ABSTRACT
In Indonesia the paradoxes of culture and development loom unusually large. A Muslim-majority nation long renowned for its tolerance and moderation, Indonesia has in recent years been plagued by some of the world’s worst Islamist violence. In the early modern era (1500s to 1700s), the island expanse that was to become Indonesia was distinguished by the scale of its commerce, which rivaled that of capitalism in the early-modern West. The historian Anthony Reid has dubbed this period a veritable “age of commerce” and observed that a Muslim-based commercial culture was established across the region at that time. Despite these promising cultural precedents, however, the commercial expansion that Indonesia experienced from the 1970s to the late 1990s drew little on Muslim businesses, relying instead on the country’s small but dynamic Chinese minority. Although they are just 2.5 percent of Indonesia’s population, Chinese-Indonesians control 60 to 70 percent of all nonagricultural private capital. Rather than contributing to the country’s modern economic boom, the old Muslim business class actually declined during the first two decades of the New Order (1966–98), although it has recently shown signs of revival. The imbalance between a prosperous Chinese minority and a less-successful Muslim majority remains a major source of tension in the country
