16 - The Sky Starts to Fall

Summary

1996 — the year before the financial crisis hit the region — could be called Salim's high-water mark. Everything was progressing smoothly — business was booming and the sky looked to be the limit. In July 1996, Asiaweek magazine in Hong Kong put out its first annual list of people it labelled Asia's “Power 50”, and Suharto and Liem proved their potency — the president topped the list, while his leading cukong was Number 5 (and the highest ranking businessperson). That year, Salim published its first comprehensive corporate brochure, a forty-page full-colour production with a plain white cover featuring the group's logo — an embossed globe with the name Salim written across it. Chairman Liem's written message declared confidently that the group's “best years still lie ahead”. What lay ahead instead was a traumatic plunge from power for Liem and his patron. In retrospect, the bucolic days of 1996 for Salim were somewhat akin to the maiden voyage of the Titanic before it struck the iceberg: there was celebration and partying on board, and passengers envisioned grand dreams for the future. It was the prophetic calm before the storm. For Suharto, 1996 portended the calamity that would follow. Having ditched his close military advisors and at the apogee of power, Suharto continued dispensing favours for his children's ventures, and indeed, extended it to the next generation as well. That year proved to be a turning point for the president when his wife — his pillar of support, and some say, the possessor of his wahyu — died.

HONOURED IN PHILADELPHIA

For Salim, though, 1996 was smooth sailing. There was a high point for Salim's offshore vehicle, First Pacific. In July, the company was named a “component stock” of Hong Kong's benchmark Hang Seng Index. Being part of the index boosted interest in First Pacific, whose shares were more than ten times higher than in 1991. The magazine BusinessWeek declared: “First Pacific's mix of East and West may be a model for the future.” It was a nice birthday present for FP chief Manny Pangilinan, who had just turned fifty and celebrated it with a big bash at the posh Shangri-la Hotel in Manila — he was now the head of a certified blue-chip company.