Giving Suharto His Due

January 29, 2008

I was of two minds as to whether or not to join in the analysis of Suharto's legacy, but I decided that I cannot let stand some of what I have read about Suharto, Indonesia's strongman president for 31 years, who died on Sunday at the age of 86. For those who don't know me: I was the World Bank's country director in Jakarta from 1994 to 1999. I was present during Indonesia's financial crisis and when Suharto was forced out of office in May, 1998. I can't say that Suharto and I were close, but I met him many times, and, to the extent that any outsider can ever really know a Javanese, I believe I knew something of what made him tick.I have taken a good deal of grief over the years since I left Indonesia as an apologist for Suharto. Why? Because I have argued that the bad that he did -- and some of it was horrific -- should be balanced against the good, not for the sake of Suharto but for the sake of development. To see Suharto as just another corrupt dictator is to risk losing the lessons from one of the great development success stories of all times.We all know the bad parts. If you don't, just read almost anything that Jeff Winters, a Northwestern University academic, has to say on Suharto. Winters has made a career out of railing against Suharto, loves phrases like "iron-fisted, brutal, cold-blooded dictator," and makes statements like, "Suharto is responsible for some of the worst crimes against humanity in the 20th Century" and "Sukarno's widow called Suharto Indonesia's Pol Pot."The worst crimes against humanity in the 20th Century? Indonesia's Pol Pot? Sorry, but this is headline grabbing, hyperbolic nonsense.Suharto was a complicated and flawed leader (which national leader isn't?), but the idea that the only Indonesians who are morning his passing are his family and cronies is just plain wrong. The vast majority of Indonesians saw and see Pak Harto, as he is called in Indonesia, as a leader who rescued a huge, bankrupt and collapsing country from disintegration.In mid 1960s, before the fall of President Sukarno, Indonesia was a development basket case par excellence. An international pariah, it was not even a member of the UN let alone of the Bretton Woods institutions. With a government that had virtually ceased to function, it was wasting whatever remaining resources it had by waging a needless war with its neighbor, Malaysia. At roughly $60 per capita, it was poorer by far than most other developing countries, half the income levels of India and Pakistan, a third less than China or Nigeria. With over 300 ethnic groups and 7,000 inhabited islands, the Indonesia Suharto "inherited" hardly qualified as a country.Thirty years later, Indonesia's economic performance had left the competition in the dust. Incomes had increased annually by an average of more than 7 percent to $980, half again as much as China, twice Pakistan, three times India, four times Nigeria and Bangladesh. And, no, all this money was not going just to the elite. Income distribution did not change much during this period, and average food intake went from 1,650 calories to 2,750. Given its starting point, the success of Suharto's Indonesia was, indeed, an Asian miracle.And what about corruption? Was Suharto the most corrupt dictator of the 20th Century? Does he deserve to be at the top of Transparency International's rogue's gallery of corrupt leaders? I question this on two grounds. First, where is all the money Suharto allegedly stole? Here is a guy who has lived in the same modest house (I have been there; it is comfortable and in a good neighborhood, but nothing more), led a modest life both as president and afterward. Do his children have it? Yes and no. They were given special access to market opportunities as Indonesia boomed, and created giant corporate conglomerates from which they got rich. But these conglomerates did things, produced stuff, exported things, employed people. What exactly is the difference between the opportunities that George W. Bush had in the business world because of his father, and the opportunities that Suharto's children had? At best a distinction of degree, not direction. There were abuses of power by Suharto's children, by Tommy Suharto especially, but there were also real contributions to development.Second, if there was corruption at the level claimed by TI and others, how did Indonesia do so well for so long? In a visit to Jakarta in the early 1970s, Bob McNamara, the former World Bank President, told Suharto that Indonesia had a serious corruption problem that would keep the country from developing. In 1997, Jim Wolfensohn the then-World Bank president, gave Suharto the same message. Suharto's response? To detail the 25 years of record setting development that took place under his rule, certified by the World Bank itself.Something is wrong with the popular image of Indonesia's corruption, but is not something one can raise in polite society. It smacks of being soft on corruption, as the Wall Street Journal has suggested more than once that I am.Suharto did many terrible things -- or more accurately, many terrible things happened on his watch. One of his worst sins, from a development perspective, was that he systematically held in check the development of the kinds of institutions a country needs to weather political storms. Suharto was the only institution that mattered in Indonesia, and he was determined to keep it that way. And when the storm came, and the institution that was Suharto departed, Indonesia suffered. But it did recover and it is moving on.One of my great frustrations after leaving Indonesia is that no one seems willing to step back and try to understand why Indonesia did so well for so long under Suharto, and from such an awful starting point. My guess is that this hasn't happened because giving Suharto his due as a development leader is more than political correctness can accommodate. What a shame.


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