The Political Economy of Oligarchy and the Reorganization of Power in Indonesia

Abstract

When three decades of authoritarian rule unravelled in Indonesia following the fall of President Suharto in 1998, it was widely expected that this would also open the doors for a dramatically different sort of politics in which individuals and social organizations could demand accountable governance and rule of law. It was indeed true that the old centralized authoritarian regime gave way to a remarkably open system of electoral democracy and to the devolution of state administrative authority. A vibrant and often chaotic media emerged to debate ideas previously proscribed, and new figures flooded onto the political landscape. And in the volatile period that followed the Asian financial crisis just a few years previously, successive Indonesian governments had been forced to agree to the demands of the IMF (International Monetary Fund) and other global organizations for widespread reforms in finance and banking, in public and corporate governance, and in the judiciary, especially in the commercial courts. However, such institutional changes were not reflected in the way social and economic power was concentrated or imposed in Indonesia. Well over a decade after the fall of the Suharto regime, access to and control of public office and state authority continues to be the key determinant of how private wealth and social power is accumulated and distributed. Many of the old faces continue to dominate politics and business, while new ones are drawn into the same predatory practices that had defined politics in Indonesia for decades. Even political parties that presented themselves as