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Vol. 4, No. 3, CHONG

Contents>> Vol. 4, No. 3

Local Politics and Chinese Indonesian Business in Post-Suharto Era

Wu-Ling Chong*

*鍾武凌, Department of South East Asian Studies, Faculty of Arts and Social Sciences, University of Malaya, 50603 Kuala Lumpur, Malaysia

e-mail: chong.wu.ling[at]; chong.wu.ling[at]

This article examines the relationships between the changes and continuities of Indonesian local politics and Chinese Indonesian business practices in the post-Suharto era, focusing on Chinese Indonesian businesses in two of the largest Indonesian cities, Medan and Surabaya. The fall of Suharto in May 1998 led to the opening up of a democratic and liberal space as well as the removal of many discriminatory measures against the Chinese minority. However, due to the absence of an effective, genuinely reformist party or political coalition, predatory political-business interests nurtured under Suharto’s New Order managed to capture the new political and economic regimes. As a result, corruption and internal mismanagement continue to plague the bureaucracy in the country and devolve from the central to the local governments. This article argues that this is due partially to the role some Chinese businesspeople have played in perpetuating corrupt business practices. As targets of extortion and corruption by bureaucratic officials and youth/crime organizations, Chinese businesspeople are not merely passive and powerless victims of corrupt practices. This article argues, through a combination of Anthony Giddens’s structure-agency theory as well as Pierre Bourdieu’s notion of habitus and field, that although Chinese businesspeople are constrained by the muddy and corrupt business environment, they have also played an active role in shaping such a business environment. They have thus played an active role in shaping local politics, which is infused with corruption and institutionalized gangsterism, as well as perpetuating their increasingly ambivalent position.

Keywords: Indonesia, Chinese Indonesians, Chinese Indonesian business, local politics, democratization, regional decentralization

Susanto, a Chinese Indonesian living in Medan, is a distributor of stuffed toys. He runs his business from a shophouse located in the central city area. He started his business in 2003, and the business has remained small-scale. He brings in stuffed toys from Jakarta and sells them to customers in Medan. He has 15 employees working for him, most of whom are indigenous Indonesians.

Susanto revealed to me that after the end of the New Order regime, the central government has become stricter in collecting taxes from business enterprises. Business owners need to declare their revenues, calculate the taxes they have to pay, and make payments accordingly. Tax officers later visit the companies to check their actual revenues. If they find that the business owners have under-reported their revenue, instead of penalizing them, the tax officers usually ask for bribes to cover up the tax fraud. Susanto emphasized, however, that even if a business owner has paid all the necessary taxes, tax officers usually create fictive taxes and charges and request the business owner to pay accordingly. Moreover, tax officers often demand higher bribes from businesspeople who are ethnic Chinese, as they are deemed to be doing better than other businesspeople. For this reason, Susanto and many local Chinese businesspeople have found it expedient not to declare their actual revenues, knowing that honesty does not pay and will lead to even more taxes and bribes. Instead, they wait for the officers to visit and negotiate with them the rates of the taxes and bribes requested and only then pay their taxes. In my interview with him, Susanto said, “Although many other businesspeople and I feel bad about it, we have no choice but to pay them [the bribes] since we have to survive.”1) Susanto also revealed that he and other Chinese businesspeople preferred not to fight against the extortion because they were “afraid of running into trouble” (Mandarin: pa mafan, 怕麻烦) if they did so. They would rather pay the bribes to avoid any further problems. This indicates also that Chinese businesspeople possess enough economic capital to pay the bribes in order to protect their business.

Susanto’s story indicates the ambivalence among Chinese toward democratization in post-Suharto Indonesia. Although democratization has opened spaces for them to live their culture and express their ethnicity, it has not led to the emergence of good governance that promotes the rule of law, transparency, and accountability, as corruption remains endemic in state institutions. This poorly developed democratization creates, therefore, an even more ambivalent situation for Chinese Indonesian businesspeople. On the one hand, they remain the targets of extortion and corruption by power holders; on the other hand, they play a role in perpetuating the corrupt, predatory political-business system. It is also important to note that the local business environment in post-Suharto Indonesia is crucially influenced by local politics, especially after the implementation of regional decentralization in 2001. If corrupt practices plague the local government, this will certainly lead to a corrupt and muddy business environment. Moreover, if institutionalized gangsterism is dominant in a particular locality, the local business community will encounter more harassment and extortion.

This study shows that Chinese Indonesian businesspeople in Medan encounter more harassment and extortion than their counterparts in Surabaya, because institutionalized gangsterism is dominant in Medan. However, it is important to note that although Chinese Indonesian businesspeople in Surabaya do not experience as much harassment and extortion, they still play a crucial role in perpetuating the corrupt local business environment. In this article, I look at how local politics that is infused with corrupt practices and institutionalized gangsterism has led to the emergence of a corrupt and muddy business environment in post-Suharto Medan and Surabaya. I also examine how such a business environment has influenced the ways Chinese Indonesian businesspeople in both cities advance and safeguard their business interests as well as deal with illegal practices by government officials, police, and preman (thugs or gangsters). I argue that in facing the corrupt and muddy business environment, due to the fear of the hassle of fighting back, as well as the economic and social capital they possess, Chinese Indonesian businesspeople on the whole tend to give in to the illegal requests of government officials, police, and preman; they also resort to illegal or semi-legal means as well as opportunistic tactics to gain wealth and protect their business interests. Although there are Chinese businesspeople who fight against the illegal practices, they are rare. This collusion with corrupt practices in turn reinforces negative stereotypes against the Chinese and consequently perpetuates their ambivalent position as well as corruption in local politics.

It is hoped that the case studies in this paper constitute a pioneering representation of Chinese Indonesian business communities in urban centers of post-Suharto Indonesia—primarily Medan and Surabaya, because both are big cities with a relatively high percentage of ethnic Chinese Indonesians. The dynamics of Chinese Indonesian business communities in post-Suharto urban Indonesia are therefore apparent in this study.

This article is divided into 10 main sections. The first section deals with theoretical issues. The second focuses on research methodology. The third section looks at the economic role of ethnic Chinese in post-Suharto Medan and Surabaya. Next, I turn my attention to local governance and the business environment in post-Suharto Indonesia as well as the experiences of Chinese Indonesian businesspeople in Medan and Surabaya. I point out that Chinese big business as well as Chinese small and medium businesses deal with the new business environment in different ways. Then I discuss the changes in the political environment and the political activism of Chinese Indonesian businesspeople in the post-Suharto era. In the remaining four sections, I examine the illegal and semi-legal business practices utilized by Chinese Indonesian businesspeople in both cities to safeguard their business interests. I conclude that there is evidence to suggest that Chinese Indonesian businesspeople in Medan and Surabaya continue to encounter rampant corrupt practices in bureaucracy as well as harassment and extortion from local power holders and youth/crime organizations (in Medan) since the end of the New Order. Using Anthony Giddens’s concept of structure and agency, and Pierre Bourdieu’s notion of habitus and field, I argue that such a corrupt, predatory political-business system continues to exist not only because the predatory political-business interests nurtured under the New Order managed to capture the new political vehicles and institutions, but also because many, if not most, local Chinese businesspeople play a role in perpetuating the system.

Theoretical Framework

This study adopts a combination of Anthony Giddens’s structure-agency theory as well as Pierre Bourdieu’s notion of habitus and field as a framework for examining strategies and tactics that Chinese Indonesians adopt to safeguard their business interests in the post-Suharto era. Both Giddens and Bourdieu perceive social actors as agents that actively respond to and shape their social structures. Giddens argues that our social reality is shaped by both social forces and active human agency. All people are knowledgeable about the conditions and consequences of their actions in their daily lives. Although people are not entirely free to choose their own actions, they do have agency (Giddens 1984). Therefore, Giddens sees social structures as both the medium and the outcome of the actors’ actions:

As human beings, we do make choices, and we do not simply respond passively to events around us. The way forward in bridging the gap between “structural” and “action” approaches is to recognize that we actively make and remake social structure during the course of our everyday activities. (Giddens 1989, 705, emphasis in the original)

Habitus, according to Bourdieu, is a system of acquired dispositions through which people deal with the social world (Bourdieu 1990a, 131). Bourdieu also notes that “[a]s an acquired system of generative schemes, the habitus makes possible the free production of all the thoughts, perceptions and actions inherent in the condition of production” (Bourdieu 1990b, 55). In other words, habitus is an orientation to individual action. The concept of field complements the idea of habitus. A field is a relatively autonomous arena within which people act strategically, depending on their habitus, to enhance their capital. Examples of fields include politics, religion, and philosophy (Bourdieu 1993, 72–74). Bourdieu considers habitus to be the union of structures and agency: “. . . habitus operates as a structuring structure able to selectively perceive and to transform the objective structure [field] according to its own structure while, at the same time, being re-structured, transformed in its makeup by the pressure of the objective structure” (Bourdieu 2005, 46–47). In other words, habitus shapes the objective structure (field) but at the same time is also shaped by the objective structure. This concept is parallel to Giddens’s structure-agency theory. One of the significant strengths of Bourdieu’s notion of habitus lies in its consideration of actors’ social positions in the study of habitus; this is never discussed in Giddens’s theory. Bourdieu argues that a person’s habitus is structured by his or her position within a social space, which is determined by his or her sociological characteristics in the form of volume and kinds of economic capital, cultural capital, and social capital possessed (Bourdieu 1984, 114; 1998, 6–8). Economic capital refers to material resources that can be turned into money or property rights. Cultural capital refers to non-material goods such as types of knowledge, skills and expertise, educational credentials, and aesthetic preferences acquired through upbringing and education that can be converted into economic capital. Social capital refers to networks of contacts that can be used to maintain or advance one’s social position (Bourdieu 1986).

According to Bourdieu, actors who are well endowed with capital and therefore enjoy privileged positions in a particular field tend to defend the status quo in order to safeguard their capital, whereas those least endowed with capital and therefore occupying the less-advantaged positions within the field are inclined to challenge the status quo via subversion strategies in order to enhance their capital and improve their social positions (Bourdieu 1993, 73).

Hence, this is the theoretical framework for this study: Social structures constrain and enable actors’ actions. Actors’ actions are always oriented by their habitus, which is dependent on the volume and kinds of capital possessed. Those who are well endowed with capital in a social structure tend to defend the status quo of the structure in order to safeguard their capital and position, whereas those least endowed with capital within the structure are inclined to challenge it via subversion strategies.

Methods of Research

My analysis is based on fieldwork conducted from July 2010 until May 2011 in Medan and Surabaya.2) Medan and Surabaya were selected as field sites for this study since both cities are economically and politically significant. These cities are the capitals of North Sumatra and East Java respectively, which have been “the sites of vibrant urban and industrial centers” (Hadiz 2004, 623). Medan is a historically important town for plantations, manufacturing, and trade, while Surabaya is a vital port city that functions as a gateway to Eastern Indonesia (Buiskool 2004, 1; Hadiz 2004, 623). According to City Population, an online atlas, Medan and Surabaya were the fifth- and second-largest cities in the country respectively in 2010 (City Population 2012). Both cities also have a significant Chinese Indonesian population: according to the Indonesian Population Census of 2000, the concentration of the Chinese Indonesian population was 10.65 percent in Medan and 4.37 percent in Surabaya,3) figures that are much higher than the percentage of Chinese Indonesians in the total population of Indonesia (1.2 percent) (Aris et al. 2008, 27, Table 2.2). The methods used in this research are library research and individual interviews. I conducted library research at public as well as university libraries. I also interviewed or had personal communications with 12 Chinese Indonesian businesspeople, three politicians, one journalist, eight NGOs or social activists, one leader of the North Sumatra branch of Pancasila Youth (PP, Pemuda Pancasila), seven staff or people in charge of local Chinese-language presses, six academics or university lecturers, and one former staff of a real estate company in Surabaya’s Chinatown (see Appendix). All interviews and personal communications were conducted in Indonesian, Mandarin, Hokkien, or English. All names of informants used in this article, except for public figures, are pseudonyms.

The Economic Role of Ethnic Chinese in Post-Suharto Medan and Surabaya

Sofyan Wanandi (1999), Michael Backman (2001), and Charles A. Coppel (2008) have pointed out that it is commonly asserted that ethnic Chinese control 70 percent of Indonesia’s economy, although official data on the economic domination of Chinese in Indonesia is unavailable. These authors emphasize that such a view is an exaggeration because a large portion of Indonesia’s economy (such as the oil and gas industry) has always been under the control of the state, not the Chinese (Wanandi 1999; Backman 2001; Coppel 2008). In addition, the sociologist Mely G. Tan (陈玉兰) argues that it is impossible for the Chinese minority, who constitute less than 3 percent of the total population in Indonesia, to control 70 percent of the national economy.4) Wanandi suggests that Chinese Indonesian businesses constitute only 25 percent of the national economy, while Backman estimates that Chinese Indonesians “control 70 percent of the private, corporate, domestic capital” (Wanandi 1999, 132; Backman 2001, 88).

In the post-Suharto era, Chinese Indonesians continue to play a crucial role in the economic development of Medan and Surabaya. Since there is no official data available specifically on the economic domination of Chinese Indonesians, I had to rely on individual interviews to obtain information on this aspect. According to an NGO activist in Medan, Chinese Indonesians in the city dominate businesses that are medium-sized and larger, such as manufacturing, food production, and hotels. At the same time, domination of businesses that are medium-sized and smaller is split almost evenly between Chinese and indigenous businesspeople. Businesses that are small and micro are dominated by indigenous businesspeople.5) In addition, three other NGO activists disclosed that Chinese businesspeople engage in nearly all sectors of the economy in Medan except the construction industry, which is dominated by indigenous businesspeople who are Batak and members of youth/crime organizations.6) This is because most construction projects in Medan are local state projects that are usually allocated to members of youth/crime organizations who are well connected to the local government.7) A local economic analyst in Surabaya remarked that Chinese businesspeople dominate 100 percent of the manufacturing business and about 90 percent of the real estate business in the city. In addition, more than 60 percent of bankers and about 70 percent of advertisers in Surabaya are Chinese Indonesians.8) In short, based on the information provided by my informants, Chinese Indonesians continue to dominate the private economy of Medan and Surabaya in the post-New Order era.

Local Governance and Business Environment in Post-Suharto Indonesia

In order to accommodate growing regional and local demands for greater autonomy in access to local resources and control of local political machines, the post-Suharto government introduced regional decentralization and local autonomy policies under two umbrella laws, Law No. 22/1999 and Law No. 25/1999. These laws were later revised and replaced with Law No. 32/2004 and Law No. 33/2004. Under the decentralization laws and regulations, significant administrative powers in industry, trade, investments, agriculture, public works, transport, cooperatives, labor, land, health care, education and culture, and environmental issues transferred from the central government to regional and local governments (Ariel and Hadiz 2005, 261; Hadiz and Robison 2005, 233; Widjajanti 2009, 76). According to the scholar-bureaucrat Ryaas Rasyid, who was appointed by President Habibie to form a group known as the Team of Ten (Tim Sepuluh) to formulate the decentralization laws and regulations, “The [decentralization] policy was intended to provide more scope for local creativity and initiative in making policy and promoting public participation” (Rasyid 2003, 64). Therefore, it can be said that in the context of Indonesia, one of the objectives of regional decentralization is to promote democratization at the local level.

Moreover, international and domestic organizations such as the SMERU Research Institute, the World Bank, and the United States Agency for International Development (USAID) have been actively offering policy advice on decentralization of state authority in the country. The SMERU Research Institute sees regional decentralization as a huge administrative operation that could improve weaknesses in the administration of central and local governments (Syaikhu 2002). The World Bank believes that decentralization will break up stifling central government authority, reduce complex bureaucratic procedures and administrative bottlenecks, as well as “increase government officials’ sensitivity to local conditions and needs” (World Bank Group, n.d.). A USAID publication argues that decentralization will stimulate the development of democratic, accountable, and effective local governance (USAID Office of Democracy and Governance 2000, 7). In particular, the Asia Foundation assists local governments in addressing inefficiencies in the business licensing process and reducing the cost of doing business in Indonesia through developing the One Stop Shops (OSS) program. OSS are service centers that handle applications for various business permits (Steer 2006). As stated in an article that introduces the program, “[OSS] are new institutions that merge authority from disparate technical departments into one office where licenses and permits can be obtained quickly” (ibid., 7).

However, according to some scholars, the end of authoritarianism and the subsequent opening up of politics, as well as the introduction of regional decentralization, have not led to the emergence of good governance that is able to deploy public authority and public resources in a regularized manner for public purposes. Both Marcus Mietzner and Jamie S. Davidson point out that corruption and internal mismanagement continue to characterize the bureaucracy in the country (Mietzner 2008, 244–248; Davidson 2009, 294). Due to the absence of an effective, genuinely reformist party or political coalition, the demise of Suharto’s New Order regime did not end the rampant corruption and internal mismanagement in the country’s bureaucracy. According to Vedi R. Hadiz and Richard Robison, the predatory political-business interests nurtured under the New Order managed to reconstitute and reorganize themselves successfully within the new political and economic regimes. Newly decentralized and competing predatory interests contest to gain ascendancy at the local level of politics as regional decentralization has created new rent-seeking opportunities for local governments (Hadiz and Robison 2005, 232). In other words, corruption, or what Indonesians generally call KKN (the Indonesian-language acronym for corruption, collusion, and nepotism), has devolved from the central to local governments.

For instance, during my fieldwork in Medan, the OSS program, which was established with the aim of addressing the licensing process and reducing the burden on business, actually created more burdens for local businesspeople. According to a news report in Harian Orbit, a local Indonesian-language newspaper in Medan, officials at the center often demand bribes by asking for “service charges” from applicants. If the applicants refuse to pay, they need to wait a long time before getting their permits (Harian Orbit, November 15, 2010). For instance, applicants for a business permit (SIUP, Surat Izin Usaha Perdagangan) need to pay an extra Rp.150,000 of unofficial “service charge” to the officials in order to get a permit on time (ibid.). Such incidents have been highlighted in the press, and the then Medan Mayor Rahudman Harahap said he would summon the persons in charge of the OSS (Harian Orbit, November 16, 2010). But as of December 2013, the local government had not yet investigated the problem and such corrupt practices were still rampant in the OSS of Medan (Batak Pos, December 5, 2013).

Although Joko Widodo, a politician who does not have any ties to the New Order regime, was elected as the new president of Indonesia in 2014 and promised to improve and simplify business licensing procedures in government offices, the House of Representatives is dominated by parliamentarians who favor Prabowo Subianto, Widodo’s only opponent in the presidential election (The Jakarta Globe, October 9, 2014; October 28, 2014). Subianto is a former general who used to be Suharto’s son-in-law.9) He was accused of human rights violations when he was a general (Tomsa 2009). Subianto’s supporters in the House of Representatives declared that they would block every policy made by Widodo. Hence, it might not be easy for Widodo to deliver on his promise to address the licensing process and reduce the burden on business.

In addition, scholars have noted that the implementation of regional decentralization in Indonesia has produced many regional heads who behave like “little kings” (raja-raja kecil) in the sense that they perceive decentralization and autonomy as meaning more power given to them to control local resources and raise revenues rather than as greater responsibility for them to offer better public services to their local constituencies. These “little kings” are unaccountable to central authorities, local parliaments, or local citizens (Azis 2003, 3; Hofman and Kaiser 2004, 26; 2006, 97; Firman 2009, 148). Since the decentralization law went into effect, local governments in Indonesia have had more power to tax the local population in order to raise revenues. According to my informants, the imposition of new taxes has increased the burden on local businesspeople, particularly those running small or medium businesses.10) The local governments in Medan and Surabaya have been levying new taxes and charges on businesses as a means to increase direct revenues, as well as to extract indirect revenues in the form of bribes. Moreover, officials at all levels of government—central, provincial, and local—claim ultimate authority over many kinds of investment activity (Hadiz and Robison 2005, 235–236). This increases unpredictability in business, as well as the necessity to further the common practice of bribing officials for licenses and the like.

At the end of 2010, the Committee of Monitoring for Regional Autonomy (KPPOD, Komite Pemantau Pelaksanaan Otonomi Daerah), an NGO in Indonesia that monitors the implementation of regional autonomy in the country, announced that North Sumatra and East Java, where Medan and Surabaya are located, had more problematic local regulations issued by the city and kabupaten governments than all the other provinces. The committee proposed that 315 local regulations in North Sumatra and 291 local regulations in East Java should be abolished because they were deemed to hamper business activities in the provinces. Nevertheless, as of 2011, the city and kabupaten governments of North Sumatra and East Java had only repealed 98 and 91 of the problematic regulations respectively (Jawa Pos National Network, February 23, 2011).11)

Therefore, it can be said that local politics in North Sumatra and East Java is infused with corruption. However, it is also important to note that there is a significant difference between the two provinces in regard to local politics: the dominance of institutionalized gangsterism in North Sumatra. In other words, youth/crime organizations are influential and dominant in North Sumatra. According to Vedi R. Hadiz (2010), such organizations exist also in Surabaya but are much less dominant. As the capital of North Sumatra, Medan is notorious for its institutionalized gangsterism or premanism and is therefore known as a gangster city (kota preman) (Honna 2011). The origins of preman go back to the 1945–49 Indonesian National Revolution and the late 1950s. According to Ian Wilson, during the revolution strongmen and toughs were at the forefront of the struggle for Indonesia’s independence. Many of them were later incorporated into the new national military (Wilson 2010, 201). In 1954 General Nasution, the head of the armed forces, “deployed networks of gangsters and former militias as part of a campaign to pressure Sukarno into suspending parliamentary democracy, eventually ushering in the period known as ‘Guided Democracy’” (ibid.).12) Pancasila Youth (PP, Pemuda Pancasila), the largest quasi-official youth/crime organization, was formed out of this alliance. In the mid-1960s, the military mobilized PP and local gangsters to confront and crush suspected members of the Communist Party (Ryter 2000, 19; 2001; 2002; Hadiz 2004, 626). Former Governor of North Sumatra Syamsul Arifin, interviewed in The Act of Killing—a 2012 documentary film about the anti-communist genocide—acknowledged the important role of gangsters in eliminating communism in Indonesia: “Communism will never be accepted here, because we have so many gangsters, and that’s a good thing” (cited in the subtitles of Oppenheimer 2012). Under Suharto the institutionalization of local gangsters was further intensified (Wilson 2011, 242). Apart from PP, other quasi-official youth/crime organizations, such as the Army Veterans’ Youth (PPM, Pemuda Panca Marga) and Armed Forces Sons’ and Daughters’ Communication Forum (FKPPI, Forum Komunikasi Putra-Putri Purnawirawan Indonesia), were formed to help maintain political order and stability through violence and intimidation (Ryter 2001; 2005, 22; Beittinger-Lee 2009, 164). These organizations are generally considered to be “fronts for preman activity” (Hadiz 2003, 125–126) and were usually backed and protected by the military during the New Order period (Ryter 2000, 20). Thus, such organizations are also known as “preman organizations” (Wilson 2010, 200). (Hereafter, the terms “youth/crime organizations” and “preman organizations” will be used interchangeably.) Therefore, it can be said that the distinction between preman, soldier, politician, and criminal is often blurry.

After the unraveling of the New Order regime, despite losing their main backer, preman have been able to survive by taking advantage of the inability of the post-New Order regimes to maintain security and the opportunities opened up by competitive electoral politics as well as regional decentralization. Many political parties have established their own paramilitary wings or civilian militia known as satgas parpol (satuan tugas partai politik, i.e., political party militias). Members come mostly from youth/crime organizations such as PP and “[mercenaries] of the disenfranchised urban milieu” (King 2003). Moreover, preman still dominate the protection racket scene in Indonesia.

As ethnic Chinese are often deemed wealthier than other residents in Medan, they become the target of extortion for preman (Hadiluwih 1994, 159). It is also common for local Chinese Indonesian businesspeople in the city to rely on extralegal resources such as preman for their security and protection (Purdey 2006, 117). Preman in Medan are mostly members of major New Order-nurtured youth/crime organizations such as PP, Work Service Youth Association (IPK, Ikatan Pemuda Karya), and FKPPI. When the Indonesian Democratic Party of Struggle (PDI-P, Partai Demokrasi Indonesia-Perjuangan) became the ruling party after winning a majority of national parliamentary seats in the 1999 elections, they formed Satgas PDI-P as the paramilitary arm of the party to compete with the other more established youth/crime organizations in Medan in controlling local state and private resources (Hadiz 2003, 128).13) Although satgas were banned in 2004, they later revived in a less formal way (Wilson 2010, 204–205). In other words, there are more preman organizations in Medan now than before the fall of Suharto.

Indeed, according to Hadiz, the collapse of the Suharto regime did not reduce the influence of local preman linked to youth/crime organizations in Medan, but instead brought new opportunities for them to exploit (Hadiz 2004, 626). These preman are able to provide muscle for candidates during election periods and fund political bids since they dominate lucrative underworld businesses (Hadiz 2003, 128). In addition, many leaders of youth/crime organizations are given opportunities to run local branches of political parties. Some even hold local parliamentary seats and top executive body positions in local government (ibid., 125–126). For instance, during 1999–2004, three members of the Medan city parliament—Bangkit Sitepu (Golkar), Moses Tambunan (Golkar), and Martius Latuperissa (Justice and Unity Party)—were leaders of the local branches of preman organizations. Sitepu, Tambunan, and Latuperissa led the Medan branches of PP, IPK, and FKPPI respectively (Ryter 2000, 19–21; Bambang 2002; Hadiz 2005, 47). Besides that, Ajib Shah, the former chairperson of PP’s North Sumatra branch, is a member of the North Sumatra provincial parliament who was affiliated to Golkar during 2009–14 (Harian Mandiri, May 11, 2012; Harian Sumut Pos, April 23, 2013; Medan Bisnis, August 29, 2013). He was also one of the candidates in Medan’s 2010 mayoral election (Pancasila Youth of North Sumatra’s website, 2010). Therefore, it can be said that members and leaders of local youth/crime organizations in Medan have captured the new local state institutions and political vehicles in the Reformasi era.

This is felt by some of my informants who are local Chinese businesspeople in Medan, who say they have encountered more harassment and extortion from preman in the post-Suharto era, especially during Megawati’s presidency (2001–04).14) A few of my informants disclosed that preman often ask for “protection money” from businesspeople who own factories or shophouses, and if the latter do not pay up the preman vandalize these places.15) To further squeeze money from these businesses, when an owner or their employees load or unload goods in front of their shophouse, preman again force their loading or unloading services on the business. Usually they charge Rp.500–1,000 per item of goods. Even if the business owner or their employees refuse such service, they still need to pay the preman, who will otherwise vandalize their shophouses.16) In addition, preman ask for Rp.300,000–500,000 when a businessperson opens a new company in their area; and if a shophouse is renovated, the owner also needs to pay a certain amount of money to preman.17) Moreover, whenever preman organizations have installation events, they send an “invitation” with a proposal for expenses to be paid by businesspeople and ask for “donations.” Normally, businesspeople need to pay them at least Rp.10,000–20,000.18) Some Chinese businesspeople need to pay uang keamanan (protection money) to more than one preman if there is more than one youth/crime organization that claims authority over that particular area.19) As a “service” to industrialists, preman also help to break up strikes.20)

It is important to point out that preman demand uang keamanan also from indigenous businesspeople.21) But my informants disclosed that they often ask for more uang keamanan from businesspeople who are ethnic Chinese as the latter are deemed to be doing better in business than their non-Chinese counterparts.22)

Why do preman ask for money from the business community? According to the chief of PP’s North Sumatra branch, there are too many unemployed citizens in Indonesia. If they join “youth” organizations such as PP, the organizations arrange for them to help in taking care of the safety of business areas and let them collect money from the businesspeople.23) The sociologist Usman Pelly and criminologist Mohammad Irvan Olii, as interviewed by Gatra and The Jakarta Globe respectively, made a similar argument that poverty and unemployment are the main causes of premanism (Sujatmoko et al. 1995, 27; The Jakarta Globe, February 24, 2012). According to another source, the unemployment rate in Indonesia reached 6.8 percent in 2011, and more than half the population were living on less than US$2 per day in the same year. In addition, more than 65 percent of workers in the country were employed informally (Brooks 2011).24) Poverty and the failure of the Indonesian government to create sufficient employment opportunities for its citizens are seen by many as the main causes of the rampancy of such extortion.

Informants told me that preman have become less active since President Susilo Bambang Yudhoyono (2004–14) came to power because the police have become more powerful and have started to arrest preman who extort money from the business community.25) This corresponds to findings by other scholars working on Indonesia (Aspinall et al. 2011, 33; Wilson 2011, 257–258). According to Wilson, high-profile anti-preman campaigns were initially run by the police in 2001 and were limited only to Jakarta, but they became national in scope by 2004 (Wilson 2011, 257). Aspinall and his co-authors, on the other hand, remarked that the influence of IPK, which was once a dominant youth/crime organization in Medan, has declined since the death of its founder, Olo Panggabean, in 2009 (Aspinall et al. 2011, 33).26) The diminution of IPK’s power is due also to a police crackdown on illegal gambling run by the organization. Although the power of preman organizations in the city has declined markedly, it is alleged that business enterprises in certain areas such as Jalan Asia and Jalan Gatot Subroto still encounter harassment and extortion from preman.27)

In Surabaya, on the other hand, youth/crime organizations such as PP and FKPPI are much less dominant and influential. In addition, IPK, which is based in North Sumatra, does not have a presence in East Java. Preman who offer “protection” for Chinese business premises in Surabaya are often unorganized Madurese preman. According to Dédé Oetomo (温忠孝), an ethnic Chinese social activist in Surabaya, there is a system of mutual dependence between Chinese businesspeople and Madurese preman in Surabaya. Chinese businesspeople usually pay about Rp.500,000 a month to the Madurese preman in exchange for protection of their business.28) The preman make sure that the business premises in their territories are free of burglary, theft, robbery, and vandalism.29) Such a system of mutual dependence existed in the city even before the demise of the New Order regime. Although unorganized, Madurese preman normally allocate their territories among themselves so that each area has only one preman in charge of its “safety.” Since in general Chinese businesspeople in Surabaya need to pay only one preman in exchange for protection of their business premises, it can be said that they enjoy a relatively peaceful business environment compared to their counterparts in Medan who need to deal with more preman organizations in the post-Suharto era, and pay more than one preman if there is more than one youth/crime organization that claims authority over that particular area.

In addition, according to Jun Honna (2010, 148) and Hadiz (2010, 156), industrialists in Surabaya often hire Madurese preman or members of Banser, the vigilante corps of Nahdlatul Ulama (NU), the largest mass-based Muslim organization in Indonesia, to break up strikes. NU has a strong base in East Java.

In Surabaya, military and police units are more dominant than youth/crime organizations and Banser in the control of underworld activities. According to Hadiz, it is alleged that the military act as immediate protectors and bodyguards for illegal gambling operations controlled by Chinese Indonesians in Surabaya. Furthermore, navy and marine units in the city are said to have direct links with local prostitution (ibid., 140).30)

It is ironic, therefore, that in attempting to control preman activities, the police have started acting like preman. According to an NGO activist in Medan, local police officers often extort money from businesspeople in the city, especially those who own factories; such incidents have become more rampant, especially throughout the anti-preman campaigns.31) Police officers pay a visit to the factory and ask for money. If the business owner refuses to pay, the police coerce him or her to admit to offenses that he or she did not commit and threaten to close down the factory. Sometimes the police even confiscate machines in a factory if the business owner refuses to pay them.32) Wilson suggests that such phenomena indicate that some police “have used the campaigns as an opportunity to reclaim sources of illegal rent extraction taken from them by street level racketeers” (Wilson 2011, 257). A well-established Chinese businessperson in Medan even remarked that:

During Suharto’s reign, the military was the most powerful institution. Since the fall of Suharto, the military is not as powerful as before. Now the police are more powerful. They often ask for money from businesspeople and will give us a hard time if we refuse to pay them. So the police are no different from a select group of scoundrels.33)

Similarly, in Surabaya, the police often ask for money from local businesspeople, who are mostly ethnic Chinese. According to an informant who used to work in a real estate company in Surabaya’s Chinatown, whenever the police have an event they ask for contributions from businesspeople in their area. If the businesspeople refuse to pay, the police give them a hard time when the former ask for police help.34) In addition, Junus, a university professor in Surabaya, told me that the police often visit nightclubs and discos (which are mostly run by Chinese businesspeople) and ask for a “protection fee.” If the owners refuse to pay, the police conduct a raid and threaten to close down the premises.35)

It is important to note that Chinese big business or conglomerates and Chinese small and medium businesses react and adapt to the corrupt and muddy business environment in the post-Suharto era in different ways. Christian Chua (2008) in his work on Chinese big business in post-Suharto Indonesia points out that Chinese big business or conglomerates manage to deal with the murky business environment well because they have experienced staff to identify and approach the right persons in different political departments, and sufficient capital to bribe regional decision makers. The wealth and strong social networks of Chinese big businesspeople also enable them to establish close ties with local power holders and security forces. Chua further notes that some Chinese big businesspeople establish close links with youth/crime organizations and through such connections have their own vigilante groups at their command. Some control or intimidate critical media through financial coercion to ensure favorable reporting on them and their business. In these ways their businesses are well protected. My study, as will be shown with a few examples later in this article, confirms Chua’s research findings that Chinese big business or conglomerates are in an advantageous position when dealing with the new business environment, which is—paradoxically—more infused with corruption and uncertainties. However, as mentioned, my study also shows that Chinese businesspeople running small or medium businesses generally do not have the necessary economic and social capital to establish close ties with local power holders, local security forces, and preman. Most of them choose to give in to the illegal requests of government officials or preman to prevent further hassles.

Changes in Political Environment and Political Activism of Chinese Businesspeople

The opening up of the political space after the fall of Suharto was followed by an explosion in the cost of election campaigning. Therefore, as Chua (2008) reveals in his work, in the era of Reformasi, those who want to contest and win in general or local elections need to pay large amounts of campaign funds. Consequently, aspiring power holders need to seek harder for the support of rich businesspeople, who can make considerable financial contributions to their political activities and campaign fund. Chinese Indonesian business elites are therefore deemed to be important sources of income for political parties that need significant electoral campaign funds to win local elections. In return, the former often expect to receive political protection, kickbacks, or other benefits should the candidate get elected. In addition, since the advent of competitive electoral politics, it is too risky for Chinese business elites to offer funding for only one particular candidate during general elections. Hence, some hedge their bets by sponsoring more than one candidate, thus creating a higher chance that they will have supported someone who will be elected into office, whom they can seek favors from. For example, during the 2004 presidential elections, it was alleged that Tomy Winata, the owner of the Artha Graha Group, financed the campaigns of both Megawati and Yudhoyono.36) Chua (ibid.) notes that certain Chinese business family members “carefully split their political loyalties” (ibid., 126). For instance, Sofjan Wanandi, the owner of the Gemala Group,37) backed Yudhoyono, while his brother, Jusuf Wanandi, who was a board member of the Jakarta Post, used the daily to secure support for Megawati. Mochtar Riady, the founder and owner of the Lippo Group,38) backed opposition leaders, while his son, James Riady, supported the actual power holders.

My field study in Medan and Surabaya shows similar findings. For example, Yahya, a university professor in Surabaya, disclosed that Alim Markus (林文光), the owner of the Maspion Group in the city, funded three out of five pairs of candidates during the first direct gubernatorial election in 2008, although he was well connected to only one candidate pair: Soekarwo-Saifullah Yusuf. The other two candidate pairs were Soenarjo-Ali Maschan Moesa and Kholifah Indar-Mudjiono.39) The election was eventually won by the Soekarwo-Saifullah Yusuf pair.

Likewise, in Medan, according to a Chinese Indonesian city parliamentarian, many well-established Chinese businesspeople sponsor candidates (usually incumbents) who are deemed to have better chances of winning in general or local elections, in order to get political protection for their own business.40) For instance, during Medan’s mayoral election in 2010, although many Chinese big businesspeople funded the Rahudman Harahap-Dzulmi Eldin pair as Rahudman was the incumbent acting Medan mayor and was deemed to have a higher chance of winning, they also offered to sponsor Sofyan Tan (陈金扬), a well-known social activist, who was also the only ethnic Chinese mayoral candidate, and his running mate after they won the second-highest number of votes in the first round and were qualified to enter the second round.41) These business elites included a well-established real estate tycoon in the city. Sofyan Tan disclosed that the business elites intended to fund him and his running mate in order to obtain business favors if the pair won in the second round.42) Nevertheless, Tan refused their financial offers and made it clear that if he were to get elected and become the mayor, he would not involve himself in corruption and nepotism. In addition, he would not grant any favors to businesspeople who had sponsored him during the election. Tan and his running mate ended up losing in the second round of elections.

On the other hand, there are also Chinese Indonesian businesspeople who make use of the democratic environment in the post-Suharto era to directly participate in formal politics, and some of them even run for public office. Rusdi Kirana, Murdaya Widyawimatra Poo a.k.a. Poo Tjie Goan (傅志宽) and his wife, Siti Hartati Cakra Murdaya a.k.a. Chow Li Ing (邹丽英), and Hary Tanoesoedibjo (陈明立) are examples of Chinese big businesspeople or owners of Chinese conglomerates who get involved in politics. Kirana is the founder and chief executive officer of Lion Air, Indonesia’s low-cost airline. He joined the National Awakening Party (PKB, Partai Kebangkitan Bangsa), founded by former President Abdurrahman Wahid, and was appointed as the vice chairperson of the party in January 2014. He was later appointed as a member of the Presidential Advisory Council (Dewan Pertimbangan Presiden) by President Joko Widodo in January 2015 (, January 12, 2014; Kompas, January 19, 2015). Poo and Siti are the founders and owners of the CCM Group, a conglomerate engaged in the electric utility, footwear, plantation, furniture, and plywood industries. Poo joined PDI-P, led by Megawati, and became the treasurer and financial backer of the party. He also ran in the 2004 and 2009 elections and was elected into the national parliament in both, thanks to his financial status as a wealthy businessman and the support of well-established Chinese businesspeople in Surabaya (Jawa Pos, March 26, 2004; Li 2007, 195; 2010, 122; Detik News, December 2, 2009). In fact, Poo is the only Chinese Indonesian conglomerate owner who has been elected into public office since the end of the Suharto regime. Siti, on the other hand, joined the Democratic Party (PD, Partai Demokrat) led by Yudhoyono and became his benefactor (The Jakarta Globe, September 12, 2012). In other words, the Poo family members split their political loyalties and financial support between PDI-P and PD. But after the presidential election in 2009, when Yudhoyono was re-elected as president, Poo was dismissed from his party membership and his office in the parliament by PDI-P as he allegedly channeled his support to Yudhoyono, the incumbent, instead of Megawati during the presidential election (Detik News, December 2, 2009).43) Moreover, his wife, Siti, was later charged with bribery by the Jakarta Corruption Court and was sentenced to 32 months’ imprisonment in February 2013 (The Jakarta Post, February 5, 2013).44)

Tanoesoedibjo is the owner of the MNC Group, a media company in Indonesia. He initially joined the National Democratic Party (NasDem, Partai Nasional Demokrat), led by the media tycoon Surya Paloh, but later switched to the People’s Conscience Party (Hanura, Partai Hati Nurani Rakyat), led by ex-General Wiranto (Tempo, February 25, 2013). Moreover, he decided that he would become Wiranto’s running mate in the 2014 presidential elections (The Jakarta Post, July 3, 2013). However, Tanoesoedibjo could not fulfill such a wish as Wiranto later decided not to contest in the presidential elections (The Jakarta Post, May 18, 2014). Tanoesoedibjo left Hanura in May 2014 (Tempo, May 23, 2014).

However, it is worth noting that very few Chinese Indonesians who enter politics are well-established big businesspeople or conglomerate owners. A Chinese big businessman in Medan revealed that Chinese big businesspeople were usually reluctant to participate in formal politics because their businesses were already well established and well protected by local power holders or preman. Furthermore, they were afraid that they would make many enemies by getting involved in politics.45) Therefore, Chinese Indonesian businesspeople who get involved in politics are mostly not in big business.

In Medan and Surabaya, there are a few Chinese Indonesian parliamentarians with a background in business. These include Brilian Moktar (莫粧量), North Sumatra provincial parliamentarian from 2009 to the present; Hasyim a.k.a. Oei Kien Lim (黄建霖), Medan city parliamentarian from 2009 to the present; A Hie (王田喜), Medan city parliamentarian from 2009 to 2014; Fajar Budianto, East Java provincial parliamentarian from 1999 to 2004; Arifli Harbianto Hanurakin (韩明理), Surabaya city parliamentarian from 2004 to 2009; Simon Lekatompessy, Surabaya city parliamentarian from 2009 to 2014; Henky Kurniadi (游经善), national parliamentarian representing East Java 1 (covering Surabaya and Sidoarjo) from 2014 to the present; and Vinsensius Awey, Surabaya city parliamentarian from 2014 to the present. They were in small- or medium-scale businesses prior to getting elected as parliamentarians. Moktar was engaged in vehicle trading and servicing.46) Hasyim was a distributor of office stationery.47) A Hie was a hotel owner.48) Budianto ran a grocery shop in Kembang Jepun, Surabaya.49) Hanurakin owned a bakery shop (Jawa Pos, April 10, 2004). Lekatompessy was a billboard entrepreneur.50) Kurniadi was a real estate businessman.51) Awey ran a furniture shop (Surabaya Pagi, September 2, 2014).

Nevertheless, it should be pointed out that at present, none of the Chinese Indonesian businessmen-turned-politicians have the political standing of Joko Widodo, Jusuf Kalla, and Aburizal Bakrie, who were prominent indigenous Indonesian businesspeople. Widodo was a furniture entrepreneur before getting involved in politics. Kalla used to be the CEO of NV Hadji Kalla (now known as the Kalla Group), owned by his family. NV Hadji Kalla is a conglomerate engaged in the automotive, property, construction, and energy industries. Bakrie was the former chairperson of the Bakrie Group, a conglomerate with diversified interests across mining, oil and gas, real estate, agriculture, media, and telecommunications. Widodo served as the mayor of Solo from 2005 to 2012 and governor of Jakarta from 2012 to 2014, and was elected as the seventh president in 2014. Kalla was vice president from 2004 to 2009 and was elected into the same office in the 2014 presidential election, while Bakrie was the coordinating minister for economy under former President Susilo Bambang Yudhoyono. The fact that no Chinese Indonesian businessmen-turned-politicians currently have the political standing of Widodo, Kalla, and Bakrie is due mainly to the reluctance of many indigenous Indonesians to fully accept Chinese participation in public life. As Chua puts it, “[T]he label of Chinese would still be a barrier” (Chua 2008, 130). In addition, there have not been any Chinese Indonesians in Medan and Surabaya elected as local government heads, who have greater power to directly control local resources.

In the following sections, I will explore various illegal or semi-legal business practices that some Chinese businesspeople utilize to gain wealth and safeguard their business interests in the face of the difficult business environment.

Dealing with Power Holders, Police, and Military Commanders

As mentioned earlier, according to some of my informants, most of the Chinese businesspeople in Medan and Surabaya—especially those running small and medium businesses—usually just pay the amount of money or bribes requested by government officials in order to get their business permit or other related documents issued on time. Most of them give in to police officers’ illegal requests as well, in order to prevent further problems. Sometimes they try to negotiate with the people who ask for money if the amount requested is too large.52) As mentioned at the beginning of this article, it is alleged that even if a businessperson pays all taxes and charges levied on his or her business, tax officers still pay a visit to check on his or her business and ask for bribes; even when businesspersons pay their taxes honestly, they have to pay more. So, most Chinese businesspeople pay only some of the taxes and charges. Then when tax officers pay a visit to their companies, they just bribe the officers as requested.53) Johan Tjongiran, an ethnic Chinese social activist in Medan, explained such a practice by giving an example:

For instance, if a businessperson needs to pay Rp.500 million of taxes, the officers would normally ask him or her to pay only Rp.250 million and they would keep Rp.220 million for themselves, and submit only Rp.30 million to the government.54)

Therefore, Susanto, the ethnic Chinese toy distributor in Medan mentioned in the opening story of this article, argues that:

The wealthiest people in Indonesia are in fact not ethnic Chinese businesspeople but indigenous bureaucrats in the central and local governments like Gayus Tambunan.55) They become extremely rich after getting many bribes from businesspeople. Their children often spend time shopping in Singapore and bringing back many branded luxury goods to Indonesia.56)

Following Bourdieu’s concept of habitus and field, I argue that most Chinese businesspeople choose to give in to the illegal requests of government officials, police, and preman not only due to their reluctance to run into more trouble and their fear of the hassle of fighting back, but also because they have enough economic capital to pay bribes and extortion to protect their business and avoid further trouble. This is in line with Bourdieu’s notion of habitus and field that social actors well endowed with capital tend to defend the status quo of the field (social structure) they are in, in order to safeguard their capital.

Although there are also Chinese businesspeople who refuse to be extorted by the police and choose to get themselves organized and protest against the extortion, such people are rare. These businesspeople often do not have the necessary economic capital to pay the bribes and extortion. They therefore decide to protest against the extortion in order to safeguard their business. This is in line with Bourdieu’s notion of habitus and field that social actors least endowed with capital are inclined to challenge the status quo of the field (social structure) they are in. One well-known example is Yap Juk Lim (叶郁林), a Chinese businessperson engaged in the snack production industry near Jalan Metal, Medan. Yap used to have to pay the police Rp.300,000–400,000 every time they visited his factory. Eventually, he could not bear the extortion; and in 2007 he refused to pay. As a result, the police alleged that his factory used expired ingredients in snack production and detained him for eight days.57) As noted in a news report in Waspada, the Medan branch of the Regional Forum of Small and Medium Enterprises (FORDA UKM, Forum Daerah Usaha Kecil dan Menengah) supported Yap and launched a public protest together with other small and medium businesspeople from different ethnic backgrounds on March 25, 2008 (Waspada, March 25, 2008). The protest took place in front of the North Sumatra Police Headquarters, governor’s office, mayor’s office, provincial parliament, and Medan city parliament. The approximately 2,000 people who joined the protest demanded that the police stop extorting small and medium businesspeople.58) According to Yap, after the protest the police officers stopped harassing the factories around Jalan Metal for a long time. In 2010, however, they began to again visit some factories in that area, asking for payments; Yap’s factory, however, was free from the harassment.59) This indicates that the police recognized that Yap would fight back if they tried to extort him.

Sofyan Tan, a candidate in Medan’s 2010 mayoral election, revealed that many local Chinese businesspeople viewed Yap’s action positively, although it was not a common practice among Chinese businesspeople.60) Yap talked about the reluctance of most Chinese businesspeople to fight against extortion by government officials and police, and their reluctance to spend time getting themselves organized:

We have to get ourselves organized if we want to fight against such illegal requests. Many Chinese businesspeople regard this as time-consuming and would rather give in to illegal requests of government officials and police to avoid any further problems.61)

Another Chinese businessperson made a similar remark: “The Chinese are generally afraid of getting in trouble. If paying money to those extorting them can save them from further trouble, they will just pay the money instead of fighting back.”62)

In short, most Chinese businesspeople prefer to give in to the illegal requests of government officials and police because they are afraid of the hassle of fighting back, and of the trouble it is likely to cause them. Moreover, they have the necessary economic capital to pay the bribes and extortion to protect their business and save them from further troubles. Very few of them choose to fight against the extortion, because they feel that getting themselves organized to fight back is time consuming. By giving in to the illegal requests, Chinese businesspeople continue to make themselves the targets of extortion and perpetuate a corrupt, predatory political-business system.

Additionally, in order to obtain protection for their businesses, many well-established Chinese Indonesian businesspeople in Medan and Surabaya have utilized their social capital to establish close relationships with heads of security forces. The following quotation from an interview and the excerpts from a Chinese-language newspaper report on a welcome and farewell dinner for the East Java Regional Military Command in 2010 illustrate such political-business relationships between local Chinese Indonesian business elites and heads of security forces in both cities:

The ceremony of North Sumatra police chief transfers was held recently [in March 2010]. I was there too. [Do you] want to know who most of the attendees were? About 90 percent of them were Chinese big businesspeople!63)

East Java Entrepreneur Charitable Foundation, Surabaya Chinese Association (PMTS, Paguyuban Masyarakat Tionghoa Surabaya), and Chinese community leaders jointly organized a welcome and farewell dinner for the East Java Regional Military Command on October 6 at 7pm. The event was held at the Grand Ballroom of Shangri-La Hotel, Surabaya.

During the dinner, Alim Markus [president of East Java Entrepreneur Charitable Foundation and PMTS] delivered his speech with enthusiasm: “Thanks to the mercy of the Lord, tonight we have the opportunity to get together with the former and new military commanders of East Java. On behalf of the Chinese community in Surabaya, I would like to wish our former military commander [Suwarno] all the best in his future endeavors. I would also like to call upon the Chinese community to cooperate with the new military commander [Gatot]. (Medan Zao Bao, October 9, 2010, my translation from the Chinese original)

As referred to in the excerpt from the Chinese-language newspaper report above, the local Chinese business community in Surabaya led by Alim Markus (林文光) organized a welcome and farewell dinner for the former and new regional military commander of East Java in 2010. Junus, one of my informants—a university professor in Surabaya—revealed that Markus was well connected with President Suharto during the New Order. After the collapse of the Suharto regime, Markus established close ties with Imam Utomo, the then governor of East Java.64) Markus is the owner of Maspion Group, a Surabaya-based conglomerate that manufactures household appliances.

Many well-established Chinese businesspeople in Surabaya have also established close relationships with the governor, the regional police chief (Kapolda, Kepala Polisi Daerah), and the regional military commander (Pangdam, Panglima Daerah Militer), all of whom are paid by the former on a regular basis.65) Bambang, a Chinese big businessman whom I interviewed, disclosed that he was a good friend of Soekarwo, the governor of East Java. Bambang owns a ceramic tile factory.66) Junus, who knows many local Chinese businesspeople, commented that Bambang is free from harassment and extortion by the police due to his good relationship with the governor.67) A few well-established Chinese businesspeople who run nightclubs in the city are well connected to the mayor and local police. Therefore, their businesses are protected and their clubs are free from police raids.68)

It is alleged that some Chinese businesspeople who run big businesses in Surabaya are connected to Anton Prijatno (王炳金), a Golkar member who served in the East Java provincial legislature and the national legislature (DPR, Dewan Perwakilan Rakyat) during the Suharto era, and later, after the end of the New Order, became a prominent businessman and political patron for many Chinese businesses in Surabaya.69) In my interview with him, Prijatno revealed that he left Golkar in May 1998 because he was very disappointed with the rampant corruption within the Suharto regime.70) Unlike most local Chinese politicians with business backgrounds, Prijatno became actively engaged in business only after spending many years in politics. He became the chairperson of an asphalt distribution company in 2003.71) Since Prijatno is close to the governor, his business flourishes and is protected from harassment and extortion by the police. He is also a business partner of Sudomo Mergonoto (吴德辉), who owns Kapal Api Group, a coffee production company, and Bambang (the ceramic tile factory owner).72) In addition, Prijatno is a supplier of asphalt for many well-established Chinese real estate developers and contractors in the city.73) Since he is a prominent politician and close to the governor, it is alleged that he also acts as a political patron for most well-established Chinese businesses in Surabaya, except Markus’s Maspion Group, the largest conglomerate in Surabaya.74)

Similarly, in Medan, according to a local media activist who knows many local businesspeople of Chinese descent, in order to obtain protection and privileged access to permits and contracts from local power holders, many well-established Chinese Indonesian businesspeople in the city have established close relationships with local power holders and heads of security forces who hold the most power in North Sumatra, i.e., the governor, the regional police chief, and the regional military commander. They often group together to “contribute” money to those power holders and heads of security forces in exchange for protection and permits.75) Another NGO activist disclosed that it is common for Chinese businesspeople who operate big businesses in the city to group together and form close ties with local police officers. They pay money to the police regularly in exchange for protection.76)

Benny Basri (张保圆) is a good example of a well-connected Chinese businessman in Medan. Running PT Central Business District (CBD), a well-established real estate company in the city, Basri is said to be close to regional military officers and local police officers.77) He has also held the position of treasurer in the North Sumatra branch of the Democratic Party (PD, Partai Demokrat) since 2003.78) It is alleged that because of his close relationship with local power holders, he was able to purchase land previously owned by the Indonesian Air Force in Polonia, Medan, for a real estate development project.79)

While Chinese businesspeople who run large-scale businesses are able to establish close ties with local power holders and heads of security forces because they have a strong social network, those who own small- and medium-scale businesses generally do not have the ability and opportunity to establish close ties with local or potential power holders.

Relations with Preman
As mentioned, institutionalized gangsterism is dominant in Medan. Some local Chinese businesspeople who run large-scale businesses have established close relationships with youth/crime organizations to get protection for their business. According to an NGO activist in Medan, many well-established Chinese businesspeople hire preman to protect their business and to break up strikes.80) Some of them have also become advisers of youth/crime organizations. For instance, one of my informants disclosed that Vincent Wijaya, a local Chinese businessperson engaged in the frozen seafood industry, was an adviser of PP’s North Sumatra branch, a major youth/crime organization in the province, and hence his business was well protected by PP.81) In addition, according to the person in charge of Harian Promosi Indonesia (《印广日报》), a Chinese-language press in Medan, the founder of the press, Hakim Honggandhi (关健康), used to be the treasurer of IPK, a youth/crime organization based in Medan. Honggandhi was also connected to the North Sumatran military because he used to distribute consumer goods to them.82)

Another good example is the support that Indra Wahidin (黄印华), the then chairperson of the North Sumatra branch of the Chinese Indonesian Association, and a group of Chinese community leaders (who were mostly businesspeople) gave to Ajib Shah-Binsar Situmorang, one of the candidate pairs in Medan’s 2010 mayoral election (Harian Global, March 30, 2010; Harian Analisa, May 7, 2010; Waspada, May 7, 2010).83) Wahidin is an insurance agent and paint distributor.84) He openly supported Ajib-Binsar because of his connections with Ajib, the former chairperson of PP’s North Sumatra branch. Wahidin and several other Chinese businesspeople, some said, believed Ajib would offer more protection to their business if he was elected,85) as opposed to Sofyan Tan (the only ethnic Chinese mayoral candidate), who refused to promise any favors to those who supported his candidature.86) One informant, however, has a different interpretation of this support: that Wahidin supported Ajib in order to secure the safety of the local Chinese community. This is because Ajib was initially the candidate chosen by the Prosperous Peace Party (PDS, Partai Damai Sejahtera), but the party later revoked its support in favor of Sofyan Tan. Since Wahidin was afraid that Ajib would blame the local Chinese community for this turnaround and make trouble for them, he decided to openly support and campaign for Ajib.87)

Besides that, according to some of my informants, the local governments of post-New Order Medan/North Sumatra often allocate local state projects to indigenous contractors who are members of youth/crime organizations.88) But it is also not uncommon for them to subcontract some of their projects to Chinese contractors who are their friends. An indigenous contractor may subcontract his projects to his Chinese friends at 20 percent less than his original tender cost. What this means is that the contractor would get a 20 percent cut from the cost.89) In other words, some local Chinese businesspeople who are well connected with youth/crime organizations could informally work on local state projects.

Conversely, in Surabaya, the relations between Chinese businesspeople and preman are different since the youth/crime organizations there are much less dominant. As mentioned, Chinese businesspeople in Surabaya often pay Madurese preman in exchange for “protection” for their business premises. In addition, during workers’ strikes, Chinese Indonesian industrialists often hire Madurese preman or members of Banser, the vigilante corps of Nahdlatul Ulama (NU), to apply pressure on striking workers. With regard to the allocation of local state projects, according to a university professor in Surabaya, unlike in Medan, contractors who get local state projects in Surabaya are not necessarily members of youth/crime organizations, since such organizations are less dominant in the city. However, these contractors are generally well connected to local decision makers.90) A Chinese Indonesian politician-turned-businessman in Surabaya disclosed that during the New Order era, the local government of Surabaya often allocated state projects to indigenous Indonesian contractors; very few Chinese Indonesian contractors got the projects. Hence, it was common for indigenous contractors to subcontract some of their projects to Chinese contractors. But since the end of the New Order, the local government of Surabaya has become more open and less discriminative: about 50 percent of contractors who get state projects are well-established Chinese contractors.91) Therefore, in the Reformasi era, very few Chinese contractors in Surabaya work on state projects that are subcontracted by indigenous contractors. This is certainly very different from the triangular collusion (Chinese contractors-youth/crime organizations-local government officials) that their Chinese counterparts in Medan have developed.

Financial Coercion against the Media

After the unraveling of the Suharto regime in May 1998, many discriminatory measures against the Chinese were removed. Most significantly, Suharto’s policy of forced assimilation was abandoned.92) In 2001 President Wahid sanctioned the publication of Chinese-language print media through the repealing of laws that had prohibited the local publication of Chinese characters in Indonesia since 1965, and thus Chinese-language materials became more freely available. Many schools were allowed to conduct Chinese-language courses. Besides that, ethnic Chinese were allowed to openly celebrate Chinese festivals (Turner 2003, 347–348; Hoon 2008, 104).

The advent of democratization and the removal of restrictions on Chinese cultural expression brought about press freedom and a new beginning for Chinese-language presses in Indonesia. Several Chinese-language presses were established across the country after the end of the New Order. In Medan, five Chinese-language presses were established after the end of the Suharto regime: Harian Promosi Indonesia (《印广日报》), Su Bei Ri Bao (《苏北日报》), Xun Bao (《讯报》), Hao Bao (《好报》), and Zheng Bao Daily (《正报》). All of them except Harian Promosi Indonesia are still in business at the time of writing. Harian Promosi Indonesia ceased publication at the end of December 2014 due to low readership. It was later re-launched under a new name, Zheng Bao Daily, in February 2015 (Zheng Bao Daily, February 16, 2015). In Surabaya, four Chinese-language presses were established in the post-Suharto era: Harian Naga Surya (《龙阳日报》), Harian Nusantara (《千岛日报》), Rela Warta (《诚报》), and Si Shui Chen Bao (《泗水晨报》).93) However, Harian Naga Surya and Rela Warta ceased publication after a few years due to various reasons.94)

It is worth noting that press freedom appears to be a double-edged sword for Chinese businesspeople. On the one hand, Chinese businesspeople can establish Chinese-language presses to promote Chinese culture and discuss issues related to ethnic Chinese in Indonesian society. They can also use the presses as a cultural space to showcase themselves and their business. But on the other hand, press freedom allows the media to expose the corrupt practices of Chinese businesspeople and the politicians to whom they are connected.

Chinese-language presses in Medan and Surabaya generally run at a loss due to low readership. The prohibition of Chinese-language education in New Order Indonesia produced a younger generation of Chinese who are mostly Chinese illiterate. Therefore, there is no general readership beyond the older generation, and this leads to a diminishing market.95) The presses need to depend on the financial support of local Chinese businesspeople in order to survive. Some well-established Chinese businesspeople support Chinese-language presses in Medan and Surabaya by becoming their shareholders or advertisers. In this way, they also make sure that the presses report in favor of them and their business. Such patrimonial power relations between Chinese-language presses and well-established Chinese businesspeople have deterred the presses from reporting negative news about local Chinese businesses. Therefore, news about corrupt business practices involving Chinese businesspeople is rarely reported in local Chinese-language presses. For instance, in October 2010, while Indonesian-language newspapers in Medan such as Waspada and Harian Orbit covered the alleged tax evasion by PT Indo Palapa, a real estate company owned by Benny Basri, an ethnic Chinese real estate tycoon in the city, most of the local Chinese-language newspapers did not report on the case. PT Indo Palapa allegedly submitted false information to the tax offices in the city about the number of shophouses that had been built by the company, so as to avoid paying taxes.96) When Xun Bao later published a news report on the case, it did not mention the name of Benny Basri.97)

Chinese businesspeople who fund Chinese-language presses are mostly connected to national- and local-level power holders. In order to survive, the presses must refrain from being critical of these power holders, otherwise they might encounter a withdrawal of their funders’ sponsorship. The fate of Rela Warta (《诚报》) in Surabaya vividly illustrates the carrot-and-stick method used on a critical press. Rela Warta was the only Chinese-language newspaper in Surabaya that did not cover many of the sociocultural activities organized by local Chinese organizations. It was also the only Chinese-language newspaper that often published in-depth and critical editorials and opinion pieces on current affairs and politics in Indonesia. The newspaper published a few editorials and opinion pieces on the general election and the role of Chinese Indonesian voters during the 2004 parliamentary election.98) It also published news on Dédé Oetomo (温忠孝), an ethnic Chinese social activist in Surabaya who contested in the East Java regional representative council (DPD, Dewan Perwakilan Daerah) election in 2004.99)

Shortly after the 2004 election, Rela Warta suddenly announced that it would turn into a weekly paper due to low readership and the increase in printing price (Rela Warta, April 8, 2004).100) But according to the former person in charge of the newspaper, the change was actually due to the main advertiser’s decision to stop advertising in the newspaper after the editorial team refused to openly support Susilo Bambang Yudhoyono, the soon-to-be presidential candidate at that time, as requested by the main advertiser. The main advertiser was a member of the Chinese business elite who ran various types of business in East Java. He had been contributing Rp.2 million in advertising fees to the newspaper every month. Prior to the polls, the main advertiser, who was close to Yudhoyono, urged Rela Warta to openly support Yudhoyono and call upon the local Chinese community to do the same. But the newspaper’s editorial team refused to do so because they maintained that the Chinese community had the right to support any electoral candidate they liked. In addition, the newspaper published a few news articles that were critical of Yudhoyono prior to the election. The main advertiser was upset and subsequently decided to withdraw his regular contribution of advertisements to the newspaper. Moreover, he urged other local Chinese business elites to boycott the newspaper. Consequently, Rela Warta lost many subscribers and a considerable amount of advertising revenue. Therefore, shortly after the parliamentary election, the founders decided to turn Rela Warta into a weekly paper.101) But even after the weekly circulation of the paper was reduced to 2,000 copies, the publication continued to lose money. Later, in June 2007, Rela Warta was taken over by the East Java branch of the Chinese Indonesian Social Association (PSMTI, Paguyuban Sosial Marga Tionghoa Indonesia), led by Jos Soetomo (江庆德), and became the bulletin of the organization (Li 2008, 360). In 2009, the paper ceased publication as it was no longer supported by PSMTI’s East Java branch (ibid.).102)

The decline of Rela Warta clearly shows that some Chinese business elites do not hesitate to resort to financial coercion against a media outlet in order to safeguard their business interests. It also shows that it is extremely difficult to establish and maintain a Chinese-language press without financial support from the Chinese business community. Without the money, it is impossible for a press to survive in the long term. This illustrates the ambivalence of press freedom for the Chinese in the post-Suharto era. The patrimonial power relations between local Chinese-language presses and Chinese business elites in Medan and Surabaya have also played an important role in shaping local politics, which is infused with corruption.

Land Disputes in Medan and Threats against Chinese Indonesians

Due to the absence of a well-established rule of law before and after the end of the New Order, there have been several cases of land disputes involving illegal seizure of state and residential land by real estate developers, who are mostly Chinese Indonesians. However, as I will discuss later in this section, land disputes in Medan tend to turn into violent conflicts and threats against Chinese Indonesians. Conversely, violent conflicts and threats against Chinese Indonesians related to land disputes rarely occur in Surabaya, due to two reasons. The first has much to do with the interethnic relationships between Chinese and indigenous Indonesians in these two cities. According to Judith Nagata (2003, 375), Medan has a long history of tensions between local Chinese and local indigenous groups. The use of Hokkien, a Chinese dialect originating from the southern part of Fujian Province in China, among Chinese in Medan creates a gulf between them and indigenous Indonesians. The Chinese are also considered wealthier and often encounter opposition and antagonism from indigenous Indonesians.103) The situation is quite different in Surabaya; according to an article in Gatra magazine (July 18, 1998), and also mentioned in an interview with Dédé Oetomo—an ethnic Chinese social activist in Surabaya—Chinese in Surabaya, who often speak Indonesian instead of Chinese languages, generally maintain a good relationship with indigenous Indonesians.104) This good relationship is due also to the dominance of NU in East Java. According to Suhaimi, a university lecturer in Surabaya, NU is a mass-based Muslim organization that embraces moderate Islam and emphasizes tolerance for minorities, including the Chinese minority. Its teachings have influenced many East Javanese Muslims.105) A second reason has much to do with the way the local government and developers in Surabaya deal with land disputes. As Howard W. Dick notes in his book on Surabaya, the local government and developers in the city prefer negotiation to violence in dealing with land disputes. Prompt resettlement with a higher rate of compensation is the usual compromise (Dick 2003, 406). In other words, residents in Surabaya enjoy better institutional protection compared to those in Medan. Hence, land disputes in Surabaya seldom turn into threats against ethnic Chinese Indonesians.

There are a few land disputes involving Chinese Indonesian real estate developers in Medan that I want to showcase here to show how some Chinese Indonesian developers have willingly resorted to illegal practices to further their business interests. These cases have received fairly high coverage in the local and national press and have kept alive the general national view of Chinese Indonesians as being collusive and willing to engage in corruption to maintain their wealth.

In November and December 2011, Indonesian-language newspapers in Medan reported that three ethnic Chinese tycoons had been implicated in the illegal seizure of state and residential land in the city. The tycoons involved were Benny Basri (张保圆), Tamin Sukardi, and Mujianto (郑祥南). All of them were real estate developers (Harian Sumut Pos, November 8, 2011; November 9, 2011; Harian Orbit, November 17, 2011; November 30, 2011; December 5, 2011; December 7, 2011). It was alleged that they had managed to take over the land by bribing local government bureaucrats. Basri, the owner of PT Central Business District (CBD), was alleged to have obtained the land title for Sari Rejo Sub-district (Kelurahan Sari Rejo) through illegal means. The land was previously under the ownership of the Indonesian Air Force, but it had later become a residential area. However, residents who had been living in Sari Rejo for decades did not get their land title, while Basri managed to get it within a short period of time and planned to turn the land into a commercial property. In other words, the ownership of the land had been transferred from the air force to Basri’s company.

As mentioned earlier in this article, Basri was a real estate tycoon well connected to local power holders and local military as well as police officers. He was also the treasurer of PD’s North Sumatra branch since 2003. So, it was quite possible that Basri managed to take over the land in Sari Rejo within a short period of time because of his close association with local power holders and officers at the local air force base.

Both Sukardi and Mujianto were implicated in land seizures at Helvetia, Deliserdang Regency (Kabupaten Deliserdang), North Sumatra. Sukardi, the owner of PT Erniputra Terari, had taken over former state land in Helvetia for commercial purposes. The land was earlier given by the state to the residents of Helvetia. Sukardi was allegedly involved in the hiring of gangsters to kidnap and assault an NGO activist who led residents of Helvetia to defend their land rights. The activist was later released, after being repeatedly assaulted by gangsters for several hours. Mujianto, the owner of Agung Cemara Realty, was implicated in the seizure of another piece of former state land in Helvetia in 1968. The land had been given to residents of Helvetia, who later turned it into a football field. According to a local social activist, as cited in Harian Orbit, Mujianto suddenly claimed ownership of the land in 2011 with a title deed. Although the title deed did not show the correct address of the land, Mujianto still fenced the land with the help of the police to prevent residents from entering. Therefore, the activist believed the incident was “a game of land mafia” with the collusion of government officials (Harian Orbit, November 30, 2011, my translation from the Indonesian original). As a result, the residents could no longer use the field for leisure and exercise. This angered the residents, and they subsequently demolished the fence, leading to a clash between the residents and gangsters hired by Mujianto. Police officers showed up during the clash; but instead of protecting the residents, they joined the gangsters in attacking the residents. Several residents were injured in the confrontation.

The land disputes in Helvetia drew the attention of a few North Sumatra provincial parliamentarians, who paid a visit to the site of the land disputes on April 9, 2013. They promised to hold a meeting with the residents to discuss the issue and a search for a solution. By June 2013 the promise had not yet been fulfilled, so on June 7, 2013, the Islamic organization Al Washliyah, which owned land in Helvetia that had been taken over by Sukardi, officially lodged a complaint with the Corruption Eradication Commission (KPK, Komisi Pemberantasan Korupsi) about Sukardi’s seizure of land in Helvetia. Apart from protesting against Sukardi in front of his office, members of Al Washliyah also held demonstrations in front of the North Sumatra chief attorney’s office and the North Sumatra High Court, urging law enforcers to take action against Sukardi (Harian Orbit, June 10, 2013). The protesters carried a coffin when they protested again outside Sukardi’s office on June 24, 2013 (Harian Orbit, June 25, 2013).

Harian Orbit referred to the three developers as “slanted-eye businesspeople” (pengusaha mata cipit), clearly indicating their Chinese ethnicity, since it was common for non-Chinese in Indonesia to refer to the Chinese as “slanted-eye” or mata cipit (Harian Orbit, December 5, 2011). To some extent, the alleged involvement of the three Chinese developers in land disputes reinforced the stereotypes of Chinese businesspeople as being heartless, corrupt, and opportunistic.

On another occasion, PT Jatimasindo, a real estate company owned by Arsyad Lis, another ethnic Chinese tycoon in Medan, was involved in the demolition of the Raudhatul Islam Mosque in Medan on April 11, 2011 (Suara Nasional News, January 30, 2013). The mosque was situated behind Emerald Garden Hotel, which was also owned by Lis. According to the chairperson of the Muslim People’s Forum (FUI, Forum Umat Islam),106) Indra Suheri, as interviewed by the Jakarta Post, the demolition of the mosque was to make way for the establishment of a shopping mall and a housing complex (The Jakarta Post, January 28, 2012). The company carried out the demolition after getting approval from Medan’s Council of Indonesian Islamic Scholars (MUI, Majelis Ulama Indonesia). Suheri accused Medan’s MUI of gaining material benefits at the expense of a mosque (Harian Orbit, February 7, 2012). Since then, FUI and several local Islamic activists have staged demonstrations in front of Emerald Garden Hotel from time to time. In early February 2012, banners with the provocative words “[Kalau] 1 mesjid lagi digusurr.1000 rumah cina kami bakarr!” (If one more mosque is demolished, we will burn 1,000 Chinese houses!) were even displayed during the demonstrations. It was also rumored that the protesters carried out sweeping raids on every car passing the area and asked the drivers to lower the car window. Although the sweeping never really occurred, the rumor—which was circulated via mobile phone text messages in Medan—caused panic among local Chinese in the city (Tribun Medan, February 4, 2012).

Later, in February 2013, PT Jatimasindo promised to rebuild the mosque at the same location. But as of May 2014, the company had not yet provided the rebuilding funds, and this was perceived by local Islamic activists as breaking the promise. So, the activists continued to stage open demonstrations in front of the Emerald Garden Hotel (Harian Sumut Pos, March 23, 2013; Harian Andalas, May 17, 2014).

At the time of writing, there has been no further news on land disputes involving the above Chinese tycoons.

The Chinese Indonesian developers’ involvement in land disputes not only violated the land rights of local communities but also perpetuated the corrupt, predatory political-business system in Medan. In addition, their alleged corrupt business practices reinforced the negative perception of ethnic Chinese among indigenous Indonesians, and this sometimes led to violence and threats against Chinese Indonesians.


The corrupt local politics and murky business environment in post-Suharto Indonesia are the result of corrupt practices and internal mismanagement that continue to characterize the bureaucracy in the country. This study shows that Chinese big business or conglomerates and Chinese small and medium businesses react and adapt to such a political-business environment in different ways. Chinese big businesses or conglomerates have experienced staff to identify and approach the right persons in different political departments as well as sufficient capital to bribe regional decision makers. Moreover, Chinese big businesspeople utilize their wealth and strong social networks to establish close ties with local power holders, security forces, and youth/crime organizations. Some control or intimidate critical media through financial coercion. In other words, Chinese big businesses or conglomerates are in an advantageous position in dealing with the corrupt and muddy business environment. Chinese businesspeople running small or medium businesses, however, generally do not have the necessary economic and social capital to establish close ties with local power holders, security forces, and youth/crime organizations. Most of them just choose to give in to the illegal requests of government officials or preman to prevent further hassles. On the other hand, there have been a few Chinese Indonesian businesspeople getting involved in politics and being elected as parliamentarians after the opening up of a democratic political space. However, I argue that the political power of Chinese Indonesians in Medan and Surabaya is overall still limited, because there have not been any Chinese Indonesians elected as local government heads, who have more power to directly control local resources.

It is important to note that all the different semi-legal and illegal means utilized by Chinese Indonesian businesspeople in dealing with the new political-business environment have perpetuated and reproduced the corrupt, predatory political-business system. By giving in to the illegal requests of power holders, police, and preman, Chinese businesspeople have colluded in and indirectly perpetuated such corrupt practices, as well as reinforced the stereotype that the Chinese can pay, will pay, and should pay for everything, including a peaceful business environment. By colluding with local power holders, heads of security forces, and youth/crime organizations to get protection and access to permits and contracts, Chinese businesspeople have directly become an integral part of the problematic political-business relationships and the local politics infused with corruption and institutionalized gangsterism. Although there are a few Chinese businesspeople who refuse to become victims of extortion and choose to fight back, these appear to be rare. By intimidating critical media through financial coercion, Chinese businesspeople have seriously threatened press freedom in post-Suharto Indonesia. Such a problematic political-business system is a vicious circle: Following Giddens’s structure-agency theory, corrupt local politics in post-Suharto Indonesia prompts Chinese businesspeople to resort to various illegal and semi-legal business practices to gain and protect their business and personal interests. Such business practices in turn perpetuate and reproduce the problematic business environment, as well as reinforce and reproduce the ambivalent position of ethnic Chinese in Indonesian society. I therefore argue that the corrupt local politics and murky political-business environment continue to exist in the Reformasi era not only because of the capture of new political vehicles and institutions by the New Order-nurtured predatory interests, but also due to the active role of many Chinese businesspeople in perpetuating the system. Many, if not most, Chinese businesspeople in post-Suharto Medan and Surabaya are agents who maintain the status quo (of the corrupt local politics, the problematic political-business system, and the ambivalent position of the Chinese minority) instead of being agents of change.

Accepted: March 11, 2015


This article is adapted from part of my Ph.D. thesis. An earlier version of this article was presented at “The International Seminar on Chinese Indonesian Businesses in the 21st Century: Historical and Contemporary Dynamics,” Yogyakarta, Indonesia, September 9–10, 2011. I wish to take this opportunity to thank Associate Professor Maribeth Erb, Associate Professor Douglas A. Kammen, Professor Vedi R. Hadiz, Associate Professor Eric C. Thompson, and Dr. Charles Caroll for their guidance and useful comments. I would also like to thank two anonymous reviewers for their valuable comments and suggestions. In Medan and Surabaya, I am particularly grateful for the advice and assistance offered by Mr. Elfenda Ananda, Ms. Suci Al-Falah, Dr. Dédé Oetomo, and Mr. Anton Prijatno. Funding for the fieldwork was obtained from the Faculty of Arts and Social Sciences, National University of Singapore.



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―. November 12, 2010. Tidak Beri Uang Keamanan, Preman Pukul Ibu Rumahtangga [Refused to pay protection money, preman beat up housewife].

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―. April 3, 2004. Yao Zhengque Shiyong Women De Xuanjuquan (2) 要正确使用我们的选举权(2)[We should exercise our voting rights wisely (2)].

―. April 2, 2004. Yao Zhengque Shiyong Women De Xuanjuquan (1) 要正确使用我选举权(1)[We should exercise our voting rights wisely (1)].

―. March 11, 2004. Xuanmin Yao Jizhu Saba Nian Qian De Jintian, Buyao Zai Xuan Shoujiupai Yiyuan Houxuanren 选民要记住卅八年前的今天,不要再选守[旧]派议员候选人 [Voters must remember the tragedy 38 years ago, never vote for conservative candidates again].

―. March 3, 2004. Buyao Xuan Ceng Yanzhong Qinfan Huaren Jiben Renquan De Yiyuan Houxuanren 不要选曾严重侵犯华人基本人权的议员候选人 [Never vote for candidates who violated human rights of ethnic Chinese in the past].

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―. March 25, 2008. Hari Ini Ratusan Pelaku UKM Unjukrasa Keprihatinan [Today hundreds of SME owners attend public protest].

Xun Bao 讯报. November 2, 2010. Jianzu Xingjian Xukezheng Xingpian, INDO PALAPA Gongsi Laoban Bei Yaoqiu Ti Shenpan 建筑兴建许可证行骗,INDO PALAPA公司老板被要求提审 [Submitting false information in construction permit application, Indo Palapa’s boss was requested to be persecuted].

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List of Informants

Public Figures


Mely G. Tan (陈玉兰) (sociologist), June 8, 2010.


Dirk A. Buiskool (historian), July 14, 2010.

Brilian Moktar (莫粧量) (member of North Sumatra provincial parliament, 2009–present), July 16, 2010.

Johan Tjongiran (章生荣) (social activist), August 3, 2010.

Hasyim a.k.a. Oei Kien Lim (黄建霖) (member of Medan city parliament, 2009–present), August 11, 2010.

Sofyan Tan (陈金扬) (candidate in Medan’s 2010 mayoral election; social activist), August 23, 2010.

Anuar Shah (chairperson, Pancasila Youth’s North Sumatra branch), October 30, 2010.

Yap Juk Lim (叶郁林) (ethnic Chinese businessperson engaged in the snack production industry; chairperson, Medan Deli Regional Forum of Small and Medium Enterprises [FORDA UKM Medan Deli]), November 16, 2010.


Dédé Oetomo (温忠孝) (social activist), December 24, 2010.

Anton Prijatno (王炳金) (ethnic Chinese businessperson engaged in the distribution of asphalt; former member of the East Java provincial legislature, 1977–87; former member of the national legislature, 1987–97), February 24, 2011.

Henky Kurniadi (游经善) (ethnic Chinese businessperson engaged in the real estate industry; national parliamentarian representing East Java 1, 2014–present), March 9, 2011.

Harry Tanudjaja (陈国樑) (chairperson, Surabaya branch of the Partai Kasih Demokrasi Indonesia (PKDI); candidate in 1999 and 2009 general elections; lawyer), March 31, 2011.

Samas H. Widjaja (黄三槐) (former chief editor, Rela Warta [《诚报》]; former adviser, Harian Naga Surya [《龙阳日报》]), May 5, 2011.

Other Informants (with Pseudonyms)


Daniel (deceased) (former media activist), July 13, 2010; September 17, 2010.

Farid (ethnic Chinese businessperson engaged in the garment production industry), July 15, 2010.

Ivan (ethnic Chinese businessperson engaged in real estate), July 16, 2010.

Halim (NGO activist), July 26, 2010.

Usman (NGO activist), July 30, 2010.

Susanto (ethnic Chinese businessperson engaged in the distribution of toys), August 4, 2010.

Christopher (ethnic Chinese businessperson engaged in the frozen seafood industry), August 18, 2010.

Erik (ethnic Chinese businessperson engaged in the iron and plastics industry), August 25, 2010.

Surya (media activist), September 17, 2010.

Andi (journalist), September 20, 2010.

Melani (person in charge, Medan Zao Bao [《棉兰早报》] and Su Bei Ri Bao [《苏北日报》]), October 22, 2010.

Janice (staff, Medan Zao Bao/Su Bei Ri Bao; former staff, Hua Shang Bao [《华商报》]), November 12, 2010.

Joe (person in charge, Xun Bao [《讯报》]), November 5, 2010.

Setiawan (person in charge, Harian Promosi Indonesia [《印广日报》]), November 8, 2010.

Eddie (ethnic Chinese businessperson engaged in the distribution of mechanical power-transmission products), November 10, 2010.

Joko (NGO activist), November 11, 2010.

Patrick (person in charge, Hao Bao [《好报》]), November 15, 2010.


Harianto (ethnic Chinese businessperson engaged in the beverage production industry), November 23, 2010.

Yahya (university professor), December 31, 2010.

Junus (university professor), January 11, 2011.

Atan (ethnic Chinese businessperson engaged in the real estate industry; developer-cum-contractor), February 28, 2011.

Bambang (ethnic Chinese ceramic tile factory owner), March 3, 2011.

Vincent (adviser, Si Shui Chen Bao [《泗水晨报》]), April 7, 2011.

Yati (former staff of a real estate company in Surabaya’s Chinatown), April 8, 2011.

Suhaimi (university lecturer), April 27, 2011.

Wahyu (economic analyst; university lecturer), May 18, 2011.

1) Interview with Susanto, an ethnic Chinese businessperson engaged in the distribution of toys, Medan, August 4, 2010.

2) I also had a personal communication with an academic in Jakarta.

3) Calculated from Central Statistics Agency of North Sumatra (2001, 40, Table 6) and Central Statistics Agency of East Java (2001, 75, Table 10.9). These are the latest official figures on the Chinese Indonesian populations in Medan and Surabaya.

4) Personal communication with Mely G. Tan, sociologist, Jakarta, June 8, 2010.

5) Interview with Halim, NGO activist, Medan, July 26, 2010.

6) Interview with Daniel (deceased), former media activist, Medan, September 17, 2010; interview with Surya, media activist, Medan, September 17, 2010; interview with Halim, July 26, 2010.

7) Interview with Halim, July 26, 2010. This point is elaborated in the section titled “Relations with Preman.”

8) Interview with Wahyu, economic analyst and university lecturer, Surabaya, May 18, 2011.

9) Subianto and his wife (Suharto’s daughter) were divorced after the end of the Suharto regime.

10) Interview with Johan Tjongiran, social activist, Medan, August 3, 2010; interview with Sofyan Tan, a candidate in Medan’s 2010 mayoral election and social activist, Medan, August 23, 2010; interview with Harianto, an ethnic Chinese businessperson engaged in the beverage production industry, Surabaya, November 23, 2010.

11) These are the latest data available. There is no further update after 2011.

12) For the background and characteristics of Guided Democracy, see Ricklefs (2008, 292–321).

13) Among all political parties, PDI-P has the largest number of members with a preman background. The party greatly appealed to preman through its populist approach and pro-“little people” rhetoric (see Wilson 2010, 204).

14) Interview with Susanto, August 4, 2010; interview with Eddie, an ethnic Chinese businessperson engaged in the distribution of mechanical power-transmission products, Medan, November 10, 2010.

15) Interview with Hasyim a.k.a. Oei Kien Lim, member of Medan city parliament, 2009–present, Medan, August 11, 2010; interview with Sofyan Tan, August 23, 2010; interview with Halim, July 26, 2010; interview with Joko, NGO activist, Medan, November 11, 2010.

16) Interview with Johan Tjongiran, August 3, 2010; interview with Andi, journalist, Medan, September 20, 2010.

17) Interview with Johan Tjongiran, August 3, 2010.

18) Interview with Daniel (deceased), September 17, 2010; interview with Johan Tjongiran, August 3, 2010.

19) Interview with Andi, September 20, 2010.

20) Interview with Halim, July 26, 2010.

21) For instance, an indigenous businesswoman who owned a restaurant in Medan was beaten by two preman on November 4, 2010, as she refused to pay the Rp.500,000 “protection money,” which she deemed too high (see Harian Orbit, November 12, 2010). In addition, preman often extort money from small and medium businesspeople, including street vendors (pedagang kaki lima), who are mostly indigenous Indonesians, in exchange for “protection” (see Tan 2004, 134-136).

22) Interview with Susanto, August 4, 2010; interview with Sofyan Tan, August 23, 2010.

23) Interview with Anuar Shah, chairperson, PP’s North Sumatra branch, Medan, October 30, 2010.

24) These are the latest data available at the time of writing.

25) Interview with Johan Tjongiran, August 3, 2010; interview with Susanto, August 4, 2010; interview with Dirk A. Buiskool, historian, Medan, July 14, 2010.

26) See also Harian Global (April 30, 2009).

27) Interview with Andi, September 20, 2010.

28) Interview with Dédé Oetomo, social activist, Surabaya, December 24, 2010.

29) Interview with Dédé Oetomo, social activist, Surabaya, December 24, 2010.

30) Ironically, in May 1998, when riots against the Chinese broke out in several major cities in Indonesia, it was reported that the local Chinese Indonesian business community in Surabaya was able to guarantee relative peace in the city by paying generously for local military protection, in contrast to many other cities such as Medan, Jakarta and Solo, where all troops mysteriously disappeared when the riots broke out (Dick 2003, 475; Purdey 2006, 113–122).

31) Interview with Joko, November 11, 2010.

32) Interview with Joko, November 11, 2010.

33) Interview with Erik, an ethnic Chinese businessperson engaged in the iron and plastics industry, Medan, August 25, 2010.

34) Personal communication with Yati, former staff of a real estate company in Surabaya’s Chinatown, April 8, 2011.

35) Interview with Junus, university professor, Surabaya, January 11, 2011.

36) There were five pairs of candidates contesting in the 2004 presidential election: Wiranto-Solahuddin Wahid (nominated by the Party of Functional Groups, Golkar), Megawati Sukarnoputri-Hasyim Muzadi (nominated by the Indonesian Democratic Party of Struggle, PDI-P), Amien Rais-Siswono Yudo Husodo (nominated by the National Mandate Party, PAN), Susilo Bambang Yudhoyono-Jusuf Kalla (nominated by the Democrat Party, PD), and Hamzah Haz-Agum Gumelar (nominated by the United Development Party, PPP) (Aris et al. 2005, 71–74). The Yudhoyono-Kalla pair was elected.

37) The Gemala Group is a conglomerate engaged in automotive and property development businesses.

38) The Lippo Group is a conglomerate engaged in retailing, media, real estate, health care, and financial businesses.

39) Interview with Yahya, university professor, Surabaya, December 31, 2010.

40) Interview with Hasyim, August 11, 2010.

41) Interview with Sofyan Tan, August 23, 2010; interview with Surya, September 17, 2010.

42) Interview with Sofyan Tan, August 23, 2010.

43) There were three pairs of candidates contesting in the 2009 presidential election: Jusuf Kalla-Wiranto (nominated by Golkar), Susilo Bambang Yudhoyono-Boediono (nominated by PD), and Megawati Sukarnoputri-Prabowo (nominated by PDI-P) (Rizal 2010, 61).

44) However, Siti was granted parole by the Ministry of Justice in September 2014 (The Jakarta Globe, September 2, 2014). The case of the Poo family indicates that splitting political loyalties and financial support between different political elites does not necessarily bring long-term protection and guarantees for the family members’ business or political career.

45) Interview with Christopher, an ethnic Chinese businessperson engaged in the frozen seafood industry, Medan, August 18, 2010.

46) Interview with Brilian Moktar, member of North Sumatra provincial parliament, 2009–present, Medan, July 16, 2010.

47) Interview with Hasyim, August 11, 2010.

48) Interview with Yap Juk Lim, an ethnic Chinese businessperson engaged in the snack production industry and chairperson of the Medan Deli Regional Forum of Small and Medium Enterprises (FORDA UKM Medan Deli), Medan, November 16, 2010.

49) Interview with Harry Tanudjaja, chairperson, Surabaya branch of the Indonesian Democratic Party of Devotion (PKDI); candidate in the 1999 and 2009 general elections; and lawyer, Surabaya, March 31, 2011.

50) Interview with Simon Lekatompessy, member of the Surabaya city parliament, 2009–14, Surabaya, May 5, 2011.

51) Interview with Henky Kurniadi, an ethnic Chinese businessperson engaged in the real estate industry and national parliamentarian representing East Java 1, 2014–present, Surabaya, March 9, 2011.

52) Interview with Daniel (deceased), July 13, 2010; interview with Johan Tjongiran, August 3, 2010; interview with Susanto, August 4, 2010; interview with Atan, an ethnic Chinese businessperson engaged in the real estate industry and a developer-cum-contractor, Surabaya, February 28, 2011.

53) Interview with Johan Tjongiran, August 3, 2010; interview with Susanto, August 4, 2010.

54) Interview with Johan Tjongiran, August 3, 2010.

55) Gayus Tambunan is a former tax official who was arrested by police on March 30, 2010, for alleged tax evasion of Rp.25 billion (see ANTARA News, March 27, 2010; March 31, 2010). Although Tambunan is of Batak origin, an ethnic minority group in Indonesia, his ethnicity is never problematized by the public because Batak are one of the indigenous groups in the country.

56) Interview with Susanto, August 4, 2010.

57) Interview with Yap Juk Lim, November 16, 2010.

58) Interview with Yap Juk Lim, November 16, 2010.

59) Interview with Yap Juk Lim, November 16, 2010.

60) Interview with Sofyan Tan, August 23, 2010.

61) Interview with Yap Juk Lim, November 16, 2010.

62) Interview with Ivan, an ethnic Chinese businessperson engaged in real estate, Medan, July 16, 2010.

63) Interview with Usman, NGO activist, Medan, July 30, 2010.

64) Interview with Junus, January 11, 2011.

65) Interview with Junus, January 11, 2011.

66) Interview with Bambang, an ethnic Chinese ceramic tile factory owner, Surabaya, March 3, 2011.

67) Interview with Junus, January 11, 2011.

68) Interview with Junus, January 11, 2011.

69) Interview with Junus, January 11, 2011. Prijatno was a member of the East Java provincial legislature from 1977 to 1987 and a member of the national legislature from 1987 to 1997 (interview with Anton Prijatno, an ethnic Chinese businessperson engaged in the distribution of asphalt; a former member of the East Java provincial legislature, 1977–87; and a former member of the national legislature, 1987–97, Surabaya, February 24, 2011).

70) Interview with Anton Prijatno, February 24, 2011.

71) Interview with Anton Prijatno, February 24, 2011.

72) Interview with Junus, January 11, 2011.

73) Interview with Anton Prijatno, February 24, 2011.

74) Interview with Junus, January 11, 2011.

75) Interview with Daniel (deceased), September 17, 2010.

76) Interview with Joko, November 11, 2010.

77) Interview with Usman, July 30, 2010; interview with Christopher, August 18, 2010; interview with Joko, November 11, 2010.

78) Interview with Sofyan Tan, August 23, 2010; interview with Joko, November 11, 2010.

79) Interview with Usman, July 30, 2010.

80) Interview with Halim, July 26, 2010.

81) Interview with Joko, November 11, 2010.

82) As Harian Promosi Indonesia had been running at a loss due to low readership, Honggandhi eventually lost all of the capital he had invested in the press. He later moved to Jakarta and worked in a hotel (interview with Setiawan, person in charge, Harian Promosi Indonesia [《印广日报》], Medan, November 8, 2010).

83) For more details of Medan’s 2010 mayoral election, see Aspinall et al. (2011).

84) Interview with Christopher, August 18, 2010.

85) Interview with Farid, an ethnic Chinese businessperson engaged in the garment production industry, Medan, July 15, 2010; interview with Ivan, July 16, 2010.

86) Interview with Sofyan Tan, August 23, 2010.

87) This interpretation was given by Surya, a media activist in Medan (interview with Surya, September 17, 2010).

88) Interview with Ivan, July 16, 2010; interview with Halim, July 26, 2010.

89) Interview with Halim, July 26, 2010.

90) Interview with Junus, January 11, 2011.

91) Interview with Anton Prijatno, February 24, 2011.

92) For a background to Suharto’s policy of forced assimilation, see Suryadinata (1992) and Coppel (1983).

93) Si Shui Chen Bao is a subsidiary paper of Guo Ji Ri Bao, the largest Chinese-language daily in Jakarta.

94) The closing down of Rela Warta was due mainly to the withdrawal of advertising by its main advertiser. The closing down of Harian Naga Surya was due to low readership. For more details, see Huang (2005).

95) Interviews with people in charge and staff of local Chinese-language presses in Medan and Surabaya.

96) See Harian Orbit (October 15, 2010) and Waspada (October 15, 2010).

97) See Xun Bao (November 2, 2010).

98) For examples, see Rela Warta (March 11, 2004; April 2, 2004; April 3, 2004; June 25–July 1, 2004).

99) For example, see Rela Warta (March 3, 2004).

100) See also Li (2008, 360).

101) Interview with Samas H. Widjaja, former chief editor, Rela Warta (《诚报》), and former adviser, Harian Naga Surya (《龙阳日报》), Surabaya, May 5, 2011.

102) PSMTI is a major ethnic Chinese organization formed in Indonesia after the end of the New Order.

103) In fact, Medan was the site of the first violence against Chinese in May 1998 (Purdey 2006, 114).

104) Interview with Dédé Oetomo, December 24, 2010.

105) Interview with Suhaimi, university lecturer, Surabaya, April 27, 2011.

106) Muslim People’s Forum is an Islamic organization in Indonesia.


Vol. 3, No. 2, Shiraishi Takashi

Contents>> Vol. 3, No. 2

Indonesian Technocracy in Transition: A Preliminary Analysis*

Shiraishi Takashi**

*I would like to thank Caroline Sy Hau for her insightful comments and suggestions for this article.

**白石 隆, Institute of Developing Economies Japan External Trade Organization (IDE-JETRO), 3-2-2 Wakaba, Mihamaku, Chiba, Chiba Prefecture 261-8545, Japan; National Graduate Institute for Policy Studies (GRIPS), 7-22-1 Roppongi, Minato-ku, Tokyo 106-8677, Japan

e-mail: takasisiraisi[at]

Indonesia underwent enormous political and institutional changes in the wake of the 1997–98 economic crisis and the collapse of Soeharto’s authoritarian regime. Yet something curious happened under President Yudhoyono: a politics of economic growth has returned in post-crisis decentralized, democratic Indonesia. The politics of economic growth is politics that transforms political issues of redistribution into problems of output and attempts to neutralize social conflict in favor of a consensus on growth. Under Soeharto, this politics provided ideological legitimation to his authoritarian regime. The new politics of economic growth in post-Soeharto Indonesia works differently. Decentralized democracy created a new set of conditions for doing politics: social divisions along ethnic and religious lines are no longer suppressed but are contained locally. A new institutional framework was also created for the economic policy-making. The 1999 Central Bank Law guarantees the independence of the Bank Indonesia (BI) from the government. The Law on State Finance requires the government to keep the annual budget deficit below 3% of the GDP while also expanding the powers of the Ministry of Finance (MOF) at the expense of National Development Planning Agency. No longer insulated in a state of political demobilization as under Soeharto, Indonesian technocracy depends for its performance on who runs these institutions and the complex political processes that inform their decisions and operations.

Keywords: Indonesia, technocrats, technocracy, decentralization, democratization, central bank, Ministry of Finance, National Development Planning Agency

At a time when Indonesia is seen as a success story, with its economy growing at 5.9% on average in the post-global financial crisis years of 2009 to 2012 and performing better than its neighbor economies of Malaysia (with its economic growth of 4.1% a year in 2009–12), the Philippines (4.8%), and Thailand (3.0%), it is easy to forget that less than a decade ago many people wondered and worried whether Indonesia would turn into a Yugoslavia, in danger of breaking up owing to ethnic and religious tensions, or a Pakistan, subject to periodic military intervention and the rising jihadist threat, or a Philippines, democratic but with insurgencies simmering in the provinces and a weak and stagnant economy.

Nothing of this sort has happened. Instead, and most remarkably, a politics of economic growth has returned, but under conditions that are different from the politics of economic development pursued by Soeharto under the New Order.

The politics of economic growth is politics that transforms political issues of redistribution into problems of output and attempts to neutralize social conflict in favor of a consensus on growth, thus creating a “virtuous” cycle of political stability which leads to economic development which leads to the rising living standard which in turn leads to further political stability. Under Soeharto, this politics provided the ideological legitimation to his authoritarian state, while also delivering on its promise to improve the living standards of a substantial majority of the Indonesian people, helping to create a sizeable Indonesian middle class. In this context, technocrats emerged as major allies of Soeharto, working closely with the President on all economic policy issues.

The new politics of economic growth works differently under the current decen­tralized democracy, and technocrats also now work under conditions different from ­Soeharto’s New Order. The salience of this politics of economic growth was underscored in the reelection of Susilo Bambang Yudhoyono in 2009 as President. Public support for the incumbent President and his Democratic Party nicely correlated with public perception of Indonesia’s economic performance. Thanks in part to the global financial crisis that pushed down fuel prices, for which the President took credit, Yudhoyono was reelected overwhelmingly in the first round voting with technocrat Budiono as his running mate. The resurgence of the politics of economic growth in Indonesia and with it the comeback of technocrats as a force (though as vulnerable as the technocrats in ­Soeharto’s time, but in a different way) in Indonesian politics can be seen in the prestige and authority that former Minister of Finance Sri Mulyani Indrawati enjoys even after she was sent off to the International Monetary Fund.

What made technocrats effective as economic policy-makers under Soeharto? What conditions have enabled technocrats to be effective under the current democratic system? Who are they in the first place? The answers to these questions illuminate the important but nevertheless fraught position occupied by technocrats in Indonesia’s changing political structure and processes of economic policy-making.

The Making of Indonesian Technocracy

Technocracy in Indonesia emerged and developed in the 1960s and 1970s in tandem with the rise and consolidation of Soeharto’s authoritarian developmental state. Soeharto fashioned his New Order regime with the state as his power base and the army as its backbone. The regime was centralized, militarized, and authoritarian. Army officers dominated the military and occupied strategic positions in the civilian arm of the state as district chiefs, provincial governors, directors-general, and ministers in the name of dual functions. State power was repeatedly impressed upon regime “enemies”—“com­munists,” “separatists” in East Timor, Aceh, and Papua (Irian Jaya), criminals, labor activists, journalists, and Islamists. The government contained the question of social divisions along ethnic and religious lines through state repression (politics of stability, that is) while it addressed the question of class divisions through its politics of economic development. The government thus achieved the state of political demobilization (as opposed high level of political mobilization under Sukarno’s Guided Democracy) deemed necessary to national development by barring oppositional groups (whether ethnic, religious, or political) from participation in the political processes and imposed its politics of stability and development on the public.

Technocrats, who were in charge of development, thrived in the state of political demobilization under the New Order. They started their technocratic career in the early days of the New Order as Soeharto’s economic advisers. They were young academics trained as economists at Indonesia’s premier university, the University of Indonesia (hereinafter UI), and abroad who maintained their academic status as UI professors while joining the government as technocrats. Five of them emerged as key members of ­Soeharto’s economic team and founding fathers of the Indonesian technocracy: Widjojo Nitisastro, Ali Wardhana, Emil Salim, Subroto, and Mohammad Sadli.

In the early years of the New Order, there were not very many Indonesians who had the technical expertise to formulate and manage economic policies and to communicate in the language of economics with their counterparts from other countries such as the United States and Japan and from international agencies such as the International Monetary Fund (hereinafter IMF), the World Bank (hereinafter WB), and the Asian Development Bank (hereinafter ADB). The first-generation of technocrats obtained the expertise and the language thanks to their training at foreign, largely American, universities. Their small number and close personal relationships with each other (as well as their expertise) set them apart from the great majority of civilian bureaucrats and military officers who ran the New Order state. While they could have a significant impact on broad economic policies, above all monetary policies and major allocations of government resources, they had relatively little influence on or control over the political and bureaucratic processes that enabled the policy implementation of contracts, licenses, promotions, payoffs, and other micro-economic details (Bresnan 1993, 73).

Technocrats enjoyed Soeharto’s trust and confidence as his ally and were appointed as ministers in charge of key economic agencies: Widjojo Nitisastro as Chairman of ­BAPPENAS (Badan Perencanaan Pembangunan Nasional) (1967–83), Coordinating ­Minister for Economy, Finance and Industry (hereinafter Menko, 1973–83), and presidential economic advisor (1993–98);1) Ali Wardhana as Minister of Finance (1973–83) and Menko (1983–88);2) Emil Salim as State Minister for State Apparatus (1971–73), Minister of Transportation, Communication and Tourism (1973–78), State Minister for Development Supervision and Environment (1978–83), and State Minister for Population and Environment (1983–93);3) Subroto as Minister of Manpower, Resettlement and Cooperatives (1978–83) and Minister of Mining and Energy (1983–88);4) Mohammad Sadli as Minister of Manpower (1971–73) and Minister of Mining and Energy (1973–78).5) They were soon followed by their juniors: J. B. Sumarlin who served as State Minister for State Apparatus (1973–83), State Minister for National Development Planning and BAPPENAS Chairman (1983–88), and Minister of Finance (1988–93);6) Saleh Afif who served as State Minister for State Apparatus and Deputy Chairman of BAPPENAS (1983–88), State Minister for National Development Planning and Chairman of BAPPENAS (1988–93) and Menko (1993–98);7) Adrianus Mooy as BI (Bank Indonesia) Governor (1988–93);8) Rachmat Saleh as BI Governor (1973–83) and Trade Minister (1983–88);9) Arifin Siregar as BI Governor (1983–88) and Trade Minister (1988–93);10) Soedradjad Djiwandono as BI Governor (1993–98).11)

As their careers show, four of the first-generation technocrats studied at the ­University of California, Berkeley, and three of them obtained their Ph.Ds there, hence the group appellation “Berkeley Mafia.” But a more appropriate label for the technocrats under Soeharto should have been the “UI-Gadjah Mada Mafia” because many of the technocrats who followed their footsteps were either trained at the UI or Gadjah Mada University, which would serve as the nesting grounds for grooming the technocrats who succeeded the original five.

In the early years of the New Order, technocrats were instrumental in setting the principles that informed the macro-economic policy framework under Soeharto: the ­balanced budget, the open capital account, and the pegged exchange rate system. The balanced budget principle and its international institutional framework, IGGI/CGI, served as a mechanism to keep total public expenditures under domestic government revenues plus official capital inflows.12) It was instrumental in keeping the government from resorting to deficit financing and served to shield the Minister of Finance from excessive financing demands (Ginandjar and Stern forthcoming, 13–14). It also functioned to prevent the government from attempting to raise funds by issuing domestic government bonds (and indeed, the government did not issue domestic bonds until the 1997 crisis). But it was never made into a law. It essentially depended on the ability of the Finance Minister to persuade the President to reject proposals that required excess expenditure. The government also relied on off-budget expenditures, the size of which was often unknown even to senior policy-makers. Over time, the government increasingly resorted to off-budget accounts to fund numerous pet projects (such as the state aircraft industry and Krakatau Steel), finance government election campaigns, and underwrite persistent public enterprise sector deficits by borrowing from state banks (ibid.).

The second principle—the open capital account—was introduced in 1971, when the government eliminated controls on foreign exchange transactions, most notably capital flows. The open capital account was meant to provide a further brake on monetary policy by ensuring that any monetary mismanagement would show up almost immediately in an outflow of foreign exchange. And finally, an adjustable pegged exchange rate (the third principle) was meant to maintain the real international value of the rupiah by adjusting the nominal rate to reflect changes in domestic consumer prices relative to the international prices of its major trading partners (ibid.).

Technocrats, enjoying Soeharto’s trust and armed with the three principles, proved effective in the economic policy-making as long as the president supported them. They formulated broad economic policies collectively. A good example is monetary policy. Under the New Order, the BI was not independent. Central Bank Law No. 13, 1968 (Law of the Republic of Indonesia Number 13 of 1968 concerning the Central Bank) explicitly stated that BI implement monetary policy formulated by the Monetary Board. The board was composed of the Finance Minister, Minister of Trade and Industry, State Secretary, government Economic Advisers (Widjojo Nitisastro and Ali Wardhana, that is), and the Governor of BI. Policy recommendations and decisions as well as their implementation were in due course reported and discussed with the President. Decisions were generally made after going through him. Sometimes decisions were made for immediate implementation. Otherwise, they went through Cabinet meetings, which were conducted once a month (Djiwandono 2004, 46).

But the above technocrats only represented one school of thought on Indonesia’s economic development. They adhered to the doctrine of free trade and advocated limiting state intervention in the market to a minimum and guaranteeing as much as possible the free economic activities of the private sector. They also hewed to the notion of “comparative advantage” of a country for economic development. Another school of thought—mainly represented by engineers, many of whom were trained at the Bandung Institute of Technology (ITB)—believed in industrial policy and upheld state-led economic nationalism, arguing that the state should actively intervene to promote long-term growth of domestic industries, if necessary shielding these domestic industries from outside competition.

Officials representing these two opposing camps sought Soeharto’s support and blessings. Indonesia’s development strategies oscillated between the two schools of thought as Soeharto oscillated between the two strategies. When the economy was booming, economic nationalism manifested itself in the form of large-scale capital-­intensive state projects, which often turned out to be wasteful and served to increase Indonesia’s external debt. When the economy experienced a downturn, those projects were shelved, the exchange rate was devalued, and deregulations were introduced to integrate the Indonesian economy more deeply into the global market.

BAPPENAS was the stronghold of technocrats with the physical presence, either formal or informal, of Widjojo Nitisastro, while the nationalist school was represented by such high-ranking officials as B. J. Habibie, who served as State Minister for Science and Technology and Chief of Technology Assessment and Application Agency (Badan ­Pengkajian dan Penerapan Teknologi, BPPT) from 1983 to 1998; Ginandjar Kartasasmita who served as Junior Minister for the Promotion of Domestic Products (1983–88), Head of the Investment Coordinating Board (Badan Koordinasi Penanaman Modal, BKPM) (1985–88), Minister of Mining and Energy (1988–93), and State Minister for National Development Planning and Chief of BAPPENAS (1993–98); Hartarto, Minister of ­Industry (1988–93); and Tunky Ariwibowo, Minister of Industry (1993–95) and Minister of Industry and Trade (1995–97). Rent-seekers with vested interests, above all presidential cronies and, increasingly, Soeharto’s family members, openly allied themselves with the nationalist school.

Technocrats had their heyday in the mid- to late 1980s. One contentious issue between technocrats and nationalists was import controls. In 1982, an “approved traders” system was introduced. The system established a list of categories of raw materials, components, and products that could be imported only by specified agencies. By early 1986, 1,484 items were under import license controls and 296 items were under physical import quotas. These items amounted to USD2.7 billion worth of imports in 1985, representing more than half the value of Indonesia’s total imports. These controls did little to protect local industries, and functioned more as a means of generating income for the president’s family and friends (Bresnan 1993, 247, 249). Another issue was controls on private investment. Foreign investment was tightly controlled; from 1974 onward, the Investment Coordinating Board (BKPM) issued comprehensive guidelines every year listing the priority areas for investment. Under the leadership of Ginandjar Kartasasmita, the 1985 investment priority list, for instance, included 400 projects which were open to foreign investors, others which were restricted to domestic investors, and areas that were closed to investment altogether (ibid., 251).

But oil revenues were declining because of the collapse of oil prices in the early 1980s. The Fourth Five-Year Plan, announced in 1984, made it clear that the days of state-funded projects were over. The Plan estimated that the economy would have to create nine million new jobs over the five-year period; this in turn would require the investment of Rp145.2 trillion, but the government budget would only be able to provide around half of that amount. The remainder, Rp67.5 trillion, would have to come from the private sector and state enterprises. Both the Commander in Chief of the Armed Forces Gen. Benny Murdani and the State Secretary and Chairman of the government’s party, Golongan Karya (Golkar) Lt. Gen. Suhdarmono—Soeharto’s two top lieutenants in those days—called on ethnic Chinese businessmen to support the Plan by calling for the end of racial discrimination in government policies (ibid., 254–255).

With this broad political backing, technocrats took initiatives toward deregulation from 1983 to 1989. The economic team which retained control over the major economic portfolios took steps to reform the financial system, adopted a more open trade stance, and introduced a modern tax system (Ginandjar and Stern forthcoming, 17). Soeharto took his economic ministers’ advice, as he had on earlier occasions when resources were constrained. Menko Ali Wardhana and his economic ministers proceeded with their reforms when they had the formal authority, bureaucratic strength, political backing, and Soeharto’s personal support to act on such issues as trade, investment, exchange rates, interest rates, and taxes. The incremental approach included bank reforms in 1983; a tax reform at the end of that year; reform of the customs service in 1985; the devaluation of the rupiah in 1986; and partial trade reforms in 1986 and 1987. Investment controls were eased in 1986 and 1987, and in 1988 a package of deregulation measures in trade and customs was announced by Radius Prawiro, the new Menko (Bresnan 1993, 262–263).

But technocrats had lost their momentum and political support by the early 1990s. In the 1993 reshuffle, most of the technocrats were replaced by economic nationalists and bureaucrats (Ginandjar and Stern forthcoming, 17–18). This was in part because of the rise of nationalists led by Habibie and Ginandjar and in part because of the rise of a new breed of career bureaucrats who were able to obtain technical expertise by doing graduate work abroad (technocratic bureaucrats) and who were often supported by ­Soeharto and his family members and cronies.

Mar’ie Muhammad13) replaced J. B. Sumarlin as Finance Minister; Ginandjar ­Kartasasmita14) replaced Saleh Afif as State Minister for National Development Planning and BAPPENAS Chief; S. B. Joedono,15) Habibie’s ally, replaced Arifin Siregar as Trade Minister; while one of two remaining technocrats, Saleh Afif, was appointed as Menko to replace Radius Prawiro16) and another, Soedradjad Djiwandono, replaced Adrianus Mooy as BI Governor.

It is also important to note that the Indonesian economy was undergoing major changes by the early 1990s. The private sector emerged as the driving force for economic growth. There was a general surge in foreign direct investment after the 1985 Plaza Accord as realized foreign investment rose from USD0.3 billion in 1985 to USD4.3 billion in 1995. Most notable was the shift in the ratio of non-oil and gas revenue receipts as a proportion of the Gross Domestic Product (GDP), which rose from slightly more than 8% in 1985–86 to nearly 12% in 1994–95 (ibid., 19, 22). But attempts at curbing vested interests were not very successful. As Menko, Saleh Afif knew that eliminating or even reducing the monopolies Soeharto’s cronies controlled would be impossible. Protectionism also reared its head in the form of Soeharto’s son’s national car project, which began in 1996 and was routinely ridiculed as the “family car project.”

But most important was the fact that as private capital flows increased in the 1990s, the government found it increasingly difficult to manage the exchange rate regime. The BI purchased foreign currencies to manage increasingly large capital inflows and to prevent an appreciation of the rupiah, thereby increasing the money supply and forcing the BI to offer higher Certificates of Deposit rates to raise interest rates, which in turn invited more private capital inflows under the pegged exchange rate regime. As the economy overheated and the real exchange rate appreciated, imports grew rapidly while exports slowed down. Though the government took steps to reduce domestic demand, it failed to address the issue of export growth. As a result, the growing trade imbalance and Indonesia’s debt, above all short-term private debt, began to rise significantly. The BI widened the intervention bands around the pegged exchange rate in a belated effort to introduce more flexibility into the foreign exchange market and to warn offshore borrowers that they were taking considerable foreign exchange risks that had to be covered. But widening the bands was immediately followed by pressures that drove the exchange rate to the appreciation edge of the band. Serious concerns were also raised when it became known that the president’s cronies and family members were using state banks to obtain foreign funds for a range of large investment projects since such borrowings were assumed to have a measure of sovereign guarantee. In short, adherence to the exchange rate regime in place led in the 1990s to significant and large unhedged foreign exchange exposure by many Indonesian companies. Eventually, widespread bankruptcies would follow when the exchange rate regime collapsed in 1997–98.

Technocrats in Crisis

The implicit inconsistency between the open capital account policy and the reliance on a pegged exchange rate was exposed when the economic crisis started in Thailand and spread to Indonesia (Ginandjar and Stern forthcoming, 17, 34–35). Technocrats initially believed that Indonesia’s economic fundamentals were sound and viewed the crisis as containable.17) They in fact characterized it as a “mini crisis” that could be used to redress long-term structural problems which had not been addressed after the deregulations lost steam in the early 1990s. Between 1989 and 1996, real GDP growth averaged 8%; the overall fiscal balance remained in surplus after 1992; public debt as a share of GDP fell; and inflation hovered near 10%. Confident of Indonesia’s sound economic fundamentals, technocrats seized the opportunity to persuade Soeharto to introduce structural reforms as they deemed fit and to address structural problems such as expanding bad loans in the banking sector, the dependence of business groups on short-term dollar-denominated funds from foreign sources, and the control of Soeharto’s children, lieutenants, and crony business tycoons over commanding heights of the Indonesian economy.

The government abandoned its long-standing crawling peg exchange rate regime on August 1, 1997; in September, the government announced 10 policy measures, which technocrats named their own IMF conditionality, calling for financial and fiscal tightening and structural reforms, including the suspension of government development projects and banking sector reforms, i.e., bailing out healthy banks which faced temporary liquidity difficulties, merging unhealthy banks with other banks, or else liquidating them ­(Shiraishi 2005, 33; Ginandjar and Stern forthcoming, 48).18)

Yet the rupiah kept going down; by early September 1997, it plunged below the symbolic USD1:Rp3,000 line. On October 8, Widjojo persuaded Soeharto to ask for assistance from the IMF. The President appointed Widjojo Nitisastro to head the economic team to make the necessary preparations to notify the IMF (Djiwandono 2004, 63). The team was composed of members of the Monetary Board—Minister of Finance Mar’ie Muhammad, Minister of Trade and Industry Tungky Ariwibowo, State Secretary Moerdiono, Economic Advisors Widjojo Nitisastro and Ali Wardhana, and BI Governor Soedradjad Djiwandono. Interestingly, Ginandjar Kartasasmita, BAPPENAS Chief, was not included in the team. A small team who negotiated the program in details assisted the team, which was composed of Director General of Financial Institutions (MOF) ­Bambang Subianto, BI Managing Director Boediono, and Assistant to Coordinating ­Minister for Economic and Financial Affairs Djunaedi Hadisumarto.

In November 1997, the government signed the letter of intent (LOI) with the IMF. The President was well aware of the essence of the program. But Soedradjad Djiwandono tells us in his memoirs that whether the program should be precautionary or stand-by was never brought up in discussions between the economic team and the President. After the signing of the first LOI, BI Governor proposed at an economic team meeting that the team should explain the details of the program, including the meaning of first and second line of defense and the issue of conditionality, to the President. But Widjojo Nitisastro, the chairman of the team, decided to wait for a better moment. This never happened (ibid., 72).

The November 1997 LOI was based on the assumption that the crisis was essentially a moderate case of contagion and overshooting of the exchange rate. The program was thus designed for such a mild crisis (Ginandjar and Stern forthcoming, 49). But the LOI required every structural and bureaucratic reform that were deemed good for Indonesia. Both technocrats and the IMF wanted to use the crisis to achieve what Indonesian technocrats had worked for. Taking over the broad reform agenda without fully appreciating what the reforms entailed, what political and social changes they implied, and the capacity of the government to manage such rapid economic change, the team and the IMF not only weakened the focus of its own agenda but in the end undermined the political structure that had evolved under Soeharto over 40 years (ibid., 109).19)

The structural reforms required by IMF not only threatened to hurt the business interests of Soeharto’s children, his crony business tycoons, and his lieutenants, but also worked to undermine Soeharto’s huge patronage networks and the informal funding mechanisms of state agencies (including the military). When the government closed 16 troubled banks and suspended government development projects right after it signed the agreement with the IMF, Soeharto learned that he was duped. He allowed his son to take over another bank and revived government development projects the government had suspended and which were controlled by his family and crony businesses. The ­closure of banks also triggered a bank run and led to a systemic crisis in the banking sector.

Technocrats’ attempt to correct the “distortions” of cronyism backfired because they failed to understand the huge political significance and functions of patronage under the New Order. In trying to rein in the activities of Soeharto’s children as well as cronies, the technocrats not only antagonized their President, but unwittingly triggered a crisis in an already jittery market. Bank closures, rather than addressing the question of unhealthy banks, had the opposite effect, undermining confidence in all private banks and precipitating an open political confrontation between the presidential family and the ­Minister of Finance and BI Governor. The presidential family won the battle. But the price paid was high: the market confidence in the government will in complying with the IMF conditionality was deeply undermined, while technocrats lost the presidential ­confidence.

The most contentious issue between the President and the economic team was the question of liquidity. The BI had to deal with banks that suffered from bank runs, but adding liquidity into the banking sector could jeopardize the efforts to strengthen the rupiah and possibly violate IMF conditionality. The BI thus found itself in between the two opposing camps. “On the one hand, the President mounted pressure for easing liquidity to help the weakening real sectors. On the other hand, the Fund (IMF) kept reminding BI of the need to keep interest rates high to defend the rupiah as agreed upon in the LOI” (Djiwandono 2004, 99). Besides, the President instructed state banks to start lending to small and medium scale enterprises with subsidized rates of interest. To make things worse, this scheme was designed by the President and some Cabinet ministers and senior officials of several ministries without consulting either the Governor of BI or the Ministry of Finance (ibid., 112–113). Soedradjad Djiwandono asked for the presidential approval to raise the interest rate in compliance with the LOI, but he never got it (ibid., 113). Instead the President instructed the BI to inject liquidity into the troubled banks and loosen monetary controls. The resulting sharp increase in liquidity support from the last quarter of 1997 to 1998 spurred further deterioration of the macro-economic situation and increasingly strained the relationship between the government and the IMF (Ginandjar and Stern forthcoming, 95). Sino-Indonesian businesses benefited the most from the liquidity support. A 2000 study by the Supreme Audit Agency (Badan Peneriksi Keuangan) claimed that around Rp138 trillion of the BLBI funds issued was misused between 1997–98 (ibid., 96).

Then, in December 1997, Soeharto fell seriously ill and did not attend the ASEAN summit meeting. This instantly transformed the economic crisis into a political crisis. Conflict manifested itself again between the government and the IMF in January 1998 when the government announced a draft budget with no surplus, in spite of the IMF requirement of a 1.3% GDP surplus in the November agreement. The draft budget was also criticized for its “unrealistic” tax revenue and exchange rate assumptions. In reaction, the rupiah plummeted by 70%, reaching 10,000 rupiah per dollar. Another round of negotiations between the government and the IMF began. This time, though, it was Soeharto himself, and not the technocrats, who took charge of the negotiations with IMF representative Stanley Fisher (ibid., 51)—another sign that the President had lost faith in his economic team. To compound the matter, Soeharto pointedly chose not to invite the Minister of Finance and the Governor of BI to the official signing of the LOI.

By that time, US high officials began to see Soeharto as part of the problem. ­Soeharto understood this very well and wanted to wage what he called “guerrilla warfare.” He let the IMF spell out all the structural reform measures it wanted (which amounted to over 100) without any intention of abiding by the conditionality (Shiraishi 2005, 24; Ginandjar and Stern forthcoming, 53). Soeharto also entertained the possibility of introducing a currency board system as a solution to the crisis, calling it “IMF plus”; this was supported by some officials in the MOF (Ginandjar and Stern forthcoming, 52). Japan and the United States, however, were alarmed since the ill-timed introduction of a currency board system would instantly deplete Indonesia’s foreign currency reserves and devastate the Indonesian economy while providing Soeharto’s children and cronies with a small window of opportunity for bailout. BI Governor Soedradjad Djiwandono opposed the idea and was dismissed in February 1998.20) In a few weeks, Deputy Governor of the BI, Boediono, was also dismissed.21) Ginandjar writes: “For a time it seemed that Finance Minister Mar’ie Muhammad would be headed for a similar fate but he survived for reasons that may never be known” (ibid., 101).

With the economic team in disarray, Japan and the United States intervened. ­President Clinton sent former Vice President Walter Mondale in March 1998 to dissuade Soeharto from introducing a currency board system. Suspicious of US intentions, however, Soeharto was in no mood to listen to the US envoy. The meeting was cut short when Soeharto rejected Mondale’s suggestion about the need for “political reform.” Shortly thereafter, Japanese Prime Minister Ryutaro Hashimoto visited Indonesia, met with Soeharto, persuaded him not to introduce the currency board system, and opened the way for yet another IMF rescue package, which was to be agreed on in April 1998.

In the meantime, Soeharto was re-elected president once again on March 11, 1998, with B. J. Habibie as his vice president. The positions of Menko and BAPPENAS chief were held by Ginandjar Kartasasmita. Fuad Bawazir,22) who was known to be close to Soeharto’s children and in favor of introducing a currency board system, was appointed as the Minister of Finance, while Syahril Sabirin,23) the only survivor of the BI massacre and in support of a currency board system, had replaced Djiwandono as BI Governor. The new cabinet thus further reduced the role of technocrats with some ministers becoming closely identified with the presidential family.

After his re-election, Soeharto established the Economic Stabilization Council with Menko Ginandjar Kartasasmita as its executive chairman. Ginandjar promptly set as his top priority the need to repair relations with the international community and regain market confidence. The committee also had Anthony Salim, the son of Indonesian ­Chinese business tycoon Liem Sioe Liong, as Secretary General (ibid., 55–58). He also regularly consulted with Widjojo.

Ginandjar was in charge of negotiations with foreign governments and the IMF. His counterparts were the so-called “Three Musketeers”: US Treasury Undersecretary for International Affairs, David Lipton; Japanese Vice Minister for International Finance, Eisuke Sakakibara; and German Director General of International Affairs, Ministry of Finance, Klaus Regling. The committee decided to abandon the currency board scheme, reestablished dialogue with the IMF, and concluded a new LOI two weeks after the new cabinet was formed. Ginandjar states that all the programs resulting from the negotiations were embraced by the Indonesian economic team as its own. All the government departments were given specific and written instructions by the Menko to carry out reforms within their areas of responsibilities and to abide by the timetable (ibid., 56–57).

But it was too late. By then Soeharto’s politics of stability and economic development had been thoroughly discredited. Its collapse was triggered by the fuel price increase in May 1998. Following massive riots in May in Jakarta and elsewhere, Soeharto resigned. The New Order came to an end.

The Remaking of Indonesian Technocracy

B. J. Habibie succeeded to the presidency according to constitutional stipulation. He had a weak presidential mandate and power base. He chose to present himself as a reformer, initiating measures in the name of reformasi, which eventually led to the transformation of the Indonesian political system from developmental authoritarianism into decentralized democracy.

The basic shape of the post-Soeharto regime was defined by the constitutional revisions and new laws introduced over the transitional period under Presidents Habibie (May 1998–October 1999), Abdurrahman Wahid (October 1999–July 2002), and ­Megawati Sukarnoputri (July 2002–October 2004). These constitutional revisions—which took place incrementally from 1998 to 2003—reformulated the relationship among the three branches of government in terms of the division of powers. The President and the Vice President, formerly elected by the People’s Consultative Assembly (Majelis ­Permusyawaratan Rakyat, hereinafter MPR), are now to be elected directly; the legislature is to consist of the DPR (Dewan Perwakilan Rakyat), the Council of People’s ­Representatives and the newly created DPD (Dewan Perwakilan Daerah), the Council of Local Representatives; and the MPR, the highest decision-making body under ­Soeharto which saw the peak of its power in the transitional years under B. J. Habibie and ­Abdurrahman Wahid, lost much of its powers. While Soeharto controlled the MPR through direct and indirect appointment of its majority members and by extension all the government organs, constitutional revisions in the post-Soeharto era have created a division of powers in which the presidency has to share power with a parliament whose members are directly elected and in which political parties dominate. Elections, both parliamentary and presidential, are to be held every five years and define the national political calendar. Though still powerful with its own sphere of influence and interests curved out in the name of national unity and security, the army no longer dominates politics. The military doctrine of dual functions was scrapped and military officers were withdrawn from the civilian arm of the state. New defense and police laws were enacted. The army domination over the military establishment came to an end. Navy and air force officers serve as a military chief in rotation with army officers. The police was separated from the military (Matsui and Kawamura, 2005, 75–99; Honna, 2013).

Free and fair parliamentary elections were held in 1999, 2004, and 2009. The first direct presidential election, which brought the current president Susilo Bambang ­Yudhoyono to power, took place in July and October 2004. The second presidential election brought the incumbent back the second term in 2009. Democratization has also gone hand in hand with decentralization. New laws on local autonomy and local finance in 1999 have created local governments which are no longer accountable to the central government but answer to the local parliament. While Soeharto could in effect appoint provincial governors, district chiefs, and mayors, the central government now has to share powers with local governments. More powers and resources have been devolved to local governments, above all district and municipality governments at the expense of—and often in tension with—the central and the provincial government. An increasing proportion of central government budget has been allocated to local governments: from 19.3% in 2001 to 30.7% in 2005, when direct elections of local chiefs started, to 33.9% in 2007. Expanded authority combined with guaranteed and increasing resource allocation to the local governments created incentives for local groups to create more local governments and to control such governments with their own men. The number of districts and municipalities increased from 311 in 1998 to 478 in 2008 while the number of provinces expanded from 27 in 1998 to 41 in 2008. Parties formed coalitions to control local governments, the composition of a governing coalition different from one locality to another, some being made up with only nationalist parties or Islamic and Islamist parties, but more often combining both nationalist and Islamic and Islamist parties ­(Okamoto 2010).

In democratic politics, the DPR, the lower house of the parliament, has emerged as a new power center along with the presidency and the military, and electoral politics has assumed a crucial role in organizing the government. Yet no single party controls the parliament. A party or two may emerge or disappear every election, but the multiparty system will remain with no single party controlling the parliament, as long as the ­current electoral system stays and deep social divisions along religious (pious Muslims vs. statistical Muslims and non-Muslims, traditionalist vs. modernist Muslims), ethnic, and class lines inform party divisions. It is not easy for any president to organize any cabinet to work as a team because a “team” composed of technocrats, professionals, military officers, bureaucrats, and politicians from different parties needs to be cobbled together not only for the business of governing but also for achieving a majority in the parliament.

This is evident in all the teams assembled by the successive Presidents. Instrumental in checkmating Soeharto in his final days, Ginandjar Kartasasmita emerged as a key player in the Habibie government, along with the President himself and General Wiranto, Commander in Chief of the Armed Forces and Defense Minister. Ginandjar, not Habibie, assembled his economic team as Menko, including Boediono24) (formerly Ginandjar’s deputy for macro-economic affairs at BAPPENAS before his transfer to the BI) as BAPPENAS Chief and State Minister for National Development Planning, ­Bambang Subianto25) as Minister of Finance (appointed at Widjojo’s recommendation), and Syahril Sabirin as BI Governor. The arrival of Abdurrahman Wahid as the fourth President marked a clear break with the New Order past. Elected as an outcome of back room dealings among political party bosses in the MPR, his cabinet was dominated by party politicians: out of 35 cabinet ministers in his first cabinet, 22 were party politicians while 6 were retired military officers and 4 career bureaucrats; in the second cabinet, 11 party politicians, 4 military officers, 6 career bureaucrats in the 26 member cabinet. Kwik Kian Gie,26) Indonesian Democratic Party of Struggle (Partai Demokrasi Indonesia ­Perjuangan, hereinafter PDI-P) politician and Vice President Megawati’s confidant, became Menko. Bambang Sudibyo,27) Gadjah Mada accounting professor and a confident of National Mandate Party (Partai Amanat Nasional) Chairman and People’s Consultative Assembly (Majelis Permusyawaratan Rakyat, MPR) General Chairman, Amien Rais, was appointed Finance Minister. Djunaedi Hadisumarto,28) inheriting the technocratic ­mantle, served as Chairman of BAPPENAS, but was not made State Minister for National Develop­ment Planning. Syahril Sabirin remained as BI Governor. In the second ­Abdurrahman Wahid cabinet, Rizal Ramli—a former student activist with the background in engineering who was sent by technocrats to do graduate work at Boston University, but who rebelled against his seniors by openly attacking technocracy and establishing his own business consultancy firm upon his return to Indonesia—became Menko, while Prijadi Praptosuhardjo, previously Bank Rakyat Indonesia director, became Finance ­Minister.29)

Mindful of the fate of Abdurrahman Wahid whose administration was chaotic and who was eventually ousted from power in impeachment, Megawati was careful not to antagonize any party. The Jakarta elite had also come to the agreement that political alliance alone would not suffice to lift Indonesia out of the mess and that Megawati needed “professionals” unbound by party politics. She gave ministerial positions to party representatives, but reserved some of the more important economic posts for non-partisan professionals and her confidants. Dorodjatun Kuntjoro-Jakti,30) UI professor of political economy whom Soeharto in his final days sent to the United States as ambassador, was appointed Menko; Boediono Minister of Finance; and Kwik Kian Gie Minister of National Development Planning. Burhanuddin Abdullah replaced Syahril Sabirin in 2003 as BI Governor.

By the time Susilo Bambang Yudhoyono came to power in 2004, Boediono had restored the credentials of technocrats by his success in achieving macro-economic sta­bility. With his party controlling only 10% of the parliament, it was imperative for the President to gather a stable parliamentary majority. He enlisted most of the political parties except Megawati’s PDI-P for the government coalition, while encouraging the Vice President to take over the Golkar leadership and destroying the opposition coalition of PDI-P and Akbar Tandjung-led Golkar. But he paid a high price. He gave almost one third of ministerial positions to party representatives in organizing his cabinet and allowed the Vice President to have a say in appointing economic team members, even though parties, including the Golkar, in the governing coalition do not hesitate exploiting opportunities to promote their own gains at the expense of the President and the government.

As mentioned earlier, the fact that the Indonesian economy did well under ­Yudhoyono enhanced the stature of his Finance Minister Sri Mulyani and was a factor in his designation of BI Governor and former Menko Budiono as his running mate in the 2009 presidential election. Given the new division of powers and the effects of decentralization on center-local relations, however, it is clear that the president can no longer preside over Indonesia’s political life in the way Soeharto had done before. This was amply demonstrated recently when Sri Mulyani was sent off to the IMF in 2010 despite (or perhaps because of) her success as Finance Minister because her principled budget-making angered many politicians, particularly Golkar boss Aburizal Bakrie, who demanded pork barrel funding. Even a technocrat of her stature who has enjoyed good relations with the President can be politically expendable.

The government can take policy initiatives to address problems and policy issues only on the basis of an achieved national consensus. But achieving a national consensus under the new democratic dispensation is a challenge precisely because the era of political demobilization is over and various social forces are making themselves felt in political processes.

There are important commonalities among those who now dominate local and national politics: the great majority of national and local parliamentary members are men, born in the areas they represent (putra daerah), highly-educated at least formally, with activist backgrounds in party, youth, and religious organizations (whether nationalist or Islamic), belong to Indonesia’s small but fast expanding middle classes, and are represented by business people, professionals, civil servants, school teachers, military and police officers, religious teachers, and journalists. There are hardly any parliamentary members with peasant, labor, and urban poor backgrounds.

The implications are clear. In national as well as local politics, local men with middle-class backgrounds dominate. In part a product of Soeharto’s politics of stability and development, this emergent elite thrived under Soeharto, but now encompasses formerly marginalized (but nonetheless middle-class) groups composed of journalists, school teachers, and religious leaders. This elite shares in the belief that economic growth is the key to Indonesia’s future, and is in a position to make its belief a part of the national agenda, even though its members disagree on how to achieve growth and they do not shy away from calling for populist and protectionist measures in the name of welfare whenever those measures suit their political and economic interests. In his election manifesto, Yudhoyono (2004) made the achievement of economic growth, along with maintaining national unity, central to his agenda. The new system of decentralized democracy has also worked for him, despite its decisive curbing of the executive power of the presidency.

At the same time, however, decentralization has given real powers and resources to local governments, above all district chiefs and mayors. To see how decentralization combined with democratization, above all direct elections of local chiefs worked, it is useful to examine two provinces with very different sets of social conditions, North Sumatra and Central Java (including the special region of Yogyakarta).

In North Sumatra, which is ethnically and religiously highly diverse (with 33% ­Javanese, 16% Tananuli Bataks, 10% Toba Bataks, 8% Mandailing Bataks, 6% Nias, 5% Karo Bataks, 5% Malays, 3% Angkora Bataks as well as smaller minorities, while 65% Muslim, 27% Protestant, 5% Catholic, 3% Buddhist), the number of districts and mayor­alty increased from 19 in 2000 to 26 in 2008 (BPS 2001a). Seventeen small parties (which do not have members in the national parliament) along with seven national parties helped forge governing coalitions that differed in composition and membership from one district to another (on average, about 2.7 small parties in a coalition). In 12 out of 26 districts/municipalities, governing coalitions were made up with a combination of nationalist parties (PD, Golkar and/or PDI-P) and Islamic parties; only 4 districts/municipalities were controlled by Islamic/Islamist parties.

In Central Java which is ethnically and religiously homogeneous, with 98% Javanese and 96% Muslim, a different picture obtains (BPS 2001b). The number of districts and municipalities has remained the same. A smaller number (2.3 on average) of small parties joined governing coalitions in smaller number of districts and municipalities (6 out of 40); in 18 out of 40, a coalition of nationalist parties (PD, Golkar and/or PDI-P) with Islamic and Islamist parties, while 6 districts and municipalities came under the governing coalition of Islamic and Islamist parties.

The implications should be clear enough. In ethnically diverse North Sumatra, ethnic politics are now very much localized and contained in local politics because ethnic groups have ended up with creating their own local governments and/or joining governing coalitions. Religious politics have also to some extent come to be contained locally because the areas with a high concentration of pious Muslims now have Islamic/Islamist party coalition under which local governments introduce religious regulations to meet the demands of pious Muslims, while in other districts these religious issues remain muted because of the coalition that brings together both nationalist and Islamic/Islamist parties.

To put it simply, democratization and decentralization have “contained” ethnic and religious politics by localizing them. Politics of identity, once suppressed by Soeharto, now thrives, but as a local issue, with some exceptions (such as pornography) flaring up occasionally. “National” issues are now largely framed by, and very much tied to, a politics of economic growth, with the central government deriving its public support and electoral success from its perceived capacity to deliver economic growth, create jobs, reduce poverty, and keep inflation under control as we can see in Fig. 1. The language of economic growth—a byproduct of economics as a discipline—is part of a discursive field in which technocrats claim expertise. But the irony is that the elevation of this discourse of economic growth to the national agenda comes at a time when technocrats have become no more than technicians who are charged with “fixing” the economy while having no control or say over how politics, or more specifically the purpose of politics, is defined. The transformation of technocracy and the changing conditions under which technocrats now work need to be located—and can only be understood—within this larger context of political and ideological transformation, rather than a simple question of economics and economic policy.


Fig. 1 Economic Performance and Public Ratings of the President and the Democratic Party

Source: Lembaga Survei Indonesia (LSI) (2009).

This is not to say that Indonesia did not undergo important institutional changes for the economic policy-making in these transitional years. The Central Bank Law, enacted in 1999 under Habibie, guaranteed the independence of the BI from the government for the first time; and prohibited the BI from purchasing government domestic bonds. BI’s independence was tested in 2000 when President Abdurrahman Wahid asked BI Governor Syahril Sabirin to resign while promising him other positions. Syahril Sabirin refused to resign and was arrested and put in jail, but was subsequently cleared of all charges by the High Court.31) It was a symptom of the technocrats’ marginalization from economic policy-making that Wahid’s first Coordinating Minister (Menko) for Economic Affairs, Kwik Kian Gie, went so far as to refer to his government as “they” and did not bother to coordinate. No State Minister for National Development Planning was appointed, because the President wanted to undercut the power of BAPPENAS.32)

Under Megawati, who came to power in July 2001, restoring macro-economic stability became the top priority. Megawati appointed “professionals” who were unbound by party politics to two strategic posts for this objective. Boediono33) was named Minister of Finance and Burhanuddin Abdullah replaced Syahril Sabirin as BI Governor. Both Boediono and Burhanuddin did their jobs well to achieve macro-economic stability and banking sector reform to pave the way for Indonesia’s graduation from the IMF program. But the economic ministers did not work as a team. Megawati confidant Kwik Kian Gie, appointed Minister of State for National Development Planning, openly attacked his own agency, ­BAPPENAS, as a nest of corruption.

Megawati years also witnessed two major institutional developments in the economic policy-making. One was the enactment of Law Number 17 on State Finance in 2003. It introduced the European Union Maastricht treaty-type rule to achieve economic and financial stability, legally requiring the government to keep the annual budget deficit below 3% of the GDP and the total government bonds issuance (both central government and local government bonds) below 60% of the GDP. In other words, the law holds the government politically accountable for maintaining a self-restraining fiscal policy.

This law led to the reorganization of the Ministry of Finance, expanding its powers at the expense of BAPPENAS, the National Development Planning Agency. The Agency for Economic, Fiscal, and International Cooperation Research was created out of the former Agency for Fiscal Analysis and was made responsible for budget making, while the budget planning function was assigned to the Directorate General for Budgetary and Fiscal Balance, which was created out of the former Directorate General of Budgeting. The power to make the Fiscal Policy and Macro Economic Framework, a power previously shared by BAPPENAS and MOF, came under MOF jurisdiction with the passing of the new law. Equally important, the budget which had previously been classified as the routine budget and development budget and were respectively under the jurisdiction of the MOF and BAPPENAS came under MOF jurisdiction with the elimination of the routine and development budget distinction. By abolishing the distinction, the law stripped BAPPENAS of its control over the development budget (Hill and Shiraishi 2007, 123–141).

Under Soeharto, BAPPENAS was in charge of national planning, the development budget, coordination with foreign governments and international organizations for international assistance, and development project coordination and implementation. This in effect made BAPPENAS the super ministry to oversee the entire economic policy-making. In its heyday, Widjojo Nitisastro, Soeharto’s most trusted economic adviser, served as Coordinating Minister for Economic and Fiscal Affairs, State Minister for National Develop­ment Planning, and Chief of BAPPENAS simultaneously. Under Soeharto, national development planning was implemented by presidential decree, not by law. The legal status of BAPPENAS was not clearly defined. Its effectiveness depended on its chief’s ability to work with Soeharto and on his commitment to prioritizing national development.

In the post-Soeharto era, BAPPENAS lost much of its powers. A new law on the national development planning system was enacted in 2004 in the final days of the ­Megawati presidency. It granted legal status to BAPPENAS and stipulated that the Chief of BAPPENAS support the president in formulating the presidential national development plan and assume responsibility for drafting the central government development plan. Now, however, almost two thirds of budget for public works, for instance, is allocated to provinces and districts/municipalities. BAPPENAS not only lost its control over the development budget, but also has no say in almost two thirds of the public works budget.

The Indonesian technocracy evolved under the New Order from 1966 to 1998 as a strategic component of its politics of stability and economic development. Technocrats were instrumental in persuading Soeharto to adopt reform measures in the 1980s that imposed market discipline on the government’s developmental policies. Indonesian technocrats as a group were effective because they were cohesive in their adherence to the three principles of balanced budget, open capital account, and pegged exchange rate system, and also because they enjoyed Soeharto’s confidence and could therefore function as his right arm in formulating and executing national development policies. In the 1990s, however, technocrats faced increasing challenges from economic nationalists entrenched in the government agencies such as the Ministry of Industry, the Investment Coordination Agency and the BPPT/BPIS (Agency for State Strategic Industries), Soeharto’s family and crony business interests, and bureaucrats who were trained abroad and rose in their individual departmental hierarchies as career officials. In their attempt to regain their power, technocrats tried to seize the opportunity offered by the 1997 currency crisis to persuade Soeharto to go to the IMF and to introduce reform measures, but the move backfired because technocrats lost his confidence.

The transitional governments led by B. J. Habibie, Abdurrahman Wahid, and ­Megawati Sukarnoputri sought institutional and political alternatives to the discredited Soeharto-era economic policy-making process. These alternatives ranged from relying on technocrats while consulting key players in Indonesia’s economy and politics such as businessmen, mass media, politicians, public intellectuals, and future technocrats, as well as foreign governments and international organization (as Ginandjar Kartasasmita did as Coordinating Minister under Habibie) to outright disregard for technocracy and its institutional bulwark BAPPENAS (under Abdurrahman Wahid) to the empowerment of MOF for the sake of macro-economic stability at the expense of BAPPENAS and long-term national planning (under Megawati).

In retrospect, however, it is decentralized democracy, introduced in those transitional years, which created a new set of conditions for a politics of economic growth: social divisions along ethnic and religious lines are no longer suppressed as they had been under Soeharto but are now contained locally, while the politics of economic growth is embraced not only by middle-class people who dominate local and national politics but more broadly by the population. With the enactment of a series of laws governing the BI and government finance as well as constitutional revisions, a new institutional framework based on the two preeminent agencies of BI and MOF is now in place for macro-economic policy-making. But technocrats are now more dependent on their ability to court public support for policy measures they are advocating and to secure the backing of the president and the vice president who may or may not agree on any policy issue and whose decisions on economic policy will be influenced by non-technical and highly political issues such as public reception, parliamentary approval, and personal chemistry. The era of political demobilization during which technocrats had a freer hand in formulating economic policies and could rely on the backing of the president alone is over. In retrospect, however, technocracy has never been shielded from “politics.” If it once looked as if this had been the case under the New Order, it was because Soeharto used the enormous state power to demobilize popular politics. But those days are over. Although the institutional foundation is now in place for the independence of the Central Bank and the fiscal prudence of the Ministry of Finance, their performances ultimately depend on who runs these institutions and the complex political processes that inform their decisions and operations.

Accepted: November 1, 2013


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1) Widjojo Nitisastro (UI; Ph.D., University of California, Berkeley) joined Soeharto’s advisory team in 1966 as a member of the National Economic Stabilization Board. He was appointed Chairman of BAPPENAS in 1967 and served in that position until 1983, while also serving as Menko from 1973 to 1983. He was appointed as advisor to BAPPENAS (1983–98) and presidential economic advisor (1993–98), while working as professor of economics at UI from 1964 to 1993.

2) Ali Wardhana (UI; Ph.D., University of California, Berkeley) was professor of economics at UI. From 1966 to 1968, he was a member of the Economic Advisory Team of the President, served as Minister of Finance from 1973 to 1983, and replaced Widjojo as Menko from 1983 to 1988.

3) Emil Salim (UI; Ph.D., University of California, Berkeley) served as Deputy Chief of BAPPENAS (1967–71), State Minister for State Apparatus (1971–73), Minister of Transportation, Communication and Tourism (1973–78), State Minister for Development Supervision and Environment (1978–83), and Minister of State for Population and Environment (1983–93).

4) Subroto (UI; Ph.D., University of Indonesia) served as Director General of Research and Development at the Department of Trade, Minister of Manpower, Resettlement and Cooperatives, and finally Minister of Mining and Energy (1983–88) before becoming Secretary General of the Organization of Petroleum Exporting Countries, OPEC, in 1988.

5) Mohammad Sadli (UI; Ph.D., University of Indonesia) studied at the Massachusetts Institute of Technology (MIT) and the University of California, Berkeley, and served as Minister of Manpower (1971–73) and Minister of Mining and Energy (1973–78).

6) J. B. Sumarlin, a UI graduate, who obtained his Ph.D. from the University of Pittsburgh started his technocratic career as deputy chairman for fiscal and monetary matters at BAPPENAS (1970–73), then served as Vice Chairman of BAPPENAS (1973–82) and State Minister for State Apparatus (1973–83); as State Minister for National Development Planning as well as BAPPENAS Chairman (1983–88); and finally Minister of Finance (1988–93).

7) Saleh Afif, another UI graduate, obtained his Ph.D. from the University of Oregon and started his technocratic career as State Minister for State Apparatus and Deputy Chairman of BAPPENAS (1983–88) before being appointed State Minister for National Development Planning and Chairman of BAPPENAS (1988–93) and finally Menko (1993–98).

8) Adrianus Mooy was a Gadjah Mada graduate, and had a Ph.D. in Econometrics from the University of Wisconsin. He joined BAPPENAS in 1967, and rose up the BAPPENAS hierarchy, serving as Bureau Chief for Domestic Finance, Assistant to the Minister for Development Planning/BAPPENAS, and Deputy Chairman for Fiscal and Monetary Affairs (1983–88) before being appointed BI Governor (1988–93).

9) Rachmat Saleh, a UI graduate, joined the BI and climbed the central bank hierarchy as Represent­ative of BI in New York in 1956; Secretary to the Board of Directors of BI in 1958; Head of Research, and later Vice Director of BI, in 1961; Director of BI, 1964; and Chairman of the Directorate of Foreign Exchange Institute, Jakarta, in 1968; BI Governor (1973–83) before being appointed Trade Minister (1983–88).

10) Arifin Siregar graduated from the Netherlands School of Economics, Rotterdam, in 1956; got his Ph.D. from the University of Muenster, West Germany, in 1960; then worked as Economic Affairs Officer in the United Nations Bureau of General Economic Research and Policies in New York in 1961 and the United Nations Economic and Social Office, Beirut, in 1963. He was an Economist at the Asian Development, IMF, in 1965 and a representative of the IMF in Laos (1969–71), then joined the BI as Director in 1971, served as Alternate Governor of the IMF in Indonesia (1973–83) and finally as BI Governor (1983–88) before being appointed Trade Minister.

11) Soedradjad Djiwandono, BI Governor (1993–98), was a graduate of Gadjah Mada (1963) and had a Ph.D. from Boston University (1980). Married with a daughter of Sumitro Djojohadikusumo, the founder of the Faculty of Economics, University of Indonesia, he joined the Ministry of Finance (MOF) as a staff member of the Director General for Monetary Affairs in 1964, rose to Junior ­Minister for Trade (1988–93) under Arifin Siregar, and was subsequently appointed BI Governor in 1993.

12) IGGI (Inter-Government Group for Indonesia) was established in 1966 and was succeeded by the CGI (Consultative Group on Indonesia) in 1992 as an international framework for consultation to provide concessionary loans to the Indonesian government.

13) Mar’ie Muhammad, a UI Accounting graduate with an Islamic activist background, joined the MOF in 1970 and rose in the Finance bureaucracy to serve, from 1988–93, as Director General of Taxes before being appointed as Minister of Finance from 1993–98. Soeharto gave him the finance portfolio because he had known him since his student activist days and because he was impressed by his performance as the clean and forceful Director General of Taxes.

14) Ginandjar Kartasasmita, a Chemical Engineer graduate of the Tokyo University for Agriculture and Technology (1960–65), rose in the state secretariat bureaucracy from the G-5 of the Supreme Command as one of future Vice President Sudharmono’s lieutenants in the early days of New Order to Junior Minister for the Promotion of Domestic Products from 1965–83. He then served as Chief of the Investment Coordinating Board (BKPM) from 1985–88; as Minister of Energy from 1988–93; and finally as State Minister for National Development Planning and Chief of BAPPENAS from 1993–98. He was given the job of the BAPPENAS chief in part because he enjoyed the presidential trust and in part because he was acceptable to B. J. Habibie who was intent on increasing his bureaucratic power at the expense of the technocrats.

15) Satrio Budihardjo Joedono was born on December 1, 1940 in Pangkalpinang, Bangka. A graduate of UI (Economics), he obtained his Ph.D. in Public Administration from the State University of New York, Albany. While teaching at UI (promoted to professor in 1987) and serving as director of the Institute for Economic and Social Research (1970–78) and Dean of the Faculty of Economics (1978–82), he also served as assistant to the Minister of Trade (1970–73) and to the Minister of Research (1973–78), Assistant Minister of Research and Technology (1978–82 and 1986–88) and Assistant Minister for Industry and Energy (1988–93) before being appointed as Minister of Trade (1993–95). Known to be incorruptible, he was elected Chairman of the Board of Audit, 1998–2003.

16) Radius Prawiro, a graduate of the Nederlandse Economische Hogeschool (The Netherlands Economic High School), obtained his Ph.D. from the UI. He began his technocratic career as Governor of BI (1966–73), and served as Minister of Trade in 1973–83, Minister of Finance (1983–88), and finally Menko (1988–93).

17) What Djiwandono has to say in his memoirs is instructive. He writes: “A question that I kept being asked was, if our fundamentals were strong how come Indonesia suffered so much? To shed some light on this issue, I like to think that there is a different perception about what constitutes the macro fundamentals of an economy. I would argue that at least until the Asian crisis, macroeconomists generally thought about growth of national products, exports, current accounts, inflation rates, unemployment rates and several other macro indicators every time they talked about economic fundamentals. I would even argue that, in general, macroeconomists did not include the state of the banking sector as an important item in economic fundamentals. Banking issues have traditionally been treated as microeconomics. . . . In other words, in a macro-economic analysis, the workings and soundness of the banking sector had been assumed to be present or taken for granted” ­(Djiwandono 2004, 28).

18) Djiwandono says about the bank closure as follows: he went to President Soeharto to propose closing seven small commercial banks as a first step in December 1996. But the President did not approve the proposal and instructed Djiwandono to finalize a government decree to regulate bank closure. It was issued at the end of 1996 as Government Decree No. 68, 1996. In April 1997, he went back to the President with the proposal to close the seven banks once again. This time he approved it, but asked him to postpone execution until after the 1997 general election and the general assembly of the People’s Consultative Assembly in March 1998. The financial crisis began in July 1997 (Djiwandono 2004, 128).

19) It is useful to note what Djiwandono has to say about the conditionality and the bank closure. He writes on the IMF conditionality that “my instincts told me then that our government would not be able to fulfill the stringent conditionality that went with the stand-by arrangement” (Djiwandono 2004, 64). He also tells us about the bank closure as follows: “I was comfortable about liquidating the seven banks with the President’s approval. However, I had to admit that liquidating more than twice the number of banks really scared me” (ibid., 130).

20) To be precise Soedradjad Djiwandono never opposed a CBS because he was afraid to publicly air his difference with the President on the matter. But he says he also knew that being vague was the best technique in that peculiar environment to send a message to the President that he did not support the CBS scheme (Djiwandono 2004, 9, 19).

21) In fact all the BI managing directors except one, Syahril Sabirin, were dismissed before their terms ended (Djiwandono 2004, 3). This untimely dismissal demonstrated his intention to the public that he would punish any official for violating his unwritten rule not to embarrass his family (ibid., 12).

22) Fuad Bawazir who is of Arab descent and a Gadjah Mada graduate with a Ph.D. from the University of Maryland rose in the MOF hierarchy. Similar to Mar’ie Mohammad, he had an Islamic activist background and granted favors to Soeharto’s family members while he was Director General of Taxes before he was appointed the Minister of Finance.

23) Syahril Sabirin, a graduate of Gadjah Mada University (1968), obtained his Ph.D. in 1979 from Vanderbilt University. From 1969 to 1993, he worked at the BI, rising in the bank hierarchy and serving as section chief for current account (1982–83) and for bank development (1982–84), bureau chief of economics and statistics (1985–87) and of clearing (1987–88), and director (1988–93). He was senior financial economist at the WB (1993–96) before returning to BI as director (1997–98), and finally as governor (1998–2003).

24) Boediono was trained abroad (B.A., University of Western Australia; M.A., Monash University; Ph.D., Wharton School of Business, University of Pennsylvania) and served as deputy for fiscal and monetary affairs at BAPPENAS (1988–93) and Deputy Governor of the BI (1993–98) before being made State Minister for National Development Planning and BAPPENAS Chief in 1998.

25) Bambang Subianto, a graduate of Leuven Catholic University in Belgium, rose in the finance hierarchy to become Director General of Monetary Affairs, and was appointed the first Chief of Indonesian Bank Restructuring Agency, only to be dismissed by Soeharto after a few months.

26) Kwik Kian Gie, born in Juwana, Central Java, is of ethnic Chinese ancestry. A graduate of the Nederlandse Economische Hogeschool (The Netherlands Economic High School) Rotterdam in 1963, he worked as an investment company executive and joined the Indonesian Democratic Party (PDI). He served as a member of the People’s Consultative Assembly (MPR) from 1987 to 1992. He became the chief economic advisor to ­Megawati Soekarnoputri after her election as the Chairman of PDI in 1994. He headed the party’s research and development department until Megawati elected as Vice President before he was appointed as Menko under Abdurrahman Wahid.

27) Born in Temanggung, Central Java, on October 8, 1952, Bambang Sudibyo, a graduate of Gadjah Mada University and a Ph.D. (Business Administration) from the University of Kentucky (1985), spent most of his career at Gadjah Mada University. He joined the National Mandate Party when it was established in 1998 and served as chairman of its Economic Council before he was appointed as Finance Minister under Abdurrahman Wahid.

28) Under normal circumstances, Djunaedi Hadisumarto should have inherited the mantle from Boediono to serve as State Minister for National Development Planning and Chief of BAPPENAS. But Abdurrahman Wahid did not appoint any minister for national development planning. Djunaedi, a UI graduate and UI professor of economics, had served as Secretary General of the Ministry of Transportation and Vice Chairman of BAPPENAS under Boediono before being promoted to Chairman of BAPPENAS.

29) Rizal Ramli, a graduate of the ITB and a student activist, obtained Ph.D. in economics from Boston University in 1990. Upon completion of his graduate work, he established an economic research and publishing firm, Econit, and emerged as a critic of Soeharto’s crony Liem Sioe Liong, Freeport, and the IMF. He served as Head of the National Logistic agency (Bulog) before he was appointed as Menko from 2000 to 2001. Prijadi Praptosuhardjo, Abdurrahman Wahid confidant, is a graduate of the Bogor Institute of Agriculture (IPB) where he studied fishery. He spent his career in Bank Rakyat Indonesia (BRI) where he became friends with Abdurrahman Wahid. He was appointed as BRI director in 1992 but failed in his bid to become the bank president despite Abdurrahman Wahid’s recommendation. Instead, he was appointed Minister of Finance.

30) Dorodjatun Kuntjoro-Jakti, a UI Economics graduate, holds a Ph.D. (Political Economy) from the University of California at Berkeley, and was ambassador to the United States before being appointed as Menko under Megawati.

31) For Abdurrahman Wahid’s attempts to oust Syahril Sabirin from the BI governorship, see Fachry et al. (2003, Ch.5). It should be noted that Abdurrahman Wahid even entertained the idea of liquidating the BI to oust him and that he was supported by some of the key players in the economic policy-making in those days such as Kwik Kian Gie, Rizal Ramli, and Prijadi Praptosuhardjo.

32) Under normal circumstances, Djunaedi Hadisumarto should have inherited the mantle from Boediono to serve as State Minister for National Development Planning and Chief of BAPPENAS. A UI graduate and UI professor of economics, he had served as Secretary General of the Ministry of Transportation and Vice Chairman of BAPPENAS under Boediono before being promoted to Chairman of BAPPENAS in 1999.

33) Boediono was trained abroad (B.A., University of Western Australia; M.A., Monash University; Ph.D., Wharton School of Business, University of Pennsylvania) and served as deputy for fiscal and monetary affairs at BAPPENAS (1988–93) and Deputy Governor of the BI (1993–98) before being made State Minister for National Development Planning and BAPPENAS Chief in 1998.


Vol. 3, No. 1, Agus Trihartono

Contents>> Vol. 3, No. 1

Beyond Measuring the Voice of the People: The Evolving Role of Political Polling in Indonesia’s Local Leader Elections

Agus Trihartono*

* Graduate School of International Relations, Ritsumeikan University, 56-1 Toji-in Kitamachi, Kita-ku, Kyoto 603-8577, Japan

e-mail: atrihartono[at]

Since 2005, political polling and the application of polls-based candidacy have been enormously influential and, in fact, have become vital for local leader elections (Pilkada), particularly in Indonesia’s districts and municipalities. The Golkar Party’s declaration that it was moving to polls-based candidacy created a domino effect, inducing other major political parties—such as the National Mandate Party (Partai Amanat Nasional, PAN), the Democratic Party (Partai Demokrat, PD), and the Indonesian Democratic Party of Struggle (Partai Demokrasi Indonesia Perjuangan, PDIP)—to follow Golkar’s approach to contesting local constituencies. As polling becomes a new device for reforming the political recruitment process, political polling exercises have also unintendedly transformed into a means for waging a power struggle. Political actors have exploited polling as a tool for gaining a political vehicle, as a map for soliciting bribes, as a map for guiding the mobilization of votes, and as a means for inviting an indirect bandwagon effect. In short, political polling has moved beyond acting as a tracker of voters’ preferences to become a popular political device.

Keywords: political polling, local leader elections, democratization, Indonesia


Following the fall of Suharto in 1998, Indonesia embarked on an intensive project of local democratization. Under the banner of applying Law Number 32 of 2004 regarding “Regional Government,” local leaders—such as governors, district leaders (bupati), and mayors—were to be directly elected by the people for the first time in Indonesian political history. In particular, from June 2005 onward, Indonesia began experiencing two enormous waves of direct local leader elections (Pemilu Kepala Daerah, Pemilukada or Pilkada; hereafter Pilkada). The first episode was from mid-2005 to the beginning of 2009, and the second is still ongoing, beginning in late 2009 and extending to the beginning of 2014. From 2005 to 2008, Indonesia held no fewer than 500 Pilkada spanning all regions (Centre for Electoral Reform 2008). According to the Badan Pengawas Pemilu or Bawaslu (Election Monitoring Body), there were also approximately 244 Pilkada ­during the year 2010 (Indonesia, Badan Pengawas Pemilu [Bawaslu] 2011) and 116 Pilkada in 2011. In addition, from 2005 to 2010 more than 2,200 pairs of candidates ran for gubernatorial, bupati, and mayoral offices; there were also 333 pairs running for such offices in 2011 alone (ibid.). The implementation of Pilkada has resulted in the development of a remarkably vigorous local democracy, as indicated by the massive number of candidates and the frequency of elections. Judging from the large number of elections and candidates involved, Indonesia is unquestionably the country of elections.

One of the most important phenomena marking Pilkada has been the involvement of polling and other pollsters’ activities in these contests. The discussion of electoral politics in Indonesia has suddenly been filled with insider accounts of the results of polling activities,1) as polling has not only become a ubiquitous new fashion in local politics but has also noticeably colored the dynamics of local leader elections. It seems likely that political polling has become an integral part of almost every local leader election in Indonesia.

Previous seminal works addressing the topic of political polling in Indonesia have placed more emphasis on the mushrooming of polling at the national level (Mietzner 2009), the increasing role of pollsters as professionals (Mohammad Qodari 2010) or so-called polls-based political consultants,2) and the growing employment of political marketing that is the result of the presence of pollsters in the political arena (Ufen 2010). Those studies emphasize the impact of the presence of pollsters in the two national elections in 2004 and 2009. Although the involvement of polling and pollsters at the politically vibrant national level is headline-grabbing, previous works neglect the utilization of polling by political parties in attempting to identify electable candidates, as well as the fact that polling is used as a political weapon rather than a barometer of public sentiment.

Admittedly, the utilization and exploitation of polling in political history is not the newest phenomenon. In his classic seminal work more than 50 years ago, Louis Harris (1963), one of the key founders of polling, assertively foresaw that polls were “an important part of the arsenal of weapons used in modern American political campaigns.” R. A. Camp (1996) enthusiastically describes polling as a device that political leaders take advantage of for their own political interest, specifically to indicate successful platforms and increase their ability to defeat their opponents as well as to improve their political image. In a similar vein, Dennis Johnson (2001; 2009) and Christopher Wlezien and Robert Erikson (2003) view polling as being exploited by politicians to enhance their image during the campaign period. In short, it is not uncommon to take advantage of polling in political games.

However, in the context of Indonesia, one of the largest democratic countries in the world, a study discussing the development of public opinion polling and how it has been used (and exploited) seems exceptionally limited. While the importance of political polling in the consolidation of democracy in Indonesia has increased, the country has been neglected in discussions on the development of polling in both developed and developing democracies (Geer 2004; Carballo and Hjelmar 2008; Johnson 2009). Above all, in the context of Indonesia’s local politics, it seems no research so far has focused on issues such as the development, utilization, and exploitation of public opinion polling. Against this background, this study attempts to fill in the gap by demonstrating the extent of utilization and exploitation of polls in Indonesian politics, specifically in the era of Pilkada starting from 2005.

This paper suggests that political polling in local Indonesian politics has moved beyond its long-established use as an instrument to capture the so-called voice of the people. Even though from the beginning the development of polling in Indonesia was designed to consolidate democracy and to promote the previously neglected grassroots voice, this paper provides evidence that there has been an unintended transformation in the way polling is utilized. Local political players have exploited polling as a political instrument in their struggle for power. Polling is the most recent method by which political parties improve their political recruitment process at the local level. Polling also aids in campaign strategy, key decision making, developing winning strategies, and building up campaign communications. This study attempts to show that the use of polling is increasing, and that polling is gradually gaining acceptance as a sophisticated tool to obtain a political vehicle, a bribery map, and a voter mobilization map, and as a means for inviting an indirect bandwagon effect. While providing some cases from Pilkada in districts and municipalities of North Sumatra, East Java, and South Sulawesi in 2009 through 2011 will not permit generalization, this analysis sheds new light on the other side of political polling in the current dynamics of local Indonesian politics.

To explore the aforesaid argument, the paper is divided into three sections. The first briefly discusses local leader elections, political parties, and the significance of political polling in the age of Pilkada. The second section answers the question of why pollsters have participated in the fiesta of Indonesian local leader elections since 2005. The third elaborates on the use of political polling in Pilkada, specifically spotlighting how polling has become both a new candidacy mechanism and a new political weapon. Throughout this study, I attempt to demonstrate that the emerging role of political polling in the dynamics of contemporary Indonesian local politics has gone far beyond merely uncovering people’s preferences.

Pilkada, Political Parties, and Voters

The implementation of Pilkada was promoted as a means of deepening democratization and helping to consolidate democratic practices at the local level. Pilkada has provided local communities with important opportunities, as the emergence of grassroots national leaders has been followed by the appearance of local leaders who possess popular support (Leigh 2005). Furthermore, Pilkada has provided a space for the wider participation of society in the democratic process and a correction to the previous indirect system in that it supplies regional leaders of greater quality and accountability (Djohermansyah Djohan 2004). Finally, Pilkada also offers opportunities for the grassroots to actualize their political rights without worrying that they will be reduced by the interests of political elites.

There are several essential aspects of Pilkada that need to be highlighted. First, although the position of political parties is essential in Pilkada, there is an argument that Pilkada has made political parties weak in some ways (Choi 2009). Political parties are the most prominent and vital institutions in the current practice of local democracy, as their basic role is to recruit and provide cadres to participate in elections and to nominate candidates for administration in a “gate keeping position” (Schiller 2009, 152). In the political recruitment process, political parties make the initial selection of candidates and provide alternatives for voters in elections. Understandably, political parties are vital in the nomination process because candidates can be nominated only by them.

Second, since 2007, democracy at the local level has been revived following a key review by the Constitutional Court (Mahkamah Konstitusi). This review was a legal consequence following the Constitutional Court ruling on July 23, 2007 that non-party candidates would be allowed to run in local elections subsequent to the post-conflict 2006 vote in Aceh Province that permitted local actors to run as independents. According to the review of Law Number 32 Year 2004, July 23, 2007, the court passed a petition regarding the process of non-party side nominations,3) known as the independent pathway (jalur independen). The review opened up the opportunity for candidates to run in elections without political party nomination.4) Considering that new development, therefore, at present Indonesia has two important and legitimate mediums through which political actors run for local elections, namely, the political party and the independent pathway.

Third, direct (local leader) elections have positioned voters as the premier judge in determining leaders. Voters have autonomy in electing a pair of local leaders inde­pendently. As we will discuss later, voters can even vote differently from their previous choice of party representatives in national and local legislatures. Consequently, responding to the “autonomy” of voters in electing candidates, the terms “popular,” “acceptable,” and “electable” are part of the vocabulary for candidates who struggle in contemporary local elections.

Finally, local elections are an indispensable arena for political parties to seize power. Following the implementation of decentralization at the local level, the authority given by the central government to local governments in managing financial and political resources has significantly increased. At the same time, lodging control of local government with local elites means the distance between those elites and their constituents has narrowed. Therefore, winning local elections is not understood simply as procuring control of local government but is also the means by which to be directly in touch with the acquisition and maintenance of political constituencies at the grassroots. In this sense, success in local elections is also about the survival and sustainability of political parties at the grassroots.

Accordingly, political parties have a strong rationale for extensive involvement in local elections. First, parties now recognize victory in local elections as an opportunity for their cadres to engage in the political learning process. For more than 32 years during the Suharto era, political parties were marginalized and impotent. According to Akbar Tanjung, a senior politician of the Golkar Party, during the Suharto era parties served as “cheerleaders” and as participants in political displays, as they did not have an arena in which to perform their traditional roles and functions regarding political recruitment and institutionalization.5) Second, political parties now consider success in local elections as an entry point for exercising executive power in each region. This realization is particularly important because executive positions are seen as part of a vital machine for the implementation of policies and political visions, as well as for providing access to financial and political resources. Finally, for young and minor political parties, which still have limited potential cadres to promote in the contestations, local leader elections are an arena for attracting potential and popular candidates from non internal party’s cadres to run under their flag.

In addition, the dynamics of local leader elections require political actors to understand changes in voting behavior. While we cannot generalize that all things are equal in all Pilkada, as in some cases voting behavior has special characteristics—particularly in areas of conflict such as Aceh, Poso, and Papua—significant changes in voting be­havior are evident in local leader elections. Departing from a class perspective, some scholars, for instance, started to question the weight of the political sects (politik aliran) approach (Hadiz 2004a; 2004b). Utilizing regression analysis, the works of politik aliran, religious affinity, regions, ethnicity, and social class of voting behavior in the post-Suharto democracy have been also questioned (Saiful Mujani and Liddle 2004; 2009; Saiful Mujani et al. 2012). Furthermore, political behavior is obviously different now compared with the 1950s (Saiful Mujani 2004). Regarding the significant changes, thus, the strategy for facing current Pilkada cannot be based merely on conventional ideas regarding the importance of political sects, political machines, and political patrimonialism.

Contemporary Pilkada are not only important for local people to have the opportunity to directly select their leaders; Pilkada necessitate political adjustments in local actors’ strategies to account for the large shift in local political dynamics. The new political dynamic has also provided an entry point for pollsters and political polling to play a role in an evolving set of political games, as pollsters are seen as one of the most capable actors in detecting and measuring new trends in voting behavior.

Therefore, there is a symbiotic mutualism between local players and pollsters that represents the new dynamics in local leader elections. According to Heri Akhmadi6) and Akhmad Mubarok,7) senior politicians in the Indonesian Democratic Party of Struggle (Partai Demokrasi Indonesia Perjuangan, PDIP) and the Democratic Party (Partai Demokrat, PD), political parties and pollsters are pillars that support each other as ­couples, striving to fulfill each other’s needs. Moreover, with the new circumstances in local contests, pollsters have been the most reliable means to detect fundamental changes in voting behavior. In short, pollsters fill the hole left by this new reality and play a notably significant role in local contests.

Polling in Local Elections

As previously mentioned, the increased involvement of political polling in local leader elections coincided with the first cycle of Pilkada that began in 2005. Before 2005, there were few pollsters in Indonesia. For instance, in the 1999 general elections there were five pollsters conducting polls at the national level: the Resource Productivity Center; the International Foundation for Election Systems; the Jakarta-based Institute for Social and Economic Research, Education, and Information (Lembaga Penelitian, Pendidikan dan Penerangan Ekonomi dan Sosial, LP3ES); the Kompas newspaper; and the Political Laboratory of the University of Indonesia (Komite Pemberdayaan Politik-Lab Politik UI) (Lembaga Survei Indonesia 2004, 30–31). In addition, before the 2004 general elections there were some pollsters involved in national pre-election polling, such as the Center for Islamic Studies and Society (Pusat Pengkajian Islam dan Masyarakat), the Indonesian Survey Institute (Lembaga Survei Indonesia, LSI), Soegeng Sarjadi Syndicate (SSS), and Danareksa Research Institute. There were also media polls, such as the R&D of Kompas Daily (Litbang Kompas), polls by SMS (short message system) of the SCTV (Surya Citra Televisi), and tele-polling of MARS Indonesia (ibid., 47–54). Although the number of pollsters and their activities were obvious, as Kuskridho Ambardi, executive director of the Jakarta-based LSI, illustrated, polls in this period were not part of widely accepted political, social, and economic discussions as many party men were still unaware and rejected the idea that polls should be included in a shared democratic vocabulary. At the time, political actors and mass media exposed doubts regarding the value and political influence of polls.8)

Following the first wave of local leader elections starting in 2005, the number of pollsters mushroomed, including those participating in Pilkada, such as media pollsters (Republika, Bisnis Indonesia, etc.), political party pollsters (i.e. the PDIP’s Rekode), and national and local pollsters.9) Moreover, media coverage of polling was massive, and the publication of polling results was also intensive, which led to a “survey fever” in Indonesian politics nationally and locally.

The earliest involvement of polling activities in local politics was in the first local leader elections in Kutai Kartanegara, held on June 1, 2005. The duo of Syaukani Hasan Rais and Samsuri Aspar took the assistance of the Jakarta-based Center for Strategic and International Studies.10) Further, the election for the governor of Banten Province in November 2006 marked the beginning of the “war” among national pollsters in Pilkada, as many national pollsters became involved in the contest.11) The vigorous participation of pollsters in Pilkada has come to the fore ever since the Golkar Party officially invited pollsters to become a central instrument in its polls-based candidacy, which began in December 2005, under the banner of the party’s Operational Guidelines (Juklak, ­Petunjuk Pelaksanaan) Number 2 Year 2005.12) From those moments, polling has been omni­present in Pilkada.

The application of polling in direct local leader elections has raised the expectation that polling itself strengthens and supports the development of local democracy. In other words, political polling is thought to encourage political actors to hear the previously neglected voices of local communities, and to create visions and frameworks that reflect people’s opinions. The utilization of polling, therefore, has created great optimism that the government and political actors will be encouraged to be more responsive to popular perspectives. In particular, it is thought that polling promotes the emergence of local leaders in closer touch with community preferences.13) Consequently, it is believed that those policies and platforms that are contrary to popular aspirations will be abandoned.

In practice, political parties and candidates utilize polling to improve their adaptation to a new local political environment by engaging in such activities as the following: (1) mapping the most favorable program to attract voters’ support; (2) evaluating the performance of the incumbent; (3) measuring the degree of popularity, acceptability, and electability of both political parties and potential candidates; (4) identifying party identification among voters and swing voters; (5) observing which media are most appropriate for socialization; (6) determining how candidates should socialize with voters; (7) scrutinizing the whom, the where, and the why of potential supporters and rivals; and finally (8) testing the waters and mapping strategies for minimizing possible losses.14) Last but not least, political parties and candidates view polling outcomes as the ultimate factor in deciding whether or not to continue running for election. By doing so, political actors can minimize their losses and failures.

With regard to Pilkada, there are four types of pollsters that have played a role in local contests. The first are national pollsters. Almost all national pollsters are key players in local leader elections. Prominent names, such as the LSI, the Indonesian Survey Circle (Lingkaran Survei Indonesia), Indo-Barometer, Cirrus Surveyor Indonesia, National Survey Institute (Lembaga Survei Nasional), and Indonesian Vote Network (Jaringan Suara Indonesia), have increased the vibrancy of local elections. The second type of pollsters are local pollsters that are part of national organizations. These institutions have an organizational relationship with the “parent” pollsters in their headquarters. Examples are the 34 local partner institutions of the Indonesian Survey Circle, which are also incorporated in the Indonesian Association for Public Opinion Research (Asosiasi Riset Opini Publik Indonesia, AROPI).15) The third type are local pollsters who initially operated as individuals working with national pollsters but later, having gained the skills and knowledge required for public opinion polling and political consultancy, decided to become independent and set up their own local polling organizations. Examples are the Makassar-based Adhyaksa Supporting House and the Makassar-based Celebes Research and Consulting. Adhyaksa Supporting House worked together with the Indonesian ­Survey Circle to assist the pair consisting of Syahrul Yasin Limpo and Agus Arifin Nu’mang in the 2007 South Sulawesi gubernatorial elections.16) Meanwhile, the head of Celebes Research and Consulting previously worked at the LSI. The last type of pollsters are “independent” local pollsters. These pollsters have from the beginning worked on their own: acquiring the necessary skills, understanding polling methods, and conducting surveys. They have developed and expanded a specific market segment. These pollsters have no relations with pollsters at either the organization or the network level. Examples include the Surabaya-based Research Center for Democracy and Human Rights (Pusat Studi Demokrasi dan Hak Azasi Manusia, Pusdeham); the Makassar-based Insert Institute, Yayasan Masagena, and Script Survey Indonesia; and the Medan-based Inter-Media Study.

Local Leader Elections: Pollsters’ New Realm

In general, pollsters have realized that local leader elections are attractive because they provide opportunities to bet on the new arena of political contests. Because local leader elections are numerous and spread out in various areas, the elections have provided new ground on which pollsters can survive, obtain significant financial benefits, and even attain a sphere of influence.

In comparison, national elections (both general and presidential), though note­worthy, attention-grabbing, and having significant financial impact, attract only the biggest and fittest pollsters. Therefore, there have been only a few outstanding pollsters who have become involved in and taken advantage of these two principal national events. National elections require more than just skills and wills; they require such technical factors as a significant survey network that permeates the country, a high degree of professionalism, and the capacity to cover the high cost of a national survey. These are among the factors behind the low participation rate of pollsters in national contests. In addition, the national election is a ruthless judge of pollsters’ credibility because the results, particularly pre-election polling and quick counts, are directly tested by the public, openly examined by the mass media, and critically discussed in academic circles. Simply put, polling outcomes are scrutinized and compared to the official vote count of the Election Commission (Komisi Pemilihan Umum, KPU). Consequently, the publication of polling results means laying a bet not only on the credibility but also on the sustainability of a pollster’s activity. The ability to accurately predict the outcome of an election is one of the pollster’s pillars of credibility. Although polling is not an instrument for predicting election results, if polling results are significantly different from the actual results of the election it spells disaster for the pollster’s credibility. A pollster named Information Research Institute (Lembaga Riset Informasi, LRI), also known as Johan Polls, was closed down after it failed to predict the outcome of the 2009 presidential election. The LRI released the results of surveys conducted in the 15 most populous provinces, involving 4,000 to 12,000 respondents per province. Based on the polling, LRI confidently predicted that the 2009 presidential election would go to the second round. In fact, in the presidential election held on July 8, 2009 the SBY-Budiono pair had a landslide victory in the first round (60 percent). This failure to predict an accurate result led the owner of the LRI to close the office for good.17) This tale will not soon be forgotten in the Indonesian pollster community’s collective history. Thus, in national elections, it seems that accuracy is the ultimate test that accounts for the rise and fall of pollsters.

Unlike the case of national pollsters, for local pollsters Pilkada represent the future of their existence. Local leader elections seem to provide opportunities for all kinds of pollsters: prominent national pollsters, national pollsters who do not participate in national elections, and even local pollsters with limited capacity all come to enjoy the “feast of local democracy.” In addition, local leader elections absorb many kinds of pollsters who wield, methodologically speaking, good, bad, and ugly techniques. Even the image and credibility of a pollster seems not to be critical in the context of local leader elections. A pollster that does not always succeed in local polling is still able to advertise in the national newspaper claiming to be the most successful pollster in the country, without any significant objection from the public. The public does not easily recall the failures of pollsters in local leader elections because, on average, there is a local leader election every two days.

Second, although polling in local leader elections is not profitable compared to polling in national elections, judging from their enormous number the former appear to provide enough financial resources for pollsters to survive and continue their operations. Not only have pollsters gained significant financial profit, but many rely solely on Pilkada for their wealth and fame. For some pollsters, local elections provide the only opportunity for financial benefit, as they cannot compete in national polling. Most important, the wave of local leader elections is attractive because it is truly a huge market. To make a simple calculation, in the first wave of Pilkada, for instance, in one round of local leader elections for governors, bupati, and mayors, there were approximately 510 elections with more than 1,500 pairs of candidates. Furthermore, the average number of pairs involved in elections has increased in the ongoing second cycle that lasts until 2014. According to Juklak 2/2009, for instance, the Golkar Party requires three surveys for every local election, which means the party conducts at least 1,530 political surveys. Moreover, the PD and the National Mandate Party (Partai Amanat Nasional, PAN) require at least one survey during the nomination process. Meanwhile, the PDIP is beginning to consistently utilize polling for candidates to support the party’s decision to nominate local leader candidates. If we include polling conducted individually by candidates and businessmen, the number is significantly larger. Moreover, the potential market is not exclusively for pre-election polls/surveys but also includes quick surveys, quick counts, quick real counts, exit polls, and political consultation.18) Most important, pollsters’ activities in local leader elections are quite simple and manageable, requiring no large surveyor networks and costs, and fitting within local areas, customs, and cultures. Finally, several cases demonstrate that successful pollsters that predict the winning local candidates gain not just money but also access to power and/or projects in the local area.19)

Another factor influencing pollsters that are intensively involved in local leader elections is that supportive funding from foreign donors has mostly ended. Previously, between the 1990s and 2005, certain pollsters received operational funding from external donors to support their daily activities under the banner of developing democracy in Indonesia; for example, the Japan International Cooperation Agency (JICA) supported the LSI from 2003 to 2005.20) In 2004, almost all institutions, including the National Democratic Institute, International Republican Institute, and LP3ES, saw the end of financial support from foreign donors. This development required pollsters to search for alternative funding to run their programs. The wave of local leader elections since 2005 has provided a significant alternative funding opportunity for pollsters.

To conclude, the huge market, the simplicity of managing local polling, and the end of some foreign donors’ support in 2005, as well as the invitation from political parties to engage in political and strategic adaptation, as we will discuss next, has led national and local pollsters to engage in the dynamics of local leader elections.

Instrument of Local Political Games

This section highlights the importance of the ongoing use of polling with regard to local political games. Polling is increasingly being used by political parties and other local political players in Pilkada. Political parties have started to utilize polling in the process of identifying candidates. However, at the same time, local political players such as candidates and local elites have also started to take advantage of polling as a tool for obtaining a political vehicle, a bribery map, and a voter mobilization map, and as a means for inviting the indirect bandwagon effect.

A Tool of Political Parties: Evolving Polls-based Candidacy

Responding to the change from indirect to direct local leader elections in the Indonesian election system, political parties began to consider adjusting to polls-based candidacy for winning those elections or at least minimizing failure and defeat. Previously, the nomination process for local leader elections was based on both the iron law of oligarchy with regard to local elites and the influence of “money politics.” Under this situation, a candidate was in a better position if he or she was part of the local political elite or possessed capital by which to procure a political party as a kendaraan politik (literally, a “political vehicle”). Accordingly, to obtain a political vehicle, candidates paid party elites for approval, a phenomenon known as political dowry (mahar politik). The latter is an amount of money that stands as a symbol of agreement between the party elite and the candidate so that the party or parties nominate the political actor as the only candidate to run in the election. In some cases, the giving of political dowry also means that candidates pay all the costs of both the election nomination process and the campaign. During this time, “money talks” politics, mixed with the influence of the elites’ and local bosses’ weight and approval, are not only the first element in the nomination process but to some extent are really the only game in town.

The period of Pilkada, which started in June 2005, has changed the local political landscape by emphasizing that politics is no longer centered merely on local elites. Instead, local direct elections provide greater room for the will of the people to be the new political epicenter. Unfortunately, most political parties were not ready to adjust to this new environment. Many parties, including major ones such as Golkar, held old views in facing the new situation: they assumed the effective working of the political machine and patrimonialism. Parties in general did not have any idea how to respond to the ­modern political challenges until they suffered defeats in the early stages of new direct local leader elections. For instance, the champion of the 2004 general elections, the Golkar Party, was beaten in almost 70 percent of local leader elections up until December 2005.21)

Responding to those embarrassing defeats in the early stages of the first cycle of Pilkada, the Golkar Party revised its implementation guidelines (Juklak) for short-listed candidates to take advantage of polling techniques. Golkar declared in December 2005 that it would rely on polling as the primary method for identifying candidates in local leader elections (Juklak 5/2005) and invited pollsters to assist the party in determining and selecting candidates. Golkar determined that it would examine the public acceptability of a candidate through periodic polling because it wanted to nominate the most popular and least disliked candidates. In Golkar’s understanding, the use of polling in the determination of prospective candidates would seem to increase the party’s success rate in local leader elections.

The Golkar way of polls-based candidacy created a domino effect, spurring other political parties to also utilize polling as a new device in reforming the selection process and improving strategies for winning local leader elections. The PAN in 2006 decided, based on the national meeting held that year, to utilize polling as part of its process for identifying candidates. The PD in 2007 also turned to a pollster for help with its candidate identification and nomination processes. Finally, although it had unofficially and partially utilized polling since 2006, the PDIP officially decided in 2010 to take advantage of political polling as part of the party’s decision-making process.22) Among the main reasons why parties utilize polling is the need to modernize the party, minimize money politics in local candidate selection, and reduce potential conflicts among political actors. Another reason is that political parties need to adapt to new situations in order to maintain their relevance in society.

1. Golkar Party

Golkar is one of the parties that have consistently applied polling in the recruitment of prospective regional leaders. The Golkar Party issued its Operational Guidelines Number 5 in 2005 and strengthened those guidelines in the most current version (Juklak Number 2 in 2009) (Dewan Pimpinan Pusat Partai Golkar 2009a). The new guidelines require that the National Assembly of Party Leaders (Dewan Pimpinan Pusat, DPP) select the most electable candidate based on polling outcome. In particular, the new guidelines require polling to be undertaken at least three times during the candidacy process. The guidelines also clearly divide the work between the party and the pollsters. Pollsters have been given a strong and independent role in measuring the popularity, acceptability, and electability of candidates, all important ingredients in the nomination process.

In Table 1, it can be seen that the party incorporates polling throughout the candidate nomination process. Among the 14 steps making up the candidacy process, almost half are handled by professional pollsters.

Since the Golkar Party decided to utilize polling, the party has hired at least three independent pollsters and polls-based political consultants. All polling activities were undertaken by the Indonesian Survey Circle in 2005, the LSI in 2006, and Indo-­Barometer in 2008. Political consulting services were provided by the Indonesian Survey Circle and Indo-Barometer. Meanwhile, from the beginning, the LSI consistently worked only on polling.

The new system has, on the one hand, led to a significant degree of displeasure in the Golkar’s local cadres, as it is seen as a re-centralization of the decision making of nominating candidates. Seen in this way, the involvement of pollsters has strengthened the domination of the DPP over the DPD in the candidacy process. The new system indicates a centralization of political recruitment. On the other hand, the new guidelines have had a somewhat significant impact on the party’s success rate in local leader elections. From January 2006, soon after the Golkar guidelines were implemented, until the end of the year Golkar won more than 64 percent of the 75 elections it participated in. After utilizing polling, the party’s achievements in gubernatorial elections were better than they had been in 2005. Golkar won 46.8 percent of elections at all levels of the first wave of Pilkada.23) Up until December 2008 Golkar had won 42.42 percent of all elections held at the district and municipal levels and 25 percent of all elections held at the provincial level. It is also interesting to note that 72 percent of Golkar’s achievements after 2006 were made through coalitions with other parties. This provides evidence that polling led Golkar to improve its winning strategy by increasing cooperation with other parties (coalition) to significantly achieve victory in the first cycle of Pilkada.

2. National Mandate Party

Since 2006, the National Mandate Party (PAN) has applied a new approach to invite prospective candidates. Unlike the previous approach, where the party selected only the internal party’s cadres, following its 2006 national meeting the PAN opened the possibility for outsiders (non-internal party cadres) to apply for nomination in local leader elections under the flag of the party. This decision challenged previous mechanisms, which emphasized that only the original candidates were to be supported by the party, with no room for outsiders. Accordingly, the party incorporated elements of political polling as a key part of the candidacy process. The new approach in the candidacy process is as outlined in Table 2.

Table 2 shows that polling is an essential factor in deciding which candidates the party will support. To gain the optimum outcome, the party also requires two other qualities of its candidates—namely, integrity and capacity—as part of its final decision. Yet, “electability” is most important among the candidacy criteria.24) Regarding this new approach, Viva Yoga Muladi, the former deputy secretary-general of the PAN, highlighted that the new system was designed mainly to foster party modernization and to make the party more rational and inclusive.25) Most important, implementing polls-based candidacy was intended to prevent the political tendency of using the party as merely a “rental” political vehicle in elections. Moreover, the inclusion of polling in the nomination phase has allowed anybody, whether a party’s cadre or an outsider, to gain the support of the party based on his or her potential to win the election.

The role of polling was strengthened after Drajat Wibowo, the academic wing of the party, and Aria Bima Sugiarto, the former executive director of the Jakarta-based pollster Charta-Politica, achieved the top-ranking positions of the DPP in the present era of the Hatta Rajasa administration. These two men are the figures behind the emerging role of polling in the party. To support the thorough modernization of PAN, party elites are in the process of creating internal pollsters as a strategic instrument to be wielded in both local and general elections.

Regarding the employment of polling in the party’s candidacy process, one of the main rationales was that until December 2005 the party was a notable loser in elections. The party failed to succeed, or to be part of the winning coalition, in 86 percent of elections up to 2005. After the implementation of the new procedure of Winning the Local Leader and Vice Leader Elections, PAN started to employ polling to help its candidacy. As a result, the party experienced a dramatic improvement in performance: it won individually, or as part of the winning coalition, in 32 percent of elections in 2006, 22 percent in 2007, and 23 percent in 2008.26) The contribution of the new procedure has been that polling outcomes, for instance, have guided the party to take the principal position in 64 winning coalitions in 273 elections from 2006 to 2008. In other words, the surveys have assisted the party in seeking opportunities and developing coalitions with other parties that carry electable candidates.

3. Democratic Party

Two years after the wave of local leader elections, the Democratic Party (Partai Demokrat, PD) issued an organization rule (Peraturan Organisasi) on February 9, 2007, that specifically regulated the implementation of the mechanism for choosing candidates for local leader elections. Under the new rule, the party decided to follow the path of polls-based candidacy prior to elections. Incorporating polling in a party’s decision-making process is seen as a realistic policy for the PD. As a relative newcomer compared to other major political parties, the PD has only a few grassroots support groups and does not possess many reliable and capable original cadres to boost its performance. Therefore, polling has become not only a device to ensure that the party supports the candidate with the greatest chance of winning, but also an instrument to seek potential political actors to be included in the party as part of local and national party development. Polling results are also designed to help the party make political alliances and coalitions at the local level with the most appropriate party, even with a party that it generally opposes.27) All these measures ensure that the party plays a part in running the local government.28)

The PD decided to adopt the new mechanism of polling under the rationale of improving political performance.29) The old system of selecting candidates for local leader elections was allegedly vulnerable to the abusive politics of “buying a boat” (literally membeli perahu, or “buying a political vehicle”); many such cases were internally detected.30) Therefore, under the new regulation number 02/2007, the function of Team 9 (three people from the DPP, three from the DPD, and three from the DPC to verify which candidates will run for elections) has been improved by incorporating polling in the process. As seen in Table 3, independent polling has assisted Team 9 in identifying potential candidates. The results are submitted to the DPP to be examined and approved.

Table 3 Candidacy Process of Democratic Party


Until December 2005 the PD had won only one election—in Toraja District, South Sulawesi—and shared in 8.2 percent of all coalitions of ruling parties in 2005. However, after the party implemented the polling mechanism in March 2007, its share increased to 13.64 percent of the winning coalition in 2007 and 16.23 percent in 2008. The winning rate after the introduction of polling was almost double (15.6 percent) compared to the rate in the first year of Pilkada in 2005 (8.02 percent). Considering that the PD is a novice in local political games, this achievement cannot be overlooked. Moreover, the party has been the backbone of two governors in politically strategic areas, namely, East Java and the capital, Jakarta.31) In short, the achievement suggests that polling is an effective compass for a party facing new dynamics in local elections.

4. Indonesian Democratic Party of Struggle

In May 2010 the Indonesian Democratic Party of Struggle (PDIP) officially decided to include polling outcomes in the mechanism it used to select candidates, a decision that has provided new opportunities for electable candidates to gain approval whether or not they are proposed from the bottom. The PDIP is beginning to include the public’s voice in its centralized decision-making process,32) especially in nominations for local leader elections. Currently, the decision-making process of the PDIP for determining candidates to contest elections is centralized in the DPP. Although proposals of candidates could always come from below, from the Regional Assembly of Party Leaders (DPD), the final decision in determining candidates is taken at a meeting of the DPP. The DPP might accept the DPD’s proposal based on the decision taken at the special meeting of the assembly of local party leaders (Rapat Kerja Cabang Khusus, Rakercabsus). However, in practice, the DPP can decide to choose candidates different from those recommended by the Rakercabsus meeting. The DPP has the prerogative to make final decisions.

Regarding the use of polling, it should be noted that determining candidacy through polling mechanisms improves the system in that it reduces the contraction of the party due to losses in elections. Moreover, polling has brought a novel atmosphere into the party’s decision-making process because it has, to some extent, balanced the prerogative powers of the general chairperson, Megawati Sukarnoputri.33)

The party’s candidacy process is shown in Table 4.

For the PDIP, polling is as an essential factor in determining candidacy. Although the party’s final decisions on candidacy have relied totally on the prerogative of the DPP so far, polling has enabled the PDIP to have more choices in making rational and objective decisions. Polling is now inevitably utilized in the current political ambience, and the PDIP has taken this as a party adjustment to handle direct elections. Accordingly, ­Ganjar Pranowo, a senior PDIP politician, highlights the necessity of the party to consider polling: “The PDIP cannot ignore polling as it is inevitable in the current political dynamics. In particular, if the party is not ready to face the new realities and does not make adequate improvements and adjustments in political recruitment, polling firms can help it not only to be superior in political recruitment but also to pose a significant threat to its political rivals.”34)

The aforementioned suggests that the electoral system directly affects how political parties have begun to change the political epicenter from the elites to the public. The institutionalization of political polling seems to have improved the processes within parties, as the polling outcomes serve to guide the party’s decisions. However, the evidence also shows that the weight of public preference measured by polling is still used for the sake of winning elections, especially in the selection of prospective candidates and the creation of a winning strategy.

In a similar vein, the following discussion would seem to indicate how political actors also make use of polling in pragmatic ways. They are more interested in exploiting the polls as a political weapon for the sake of political victory rather than hearing the public’s sentiments.

Device for Obtaining a Political Vehicle

In the party-candidate relationship in Pilkada, it is clear that getting funds is a primary purpose behind the party’s choice of candidate (Buehler and Tan 2007, 41–69). Specifically, mahar politik works as the first element in the nomination process. However, direct elections have raised the hope that through Pilkada the conservative nomination process will fade away to some extent. As major parties began applying polling as part of their political recruitment process, the desire to push the candidate closer to public preferences was obvious. The closer the candidate was to the public’s approval, the greater the opportunity to be the winner—this is the new idiom in Indonesian local direct elections.

Polling results have become one of the candidate’s important instruments in dealing with political parties.35) Parties are more welcoming of candidates who are likely to win, and they are willing to offer them a political vehicle. This was illustrated in the 2010 mayoral election of Sibolga city, North Sumatra, where one of the candidates used polling results to solicit the support of political parties and was able to obtain a political vehicle; he received the majority support of 18 political parties without having to spend a significant sum of money.36) Sarfi Hutauruk was formerly a Golkar Party cadre and was involved in the party’s nomination process, a prerequisite for being a Golkar candidate for the mayoral election of Sibolga city. However, in the selection process Hutauruk was not nominated as a Golkar candidate as the party’s polling results indicated that his electability was lagging behind that of his rival, Afifi Lubis. Consequently, the party nominated Afifi Lubis as its candidate in the mayoral election.

His failure to garner the Golkar Party nomination led Hutauruk to consider the support of other parties. Before applying for other parties’ nominations, he hired a Medan-based local pollster for the purpose of testing the waters and measuring his electability. He found that in four months, based on two polls, his electability rate increased and approached Afifi Lubis’s. In the last poll, three months before the KPU registration deadline, the results showed that Hutauruk’s electability was higher than Afifi Lubis’s: 43 percent versus 41 percent. Armed with this electability rate, Hutauruk applied to several political parties in Sibolga to get a political vehicle; he did not apply to the Golkar Party, which was being used by Afifi Lubis. Utilizing the polling “card,” he convinced political party leaders to back him in his run for mayor. He not only got the support of 18 political parties but won the Pilkada held on May 12, 2010, in one round. Hutauruk gained 45 percent of the votes; Afifi Lubis won 40 percent.

Another substantial change following the implementation of polling has been the minimization of party pressure on candidates. It has traditionally been common for political parties to view candidates who are seeking a political vehicle as an ATM.37) However, when polls show that a certain candidate is a likely winner, that reduces the tendency of political parties to charge the candidate large sums of money—or to treat the candidate as an ATM—to get a political vehicle and political support. The cost becomes negotiable and flexible, depending on the candidate’s electability. Although the so-called mahar politik is not completely absent, as it still functions as a lubricant in the nomination process, the change is in the amount and the time frame. Thus, for candidates who have an excellent chance of winning as indicated by polling results, money is still a concern but is not first on the agenda.38) The amount of pressure political parties place on candidates decreases in line with the candidates’ possibility of winning. The local branch leader of a leading political party in a district of South Sulawesi Province noted that for the “convincing candidate,” the amount of mahar was no more than roughly the amount needed for campaign logistics.39) On the other hand, in the case of the PD, for example, more than 75 percent of the money paid by the approved candidate was returned to be used for campaign logistics.40) Furthermore, a candidate who is the most likely to win actually has better bargaining power in terms of choosing a political vehicle. Such a candidate has the opportunity to obtain the approval of a party without spending too much “lubricant.”41) A successful local leader in Sulawesi, for instance, suggested that the position of a prospective candidate was robust in dealing with local political parties.42) A prospective leader does not only avoid being exploited as an ATM; to some extent, he or she may have the opportunity to select a party or parties as a political vehicle, not vice versa.

Nonetheless, as factors such as popularity, acceptability, and electability become vital in the nomination process, many candidates conduct their own polls and some manipulate the results. Since polling outcomes can help boost the relationship between candidates and political parties, some candidates request polling merely to gain a political vehicle. A fraction of candidates hire a credible pollster to truly test the waters. Other candidates, to obtain the leading percentage of polling results, commission pre-­nomination “tricky polls” to place themselves in an advantageous position.43) In this sense, these candidates do not overtly manipulate the results of the polling but they do set its parameters to, for example, limit the number of candidates and select the names included in the list so as not to endanger themselves in the final results.44) Simply put, to obtain an advantage from polling results, certain candidates pay unreliable pollsters, reduce the number of candidates tested, and exclude potential rivals from the polls.45) Through various means, candidates create polls to suit their purposes and use the results of such polls as a valuable bargaining tool to obtain a political vehicle in local leader elections.

Bribery Map

Local leader elections are sometimes marked by bribes to influence voters or community leaders to give support to and vote for certain candidates. Such bribery, commonly known as serangan fajar (literary “sunshine attack”), refers to money or goods that are usually distributed among voters early in the morning of the day of local leader elections.

One surprising use of polling is to create a map to plan for a sunshine attack. Political polling is normally considered to be an instrument for calculating a candidate’s level of support and for gauging a community’s desires. Nevertheless, with a simple one-step modification, polling can provide information to a candidate regarding the potential for vote buying and the particular areas in which such expenditures are necessary or useful.46) In special circumstances, polling identifies the area to target and the amount of money needed, as well as the way in which best to distribute the money.47) This method also identifies other factors that could sway votes and determines whether money affects voters’ choices. Simply put, the survey creates a map that describes areas that can be “bought” and areas that should be “neglected.”48)

Some candidates have become aware of the ability of polling to provide information useful for creating a bribery map. Although not all pollsters, particularly not academic and idealistic pollsters, agree to conduct surveys that include questions to identify a sunshine attack area, there are other pollsters that, without a doubt, offer to supply candidates with information relevant to such money politics.49) With a bribery map, candidates are able to identify how they can win the election not by gaining an absolute majority but by obtaining a mere simple majority. The map makes preparing a sunshine attack more efficient, because the amount that needs to be paid can be accurately calculated and its disbursement can be well organized, so that candidates can then “buy” only areas that are required to be bought.

According to a successful local leader candidate in East Java, a well-known pollster in the region has helped candidates understand in which area a sum of money should be distributed, how much on average, and by which means.50) A bupati (district leader) in South Sulawesi was tremendously impressed with the capacity of polling to generate recommendations for the effective use and efficient distribution of capital, thereby allowing money to be spent on the correct targets. The bupati even stated that polling had guided the delivery of bribes to precise targets. Assisted by polling results, a vice bupati was surprised to find that in his district there were certain areas where only the “Sarung and Mukena” (praying outfit), not money, was an effective buy-off for a sunshine attack.51) In addition, a party leader in East Java noted that polling provided a comprehensive map for both a “sunshine attack and an anti-sunshine attack.” The polling indicated which areas were controlled by a candidate or party and were their occupied “territory.” Using information provided by the map, political parties could decide which areas needed to be “guarded” and which needed to be “attacked.” Accordingly, the candidates’ success team deployed militant followers to keep their “territory” safe from the possibility of a sunshine attack by other candidates.52) In short, the creation of a polls-based bribery map can help a candidate to implement “modern” vote buying.

Voter Mobilization Map

Since the implementation of direct elections, there have been high expectations that voters with complete “autonomy” would determine the candidate most worthy of election. In fact, the current system of direct election still leaves room for the application of voter mobilization in some other ways. Voter mobilization is usually conducted by political actors utilizing parties’ militant followers, mass organizations, and even preman (thugs) to ensure that voters come to the polling station to vote. Voter mobilization is done directly and indirectly. Direct voter mobilization is when voters are visited and persuaded to take part in a ballot for preferred candidates. Indirect voter mobilization is when attempts are made to influence voters’ point of view with information so that their political decisions are in line with the interests of the political party concerned.

Until the end of 2005, elites’ guidance for voter mobilization came mostly from local networks, political party assessment, elites’ intuition, and information from the grassroots.53) However, along with the presence of polling in the Pilkada, political actors saw the opportunity to exploit polling to gain data for making an accurate map to guide voter mobilization. Some local politicians named this a “mobilization map.” Besides figuring out the possibility and the factors for swinging votes in a community, an overall map shows the areas that have been occupied, areas that are dominated by opponents, and areas that are still contested, as well as (most important) the extent of possible voter participation.54) This polls-based voter mobilization map is used as a guide for carrying out mobilization. It helps the candidate in protecting occupied areas and penetrating opponents’ areas. In the area that the preferred candidate has an advantage according to the map, voters are encouraged to come to polling stations and vote for the candidate. However, in areas controlled by opponents, the success team hires sukarelawan (volunteers)—and sometimes even utilizes local preman—to discourage and even intimidate voters from going to the polling stations. Discouragement is accomplished by de-­legitimatizing the opponent with various political issues linked to a negative campaign.55) Thus, the indicator of success in discouragement is that the fewer the voters who come to the polling stations, the more successful the voter mobilization.56)

Besides the aforementioned ways of voter mobilization, information is spread in a tactic known as serangan udara (air attack) through local mass media, banners, and pamphlets. Candidates use the map for “push polling” in areas controlled by their opponents. Push polling represents an underhanded attempt to use the credibility of polling to spread rumors repeatedly via SMS (short message service) blasts, telephone calls, and door-to-door fake interviews.57) Compared to the period before polling came to the fore, this map does help political actors to identify the local political structure and voter dynamics. In short, polling results have provided political actors with valuable advice and information for mapping voter mobilization in local contests.

Inviting Indirect Bandwagon Effect

One impact of the dissemination of political polling outcomes is the so-called bandwagon effect. In academic discussions there are two types of bandwagon effect: direct and indirect. The former is a situation in which the polling outcome positively influences voters’ tendencies to support the candidate who, according to the polling, has the greatest chance of winning. The indirect bandwagon effect is when a candidate who has an excellent chance of winning gains even greater support from third parties, usually such elites as members of the mass media and businessmen. Both effects increase the advantage of the apparent future winner of the election (Young 1992, 20–21). Simply put, the first effect is support from voters in the form of electing the candidate in polling stations; the second effect is support from the elites that comes in the form of mass media coverage, financial support, and political collaboration.

Because the publication of polling results in local leader elections is usually limited and exclusively for candidates and inner circles, the indirect bandwagon effect is more likely to occur than the direct. For the former, the most likely subjects of bandwagoning are businessmen and members of the local mass media. Businessmen tend to get close to power to maintain their business opportunities and to sustain their business careers in a particular area. Accordingly, businessmen usually endeavor to support candidates in elections. The mass media, on the other hand, give more attention and coverage to possible winning candidates than to possible losers.

At least until the end of 2005, local elites, mass media, and businessmen provided support to a candidate after the candidate convincingly proved backup from mass organi­zations (Organisasi Massa, Ormas), had guarantees from the military, and had the backing of a reliable political party machine.58) At the time, businessmen and the mass media had difficulty knowing where support could be focused on. Prior to polling, businessmen, media, and local elites had no clear picture of which potential candidate would succeed. Therefore, taking sides with a particular candidate posed a dilemma. To cover all bases, businessmen, for instance, usually provided the same level of financial support to all candidates. The reasoning was that whoever won, they would be friendly with the businessmen.59) However, this traditional tactic was expensive. Businessmen who employed this method were also alleged to be playing “a set of cards” that was unsafe as it was associated with pragmatism and a lack of loyalty. However, supporting only one candidate carried a tremendous risk.

Polling in Pilkada has opened up new opportunities and has become a point of reference in garnering elites’ support. Polling outcome is evolving as an effective medium to guide the elites in providing support to certain candidates. There are at least two ways in which political actors use polling to solicit the indirect bandwagon effect in Pilkada. The first is that after the pre-election polling results are published, candidates or the success team actively deliver all beneficial information to businessmen and the mass media by elaborating on the polling outcome and explaining the best-case scenario regarding the potential winner. By doing so, the candidates and their team invite the so-called indirect bandwagon effect through which the candidates gain support and sponsorship from businessmen, news coverage from the mass media, and political endorsement from political parties’ elites.

This method is actually in line with current trends, where businessmen are no longer convinced simply by candidates’ old ways of showing support from mass organizations and political party machine networks.60) Mass organizations and party networks are less relevant in Pilkada, which rely mostly on individual voters. The connection with mass organizations is delicate, as such organizations cannot self-mobilize—they need a “locomotive” to work. They are also expensive, as the “fuel” of mobilization depends primarily on the power of money.61) Therefore, polling outcome is evolving into a new card for candidates to obtain backing, and it has been exploited to invite an indirect bandwagon effect. Although polling is not the only way to obtain support, the influence of polls’ outcome is inevitable and has always been part of the political persuasion. In other words, to obtain support from businessmen and mass media, candidates use their probability of winning the election, as shown by the polling outcome, to attract the indirect bandwagon effect.62) Thus, polling has changed the method by which businessmen take decisions on supporting political candidates.

The second way in which political actors use polling to attract the indirect bandwagon effect is that support (services and even financial) can come also from pollsters. Although this is not general pollster behavior, some pollsters have enthusiastically gone on to become political advisers after their surveys correctly indicated a potential winner. In polling players’ vocabulary, providing backup to the candidate most likely to win is known as bermain di atas gelombang (surfing on the wave). Some pollsters are even keen to help fund a candidate who has the potential to win an election.63) This is about more than fame; pollsters are more interested in the winning candidates’ investment in post-election projects. This trend has become a sort of business approach adopted by several pollsters in local and general elections. This is the other side of the workings of the indirect bandwagon effect in local leader elections.


Democratization at the local level has enabled political parties to use polling as a new instrument in local leader elections. Although the importance of polling in the dynamics of local politics, particularly in Pilkada, is quite new, polling has challenged the traditional approach toward party candidacy by pushing political parties to be more open to selecting popular and electable candidates.

A number of findings provide evidence of an unintended transformation in that polling has been used beyond capturing the voice of the people. Although tracking the people’s voice is generally a part of all polling activities, it seems that many political actors do not make maximum use of the polls to gauge the pulse of the public. Instead, political actors in local elections have been more interested in the short-term exploitation of polling solely to win elections.

Not surprisingly, current politics at the local level appears to be more complex in its internal configuration than is usually depicted. It appears that we need to provide more space for the discussion of polling in Indonesia’s local politics. There is also room for further discussion on the use of political polling in other developing democracies.


I would like to express my sincere gratitude to my academic supervisors, Professor Jun Honna and Professor Kenki Adachi; Faculty of Social and Political Sciences, Jember University and the Directorate General of Higher Education of the Republic of Indonesia for my doctoral scholarship; and the Ritsumeikan University Office of Graduate Studies for a grant that enabled me to do fieldworks. I have greatly benefited from Dr. Marcus Mietzner’s insightful suggestions during a conversation in Freiburg, as well as comments and questions from the audience at the parallel session on “Elections” at the international conference on “Decentralization and Democratization in Southeast Asia: With a Special Section on 10 Years of Decentralization in Indonesia,” June, 15–17 2011, in Freiburg, where I delivered a previous version of this paper: “A Two-Edged Sword: The Emerging Role of Public Opinion Polling in the Local Politics of Post Suharto Indonesia.” I also thank my two anonymous reviewers. I am solely responsible for the contents of the paper.

Accepted: March 8, 2013


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1) In academic discussions, the terms “polling” (polls) and “survey” are interchangeable and similar. The distinction between polls and surveys is not about the methodology, but merely the number of issues in the excavation process of public opinion. Polling usually deals with a single issue, while surveys deal with multiple issues (Norrander and Wilcox 1997).

2) In Indonesia, pollsters and polls-based political consultants are two similar entities with different duties. Most polls-based political consultants are polling agencies or pollsters. Yet not all pollsters are polls-based political consultants. Polling is the primary tool used by both pollsters and polls-based political consultants in their work. However, pollsters only conduct and publish the results of polls or surveys. Political consultants go farther by utilizing the results of polls or surveys to help their clients in the election. Obvious examples of pollsters are the polling agency Indonesian Survey Institute (Lembaga Survei Indonesia, LSI) and the Jakarta-based Institute for Social and Economic Research, Education, and Information (Lembaga Penelitian, Pendidikan dan Penerangan Ekonomi dan Sosial, LP3ES), which only carry out polls or surveys. In contrast, political consultants mainly, but not exclusively, carry out three major tasks: (1) vote mapping through conducting polls and surveys, focus group discussions, interviews with elites, and content analyses of local media; (2) vote influencing through ad design and production, campaign attribute design and production, and voter mobilization (door-to-door campaigns) as well as push polling; (3) vote maintenance through campaigner training, election witness training, and doing quick counts. Besides national political consultants, according to Irman Yasin Limpo (2010, 22–24), there are also many local political consultants.

3) Simply put, because of that review, the candidacy process can also be carried out individually. More specifically, the changes in Law Number 32 Year 2004, namely, Law Number 12 Year 2008, article 2, state that prospective local candidates can also be nominated by individuals with support from a set number of people. Independent candidates can run for election if a pair has support from 3 percent to 6.5 percent of the population in the region, depending on its size. That support, verified by copies of the supporters’ identity cards (Kartu Tanda Penduduk, KTP), must come from more than half of the sub-units of the particular region.

4) In practice, even though nominating through independent pathways is open and available for candidates, it cannot be said that independent pathways are easier than going through political parties because the process of collecting so many citizen ID cards (Kartu Tanda Penduduk, KTP) is not only intricate but also expensive. Interview with Yos Rizal Anwar, former bupati candidate of Lima Puluh Kota District, Jakarta, June 7, 2009.

5) Interview with Akbar Tanjung, chairman of the Trustees Board of the Golkar Party, Jakarta, June 15, 2010.

6) Interview with Heri Akhmadi, senior politician of the Indonesian Democratic Party of Struggle, Jakarta, May 31, 2010.

7) Interview with Akhmad Mubarok, chairman of the National Assembly of Party Leaders of the Democratic Party, Jakarta, June 14, 2010.

8) Interview with Kuskridho Ambardi, Jakarta, June 11, 2010.

9) Some examples are the Indonesian Survey Circle (Lingkaran Survei Indonesia, PT. LSI), National Survey Institute (Lembaga Survei Nasional, LSN), Survey and Research Institute of Nusantara (Lembaga Survei dan Kajian Nusantara, Laksnu), Indonesian Research Development Institute (IRDI), Center for Policy Studies and Strategic Development (Pusat Kajian Kebijakan dan Pembangunan Strategis, Puskaptis), Indonesian Social Survey Institute (Lembaga Survey Sosial Indonesia), Indo-Barometer, Indonesian Institute for Survey and Public Management (Lembaga Survey dan Manajemen Publik Indonesia), Indonesian Public Policy Information Center (Sentra Informasi ­Kebijakan Publik Indonesia), and Centre for the Study of Development and Democracy (CESDA).

10) Interview with Sunny Tanuwidjaya, researcher at the CSIS, Jakarta, February 28, 2009.

11) Interview with Saiful Mujani, senior expert on public opinion polling in Indonesia, and owner (among others) of Saiful Mujani Research and Consulting, Jakarta, December 19, 2011.

12) Interview with Rulli Azwar, the former vice secretary general of the Golkar Party’s Winning Election Body (Badan Pemenangan Pemilu, Bappilu), Jakarta, June 3, 2010.

13) Interview with Saiful Mujani, Jakarta, December 19, 2011.

14) Interview with Burhanuddin Muhtadi, senior researcher of the Indonesian Survey Institute (LSI), Jakarta, August 25, 2010; and interview with Iman Yasin Limpo, the owner of the Makassar-based local political consultant Adhyaksa Supporting House, Makassar, February 21, 2012.

15) Pollsters in Indonesia mostly belong to one of two associations: the Indonesian Association for Public Opinion Research (AROPI) and the Indonesian Association of Public Opinion Survey (PERSEPI). Members of those two associations include more than 60 pollsters. However, there are also pollsters, mostly local pollsters, that are not association members, i.e., they are not registered with either association.

16) Interview with Iman Yasin Limpo, February 21, 2011.

17) Interview with Andrinof Chaniago, chairman of the PERSEPI, Jakarta, September 1, 2009.

18) The average costs for political consultation are as follows: (1) bupati or mayor: IDR 1 billion to IDR 5 billion; (2) governor: IDR 3 billion to IDR 15 billion depending on the size of the population and the degree of candidate popularity. The costs for surveys are: governor (three surveys) approximately IDR 1 billion; district leader and mayor (three surveys) IDR 300 million to IDR 500 million. Interview with Umar Bakry, secretary general of the AROPI and also head of the National Survey Institute, Jakarta, June 4, 2010.

19) Some pollsters, particularly those who provide political consultancy services, also request in addition to consulting fees a project agreement on behalf of “the sustainability of cooperation” to aid candidates in the running of their administrations. In some cases, such pollsters request a “success fee” from their client. Interview with Rully Azwar, Jakarta, June 15, 2010.

20) JICA provided financial assistance to the LSI amounting to IDR 3 billion from 2003 to 2005. Interview with Irman Suhirman, former operational director of the LSI, Jakarta, August 31, 2009.

21) Among the 212 local elections held in 2005, the Golkar Party won 58, shared in 15 winning national coalitions, and lost 139. See Dewan Pimpinan Pusat Partai Golkar (2009b).

22) In 2006, the PDIP began unofficially using polling as a type of second opinion to balance the prerogatives of chairwomen.

23) Dewan Pimpinan Pusat Partai Golkar (2009b).

24) Interview with Bima Arya Sugiarto, chairman of the Assembly of Party Leaders of the PAN, Jakarta, June 11, 2010.

25) Interview with Viva Yoga Muladi, Jakarta, September 2, 2009.

26) Dewan Pimpinan Pusat Partai Golkar (2009b).

27) It was rare for the PD to enter into a coalition with the PDIP; however, because of the polling results, the two parties finally entered into a coalition for the local election in Tomohon, North Sulawesi, involving the pair Linneke Syennie Watulangkong and Jimmy Wewengkang (Manado Pos, May 27, 2010).

28) Interview with Marzuki Alie, member of the board of trustees of the PD, Jakarta, June 17, 2010. He is now also a speaker of the House of Representatives of the Republic of Indonesia.

29) Interview with Akhmad Mubarok, Jakarta, June 14, 2010.

30) Interview with Akhmad Mubarok, Jakarta, June 14, 2010.

31) Dewan Pimpinan Pusat Partai Golkar (2009b).

32) The centralism of the decision-making process means providing room for “special situations” that allow for the chairperson’s intervention. Interview with Pramono Anung, senior politician of the PDIP, Jakarta, May 31, 2010. He is now a vice speaker of the House of Representatives of the Republic of Indonesia.

33) Interview with Heri Akhmadi, Jakarta, May 31, 2010.

34) Interview with Ganjar Pranowo, senior politician of the PDIP, Jakarta, December 23, 2011.

35) Interview with Rully Azwar, Jakarta, June 3, 2010.

36) The candidate received support from 18 political parties. Hutauruk stated, “How should I pay 18 parties? What a lot of money I need to buy 18 political parties! The truth was I came to these parties one by one; I brought the hope to win because I convinced the parties’ bosses with polling results.” Interview with Sarfi Hutauruk, the elected mayor of Sibolga city, February 15, 2010.

37) Interview with anonymous district leader, February 21, 2011. He further said: “We cannot say there was no money in the nomination. There was. However, the candidate who had the highest chance of victory would be treated well. In each nomination there was a registration fee as a normal procedure, a somewhat inevitable situation. We have to pay all costs for the campaign and other ‘operations’ needed in the area of contestation. The amount comes mainly from the candidates. Nevertheless, once the parties began treating us as merely an ATM [automated teller machine], we would look for another party or run through the independent path.”

38) Buying the boat still remains a practice in Pilkada. However, due to polling the party already has an idea of whom to support. Thus, the foremost question is “Who will win?” Next is the question of “How much?” Interview with anonymous, February 14, 2011.

39) Interview with anonymous district leader, February 20, 2011.

40) Interview with Akhmad Mubarok, Jakarta, June 14, 2010.

41) Interview with Rully Azwar, Jakarta, June 3, 2010.

42) Interview with anonymous district leader, February 20, 2011.

43) Interview with anonymous local pollster owner, August 18, 2009.

44) Interview with anonymous local pollster head, September 18, 2011.

45) Because the survey results in the nomination are so valuable, certain local surveyors are intimidated by candidates or their supporters to favor certain candidates. Initially, intimidation is carried out by bribery; and if that is not successful then the candidate resorts to preman (thugs). Interview with Dedy Setyawan and Mohammad Muchlisin, field enumerators of the LSI, East Java area, Jember, August 19, 2010.

46) Interview with anonymous national pollster head, August 17, 2010.

47) Not all polling is conducted to garner such specific information regarding vote buying. However, in situations of extremely tough competition (for instance, in the second round of the election), especially in areas identified as contested and crucial, polling is used to create a strategy for vote buying, based on the requests of candidates and their success team. Such polling is intensive but utilizes limited questions, around 4 to 10. The questions are about vote-buying methods: in what way, how much on average, and when it is most appropriate to apply. The results of the polls are essential to assist in vote buying. For example, this type of poll was undertaken in only two areas in Madura Island and some parts of Eastern Surabaya. Those areas were considered highly crucial in winning very tight competitions in the elections in East Java Province. Interview with a pollster leader, June 15, 2010; this information was confirmed by a regional party leader of the East Java Province executive board of a leading political party. Interview with anonymous party leader of East Java Province, February 24, 2011.

48) In the long and exhausting East Java gubernatorial election of 2009, a senior researcher at a leading pollster told the author that a certain candidate and his success team had requested his pollster for a polls-based political bribery map to “buy” the critical area in Madura Island with a sunshine attack. Interview with anonymous, Jakarta, August 12, 2010.

49) Interview with anonymous provincial political party leader, February 24, 2011.

50) Interview with anonymous, August 17, 2010. He further stated: “With the help of polling, I knew the vulnerable and the potential area for vote buying. I managed to lead a sunshine war to attack and to make a counterattack in the election.”

51) Interview with anonymous vice bupati, February 17, 2011.

52) Interview with anonymous party leader of East Java Province, February 24, 2011.

53) Interview with anonymous provincial political party leader, February 24, 2011.

54) Interview with anonymous provincial political party leader, February 24, 2011.

55) The simplest approach is to discourage people from coming to the polling stations by spreading the idea that it is both useless and a waste of time.

56) Interview with anonymous retired political consultant, Freiburg, Germany, June 17, 2011. This was in line with the statement by Denny JA, the owner of the Indonesian Survey Circle, that voter mobilization was taken over by political consultants by door-to-door mobilization. See the interview with Denny JA by Najwa Shihab in Mata Najwa, episode titled “Solek Politik” (The primping politics), Metro TV, June 9, 2010. For details, see Mata Najwa (2010).

57) Voter mobilization and push polls are employed one month, several months, or even six months before local elections. Candidates who have large sources of financial support, particularly in strategic and economically rich areas, engage in voter mobilization six months before the election. Candidates even hire pollsters and experts to continuously or periodically monitor the ups and downs of political support and the dynamics of voters in the area.

58) Interview with Taufik Hidayat, senior politician of the Golkar Party, Jakarta. See also Irman Yasin Limpo (2010, xii–xiii).

59) Interview with anonymous local businessman, February 12, 2011.

60) Relying on backup from mass organizations and highlighting the magnitude of the political party machinery is no longer adequate to gain support from the elites: “They always ask me how the polling outcome is and how high I can go.” Interview with anonymous mayor, February 21, 2011.

61) Interview with anonymous local businessman, February 14, 2011.

62) Interview with two national businessmen of the Indonesian Businessmen Association (Asosiasi Pengusaha Indonesia), Jakarta, August 28, 2009.

63) For instance, the owner of a leading pollster and political consultant admitted that he had lent big money to fund the campaigns of gubernatorial candidates in South Sulawesi and East Java. Interview with anonymous, October 9, 2011.


Southeast Asian Studies, Vol. 3, No. 1, April 2014, pp. 151-182
©Center for Southeast Asian Studies, Kyoto University