chapter  9
Capitalist consolidation, consolidated capitalists: Indonesia’s conglomerates between authoritarianism and democracy
ByCHRISTIAN CHUA
Pages 25

Indonesia’s New Order was a sophisticated political system based on an authoritarian, centralized and protectionist state apparatus that effectively secured the dominance of the bureaucratic elite. One of the regime’s main characteristics was the emergence of predatory patronage networks which grew out of a unique system of collaboration between the state and the holders of capital, Indonesia’s predominantly Chinese business sector. Through these networks Indonesia’s politico-bureaucrats, who held instrumental power over the state, allowed a small group of ethnic Chinese businessmen to establish economically powerful conglomerates that came to dominate the private commercial sector. Due to their ethnic label, these capitalists were otherwise politically muted as well as socially limited, making them the bureaucracy’s ideal partners who could not challenge the authority of the state elite, as would have occurred with an indigenous bourgeoisie of business leaders. There was no practical reason for these tycoons to rebel against their subordination: although they lacked direct political power and remained ultimately dependent on the bureaucrats, this mutually beneficial relationship developed, going on to serve the interests of both groups so well throughout the New Order era that the symbiosis lasted for more than three decades.