The New Confessions of an Economic Hit Man

by John Perkins

  CHAPTER 6

  Selling My Soul

  Our eleven-man team spent six days in Jakarta registering at the US Embassy, meeting various officials, organizing ourselves, and relaxing around the pool. The number of Americans who lived at the Hotel InterContinental amazed me. I took great pleasure in watching the beautiful young women — wives of US oil and construction company executives — who passed their days at the pool and their evenings in the half dozen posh restaurants in and around the hotel.

  Then Charlie moved our team to the mountain city of Bandung. The climate was milder, the poverty less obvious, and the distractions fewer. We were given a government guesthouse known as the Wisma, complete with a manager, a cook, a gardener, and a staff of servants. Built during the Dutch colonial period, the Wisma was a haven. Its spacious veranda faced tea plantations that flowed across rolling hills and up the slopes of Java’s volcanic mountains. In addition to housing, we were provided with eleven Toyota off-road vehicles, each with a driver and translator. Finally, we were presented with memberships to the exclusive Bandung Golf and Racquet Club, and we were housed in a suite of offices at the local headquarters of Perusahaan Umum Listrik Negara, the government-owned electric utility company.

  For me, the first several days in Bandung involved a series of meetings with Charlie and Howard Parker. Howard was in his seventies and was the retired chief load forecaster for the New England Electric System. Now he was responsible for forecasting the amount of energy and generating capacity (the load) the island of Java would need over the next twenty-five years, breaking this down into city and regional forecasts. Because electricity demand is highly correlated with economic growth, his forecasts depended on my economic projections. The rest of our team would develop the master plan around these forecasts, locating and designing power plants, transmission and distribution lines, and fuel transportation systems in a manner that would satisfy our projections as efficiently as possible. During our meetings, Charlie continually emphasized the importance of my job, and he badgered me about the need to be very optimistic in my forecasts. Claudine had been right; I was the key to the entire master plan.

  “The first few weeks here,” Charlie explained, “are about data collection.”

  He, Howard, and I were seated in big rattan chairs in Charlie’s plush private office. The walls were decorated with batik tapestries depicting epic tales from the ancient Hindu texts of the Ramayana. Charlie puffed on a fat cigar.

  “The engineers will put together a detailed picture of the current electric system, port capacities, roads, railroads, all those sorts of things.” He pointed his cigar at me. “You gotta act fast. By the end of month one, Howard’ll need to get a pretty good idea about the full extent of the economic miracles that’ll happen when we get the new grid on line. By the end of the second month, he’ll need more details — broken down into regions. The last month will be about filling in the gaps. That’ll be critical. All of us will put our heads together then. So, before we leave we gotta be absolutely certain we have all the information we’ll need. ‘Home for Thanksgiving,’ that’s my motto. There’s no coming back.”

  Howard appeared to be an amiable, grandfatherly type, but he was actually a bitter old man who felt cheated by life. He had never reached the pinnacle of the New England Electric System, and he deeply resented it. “Passed over,” he told me repeatedly, “because I refused to buy the company line.” He had been forced into retirement and then, unable to tolerate staying at home with his wife, had accepted a consulting job with MAIN. This was his second assignment, and I had been warned by both Einar and Charlie to watch out for him. They described him with words like stubborn, mean, and vindictive.

  As it turned out, Howard was one of my wisest teachers, although not one I was ready to accept at the time. He had never received the type of training Claudine had given me. I suppose they considered him too old, or perhaps too stubborn. Or maybe they figured he was only in it for the short run, until they could lure in a more pliable full-timer like me. In any case, from their standpoint, he turned out to be a problem. Howard clearly saw the situation and the role they wanted him to play, and he was determined not to be a pawn. All the adjectives Einar and Charlie had used to describe him were appropriate, but at least some of his stubbornness grew out of his personal commitment not to be their servant. I doubt he had ever heard the term “economic hit man,” but he knew they intended to use him to promote a form of imperialism he could not accept.

  He took me aside after one of our meetings with Charlie. He wore a hearing aid, and he fiddled with the little box under his shirt that controlled its volume.

  “This is between you and me,” Howard said in a hushed voice. We were standing at the window in the office we shared, looking out at the stagnant canal that wound past the Perusahaan Umum Listrik Negara building. A young woman was bathing in its foul waters. “They’ll try to convince you that this economy is going to skyrocket,” he said. “Charlie’s ruthless. Don’t let him get to you.”

  His words gave me a sinking feeling, but also a desire to convince him that Charlie was right; after all, my career depended on pleasing my MAIN bosses.

  “Surely this economy will boom,” I said, my eyes drawn to the woman in the canal. “Just look at what’s happening.”

  “So there you are,” he muttered, apparently unaware of the scene in front of us. “You’ve already bought their line, have you?”

  A movement up the canal caught my attention. An elderly man had descended the bank, dropped his pants, and squatted at the edge of the water to answer nature’s call. The bathing woman saw him but was undeterred; she continued washing herself. I turned away from the window and looked directly at Howard.

  “I’ve been around,” I said. “I may be young, but I just got back from three years in South America. I’ve seen what can happen when oil is discovered. Things change fast.”

  “Oh, I’ve been around too,” he said mockingly. “A great many years. I’ll tell you something, young man. I don’t give a damn for your oil discoveries and all that. I forecasted electric loads all my life — during the Depression, World War II, times of bust and boom. And I can say for sure that no electric load ever grew by more than 7 to 9 percent a year for any sustained period. And that’s in the best of times. Six percent is more reasonable.”1

  I stared at him. Part of me suspected he was right, but I felt defensive. I knew I had to convince him, because my own conscience cried out for justification.

  “Howard, this isn’t the United States. This is a country where, until now, no one could even get electricity. Things are different here.”

  He turned on his heel and waved his hand as though he could brush me away.

  “Go ahead,” he snarled. “Sell out. I don’t give a damn what you come up with.” He jerked his chair from behind his desk and fell into it. “I’ll make my electricity forecast based on what I believe, not some pie-in-the-sky economic study.” He picked up his pencil and started to scribble on a pad of paper.

  It was a challenge I could not ignore. I went and stood in front of his desk.

  “You’ll look pretty stupid if I come up with what everyone expects — a boom to rival the California gold rush — and you forecast electricity growth at a rate comparable to Boston in the 1960s.”

  He slammed the pencil down and glared at me. “Unconscionable! That’s what it is. You — all of you . . .” He waved his arms at the offices beyond his walls. “You’ve sold your souls to the devil. You’re in it for the money. Now,” he feigned a smile and reached under his shirt, “I’m turning off my hearing aid and going back to work.”

  It shook me to the core. I stomped out of the room and headed for Charlie’s office. Halfway there I stopped, uncertain about what I intended to accomplish. Instead, I turned and walked down the stairs, out the door, into the afternoon sunlight. The young woman was climbing out of the canal, her sarong wrapped tightly about her body. The elderly man had disappeared. Several boys
played in the canal, splashing and shouting at one another. An older woman was standing knee-deep in the water, brushing her teeth; another was scrubbing clothes.

  A huge lump grew in my throat. I sat down on a slab of broken concrete, trying to disregard the pungent odor from the canal. I fought hard to hold back the tears; I needed to figure out why I felt so miserable.

  You’re in it for the money. I heard Howard’s words, over and over. He had struck a raw nerve.

  The little boys continued to splash one another, their gleeful voices filling the air. I wondered what I could do. What would it take to make me carefree like them? The question tormented me as I sat there watching them cavort in their blissful innocence, apparently unaware of the risk they took by playing in that fetid water. An elderly, hunchbacked man with a gnarled cane hobbled along the bank above the canal. He stopped and watched the boys, and his face broke into a toothless grin.

  Perhaps I could confide in Howard; maybe together we would arrive at a solution. I immediately felt a sense of relief. I picked up a little stone and threw it into the canal. As the ripples faded, however, so did my euphoria. I knew I could do no such thing. Howard was old and bitter. He had already passed up opportunities to advance his own career. Surely, he would not buckle now. I was young, just starting out, and certainly did not want to end up like him.

  Staring into the water of that putrid canal, I once again saw images of the New Hampshire prep school on the hill, where I had spent vacations alone while the other boys went off to their debutante balls. Slowly the sorry fact settled in. Once again, there was no one I could talk to.

  That night I lay in bed, thinking for a long time about the people in my life — Howard, Charlie, Claudine, Ann, Einar, Uncle Frank — wondering what my life would be like if I had never met them. Where would I be living? Not Indonesia, that was for sure. I wondered also about my future, about where I was headed. I pondered the decision confronting me. Charlie had made it clear that he expected Howard and me to come up with growth rates of at least 17 percent per annum. What kind of forecast would I produce?

  Suddenly a thought came to me that soothed my soul. Why had it not occurred to me before? The decision was not mine at all. Howard had said that he would do what he considered right, regardless of my conclusions. I could please my bosses with a high economic forecast and he would make his own decision; my work would have no effect on the master plan. People kept emphasizing the importance of my role, but they were wrong. A great burden had been lifted. I fell into a deep sleep.

  A few days later, Howard was taken ill with a severe amoebic attack. We rushed him to a Catholic missionary hospital. The doctors prescribed medication and strongly recommended that he return immediately to the United States. Howard assured us that he already had all the data he needed and could easily complete the load forecast from Boston. His parting words to me were a reiteration of his earlier warning.

  “No need to cook the numbers,” he said. “I’ll not be part of that scam, no matter what you say about the miracles of economic growth!”

  PART II: 1971–1975

  CHAPTER 7

  My Role as Inquisitor

  Our contracts with the Indonesian government, the Asian Development Bank, and USAID required that someone on our team visit all the major population centers in the area covered by the master plan. I was designated to fulfill this condition. As Charlie put it, “You survived the Amazon; you know how to handle bugs, snakes, and bad water.”

  Along with a driver and translator, I visited many beautiful places and stayed in some pretty dismal lodgings. I met with local business and political leaders and listened to their opinions about the prospects for economic growth. However, I found most of them reluctant to share information with me. They seemed intimidated by my presence. Typically, they told me that I would have to check with their bosses, with government agencies, or with corporate headquarters in Jakarta. I sometimes suspected that some sort of conspiracy was directed at me.

  These trips were usually short, not more than two or three days. In between, I returned to the Wisma in Bandung. The woman who managed it had a son a few years younger than me. His name was Rasmon, but to everyone except his mother he was Rasy. A student of economics at a local university, he immediately took an interest in my work. In fact, I suspected that at some point he would approach me for a job. He also began to teach me Bahasa Indonesia.

  Creating an easy-to-learn language had been President Sukarno’s highest priority after Indonesia won its independence from the Netherlands. More than 350 languages and dialects are spoken throughout the archipelago, and Sukarno realized that his country needed a common vocabulary in order to unite people from the many islands and cultures. He recruited an international team of linguists, and Bahasa Indonesia was the highly successful result. Based on Malay, it avoids many of the tense changes, irregular verbs, and other complications that characterize most languages. By the early 1970s, the majority of Indonesians spoke it, although they continued to rely on Javanese and other local dialects within their own communities.1 Rasy was a great teacher with a wonderful sense of humor, and compared with learning Shuar or even Spanish, Bahasa was easy.

  Rasy owned a motor scooter and took it upon himself to introduce me to his city and people. “I’ll show you a side of Indonesia you haven’t seen,” he promised one evening, and urged me to hop on behind him.

  We passed shadow-puppet shows, musicians playing traditional instruments, fire blowers, jugglers, and street vendors selling every imaginable ware, from contraband American cassettes to rare indigenous artifacts. Finally, we ended up at a tiny coffeehouse populated by young men and women whose clothes, hats, and hairstyles would have been right in fashion at a Beatles concert in the late 1960s; however, everyone was distinctly Indonesian. Rasy introduced me to a group seated around a table and we sat down.

  They all spoke English, with varying degrees of fluency, but they appreciated and encouraged my attempts at Bahasa. They talked about this openly and asked me why Americans never learned their language. I had no answer. Nor could I explain why I was the only American or European in this part of the city, even though you could always find plenty of us at the Golf and Racquet Club, the posh restaurants, the movie theaters, and the upscale supermarkets.

  It was a night I shall always remember. Rasy and his friends treated me as one of their own. I enjoyed a sense of euphoria from being there, sharing their city, food, and music, smelling the clove cigarettes and other aromas that were part of their lives, joking and laughing with them. It was like the Peace Corps all over again, and I found myself wondering why I had thought that I wanted to travel first class and separate myself from people like this. As the night wore on, they became increasingly interested in learning my thoughts about their country and about the war my country was fighting in Vietnam. Every one of them was horrified by what they referred to as the “illegal invasion,” and they were relieved to discover I shared their feelings.

  By the time Rasy and I returned to the guesthouse, it was late and the place was dark. I thanked him profusely for inviting me into his world; he thanked me for opening up to his friends. We promised to do it again, hugged, and headed off to our respective rooms.

  That experience with Rasy whetted my appetite for spending more time away from the MAIN team. The next morning, I had a meeting with Charlie and told him I was becoming frustrated trying to obtain information from local people. In addition, most of the statistics I needed for developing economic forecasts could be found only at government offices in Jakarta. Charlie and I agreed that I would need to spend one to two weeks in Jakarta.

  He expressed sympathy for me, having to abandon Bandung for the steaming metropolis, and I professed to detest the idea. Secretly, however, I was excited by the opportunity to have some time to myself, to explore Jakarta, and to live at the elegant Hotel InterContinental Indonesia. Once in Jakarta, however, I discovered that I now viewed life from a different perspective. The night spent wit
h Rasy and the young Indonesians, as well as my travels around the country, had changed me. I found that I saw my fellow Americans in a different light. The young wives seemed not quite so beautiful. The chain-link fence around the pool and the steel bars outside the windows on the lower floors, which I had barely noticed before, now took on an ominous appearance. The food in the hotel’s posh restaurants seemed insipid.

  I noticed something else, too. During my meetings with political and business leaders, I became aware of subtleties in the way they treated me. I had not perceived it before, but now I saw that many of them resented my presence. For example, when they introduced me to each other, they often used Bahasa terms that according to my dictionary translated to inquisitor and interrogator. I purposely neglected disclosing my knowledge of their language — even my translator knew only that I could recite a few stock phrases — and I purchased a good Bahasa/English dictionary, which I often used after leaving them.

  Were these addresses just coincidences of language? Mistranslations in my dictionary? I tried to convince myself that they were. Yet, the more time I spent with these men, the more convinced I became that I was an intruder, that an order to cooperate had come down from someone, and that they had little choice but to comply. I had no idea whether a government official, a banker, a general, or the US Embassy had sent the order. All I knew was that, although they invited me into their offices, offered me tea, politely answered my questions, and in every overt manner seemed to welcome my presence, beneath the surface there was a shadow of resignation and rancor.

  It made me wonder, too, about their answers to my questions and about the validity of their data. For instance, I could never just walk into an office with my translator and meet with someone; we first had to set up an appointment. In itself, this would not have seemed so strange, except that doing so was outrageously time consuming. Since the phones seldom worked, we had to drive through the traffic-choked streets, which were laid out in such a contorted manner that it could take an hour to reach a building only blocks away. Once there, we were asked to fill out several forms. Eventually, a male secretary would appear. Politely — always with the courteous smile for which the Javanese are famous — he would question me about the types of information I desired, and then he would establish a time for the meeting.