The day after Christmas, The Jakarta Post published a news story titled "Bakrie, Northstar conclude talks on debt buyout scheme". Beside its technical information, the news raises two important thoughts.

First, Bumi Resources, a company owned by the Bakrie family, was sold last year for US$2.26 billion, with a net profit of $789 million.

The second consideration is the special position of the family with its political clout at the national level. This political position, together with the fall of Bumi's shares due to the American financial crisis and Sidoarjo's mud problems, have made the Bakrie family the target of public criticism in recent months. And given current national politics, it seems this criticism is not about to stop.

However, if we were to look at this group from a business perspective instead, we would see that, as a business group, the Bakries managed to set an interesting example in breaking three centuries of history marked by a pattern of unfavorable conditions for local entrepreneurs.

Early in the 19th century, the Netherlands East Indies governor general Herman Willem Daendels (1808-1811) -- adopting the traditional Javanese concept that all land is owned by the rulers -- sold all the land in the Probolinggo district in East Java to a Chinese merchant named Han Ti Ko. Employing a little historical imagination, we see this transaction is not in itself so spectacular.

Neither is the value of the transaction as reported by historian Vlekke -- a million dollars. A 1936 study by Phoa Liong Gie found that from 1400 until 1800, Chinese merchants were importers of various goods from China and India, and hence had strong control of trading routes and sea transportation in and around this archipelago.

The coming of the Dutch drastically reduced their capacity as the only intermediaries between the Indonesians and the European communities at the domestic level. If the Dutch had never come, then theoretically Chinese merchants would have been able to accumulate even greater amounts of capital than those demonstrated by Han Ti Ko.

But for indigenous entrepreneurs, the coming of the Dutch had much more destructive effects. The "embryonic capitalism" of the 16th and 17th century coastal city-states was destroyed militarily by Sultan Agung (1613-1645), the greatest king of Mataram.

In this context he said, "I'm a prince and a soldier, not a merchant like other Javanese princes." His successor Amangkurat I, as reported by van Goens, went one step further by prohibiting his people from sailing across the sea.

The Dutch East Indies Company (VOC), which already existed at the time of Sultan Agung, tightened its grip through the incessant internal conflicts of the Javanese rulers; by playing the trump card of divide et impera, it gradually came to control almost all the sea trading routes at the expense of the indigenous entrepreneurs.

On Jan. 1, 1800, the VOC was formally dissolved. Yet the fate of indigenous entrepreneurs remained unknown. The VOC's successor, the colonial state, made high-scale capital and technology-biased economic policies: "liberalization" under Daendels (1808-1811) and Thomas Stanford Raffles (1811-1816), and finally the Forced Delivery System (1830-1870). Indigenous entrepreneurs, being underdeveloped, were totally excluded from the colonial economy.

It is in this perspective the Chinese merchant Han Ti Ko's one million dollar transaction becomes so spectacular. For, in the previous century, noted by historian Ricklefs, the VOC's income from 1717-1723 reached Sp. RI (Spanyol Real) 683,620. With the value of conversion at that time, one Sp. RI 1 was worth 1.125 Rds. Holl (the Dutch currency). This means that the VOC's income for the whole of six years amounted to only Rds. Holl. 769,072. A century later, Han Ti Ko's personal wealth, therefore, was bigger than that of a corporation as big as the VOC.

Why had history and other structural powers been barriers to the emergence of indigenous entrepreneurs? This is a debate that can surely take a lot of time. To make it brief, let me say that the today's phenomenon of the Bakries' business reflects the reverse side of the pattern set during the past three centuries.

It is quite certain that the colonial state made an unfriendly environment for indigenous entrepreneurs. But even after the creation of the nation state, no concrete guarantees were provided for these local businesses. For political reasons, the New Order patrimonial state tended to favor the "pariah" entrepreneurs, who possessed no socio-political support and thus were unable to convert their wealth into political influence.

The rampant growth of nonindigenous conglomerates during the New Order can be explained from this perspective. But this also means that indigenous entrepreneurs, such as the Bakries, were deemed a political threat by the New Order regime, because the wealth accruing in their hands could easily be transformed into political force.

If these structural and historical explanations can be accepted, the survival of the Bakries today owes more to the "liberalization of politics" of 1998, when the state was no longer able to perform its patrimonial role and the prevailing setup obliged business actors to comply with the rules of fair competition according to the market system.

I hope this version of the story is true, for it proves that the 300-year-old historical shackles that chained the fate of indigenous entrepreneurs have been broken.

The writer is the Jakarta-based director of The Institute for the Study and Advancement of Business Ethics (Lspeu Indonesia).

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