Reviewing Forbes Indonesia's List

Conglomerate Responsibility to Society and Environment

Apparently about forty Indonesians possess an accumulative wealth of a third of the country’s annual budget. Forbes estimates the wealth of these forty super-rich is about USD 22,75 billion or IDR 202,7 trillion with an exchange rate of IDR 9.100 for every dollar. Meanwhile, the country’s total revenue in its 2006 budget is IDR 625,5 trillion. Of course accumulated personal wealth and a country’s yearly budget are not directly comparable, nevertheless the numbers give an indication on how the Indonesian economy is (still) heavily dependent on a group of elite.

This is not to mention the vast workforce and their families that rely their living on the conglomerates for monthly payroll. Hundreds of thousands are directly employed and millions others are also working in the supply chain relatively dictated by the gigantic corporate groups.

Not only this elite group holds economic power, but some names also have significant political influence. Members of parliament are in the list, as well as cabinet minister all the way up to the vice president. Their grasp over the country economically and politically is anything but weak.

Often if similar list is published, the local communities react with resentment or envious comments. Being a society and a nation in the middle of a maturing process, it is unconstructive for us to react in such a way. Personal wealth and property are private rights of all that must be respected. We should also not let ourselves to easily point fingers saying that they have accumulated their wealth through corrupt and indecent practices –although it is by far nothing extraordinary in this country, especially when strong political affiliations are in the picture. But this is more than ever something to be comprehended by the super-elite as well. With their elevated status in the society, by default they will be exposed whether they like it or not, whether they intend to or not. The ball is in their court to exhibit to the public that they are honest and skillful entrepreneurs who earned their wealth fair and square.

We must acknowledge that many of them did work hard and diligently to achieve their success. It is exactly those values of hard-work, insight, and determination that other entrepreneurs need to learn in order to gain their own success and in turn push the economy forward. Indonesia can certainly make use of a lot more rich people so long they also raise the livelihood of the poor.

Appraising the potentials spread across the archipelago, it is actually not that difficult to make someone rich in Indonesia. Forbes mentioned that most of the Indonesian top entrepreneurs gain their profits by exploiting the massive Indonesian market: 230 million consumers. Though it may “just” be clove cigarettes, flour, detergent, or bottled beverages, if multiplied by hundreds of millions of consumers then the number of zeros behind the profit margin can grow fast. It is worth mentioning that these native businessmen and businesswomen have in fact been practicing since decades ago a business strategy that has just recently made world-renowned: making profits from simple and cheap products for massive low-end markets. Many managers may just learned about this strategy through Prahalad’s “The Fortune at the Bottom of Pyramid” published in 2004.

Other than making their fortune from the people i.e. huge consumer market, some of the successful entrepreneurs exploit and process the country’s natural resources as their prime source of wealth. Thousands of acres of forest are subject to the timber industry or coconut oil on top of the high-profile oil and mining industry.

In short, two main factors that make the elite super rich are the people and natural resources. Surely skills and luck factor play indispensable roles, but it is by tapping the two invaluable resources they are able to enjoy financial bliss. Having said that, the conglomerates ought to carefully consider their responsibilities in maintaining social and environmental sustainability. We obviously can not force them to follow the philanthropic steps of Rockefeller, Carnegie, or Gates –which all are up to personal moral conscious. But what is needed is for government, the media, and the civil society to actively engage in monitoring and controlling functions to all business activities with social and environmental impact.

It is for the businesses own interest as well to ensure social and environmental sustainability. Once the social stability or natural cycle is disturbed, many if not all aspects of business will also bear the impact and pay the cost. Social or environmental investment that may seem expensive in the short-run frequently proof itself to be a cheap price to pay in the longer perspective when business sustainability and good reputation are put into the equation.

The bottom line is that by all means do make as many profit as the conglomerates can make but in a responsible manner. Go ahead in exploiting natural resources but without destroying the nature and communities. Cut down the trees for wood but do not forget to green back the forest. Enjoy high profits but share them fairly with the employees and workers. Abide the law and pay the taxes as prescribed.

A wealth of trillions of rupiah for almost all the population of the country is nothing more than a fairy tale. However for those who are privileged enough to have it ought to bear in mind a modern fairy tale’s saying of Spider-Man, “With great power comes great responsibility”…

Rotterdam, October 2006,

Michael C. Putrawenas

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  • Byline

    Michael is a professional leader in the fields of energy investments, complex commercial deals, and sustainability with extensive international experience. His personal interests span from socio-political issues, history, and culture.

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