5 - The Scent of Money

Summary

Clove, the aromatic spice used to flavour the popular Indonesian kretek cigarette, may resemble a nail, but over this humble flower bud, wars have been fought, and fortunes made or lost. For Liem, it was trade in this spice that helped him lay the groundwork for the path to riches. Called cengkeh in Indonesian, cloves were found originally in the five remote islands in Eastern Indonesia known as the Spice Islands. In the late eighteenth century, some seedlings were smuggled to Africa, where they flourished in the soils of Madagascar and Zanzibar (today part of Tanzania). Ironically, cloves that were grown there yielded buds of a preferred quality for use in the production of kretek, the clove-infused cigarette beloved by Indonesian smokers. But importation for the spice was tightly controlled by the government, and suppliers had to be purchased from middlemen in Singapore and Hong Kong, making them immensely wealthy. When Indonesia was not producing sufficient quantities for domestic demand, politically connected companies were granted permission to import from the African countries, starting in the Sukarno era. In 1965, using a company founded by his partner, Hasan Din, a father-in-law of President Sukarno, Liem secured a one-time permission to bring in 3,000 tons from Africa. That single import helped ease his debt burden, and he became convinced there was big money to be made in this business.

Traditionally, kretek have been hand-rolled; the fragrance of the clove said to be further enhanced when rolled by young women using the sides of their hips. Kretek consumption surged in the 1970s following the introduction of machines to roll the sticks, bringing down price per stick. Around 90 per cent of the cigarettes consumed in Indonesia are kretek. From being an industry that was in doldrums in the 1950s, kretek manufacturing began its resurgence and in the last decade or more, the owners of the largest kretek manufacturers consistently rank among the wealthiest in the country. The cigarette industry is the largest contributor to the country's excise coffers. So addicted are Indonesian smokers to their kretek that at the height of the 1997–98 financial crisis, sales of the scented cigarette actually rose — an indication that people were willing to forgo other luxuries but not their puff, or that they felt they needed it more, to soothe their woes.