Inside the Economy of Appearances

Indonesia's profile in the international imagination has completely changed. From the top of what was called a "miracle," Indonesia fell to the bottom of a "crisis." In the middle of what was portrayed as a timeless political regime, students demonstrated, and, suddenly, the regime was gone. So recently an exemplar of the promise of globalization, overnight Indonesia became the case study of globalization's failures.

The speed of these changes takes one's breath away--and raises important questions about globalization. Under what circumstances are boom and bust intimately related to each other? If the same economic policies can produce both in quick succession, might deregulation and cronyism sometimes name the same thing--but from different moments of investor confidence? Such questions run against the grain of economic expertise about globalization, with its discrimination between good and bad kinds of capitalism and policy. Yet the whiggish acrobatics necessary to show how those very economies celebrated as miracles were simultaneously lurking crises hardly seem to tell the whole story. A less pious attitude toward the market may be necessary to consider the specificities of those political economies, like that of Suharto's Indonesia, brought into being together with international finance. ¹

This essay brings us back to the months just before Indonesia so drastically changed, to canoe at the running edge of what turned out to be a waterfall, and thus to think about a set of incidents that can be imagined as a rehearsal for the Asian financial crisis as well as a minor participant in the international disillusion that led to the Suharto regime's downfall. In 1994 a small Canadian gold prospecting company announced a major find in the forests of Kalimantan, Indonesian Borneo. Over the months, the find got bigger and bigger, until it was the biggest gold strike in the world, conjuring memories of the Alaskan Klondike and South Africa's Witwatersrand. Thousands of North American investors put their savings in the company, called Bre-X. First-time investors and retired people joined financial wizards. Whole towns in western Canada invested. ² The new world of Internet investment blossomed with Bre-X. Meanwhile, Bre-X received continuous coverage in North American newspapers, especially after huge Canadian mining companies and Indonesian officials entered the fray, fighting over the rights to mine Busang, Bre-X's find. ³ The scandal of Indonesian business-as-usual, opened to public scrutiny as corruption, heightened international attention and garnered support for Bre-X. But, in 1997, just when expectation had reached a fevered pitch, Busang was exposed as barren: There was nothing there. Gasps, cries, and law suits rose from every corner. Even now, as I write two years later, the drama rumbles on. The Toronto Stock Exchange is changing its rules to avoid more Bre-Xs. ⁴ Bre-X law suits set new international standards. ⁵ Bre-X investors still hope and complain across the Internet, as they peddle the remains of their experiences: jokes, songs, and stock certificates (as wallpaper, historical document, or irreplaceable art, ready to hang). ⁶ Meanwhile, Indonesian mining officials and copycat prospecting companies scramble to free themselves from the Bre-X story, even as they endlessly reenact its scenes, hoping to rekindle investor enthusiasm. ⁷ Hope's ashes are inflamed even by ridiculous claims; recently the Bre-X chief geologist, named in many lawsuits, says there is gold at Busang. Who is to prove him wrong? ⁸

The Bre-X story exemplifies popular thinking about the pleasures and dangers of international finance and associated dreams of globalization. The story dramatizes North-South inequalities in the new capitalisms; it celebrates the North's excitement about international investment, and the blight of the South's so-called crony capitalisms: business imagined not quite/not white. Painting Southern leaders as rats fighting for garbage, the story also promises new genres of justice for the Northern investor who dares to sue. Finance looks like democracy: The Internet, [End Page 117...