Who Owns the Economy? Property Rights, Privatization, and the Indonesian Constitution: The Electricity Law Case

Abstract

Abstract Indonesia's 1945 Constitution reflects a broad mix of Leftist, nationalist and anti-colonial ideals that were influential at the time it was first drafted. Article 33 granted the state control over natural resources and essential industries, with the expectation that the Indonesian people — particularly the poor — would benefit from them. Art 33 provides for significant government intervention in the economy and has, from 1997, been a rallying point for opposition to market-oriented policies ‘pushed’ by multilateral lenders and donors. This chapter focuses upon the Constitutional Court's interpretation of Art 33 and its implications for property ownership and privatization in Indonesia. It begins by setting out Art 33 and aspects of the debates in 2001 in the MPR (Majelis Permusyawaratan Rakyat or People's Deliberative Assembly, entrusted with amending the Constitution) which resulted in the retention of that Article without amendment. It then discusses Indonesia's new Constitutional Court and its jurisdiction, before turning to the Court's treatment of Art 33, focusing on the Court's very first decision: the Electricity Law case.