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Tuesday, June 1, 1999 Published at 13:26 GMT 14:26 UK

The Chinese dilemma

Angry looters targeted Chinese shops and businesses in 1998

By the BBC's Catherine Napier

Ethnic Indonesian Chinese occupy one of the most perilous positions in Indonesian society.

Indonesia Flashpoints
Under four per cent of the population, their economic status is envied, their loyalty is questioned, and they are politically vulnerable.

For years, many were denied citizenship. They were told to keep their religion at home.

Festivals were banned in public, and Chinese language signs and publications were outlawed except for one state sanctioned newspaper.

[ image: Economic crisis added to ethnic tension]
Economic crisis added to ethnic tension
The Chinese were encouraged to adopt Indonesian names. Even their identity cards were stigmatised - with a special code signifying the holder's ethnic origin.

And in times of political upheaval, they have borne the brunt of communal violence.

But they have survived, and prospered, in a climate of exclusion and frequent hostility from Indonesian Muslims.

And with the fall of President Suharto last year, they may at last be on the threshold of gaining some real legitimacy.

Political change

One of the leaders of the reform movement - the head of the National Mandate Party Amien Rais, has promised to put a Chinese minister in his cabinet if he is elected President following the June polls.

[ image: Many Chinese have fled violence]
Many Chinese have fled violence
And President Habibie, who took over from Suharto, has begun lifting some of the restrictions mentioned above.

For the first time the status of Indonesian Chinese is being publicly debated. But many aren't taking any chances.

Fearing more violence they have left the country to wait until the elections are over.

It is not hard to understand why.

History of hostility

The Chinese in Indonesia originate mainly from Guangdong and Fujian provinces in Southern China.

In the Dutch colonial era, they were the merchant middlemen between the rulers and their subjects, resented by the Javanese for their special status and social seclusion.

[ image: The Chinese enjoyed qualified protection under Presdent Suharto]
The Chinese enjoyed qualified protection under Presdent Suharto
After independence, anti-Chinese sentiment grew, coinciding with a rise in the influence of the Indonesian communist party to which ethnic Chinese turned for support.

Muslim organisations and army leaders viewed both with extreme suspicion.

In the wake of an attempted coup in 1965 blamed on the Communist party, diplomatic relations with Beijing were frozen for more than 20 years.

Hostility against the Chinese deepened, even though as a community they escaped the worst of an anti-Communist killing spree which followed the attempted coup.

Contacts and favours

Their method of survival was to cultivate contacts in the administration. And the army, whatever its misgivings about the loyalties of ethnic Chinese, had long recognised their usefulness in the area of supply.

[ image: After Suharto, President Habibie relaxed controls on Chinese freedom]
After Suharto, President Habibie relaxed controls on Chinese freedom
One of the country's biggest tycoons, Liem Sioe Liong, began his rise to fortune through meeting the former President Suharto while he was supplies officer for an army division in central Java.

Liem was one of a handful of ethnic Chinese who were allowed to benefit from a string of financial favours including monopolies, state bank loans and special licences.

President Suharto saw ethnic Chinese like Liem having a place in the development of Indonesia as a modern industrial society with the added advantage that they represented no political threat because of their minority status.

But in the process, he alienated the Indonesian business class which resented not so much the ethnic Chinese tycoons themselves as the system which allowed them to flourish.

Chinese wealth

Deregulation in the 1980s began to reveal the extent of the wealth amassed by the biggest ethnic Chinese conglomerates, and led to a national debate on how to redress the balance.

In 1990, President Suharto was forced to respond to increasing anger over the dominance of the Chinese by summoning the country's leading tycoons to his cattle ranch in West Java - where they were asked to hand over 25% of their equity to co-operatives.

The move alarmed foreign investors, but in the event was only cosmetic. Yet the perception of all ethnic Chinese was harmed by the powerful position attained by a few.

Soon capital flight was added to their crimes. They had not only hijacked the economy, they took their money out of the country when political instability threatened.

Nepotism under attack

What happens to the business empires of the ethnic Chinese will be a key issue for the next government.

[ image: The rise of Islamic politics could help the Chinese cause]
The rise of Islamic politics could help the Chinese cause
Already battered by the region's economic crisis and the loss of their political patron, their future conduct will be under intense scrutiny from a public sick of corruption, nepotism and crony capitalism.

None of the presidential candidates has spoken out in favour of breaking the conglomerates up.

However, with politics developing a much more Islamic flavour now in Indonesia, issues like transparency, justice and clean government should move more centre stage.

Economic collapse

Attention focuses on the super rich Chinese in Indonesia - but the vast majority of ethnic Chinese are small shopkeepers and traders, or medium sized businessmen.

They still fulfil their traditional role as the entrepreneurial middle class but enjoy none of the protection available to tycoons.

Since the collapse of the economy which led to last year's political turmoil, Chinese communities have been attacked in virtually every part of the country.

The most notable violence came last May in Jakarta as student protests took over the capital.

Orchestrated attacks

In what appeared to be a well organised operation, anti-Chinese sentiment was mobilised - many believed by the army - to create chaos in the city.

Hundreds of people were killed, homes and businesses were burned to the ground, ethnic Chinese women were systematically raped and in some cases stripped in public.

Thousands of ethnic Chinese fled abroad to neighbouring countries. Many still have not gone back.

It will be a hard task for any new government to make ethnic Chinese feel safe in Indonesia, given these sort of experiences.

But ending discrimination, encouraging their participation in political life and building a society in which benefits are doled out more equally may be a start.

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