Indonesia’s Changing Political Economy: Governing the Roads by Jamie S. Davidson (review)

The opaque title of this book does it no justice. “Governing the roads” does not make a lot of sense. Nor is the book a broad study in political economy, changing or otherwise. A better description from the text is “the political sociology of infrastructure development” (12), though just what this might be is never well explained. One attempt is that it is “best deployed at a middle range of analysis [that] mediates the microanalysis of individual actors and detailed policymaking processes and the macro-level of the societal distribution of power” (31). However, this approach is not differentiated from Joel Migdal’s “state-in-society” approach.¹

The starting point is the puzzle of why the sprawling, populous nation of Indonesia continues to struggle to mobilize funds—especially private funds—for investment in basic infrastructure. International agencies like the World Bank and Asian Development Bank, which stand willing to supply funds, tend to see the problem as a technical one of setting up appropriate structures of governance. Jamie S. Davidson, associate professor of political science at the National University of Singapore, argues that the problem is more deep-seated, a chronic institutional failure whose root is executive dysfunction within the political system. This idea is explored though the troubled case history of Java’s toll roads since the mid-1960s. As such, the book will be cautionary reading for frustrated souls in the infrastructure industry, but will also be relevant to anyone with a general interest in Indonesia’s changing political system and governance from Suharto’s New Order through to the present democratic era.

In view of China’s transformative investment in modern infrastructure over the past twenty-five years, it is noteworthy that planning for Indonesia’s first tollway was initiated by President Sukarno as long ago as 1963 as one of a small number of prestige projects, most being in Jakarta. The tollway would have afforded him a much faster journey to and from his summer palace at Bogor. Instead, regime change and economic chaos delayed completion until 1978, when the Jagorawi (JAkarta-BoGOR-CiAWI) tollroad was opened by President Suharto after speedy construction by Hyundai Engineering, a South Korean firm. As recounted in Chapter 2, Jagorawi’s immediate success encouraged the Suharto government to commission other tollroads around Jakarta, including the link to the New Sukarno-Hatta airport, as well as short feeder tollways into the cities of Surabaya, Semarang, and Medan. All this was done under the auspices of the state enterprise Jasa Marga. Even so, until the mid-1980s, only 280 kilometers (175 miles) of roads had been completed throughout the country, and none of the sections actually connected together. The reality was faster travel between one traffic jam and another.

After the oil boom ended in 1983, the government struggled with its budget and the balance of payments, so that large-scale state borrowing for infrastructure became problematic. Internationally, it was the Reagan-Thatcher era characterized by a new ideology of uninhibited free enterprise, including privatization of state assets and responsibilities. President Suharto was also mindful of a family consideration: his children had grown up and were looking for ways to build their own private businesses. It was, therefore, not a difficult decision to create franchises to build and operate tollroads and give preference to the presidential children. Although the Road Act (1980) had specified that tollroads were a field for state action, a presidential decree settled the matter. State enterprise Jasa Marga would remain a stakeholder but, henceforth, most of the consortia would be controlled by and beholden to the president’s children. The first batch of such contracts were let in the late 1980s for the Jakarta Outer Ring Roads. In 1996, there followed another nineteen contracts for the 700-kilometer (435-mile) Trans-Java Expressway.

The rest of the book explores what happened next, or, as in the majority of contracts, what did not happen. Chapter 3 deals with...