The 13-15 May of 1998 Mass Riots that drastically affected businesses in Indonesia

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Let's talk about history. One historical catastrophe struck Asia in shock, one that influenced not only one country but those around it as well. In May 1998, many countries like Thailand were affected, but today, we're going to dive into the mass riots within Indonesia. This crisis led many Chinese Indonesians to flee the country during this period of time, and in this article, we're going to find out why.

At this time, there was a load of Indonesia's own citizens being in a rage across the whole country. During this time, there were a lot of documented photos containing citizens burning looted goods, a lot of fire, arson, and many more stuff! The Join Fact-Finding team, which was established by President JB Habibe in 2002, mentioned that the riots had 1,200 people whose deaths fell victim to being burned, more than 90 Chinese-Indonesian women were raped+abused, and 8,500 buildings were burned down due to arson! From all of this, I can't even fathom how much trouble there was for the police to at least try to control. But as we know from the present time, the bloodshed and grief that this event had brought onto the country couldn't be controlled even if the government, military, OR police tried to.

So, a term I found while researching this financial crisis was "foreign currency floating ."Well, floating in terms of currency means that it is the opposite of being able to exchange currency in a fixed amount, for example, how the Hong Kong dollar (HKD) has been fixed to the United States dollar so the exchange rate would be 1 USD=7.75-7.78 HKD. Instead, floating means a currency conversion is not determined by the country's dollar. Still, it's determined by the supply and demand of it in the market, so the currency can depreciate or be appreciated.

My first question in writing this article was: What led all these citizens to go into this outrage across the country? This all originated from the "Asian Financial Crisis" in 1997. Remember the term we just learned, which was floating currency? According to Indonesia Investments, the Thai baht was at a fixed value in US dollars at first. However, investors lost their confidence in Thailand's economy, so more people started selling their baht for USD. Then, the government ran out of money to keep their currency at a fixed value because the value crashed, so they had to make their currency float. And how does this relate to Indonesia? That was coincidentally the same question I had! No literally. It was. The same situation happened; the influence of questioning the countries' economies was apparent and spread to Indonesia. So it scared people, like, "What is Indonesia's economy as weak as Thailand's?" So the investors yet again SOLD or pulled out their money from Indonesia's rupiah (their currency) for USD. Do you want to guess what happened? The rupiah's value also crashed by 80% as GDP growth in 1998 became a negative value! Literally, the number was "-13.6," and their inflation rate is "65" (Hill, H. (2000). The Indonesian Economy, p. 264)!

If GDP's numerical value is negative and inflation is higher than ever at that point, what would be happening to Indonesia's business world? Cyclical employment increased even more as more jobs were lost, basic goods and services became too expensive, and businesses collapsed (The Diplomat, 2023). Even mothers who had to experience the death of their children were set to protest every Thursday outside the Jakarta presidential palace called Merdeka Palace. This came to a name called "Kamisan," with these consistent protests being for as long as 800 Thursdays, it had been recognized to fight for justice for the unjust victims during this time. This shows the determination of how citizens would try to make a difference by persistence no matter what. This shows the good side of determination, but there's another side of Indonesians who turned to looting and arsons to catch the government's attention and do something. Well, this horrid government system was obviously under an authoritarian regime led by Suharto, and his presidential term was from 1967 to 1998 (Britannica).

Enough about the history, though; what actually happened to businesses in Indonesia due to this historical event? Well, I heard from first-account sources that they vacated Indonesia at that time, but what about those who decided to stay? What happened to those skills that weren't transferrable to other lines of business? Statistics actually tell us that "[Y-Y growth] output fell by 12-15%, and inflation was increased by 80% (Rand). Well, let's look into one business in general. A business named Apek Cafe, which was located in Medan, Indonesia, experienced this historical event firsthand as it's been established for 80 years. Seyanti is the Chinese-Indonesian business owner of this cafe, and she inherited it from his father. This cafe has seen why Medan was known for its student activism against the Suharto government, as most protests connected about the rising prices and complaining about the price of gas and electricity being too much to afford.

Not only were students protesting, but on May 4, 1998, the police were looking to clear off the student protestors. Rumors were heard that the police actually attacked/assaulted the students, and more than 50 people were arrested. In addition to this, ironically, the police station that held the detained people was surrounded and attacked by others. This had obviously escalated the situation in Medan, and students were ransacking buildings and setting them on fire in the streets of Medan. This influence spread from Medan to Jakarta and then to Solo.

Along with the reports of more than 160 cases of raped Chinese Indonesians, this is the reason why thousands of Chinese Indonesians vacated the country. Luckily for Apek Cafe, Seyanti's business had to be closed for a few days, and they had experienced nothing wrong with this historical event. Even though she was scared, she mentioned that "everyone I knew in the neighborhood was never nice to me," which led her to be calm (New Naratif).

However, this luck did not fall on all Indonesian businesses. A retired business owner, Osma Halim, is 68 years old but was known for his business being in sauces in 1998. He's one of the actual few who would come to tell his story as most people would want to "not dwell in the past". He shared the unfortunate story of his location in the Jalan Asia district, which is known for its Chinese Indonesian community. He would explain that he was surviving on instant noodles and didn't dare go out to the city during the daytime, making him close his business until all of this was over. The only actual time he went out was when mobs who grappled sticks and rocks would come to the district to try to attack them. The only reason he would go out was to protect Jalan Asia with others who lived there, and he estimates that around 1,000 people had tried to attack the district. Imagine how much fear was struck in him, as a man, to have run all the way home and locked himself in when he heard of the first impending attacks from others outside the district because of something his community hadn't even done any wrong. These mobs would not only try to attack the people but would even storm the businesses and shops! This was thought to be more than a racial issue with Chinese Indonesians but more of a political one to take the spotlight away from the government's authoritarian regime and poor presidential term.

This vast historical event struck everybody in Indonesia with grief, anger, and fear. Those who were already in the low-income class in the economy were probably barely surviving because of the fear of being able to go out of their homes for food! This shows how poor a country's state can be with economic instability and how a good government also plays a massive role in the economy. Even though this was over 30 years ago, those who are even reminded of this historical event speak briefly about it so as not to dwell on the past. The country is way better now, and businesses have grown since then. Learning about this historical event in Asia shows how countries can affect one another quickly and affect everybody's lives. If you have read this far, I hope you enjoyed learning this Asian history with me, and I hope you read my other posts!