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Social Transformation, 1965-1998 Konglomerat, Kelas Bawah, Islam The pattern of class formation that crystallized in the Dutch colonial era left a legacy of instability and dynamism in class relations in postindependence Indonesia. First of all, the very processes and imperatives of accumulation promoted by the country's capitalist class and the forces of the world capitalist economy gave rise to dramatic forms of economic and social change, with major implications not only for the relations of economic production but for class relations and social reproduction more broadly. In addition, an abiding sense of uncertainty-and possibility-stemmed from the "Hidden Force" of the country's working classes, whose noted capacity for mobilization was a source of both fear and hope for the political class that claimed to represent them. Further, the very nature of this political class, its diverse internal composition, and its variegated sources of recruitment also prefigured a strong measure of internal tension and contestation especially between competing a/iran, currents emerging from different educational institutions, experiences, and networks, whether civilian or military, secular or Christian or Muslim. The transformation of class relations in Indonesia over the course of the Suharto era involved the crystallization of a new pattern of private capital accumulation and a new basis for the recruitment and reproduction of the national political class in the late 1960s and early 1970s. The tension and dynamism inherent in Indonesia's new phase of capitalist development and its newly consolidated authoritarian regime gave rise also to decisive shifts in class relations in the archipelago-in particular, the emergence of Islam, first as a rubric for mobilization against a regime understood to be dominated by secular nationalists, Christians, and Chinese businessmen, and 44 Social Transformation, 1965-1998 45 subsequently as a banner for ascendancy to and attempted dominance of the political class controlling the circuitries of the Indonesian state. The fears, hopes, and fantasies associated with this trend set the stage for violence. Capitalism with a Chinese Face, Authoritarianism with a Christian Sword The three decades of authoritarian rule under Suharto (1966-1998) brought dramatic socioeconomic transformation. Economic liberalization in the mid-1960s opened the country to a massive flow of foreign loans and direct investment, followed by the oil boom and the deepening of importsubstitution industrialization in the 1970s. World recession and falling commodity prices in the early to middle 1980s forced the government in the direction of deregulation, trade liberalization, and a shift into exportoriented industrialization, with manufacturing increasing its share of exports and of gross national product in the 1990s. Economic growth, averaging more than 7 percent per annum between 1986 and 1996, entailed unprecedented industrialization and urbanization.1 This process of capitalist development also had consequences for class relations in Indonesia. Over the course of the first two decades of the New Order, the "Chinese" business class was transformed from a collection of small-scale merchants and moneylenders into an interlocking directorate of commercial, financial, and industrial capital. Huge Chinese conglomerates emerged, such as Liem Sioe Liang's Salim Group and the Soeryadjaya family 's Astra Group, with diverse interests ranging from automobile production to banking, food processing, electronics, household appliances, pharmaceuticals, real estate, and shipping. In the cities and major towns of the archipelago the signs of Chinese capital loomed increasingly large on the urban landscape: bank outlets, department stores, factories, residential subdivisions, shopping malls, and supermarkets. The names of major Chinese capitalists and their banks, conglomerates, and commodities-Liem Sioe Liang, Bank Central Asia (BCA), Maspion Group, Indomee-became household words, even as the familiar neighborhood Chinese shopkeeper was transformed into a local retail outlet for this nationwide, if not properly national, business class.2 Although the opening of the Indonesian economy to global flows of capital and goods and the active promotion of industrialization by the New Order state helped to promote the rise of the Chinese konglomerat, these same trends worked to undermine local and self-consciously indigenous 46 Riots, Pogroms, Jihad merchant communities, which lacked access to high finance and technology , especially on Java. The cigarette manufacturers of Kudus, the pawnbrokers and moneylenders of Kotagede, and the batik manufacturers of Solo, Yogyakarta, and Pekalongan-small-scale, labor-intensive merchant communities, organized around family production and informal networks of credit and distribution, and lacking in established linkages with the state-found themselves marginalized by the 1980s, as mass production, national market circuitries, and international finance made impressive inroads . The Javanese batik industry, for example, had survived in the 1950s...


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