During my career, I spent a great deal of time working in Indonesia and Egypt. During those periods, the former was ruled by the Suharto family and the latter by the Mubarak family. To understand them, it is important to realize that, although the title of both Suharto and Mubarak was “President” both were in fact “Kings.” They controlled and supported the military, they were supported by the religious majority and they maintained this loyalty through carefully doling out goodies to key supporters who thus had a financial interest in keeping them in power. With their children, wives and in-laws, they constituted a royal family.
I became familiar with a number of common features that now seem applicable to the Trump administration in the United States.
First of course is the staggering level of corruption. In both the cases of Egypt and Indonesia, most of this was directed toward enriching the family members of the rulers. In both countries, the main vehicle for this was a law that required that any international investment was required to have 51 percent local ownership. In very many cases, this was accompanied by the requirement that the government provide licenses, favorable tax treatment, and tariff treatment. The children of the ruler were facilitators in accomplishing this, so they naturally found themselves in possession of a substantial share of the minority investment.
In the case of Egypt, Hosni Mubarak’s sons Gamaal and Alaa were partners in the biggest industrial and trading companies in Egypt, paying almost nothing for their ownership. They reportedly owned shares in restaurants, car dealerships, hotels and resorts, as well as multiple international properties.
A similar pattern emerged in Indonesia, where the children of Suharto accumulated incredible wealth. Tommy, Banbang, and Sigit and their sister Tutut were the President’s closest advisors. His daughter was the chairman of the ruling party; a son-in-law was a general. Suharto constantly shuffled senior officials as they acquired too much power, so the children became the only reliable source of influence. For an investor to “get” a Suharto required surrendering as much as 35 percent share. Tommy was given the franchise to manufacture cars in Indonesia under a contract with Kia, and the company was not assessed a 35 percent tax that was levied on all its competitors. The industries in which the First Children participated range from airlines, telecommunications, hotels and toll roads, to sugar and oranges.
In both cases, the corruption was assisted by the active participation of a foreign power. In Indonesia’s case, it was Japan. In Egypt’s case, it was the United States, primarily through foreign aid, primarily military, that represented a payoff for the peace treaty with Israel.
The one thing that a king fears most when he is toppled from power is that the next regime will “kill” his children. In historic times, this was a literal fear, but in more enlightened modern times, it takes the form of arrest, incarceration and maybe banishment, usually without the wealth that was expropriated during the period of power. This threat or the promise not to undertake these threats may be the best way to convince the king to abdicate. Otherwise, removal tends to be accompanied by violence and destruction.