Asian Transformations in Action - Api-fellowships.org

4CIRCLES OF POWER AND COUNTERBALANCESTan’s federal senatorship, despite it being promised toTan by the then Secretary General of the Chinese-basedparty, Gan (a pseudonym), who is a Foochow politicianand shares a hometown with Tan, in exchange for abribe (Brown 2001).In 1981, the Chief Minister stepped down and hisnephew assumed the position. Tan moved quickly tobuild up new political connections not only at the statelevel but also at the federal level this time. Top nationaland local politicians and their family members becameboard members in Tan’s listed company. They includeda brother of the new Chief Minister, a former federalChief of Defense Force, and a former federal Attorney-General. In 1987, Tan also purchased a 34 percent sharein a company, the other shares of which are owned bya senior local politician who is former state Ministerof Environment and Tourism and owns huge loggingconcession tracts in the eastern part of the state (Brown2001; Colchester 1994; Malaysia Business 1995).Under the new Chief Minister’s administration, Tan’spolitical ally, Gan, became the president of the Chinesebasedparty, and was also appointed as Deputy ChiefMinister in 1994. Tan’s younger brother was thenappointed as Senator in 1995. In order to make furtherpolitical connections at the federal level, Tan alsoestablished a company in Kuala Lumpur in partnershipwith a son of the Prime Minister at the time. In 1992,Tan split off 15 percent of the company to anothercompany in which the Prime Minister’s sons were soleshareholders and directors. Other share allocations wentto several politicians of the United Malays NationalOrganization (UMNO), the Malay-based party of thenational coalition government (Brown 2001).Tan’s company in Kuala Lumpur, however, failed tomake profits and his family members resigned fromthe company board in 1994. After Tan’s withdrawalfrom the partnership, the Prime Minister’s son broughta lawsuit against him. Tan tried to arrange a meetingwith the Prime Minister with the help of Gan, an oldmedical school classmate of the Prime Minister. ThePrime Minister, however, refused to meet with Tan. It isalso said that federal Inland Revenue Service agents weresent to raid the headquarters of Tan’s company (Brown2001). Tan’s attempt to make a strong connection withthe top national politician then broke down.Tan’s political links have further withered away sinceGan stepped down as the president of the Chinesebasedparty after his defeat in the 1996 election. A newparty president was selected who also became DeputyChief Minister. His daughter married a son of theChief Minister. The new Deputy Chief Minister alsoheld the office of Minister of Industrial Developmentand Minister of Modernization of Agriculture. It islikely that this was the time when Tan’s company wasovertaken by another local timber company, the ownerof which has close links with the Chief Minister and thenew Deputy Chief Minister. Furthermore, another localChinese businessman, Kiong (a pseudonym), began togain economic strength rapidly in the early 1990s. Hewent into not only the timber industry but also nontimberbusinesses such as chemical and constructioncompanies in partnerships with the Chief Ministerand a former federal Minister of Finance. Kiong alsoobtained the trust of Prime Minister through his veryquick completion of construction projects, includinga five-star hotel on a popular Malaysian resort island.Kiong conflicted with Gan over the gigantic damproject in the state and was behind the latter’s defeat inthe 1996 election (Brown 2001).While being upstaged by other local Chinese businesspeople, Tan became active and influential in the timberindustry in other countries, particularly Russia andPapua New Guinea. His company has been operatingin the Russian Far East since 1997 when it acquiredthe rights to harvest 305,000 hectares of state forest.In Papua New Guinea, his company is said to havemade close connections with national and localpoliticians through bribery, including a former DeputyPrime Minister, the Minister for Internal Security, aprovincial Governor and two Parliament members,and as a result succeeded in gaining control of closeto 50 percent of country’s log exports. Although thecompany’s international operations have been accusedof deforestation and illegal logging by Greenpeace andother international NGO groups, it is likely that Tan canmore easily conduct legal and illegal timber operationsin collusion with politicians in those countries than inMalaysia where his political connections have becomeweak at both the federal and state levels.Through the story of Tan, it is obvious that local businesspeople, especially in the timber sector, totally dependon political patronage and cannot be independenteven with their great financial ability. In addition, toppoliticians can exercise police power as a political meansof weakening their business partners if they becomeinsubordinate or intimidating. Under those conditions,it is likely that local business people in this forest-richstate in Malaysia prefer to expand their business overseaswhere it is much easier to bribe politicians for businessfavors than in their own country.Asian Transformations in ActionThe Work of the 2006/2007 API Fellows