Why Did Suharto Promote Chinese Business People Over Indigenous Ones? Essay Example


Why Did Suharto Promote Chinese Business People Over Indigenous Ones?

This paper tries to identify the background of Suharto regime and the various tactics employed by Suharto. Suharto fought for political survival, to achieve the survival Suharto through Golkar strategized how to and used the Chinese business class to his advantage. Suharto prejudiced the abilities of Chinese and therefore manipulated them to his advantage.

In September 30 1965, Surkano’s regime collapsed in due to pressure especially from the military. An abortive coup was staged which the Indonesian Communist Party was publicly blamed for, however few leaders in the party distanced themselves from the reports. A state of confusion engulfed the state, in this state of confusion a Major general named Suharto was the man to benefit from these confusions. (Nagataa 2003)

Suharto was also the commander of Army Strategic Reserve, where he commanded a lot of influence. Using his influence, he overthrew Burg Karno from his seat but confusion in the country persisted. Suharto is accused that during this time to have organized or planned ethnic violence against the people of Chinese origin. Before this occurrence, the Chinese minority had won some election over the majority Aboriginal indigenous people. The Chinese took to the street mocking the Aboriginal people, this sparked ethnic classes in which several Chinese were killed. (Mackie 1999)

This wave of violence assisted the Chinese to recognize the need to humble and avoid conflicts. In 1967, General Suharto received a March 11 letter of instruction as it is famously called. In the letter Suharto took over presidency from Suharto and introduced the New order regime.Suharto received the support of Chinese who were vulnerable and required political protection. Suharto installed Hamengkubuwono ix to the economy recovery sector. He also hired Adam Malik to form a foreign policy towards the West. He was to concentrate on domestic politics and administration through his Golkar function. (Diao & Mely 2001)

Suharto was able to suppress opposition through the Golkar as witnessed during the 1971 election, which he rigged to his advantage he later on forced political parties to merge leaving only three political parties. (Diao & Mely 2001)In 1974 election, he also maintains a vast majority despite the outcry and anger of the Aboriginal people who complained against Suharto preferential treatment to the foreign businesspersons. The same year students protests about Japanese investors turned into riot but Suharto used the military to suppress the conflicts. Protest continued in 1978 over preferential treatment to foreign businesspersons. (Nagataa 2003)

Suharto needed political survival and to achieve that he had to use the foreigners who were loyal to him for protection purposes. Suharto also had a misconception or a prejudice, he believed that Chinese were the best businesspersons and they belonged to the business field and no other field. He went on to frustrate their efforts to join public service and the politics. At the same time, he provided protection for their investments all over the country. He gave incentives to these businesspersons and even other industrious Aboriginal businesspersons. (Diao & Mely 2001)The move benefitted t5he Chinese more and went ahead to prosper in business which most of them were forced to venture into by Suharto’s policies. (Mackie 1999)

The strategy worked well for Suharto, business grew and economy as well grew in double digits. The Chinese and other foreign businesspersons got wealthier as results. The Aboriginal people protested but Suharto continued to frustrate their effort for change in governance by engaging the military in every activity of the country. The military continued to support and protect Suharto in exchange for favors and protection. The business community and especially Chinese continued to demonstrate their loyalty through financial aid to Suharto’s rule. (Mackie 1999)

Using these resources, the New order regime was able to successfully vie and six terms. Foreign businessmen continued to get protection and favorable economic policies for their loyalty which sustained the Suharto’s government .From this it was clear that Suharto favored foreign businessmen and most particularly Chinese because of the financial aid that he received from the to fund his politics, government and personal lifestyle. He also favored them because of the presumed quality of business diligence. He also favored tem because of their loyalty, which the Aboriginal people did not provide.


Diao, A. & Mely T, (2001) Indonesia in Chinese Business in South East Asia.London: UK. Routeledge

Mackie, J. (1999) ‘Tackling Chinese problem’ in post Suharto Indonesia. Renewal or Chaos Institute of Southeast Asian Studies pp 187-197 .Singapore: Singapore

Nagataa, J. (2003) Local and Transnational Initiatives Towards Improving Chinese-Indigenous Relations in Post-Suharto Indonesia: The Role of the Voluntary Sector Asian Ethnicity Volume 4, Pages 369 – 381.Retrieved from, http://www.informaworld.com/smpp/content~db=all~content=a713611826