INDONESIA: Smuggler's Army

Incensed by the discovery that it was losing millions of tax dollars in illegally exported rubber, the Indonesian government early this year assigned its best investigators to track down the culprits. The trail soon took an embarrassing turn. The chief smuggler—and the proprietor of a neat little fleet that regularly plied the straits between Sumatra and Malaya —turned out to be the Indonesian army. What was worse, the army 1) freely admitted it. 2) boldly declined to stop it. "We smuggle rubber," said a ranking officer. "So what? We have to live."

Indonesia's army is well trained, high-spirited and bigger...

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