Politics, Business and the State in Post-Soeharto Indonesia
- Contemporary Southeast Asia: A Journal of International and Strategic Affairs
- ISEAS–Yusof Ishak Institute
- Volume 34, Number 1, April 2012
- pp. 80-100
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In Indonesia, democratic transition has led to the ascendance of business in the political arena. A growing number of entrepreneurs-turned-politicians have captured the power of office, taking over positions which had previously been held by bureaucratic elites. In the existing literature, the ascendance of politically assertive business, often through democratization, is associated with the emergence of a less interventionist state. However, despite the expectation that post-Soeharto Indonesia would embark on a swift process of change towards a regulatory form of state, the patrimonial features of the Indonesian state continue to display more fundamental continuity. This article presents an alternative framework through which to better understand changing state-business relations in Indonesia. The article argues that the fall of the Soeharto regime in Indonesia has had the effect of facilitating the transformation of the patrimonial state: from a patrimonial administrative state to a patrimonial oligarchic state. Democratization has changed the old hierarchy of state-business relations over the distribution of patronage. In post-Soeharto Indonesia, business elites are no longer dependent on bureaucratic elites, as the former now enjoys direct access to state resources.