The persistence of Chinese monopoly in Indonesia's salt business and marginalisation of local salt farmers

Abstract

This paper reviews reasons for the domination of the Indonesian salt business, from the colonial to the New Order era, by the Chinese who are ethnic Indonesian citizens. The authors argue that this domination and subordination by middlemen induces a negative impact on market segmentation. Consequently, local farmers have limited market access and it appears that these salt farmers are pressurised by middlemen and the Chinese. This study used a historical method with an economic-political approach. Due to the New Order’s policy that placed the economy as a ‘commander’, business opportunities were widely open to the Chinese and even to foreign investment. During this era, there were middle-scale and large-scale salt companies, all of which belonged to the Chinese. Meanwhile, small-scale companies were non-Chinese or native Indonesian. The Chinese dominance in the salt business was not something new, and ironically, it has left almost no place for locals.