timorese, 100,000 in West Papua, and tens of thousands more in Aceh, Lampung, Tanjung Priok, West Kalimantan and elsewhere. Even while partnered with Liem and other Chinese tycoons, he systematically discriminated against the Chinese minority in Indonesia. The East Timor Action Network, a New York-based human rights group, called Suharto, "one of the worst mass murderers of the 20th century."
In his official biography, Suharto admitted that in 1983-1984 he had ordered "mysterious shooters" to kill between 2,000 and 3,000 thugs, thieves and robbers. This "shock therapy," as Suharto called the killings, earned him the nickname "Gali Pelarian Kemusuk" or "The Thug from Kemusuk." Joining Thuggery and Profits But Suharto was no ordinary thug. He was a business-minded one. Between 1971 and 1972, he and Liem set up giant wheat flour manufacturing plants. PT Bogasari Flour Mills, the foundation of Indofood, is now the world's largest instant noodle manufacturer. Liem also set up Bank Central Asia, one of Indonesia's largest private banks, in which Suharto's children owned shares. Throughout his rule, Suharto has been implicated in systemic corruption and cronyism that distorted Indonesia's economy. When the economy boomed in the 1970s, along with increased oil prices, Suharto ordered his U.S.-trained economic ministers to issue regulations that included deducting small amounts of money from the salaries of civil servants for charity. The "donation" was automatically channeled to his Supersemar Foundation and Dakab Foundation and some of the funds did help the poor, provide student scholarships and build mosques. Suharto's Dharmais Foundation established one of the biggest cancer hospitals in Jakarta. But from the 1980s, the recipients of the charity also included Suharto and his cronies who invested the money in dozens of companies. Later, his economic ministers issued regulations that granted monopolies to favored companies. Liem won government contracts to supply wheat flour and cloves. Hasan won millions of forest concessions and won the nickname "Raja Hutan" or "King of the Jungle." George Aditjondro, who has tracked the family’s fortune, wrote that Suharto established at least 40 foundations since the 1950s. The family owned shares in large companies, including in the cement and fertilizer industries, toll roads and oil palm plantations. In the late 1980s, when Suharto's six children came of age, they joined the business, helped by "Uncle Liem" and "Uncle Bob." Hasan joined with Suharto's eldest son, Sigit Harjojudanto, to set up PT Nusantara Ampera Bhakti, a holding company in mining and telecommunications. Supersemar, Dharmais and Dakab also own shares. The middle son, Bambang Trihatmodjo, established ties with the army-owned Kartika Eka Paksi Foundation, and shared ownership with Hasan in his international timber corporations. Hasan’s paper mill, PT Kiani Lestari, received funds from Suharto's foundations. The youngest son, Hutomo Mandala Putra, also linked up with a Hasan operation, Sempati Airlines. When Suharto's wife died in 1995, "Uncle Bob" became Suharto's main advisor on the children's businesses. Demands For Prosecution By the time Suharto finally stepped down from power in May 1998, he was facing street protests and the Asian economic crisis. The value of the Indonesian rupiah against the American dollar fell from 2,300 to 10,000. Many civil society organizations demanded that his successors prosecute Suharto and his cronies for criminal corruption. M. Fadjroel Rachman, a former political prisoner who campaigned for prosecuting the Suhartos, said that the government should take over the Suhartos’ fortune. Rachman especially targetted the former president’s six children and one grandchild: Siti Hardiyanti Rukmana, Sigit Harjojudanto, Bambang Trihatmodjo, Siti Hediati Harijadi, Hutomo Mandala Putra, Siti Hutami Endang Hadiningsih and Ari Harjo Wibowo. Ari is Sigit Harjojudanto's son, and Suharto's eldest grandchild. The family was protected not only by its vast wealth, but also by the network of cronies that also benefited from the Suharto fortune. Michael Backman, a researcher and business analyst in Asia, once calculated the Suhartos owned 1,247 companies. A May 1998 Asian Wall Street Journal article reported that these companies were owned by at least 20 different conglomerates, including Liem's Salim Group and Hasan's Kiani Lestari Group. Time magazine researched land ownerships and reported the Suharto family, on its own or through corporate entities, controlled some 3.6 million hectares of real estate in Indonesia -- an area larger than Belgium. That includes 100,000 square meters of prime office space in Jakarta and nearly 40 per cent of the entire East Timor. No one knows how exactly much wealth the Suhartos accumulated. Family lawyers and children repeatedly denied allegations of vast wealth and Sofyan Wanandi, a businessman once closed to Suharto, said that the family had lost much of its fortune because of mismanagement and the weakened rupiah. When Time magazine estimated the Suhartos' wealth at US$15 billion -- of which $9 billion had been transferred from Switzerland to a nominee bank account in Austria -- Suharto denied the report. He insisted that he had no bank deposits abroad and owned only 19 hectares of land plus $2.4 million in savings. In 1999, Suharto filed a lawsuit against Time magazine for defamation. After a nearly a decade of legal battles, Indonesia's Supreme Court ordered Time to pay $106 million in damages. Time and its reporters refused to pay. A family lawyer, Juan Felix Tampubolon, told the London-based Financial Times that he had no idea how rich the Suharto children were. "Yes the children have companies but, as far as I know, these are legal," he said. "All the accusations are merely that. There are newspaper clippings but no proof." Nonetheless, in 2004, Transparency International, an anti-corruption watchdog, named Suharto the world's greatest ever kleptocrat and put his fortune at up to $35 billion. The United Nations and the World Bank quoted this research when they launched an international campaign last year to help governments recoup state assets stolen by previous regimes. Efforts To Regain The Wealth Over the years there have been repeated efforts to recoup the money that critics claim Suharto stole from his country. In 2007, President Susilo Bambang Yudhoyono's administration filed a civil suit for US$1.54 billion against Suharto and one of the seven major foundations he established. State prosecutors alleged he had stolen $440 million from the government. But even from beyond the grave, Suharto wields influence and loyalty. When he died in January at 86, President Yudhoyono immediately cancelled a scheduled appearance at a UN conference on retaking states' stolen assets. Instead, he went to the Suhartos' mausoleum to preside over the patriarch's burial ceremony. Like most Indonesian leaders, Yudhoyono was a Suharto crony. And like his predecessors in office since 1989 -- B.J. Habibie, Abdurrahman Wahid, and Megawati Sukarnoputri -- he was unlikely to be able to retake the stolen assets. Vice President Jusuf Kalla, who repeatedly asked for a pardon for Suharto, owned businesses that thrived during the Suharto rule, according to Rachman. Kalla is currently chairman of the Golkar Party whose chief patron was Suharto. Last year Kalla tried to protect Suharto's youngest son, Hutomo Mandala Putra, after his money was frozen in a BNP Paribas account in the popular offshore haven of Guernsey, UK. Yudhoyono and Kalla are only two of Suharto's many cronies still in power. And hundreds, perhaps thousands, of military officers, politicians and business leaders remain loyal to the family. But critics like George Aditjondro and Fadjroel Rachman doubt that the country's leaders have the political will to follow the money trail. Retaking the stolen assets, said Rachman, will take place only "when the young leaders of Indonesia replace the Suhartoists or the old leaders like SBY, JK and their generation."Suharto and most of his circle escaped unscathed and rich. Suharto was never prosecuted. The public reason was that in 1999 doctors declared him too unhealthy to stand trial. But critics say the real reason is that successive administrations are still highly influenced by Suharto's henchmen and cronies. Only one family member, Hutomo Mandala Putra, nicknamed Tommy, was prosecuted for corruption. He was convicted but acquitted on appeal. He is now facing a civil suit as part of a government bid to recover millions of dollars from Garnet Investment Limited that has been frozen by BNP Paribas. Tommy also spent four years behind bars for hiring hitmen to kill Supreme Court Judge Syafiuddin Kartasasmita. The judge had convicted Tommy for corruption and illegal possession of weapons. Hasan spent three years in prison for causing a US$244 million loss to the Indonesian government through a fraudulent forest-mapping project in the early 1990s. The military's involvement in business also continues, prompting critics to ask if they are businessmen with weapons or soldiers with check books. In June 2006, New York-based Human Rights Watch published a 126-page report, "Too High a Price: The Human Rights Cost of the Indonesian Military’s Economic Activities," describing how the Indonesian military raises money outside the government budget through a sprawling network of legal and illegal businesses. Working with many business partners, the military has provided paid services, marked up military purchases, and invested in hundreds of companies. Today Suharto is dead, Liem is living in Singapore, and Hasan is semi-retired in Jakarta where he plays golf. But the business model the three partners built in Semarang in the 1950s endures and still forms the pillars of the Indonesian economy. Whether or not anyone has the will or ability to undermine this corrupt and intertwined edifice is a question that is crucial to Indonesia's future.

Andreas Harsono is a journalist based in Jakarta, currently writing his book "From Sabang to Merauke: Debunking the Myth of Indonesian Nationalism."

Morality and Ethics in Public Life: A Gandhian View

Morality and Ethics in Public Life: A Gandhian View
Ravindra Kumar, Delhi, India, April 28, 2008
This is a vicious cycle … with money, politicians acquire power, and with power, politicians acquire money.
Morality and ethics are interrelated to each other in the sense that both are concerned with the behavior of man. Although many times both are interpreted as synonymous to the other, they are different in their meaning and scope, and thus need to be explained separately. They also need to be applied differently in the day-to-day practices of man. Furthermore, their application in individual and public life remains separate. Simultaneously, as per the demand, it is the subject of time and space; it is a subject of wide discussion and minute analysis.
When we talk of a lack of morality and ethics in public, this generally refers to the dishonesty in the economic affairs of those who are in various walks of public life. To put it simply, it is corruption, which is an international problem. It is of course, a serious problem. Along with Asia, it is also in Europe and America. It exists in Africa as well as the continent of Australia. This we can peruse and understand from the grafts that were sought in preceding years.
During the 1990s for example, the prime minister of Thailand, Silpa Archa, had to vacate his office due to corruption. During the same decade, we witnessed at least two dozen union minister, governors, and chief ministers from the provinces of India who had to resign due to corruption charges. Their names were discovered in the diary of a businessman who paid money to them as a bribe; the whole episode afterward became known as "Hawala."
Furthermore, England had a number of cases in the media that exposed corruption in the public life, particularly among members of Parliament. As a result, a book was published in Britain under the title, "M.P.'s for Hire." Consequently, a committee under the chairmanship of Lord Nolan was appointed and its report and recommendations raised many controversial issues about morality and ethics in public life.
In America, the Mafia and Tammany Hall-style organizations continue to influence politics. The Ethics Committee of the United States Congress has exposed many illegalities and corruption in the public life of America.
Countries like Indonesia, as well as many nations of the African continent, are known for corruption in the public sphere. In developing countries, kickbacks and sleaze are especially common. To achieve the maximum with minimum efforts is a sign of success, and in such an atmosphere, honesty is suffocated. These happenings pose serious challenges to the system, particularly to democracy and a decent public life.
Although this phenomenon is related to a constant lack of morality and ethics in public life, it is not new; on the contrary, it is quite old. Though the world has witnessed tremendous progress with science and technology transforming social life in terms of material gains in the last few years, the progress in material matters has been accompanied by a lowering of standards in public life. This is a vicious cycle in that with money, politicians acquire power, and with power, politicians acquire money. Money power and muscle power have totally destroyed political life. Mafias and gangsters seek to control public life in many countries.
It is indeed a matter of serious concern. It is more serious in a country like India. It is a challenge for the country. Moreover, it is highly regrettable that apart from bureaucrats and people in the educational field, front ranking leaders—even from the ruling parties, including the Congress, which had been nursed by Mahatma Gandhi for a long period of time—have been found among the accused. Great leaders like Sardar Patel and Rajenda Prasad too have led Congress and nobody dared to point an accusing finger toward their clean and transparent public life.
But what is this? In India corruption is an issue of serious concern today. It seems as if corruption is rampant in the whole system and now, without doubt, it is a matter of concern for all of us as it puts a question mark on the very existence of a respectable life and on our national character.
Now, what to do? And that too through the noble Gandhian Way! In my opinion, and in the opinion of many others, especially Gandhian scholars, the idea of Trusteeship can be helpful to deal with this situation. Trusteeship based on nonviolence is an essential part of the economic setup suggested by Mahatma Gandhi and is worth giving a thought in this regard. In Trusteeship, Mahatma Gandhi's economic management is fully associated with ethics and morality. In it those who own money are expected to behave like the Trustees holding their riches on behalf of the poor, and in which the labor-owner relationship is like two partners working for the public good.
This very idea could be the guideline for those who are in the public arena, who serve the people, society, and the nation, and who are in fact the custodians of national life. It is based on high morality and morality is a Dharma, a duty, beyond that law that has only legal sanction or legitimacy. But like Ahimsa it is also a plant of slow growth; it demands high courage and awakening from the inside. Therefore, it may seem impractical or the application of it may seem ineffective as far as the matter of improvement in public life is concerned. Even so, without any doubt from a Gandhian perspective it is important and adaptable.
Moreover, the role of all of us, the people, to establish morality and ethics in public life is most important, as we are the makers of our own kings of democracy. We elect our own representatives. We have all the power in our hands. Therefore, our awakening in the matter is of utmost importance. It is the time we must come forward. We must unite and sacrifice—as sacrifice is a must, especially along Gandhian lines—and with introspection individually and collectively make our [political] body, society, and the nation free of this evil or curse.
Dr. Ravindra Kumar is a universally renowned Gandhian scholar, Indologist, and writer. He is the former vice chancellor of the University of Meerut, India.
This article is based on extracts of Kumar's March 2008 address at Gayatri Vidya Parishad College of Engineering, Vishakhapatnam, Andhra Pradesh, India.
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CPI[M] PLAYS ON IN NANDIGRAM

Three women allege they are beaten, stripped by CPI-M cadre
Wednesday May 7 2008 00:00 IST
PTI
NANDIGRAM: Three women activists of Bhumi Ucched Pratirodh Commitee on Tuesday claimed they were beaten up and stripped by CPI-M cadres in Nandigram for refusing to support the Marxists in the ensuing panchayat polls.Malati Das, Krishna Das and Tulsi Das of Simulkundu village claimed that they have filed a complaint but the Nandigram police refused to comment.When contacted, Superintendent of Police of East Midnapore S Panda told PTI that he had no information on the matter and that the Nandigram police station could only say anything.The women alleged that around 40-50 CPI-M cadres, led by Mamata Das, came to their houses on Monday and laid a seize.
"The CPI-M cadres told us that we should vote for their party in the panchayat polls. When we refused to oblige, they started beating us. They even snatched the voter's identity cards," they alleged."They then started stripping our clothes. We ran for around one km without any clothes to escape from their clutches," they claimed

US: Predictions of an Economic Hit Man

US: Predictions of an Economic Hit Man
by John Perkins, AlterNetJanuary 13th, 2006
Most people in the United States know that a transit strike crippled New York City. Fewer are aware that seven South American countries, representing over 80 percent of the continent's population, recently elected presidents with anti-American sentiments. The former has an immediate effect. The latter will impact our children for decades to come.In December 2005, Evo Morales buried seven challengers -- taking 54 percent of the vote -- in what the New York Times referred to as "the most important election since Bolivia's transition from dictatorship to democracy a generation ago." His platform appealed to the poor, including farmers whose main source of income, coca plants, caused them to suffer brutal treatment at the hands of U.S. drug agents. Although U.S. politicians and the media have denounced coca because it is used to produce cocaine, the fact is that it is extremely important in the Andes as a legal remedy for altitude sickness, digestive problems and other illnesses.Evo Morales is the latest in a long list of democratically elected Latin American presidents whose primary appeal is their opposition to U.S., IMF and World Bank policies that favor foreign corporations with reputations for exploiting natural resources and local labor. Bolivia joins the ranks of previously pro-American countries that have recently turned against Washington and Wall Street, such as Argentina, Brazil, Chile, Ecuador, Uruguay and Venezuela.Argentina's President Kirchner recently announced what has been hailed as an "anti-IMF rebellion." He paid off nearly $10 billion in IMF debt in order to get out from under a burden that, he said, "caused poverty and pain among the Argentine people."Venezuela's President Chavez has become a popular spokesman for anti-U.S. sentiments around the world.Ecuador's President Gutierrez was thrown out of office by a popular grass-roots uprising when he capitulated to economic hitman threats and bribes, and went against his campaign promises to force U.S. oil companies to pay more to the Ecuadorian people for Ecuadorian oil. An Ecuadorian friend told me, "If a democratically elected official does not honor his campaign promises, democracy demands that we replace him."In the past year, a rising tide of people throughout the world has been rebelling against policies they see as unjust. This has occurred in Africa, Asia, Europe, Latin America and the Middle East, as well as in the United States, where New York transit workers fought to defend their economic well-being. As one transit worker told me, "We're sick of being told that our families must sacrifice while huge corporations and their executives receive tax breaks."This rebellion is facilitated by the internet, cell phones and satellite dishes. People in places once considered remote are increasingly aware of statistics such as these:
Transnational corporations have taken control of much of the production and trade in developing countries: For example, 40 percent of the world's coffee is traded by just four companies; the top 30 supermarket chains control almost one-third of worldwide grocery sales.
A trade surplus of $1 billion for developing countries in the 1970s turned into an $11 billion deficit by 2001.
The income ratio of the one-fifth of the world's population in the wealthiest countries to the one-fifth in the poorest went from 30 to 1 in 1960 to 74 to 1 in 1995.
Of the 100 largest economies in the world, 51 are corporations; of those, 47 are U.S.-based.
The overall share of federal taxes paid by U.S. corporations is now less than 10 percent, down from 21 percent in 2001 and over 50 percent during World War II; one-third of America's largest and most profitable corporations paid zero taxes -- or actually received credits -- in at least one of the last three years (according to Forbes magazine).
Back in 1980 the average American chief executive earned 40 times as much as the average manufacturing employee. For the top tier of American CEOs, the ratio is now 475:1 and would be vastly greater if assets, in addition to income, were taken into account. By way of comparison, the ratio in Britain is 24:1, in France 15:1, in Sweden 13:1.
Pre-Civil War slaves received room and board; wages paid by the sweatshops that today serve many U.S. industries will not cover the most basic needs.
Unrest in New York and Latin America, as well as in Africa, Asia, Europe and the Middle East are harbingers of the difficulties that will haunt future generations -- unless we take heed. They serve notice that if we want a peaceful and prosperous future for our children, we must recognize basic human needs; we must insist that all people -- not just those at the top -- have the right to justice and dignity. Bolivian voters, NYC transit workers and democratically elected presidents of other countries are warning us that the bottom line of the corporate balance sheet is not the final statement upon which our society will ultimately be graded.John Perkins is the author of "Confessions of an Economic Hit Man." His website is johnperkins.org.