Commentary: Uncle Liem leaves a lasting legacy in Indonesian business
Anyone contemplating writing the economic or business history of contemporary Indonesia will frequently come across the name of Liem Sioe Liong, the businessman who died of natural causes at the age of 97 in Singapore on Sunday.
As controversial as he was as a businessman, Om Liem (Uncle Liem) as he was affectionately called by close friends and the media, left a lasting legacy, not only in terms of the huge business empire he built, but more importantly in terms of how business was conducted for much of president Soeharto’s rule between 1966 and 1998.
For good or for bad, Liem is very much part of the nation’s history, just as Soeharto is.
No one can deny that he built the Salim Group using the privileges that came with his special relationship with Soeharto, including monopoly controls over some key commodities. The relationship went back to the mid-1950s, when Soeharto was a military commander in Semarang, Central Java,
and Liem helped Soeharto through trade so that his unit could survive the difficult economic times
of the day.
Liem was among the first to embrace Soeharto’s suggestion that all Chinese Indonesians adopt Indonesian sounding names as part of a drive to promote assimilation into society. But after Liem took the name Soedono Salim, he continued to be known and referred to by his Chinese name, or Om Liem
When Soeharto rose to power after 1966, Liem’s fortunes improved dramatically, naturally. But as a very powerful and successful businessman, he always kept a very low profile and avoided even the smallest amount of publicity.
Admittedly, that has been the style of all businesses, big and small, before the booming public relations industry in the 1990s changed public perceptions and the media profiled of successful businesspeople. Liem, a first generation Chinese immigrant from Fujian, however, continued to shy away from publicity, even as his business group prospered and he was named, on more than one occasion, as Indonesia’s wealthiest man.
Little is known about the kind of relationship Liem had with Soeharto, other than the fact that the two men frequently met in private, away from the media spotlight.
It was a friendship that clearly worked to their mutual benefit. Their relationship became the standard model upon which many later business groups grew and prospered: Powerful political or military figures providing guarantees and protection to emerging family businesses, mostly of Chinese origin at first, but later including the odd business or two owned by indigenous Indonesian families.
In return for the protection given to Liem to build his business empire, the President relied on the tycoon to finance many of the government’s off-budget programs or his own private projects. Once, perhaps to show who was really in charge of the relationship, Soeharto told Liem and the heads of other Chinese Indonesian conglomerates during a public meeting that they should set aside a part of their profits to finance the charity foundations that were run on his or his family behalf.
It was also Uncle Liem who gave Soeharto’s children their first breaks when they became adults before going on to build their own business empires. As did Liem in his early years, they relied on privilege and largesse from government contracts to grow.
Liem’s business fortunes did not completely collapse after Soeharto stepped down from power in 1998. His Salim Group, which like other business groups suffered under mountains of debt during the Asian Financial Crisis, survived after relinquishing control over
some profitable companies, including the highly prized Bank Central Asia, then Indonesia’s largest commercial bank.
The real test of the resilience of the Salim Group came after it lost all privileges, including access to power, with the departure of Soeharto. Now in the hands of the second and third generations of the family, the Salim Group may no longer be the wealthiest family business in the country, but its Indofood is still one of the largest and most profitable producers of food products in the country.
The business model through which Liem built his empire no longer exists, but don’t write off the Salim Group in the Indonesian business scene.
It is probably a moot point today to ask whether Liem would have prospered as much without the special relationship he had with Soeharto. He just happened to be the right man, at the right place and at the right time, and used this historical destiny well in building his business empire.
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