Business and Politics in Indonesia (review)

BOOK REVIEWS 175 Business and Politics in Indonesia. By Andrew Maclntyre. Australia: Allen & Unwin, 1991. 282 pp. $29.95/Hardcover. Reviewed by Peter Morgan, MA. Candidate, SAIS. Writing about political change in Indonesia can be a bit of a non-starter. With the re-election ofPresident Suharto last fall, the existingpolitical order, already famous for its staying power, seems likely to survive for some time. Observing change within the Indonesian polity can be like discerning the subtle differences amongst master performances of Indonesia's famous shadow puppet ramayana plays; the story remains the same, it is the interpretation and presentation that matter. In Business andPolitics inIndonesia, Andrew Maclntyre, a lecturer in political science at Griffith University in Brisbane, has done an excellent job of explaining in detail how business and politics interact in Indonesia and of identifying shifting relationships on the Indonesian stage. Maclntyre's work is important for several reasons. Indonesia is now the 4th most populous country in the world. The Indonesian economy is growing at over 5% per year, and it grew only slightly less duringthe difficult economic period in the mid 1980s, despite falling oil prices, tumbling commodity prices, and the lethargic international economy. Despite its growing importance, information on Indonesia is surprisingly lacking, and, according to Maclntyre, particularly limited in the academic world. It is critical to understand future changes in this uniquely successful country which has combined benevolent social policies, prudent domestic economic policies, and adroit international economic management with military domination of the political order. Indonesia in general looms large, yet oddly silent on the global horizon. Maclntyre begins by outlining the terrain of Indonesian politics. He summarizes various alternative approaches to understanding the country's politics as well as the conventional view, which compares the current political system to the ancient Javanese patrimonial court system in which status bestowed wealth but also a concomitant responsibility to look after those below. 'The bureaucratic polity," he says, "has many patrimonial characteristics, with the political leadership relying largely on the distribution of largess among elite cliques to maintain its position. Those outside the state elite are effectively excluded from political participation." The author argues that there is a convergence ofacademic points ofview in which the state is viewed as unconstrained by societal interests. Maclntyre's thesis is that "important change is underway in Indonesian politics, and that there is in fact considerably more political input by societal groups outside the state structure than is generally recognized." The bulk ofthe book then details case studies ofthe textile, pharmaceutical, and insurance industries. In examining these industries, Maclntyre finds they have, to different degrees, successfully organized and pursued their own independent interests. He argues that this is very different from how we understand political representation and policy formation in Indonesia. Important determining factors in these industries' accomplishment oftheir objectives are the number, size, and proximity ofthe business; the quality ofindustry leadership; the strategic importance to the national economy ofthe industry; and most importantly, whether or not the business is privately owned. In practical terms, an interesting evolution is taking place. To influence the Indonesian government one must seem- 176 SAIS REVIEW ingly create a group that both achieves an organization's policy objectives and meets the restrictions set by the government—a narrow path to follow indeed. One broader, significant implication of this change is that forces leading to political pluralism and diffusion of power may emerge. Maclntyre is correct in arguing that Indonesian politics has become more vulnerable to pressure from business groups, but he misses several key factors which might have helped the reader understand more clearly the scale of these changes. Maclntyre does not mention that significant portions of privately owned companies are controlled by Suharto's family, and that the Indonesian economy is a remarkable mixture of business people, military interests, and politicians. To what extent was this true in the companies he examined? How does this affect the alignment ofbusiness and political interests? One wonders what the likelihood is of business groups promoting political change rather than their own narrow business interests. The susceptibility of the Indonesian government to business' demands for changes in the business environment is one thing; substantive response to pressure...