Business-Politics Relations in Indonesia: The Oligarchization of Democracy

Abstract

Listen

Translate article

This article employs official company profiles to study the nature and frequency of linkages between politicians and private business in contemporary Indonesia. We find that 45 percent of Indonesia’s parliamentarians and 65 percent of cabinet members (both 2019-2024) have direct ties to companies, thus providing further evidence of the oligarchization of Indonesia’s democracy. On the basis of this data we argue that democratic reforms have shifted the balance of power between politicians, bureaucrats and business actors. Whereas during the New Order business actors seldom directly acquired political power, Indonesia’s democratic era has led to the proliferation of politico-capitalists, a term we use to describe individuals who fuse economic and political power. We attribute the dominance of politico-capitalists to the high costs of election campaigns and the centrality of rent-rich and state-dependent industries to Indonesia’s economy. We also provide illustrations of how the growing presence of politico-capitalists and the related conflict of interest problems distort policymaking in favour of business interests.