Politics of Economic Change in Indonesia
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Richard Robison argues that the Asian economic crisis of 1997 was to exert a devastating, intense, and destructive impact on Indonesia in which "the downward spiral of the rupiah created a fiscal crisis for the government while Indonesia's corporate moguls became mired in mountains of debt beyond their capacity to repay." The central argument advanced by Robison is that Indonesia was not an innocent bystander in the economic crisis of 1997 and that the crisis itself did not usher in a transformation in Indonesia to markets and democracy in the liberal model. Rather, the oligarchs and corporate moguls who helped to precipitate the crisis via their unrestrained use of political power continue to function along much the same lines in post-crisis Indonesia as they did prior to the financial crisis. Robison puts it this way: "The shock of the crisis has been unable either to destroy the old relationships of corporate and political power or to bring to life a dominant neo-liberal coalition." Interpreting a Politics of Economic Change in Indonesia The author says that modernization and dependency theory dominated explanations of Indonesian capitalism until the late 1970s. The rise of neo-classical theory in the 1980s has introduced a new and dominant economic model that Robison describes as orthodox, suggesting that this model positions Indonesia's political economy as an ongoing process of social conflict. Neo-liberal approaches have been im
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power to shape political and government action -- played an important role. The state-enterprise sector also was significant in growing the national economy and the government introduced regulations requiring foreign investors to adopt local partners. Altogether, the end result was the creation of "powerful corporate conglomerates and politico-business families" who sought to create monopolies, patronage systems, and mechanisms that enabled the oligarchs to influence state policies.
The Triumph of Oligarchy
Robison states that from 1986 on, the technocrats were able to introduce a number of important policy reforms, to abolish some important trade monopolies, to reduce tariffs and import duties, and to eliminate restrictions on domestic interest rates. However, these changes did not bring about "a flowering of business within liberal markets defined by common law and regulation." Reform did not impact upon all sectors of the economy and the Soeharto family and their close associates continued to enjoy almost unlimited access to natural resources and favorable government policies. The conglomerates and the families that dominated Indonesia's economy profited enormously and gained new opportunities as a direct result of
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Some common words found in the essay are:
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Approximate Word count = 1563
Approximate Pages = 6 (250 words per page)
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