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Vol. 10, No. 2, Carl Milos R. Bulilan


Contents>> Vol. 10, No. 2

From Governing to Selling Tourism: Changing Role of Local Government in the Tourism Development of Bohol, Philippines

Carl Milos R. Bulilan*

*Holy Name University, Tagbilaran City, Bohol, Philippines
e-mail: cmbulilan[at]

DOI: 10.20495/seas.10.2_273

Tourism is a major global industry. Governments in developing countries have developed tourism as a means for economic progress. The role of the government is crucial in making tourism beneficial for local people. The traditional functions of government involve crafting legislation and regulating tourist activities in local destinations. The business and marketing aspects of tourism are often entrusted to the private sector. Today, local governments are directly involved in the tourism business. The traditional functions of governments have expanded into managing and marketing touristic enterprises and forming partnerships with private and government agencies, nongovernmental organizations, and host communities. This study aims to examine how local government units (LGUs) perform both political and entrepreneurial functions in tourism development. In particular, it explores the case of the province of Bohol—a model for tourism development in the Philippines. The Bohol LGU demonstrates how the local government can integrate governance, coordination, and doing business through tourism. This case study attempts to offer useful insights on formulating policies in local tourism development.

Keywords: governance, local tourism, tourism development, tourism business, public-private partnership, policy making, local politics


Tourism has become one of the biggest global industries (Hitchcock et al. 1993; McIntosh and Goeldner 1986; United Nations Steering Committee on Tourism for Development 2011; Vanhove 1997; UNWTO 2015). As a top worldwide export category, it has surpassed automotive products and food (UNWTO 2017, 6). Tourism activities affect the economic, social, political, and environmental components of host countries and communities more than traditional industries do (Crick 1989; Eadington and Smith 1992; Long 1992; Murphy 1985). Management plays a crucial role in the way tourism contributes to local economic, social, and environmental sustainability (Edgell et al. 2008; Jamal and Getz 1995). Private businesses carry out the task of managing tourism and controlling the development of destinations. Multinational corporations operate hotels, resorts, tours, and transport services with minimal government intervention.

Entrepreneurial local government units (LGUs) have become a trend in the Philippines. Aser Javier (2002) argues that public entrepreneurship among LGUs has become a strategy to decentralize the political process. This new movement is contextualized within the Philippine Local Government Code of 1991, which empowers LGUs to engage actively in corporate activities to increase their local revenue contributions (RA 7160). This new trend raises important questions on the role of the government in tourism development (Philippine Statistics Authority 2017). It raises the question of how LGUs can simultaneously carry out governance and do business. With their political advantage, are LGUs more effective than their private counterparts in managing tourism and delivering its benefits to communities?

Using the case of the tourism industry in Bohol, this study examines how LGUs perform both political and entrepreneurial functions in tourism development. First, this study examines how LGUs exercise their traditional political roles and leadership in developing tourism in the province. Second, it presents the municipality of Danao, Bohol, as a model of how traditional governance and doing business can work together in tourism. This study highlights how partnerships, collaborative actions, and leadership enable the growth of an inclusive tourism development.

This study employs qualitative case study methods. In gathering data, I used in-depth interviews with key informants and focus group discussions. Informants were selected through purposive sampling based on their knowledge of the topic and their authority regarding the issues at hand. Informants included provincial development and provincial tourism office heads, the municipal mayor, municipal development and tourism staff, local people, and tour operators. Gathering of data and fieldwork were conducted within a year. To triangulate data gathered from the interviews, I also used primary and secondary documents and literature. I gathered official documents from the provincial and municipal offices, including statistics, legislative papers, development plans, accounting and financial reports, and local narratives written by local people. Official data from government agencies were also analyzed.

I Overview of Tourism in Bohol

The province of Bohol lies in the Visayan archipelago in the Philippines. It is the 10th-largest island in the country, with a land area of 4,821 square kilometers. By January 2018, it had a population of 1,255,128 people scattered among its 47 municipalities and the city of Tagbilaran (Philippine Statistics Authority 2018). From being one of the poorest provinces, Bohol has become a first-class province (income class) and one of the most dynamic in the country. From being a hotbed of political insurgency, it has become a leading tourist destination. Tourism has become one of the socioeconomic drivers in the province, with growing tourist arrivals and tourism-related businesses.

Bohol is one of the top tourist destinations in the Philippines. With the economic benefits that accompany the arrival of visitors, tourism has become one of the biggest industries in the province. It is considered a means for alleviating poverty, generating employment, and developing social infrastructures.

The province’s tourist resources are based on its natural features, cultural practices, and heritage structures. Its natural features include white beaches, marine life, forests, animals, waterfalls and rivers, hills and mountains, caves, and “adventure parks.” Musical performances and native dances, religious and historical festivals, and local handicrafts comprise its cultural attractions. Closely connected with Boholano culture and history are the province’s heritage structures.

This section provides a general background of Bohol tourism. First, it presents a statistical overview of the touristic movement. Second, it examines both nature- and culture-based tourist resources in the province. Finally, it surveys Bohol’s public and private facilities that make travel convenient and safe. This overview demonstrates how the local habitat, history, heritage, and hospitality have become the main resources for tourism and how government support facilitates the growth of the industry.

I-1 Tourist Arrivals

The number of tourists continues to grow in Bohol. According to a report shared by the Bohol Tourism Office (BTO) from the Department of Tourism Region VII (2016), in November 2016 there were 820,640 tourist arrivals in the province. This number was 36.26 percent higher than the year before, with an average annual growth of 28.5 percent over the past three years. After the great Bohol earthquake in 2013, tourists continued to visit despite fears of another earthquake and the damage to infrastructure and tourism facilities.

Tourists in Bohol are both local and foreign. In 2016 the BTO identified 585,316 (71.32 percent of the total number of tourists that year) as local tourists, 233,736 (28.48 percent) as foreign nationals, and 1,588 (0.19 percent) as overseas Filipinos. Among the foreign tourists, the largest number came from China (59,289), followed by Korea (39,229), the United States (20,317), and France (11,690). A significant number of tourists came also from Japan, Germany, and Taiwan. The BTO and the Department of Tourism (DOT) projected 1,226,574 tourists in the province in 2012 and the operation of the new airport in Panglao Island by 2018. Airlines began operating at the airport in 2019, with flights being limited to domestic destinations for the moment. Tagbilaran Airport was closed when Bohol-Panglao International Airport began to operate.

Among the tourist destinations in Bohol, Panglao Island had the largest number of visitors. From January to November 2016, a total of 366,174 tourists visited the island municipality. The provincial capital, Tagbilaran City, had 105,885 visitors, followed by Dauis, which had 25,914. Since most of the tourist facilities (such as the airport and pier) and tourist accommodations (such as hotels and resorts) are in these areas, it is not surprising that the largest numbers of tourists are found in these municipalities. Tourists visit destinations in other municipalities for sightseeing and other activities, without staying there overnight.

I-2 Touristic Products and Activities

Nature-Based Tourism

The natural environment is one of the main features of the tourism industry (Fennell 2008; Holden 2008; Hunter and Green 1995; Krippendorf 1982). It is “crucial to the attractiveness of almost all travel destinations and recreation areas . . . provide an important ‘backdrop’ to commercial service areas and recreation sites, or at least contribute to all tourist locations” (Farrell and Runyan 1991, 26). “Nature-based tourism” refers to

tourism in natural settings (e.g., adventure tourism), tourism that focuses on specific elements of the natural environment (e.g., safari and wildlife tourism, nature tourism, marine tourism), and tourism that is developed in order to conserve or protect natural areas (e.g., ecotourism, national parks). (Hall and Boyd 2005, 3)

The Bohol provincial government has enumerated the natural assets that have been developed as tourist attractions (see Table 1).


Table 1 Nature-Based Tourism Resources in Bohol


Source: Based on data from Province of Bohol and German Development Service (2010, 7).


One advantage of traveling around Bohol is the close proximity of tourist sites. For example, in one day tourists can visit the Chocolate Hills, Man-made Forest, Loboc River, Panglao beaches, Hinagdanan Cave, and Rajah Sikatuna Protected Landscape (as a side trip). These spots are accessible through a well-cemented/asphalt 120-kilometer national highway. Located in the mid-southwestern part of the province, the Tarsier Sanctuary and Mag-Aso Falls in the towns of Corella and Antequera can be covered in a single trip. The Abatan River and mangrove plantations in the towns of Cortes and Maribojoc are two neighboring areas.

White beaches in the town of Anda and the mangrove plantation in the town of Candijay lie in the eastern part of Bohol. The islands of Pamilacan and Balicasag are located 15 kilometers from each other on the Bohol Sea and are accessible by boat from Panglao and Baclayon ports. However, lying in the Cebu Strait, north of Bohol, Banacon Island’s mangrove forest is a little farther from the rest of Bohol’s tourist attractions.

Culture-Based Tourism

Culture is “a deeply embedded aspect of tourism” (George et al. 2009, 5). Traditional practices and customs of host communities have become tourist attractions. In Bohol, cultural traditions are evident in their physical and intangible forms. Physical and artistic expressions include old religious buildings, Spanish structures, ancestral houses, music, traditional dances, religious and historical festivals, handicrafts, and delicacies. Aside from these manifestations, Boholanos are known for their tradition of hospitality and friendliness toward visitors. The provincial government of Bohol enumerates specific cultural and historical assets that are of touristic value (see Table 2).


Table 2 Culture-Based Tourism Resources in Bohol


Source: Based on data from Province of Bohol and German Development Service (2010, 7).


Old Spanish-period structures are included in tourist routes. These include stone churches dating back to the early Spanish colonization of Bohol. Almost each of the province’s 47 municipalities has its own old church strategically built within the town center plaza, where the municipal government building is also located. These church buildings with bell towers mostly have baroque designs made of coral brick and hardwood.

Some of Bohol’s heritage structures were destroyed by fire or natural disasters. The great Bohol earthquake of 2013 destroyed many historic buildings, including the churches of Loon and Loboc towns. Some have been totally restored or are undergoing restoration. Modern reconstruction also caused the degradation of some of these churches. Other heritage structures include ancient watchtowers and century-old houses that tourists can visit.

Aside from ancient buildings, Bohol is known also for its musical traditions. Talented Boholanos have caught the attention of tourists and international musicians. One of the best-known musical groups in the province is the Loboc Children’s Choir. The choir is composed of elementary and high school students from the town of Loboc carefully selected by their teachers. The group has won several international competitions, including first place at the “Europe and Its Songs” international choir festival in Barcelona in 2003 and first place at the Concorso Internazionale Di Canto Corale “Seghizzi” held in Italy in 2017. Tourists can experience Boholano musicality on a Loboc river cruise, which culminates with musical presentations.

Another occasion on which tourists can experience Boholano cultural creativity is during the monthlong Sandugo festival held every July in Tagbilaran City. The celebration commemorates the blood compact between the Spaniard Miguel Lopez de Legaspi and the native Rajah Sikatuna in 1565 marking the historic peace pact and the opening of the province to the world. The celebration starts on July 1 and wraps up with a street dancing competition on the third or fourth Sunday of the month. This is the major tourist attraction of the city of Tagbilaran.

Bohol is known for its religious festivals and parades, especially its grand fiesta celebrations. Dating back to the Spanish period, pista is a community (town, barangay, sitio) celebration of thanksgiving in honor of the local patron saint. Cultural presentations are held for at least two days. Families prepare food not only for their relatives and friends but for anybody who comes into their homes. Food is offered all day. During the pista season (especially in the month of May) tourists can experience a festive atmosphere while witnessing traditional dances and musical presentations, often in public places.

Bohol’s traditional handicrafts are produced for touristic consumption as well as for export. Products of loom weaving in the towns of Tubigon, Inabanga, Albur, and Buenavista, basket weaving in Antequera, and pottery making in Albur and Calape can be purchased in souvenir shops in tourist destinations as well as city malls. Tourists can also taste and take home traditional Boholano sweets, including calamay (made of glutinous rice powder, coconut milk, brown sugar, and peanuts) from Albur and Jagna, and peanut kisses and other locally baked pastries.

I-3 Tourist Facilities and Services

By Air, by Sea, and by Land

The island of Bohol can be reached by either airplane or boat. Bohol has one airport, Bohol-Panglao International Airport. The airport project was sponsored by the Japanese International Cooperation Agency. At present, there are seven direct flights connecting Bohol and Manila. Three main airline companies offer services on this route: Philippine Airlines, Cebu Pacific Air, and AirAsia. The one-way fare is around PHP3,500 (around US$67). On June 22, 2017, direct international flights began between Seoul-Incheon and Tagbilaran Airport.

An alternative way of getting to Bohol is by ship. There are at least four major seaports in Bohol: Tagbilaran, Tubigon, Jagna, and Ubay. There is no direct sea route between Manila and Tagbilaran. However, since air travel is inexpensive and more convenient than sea travel, people prefer to take a flight from Manila. From Cebu, it is most convenient to sail into the ports of Tubigon and Tagbilaran because of their proximity and the frequency of ferries. On the Cebu–Tagbilaran route, slow ferries cost around PHP210 (US$4) and fast ferries around PHP350 (US$7). The Cebu–Tubigon route is shorter and cheaper. Pump boats also ply between Cebu and the towns of Getafe and Inabanga. Traveling within Bohol is not a problem. Public land transportation is affordable. This includes open-air buses, air-conditioned vans, jeepneys, cabs, tricycles, and habal-habal (transport motorbikes). Tourists can also rent cars and motorcycles.

Accommodations and Other Services

Bohol has luxury hotels and resorts, tourist inns, pension houses, travel lodges, and homestays. In 2015 (the latest year for which data is available), the Bohol Tourism Office counted 360 accommodation establishments in the province, with a total of 6,370 rooms (Province of Bohol 2015, 24). This number is far higher than the 2,000 rooms counted in 2010 (Province of Bohol and German Development Service 2010, 8). These accommodations are spread throughout the province, especially in Tagbilaran City, Panglao Island, and Baclayon. With its fine white beaches and proximity to the capital city, Panglao Island has the greatest number of resorts and spas, including a five-star hotel and exclusive resorts.

There are 15 BTO-accredited local travel agencies in Bohol. For those who like shopping, Bohol has shopping malls and department stores. The three main shopping malls are Bohol Quality Mall, Island City Mall, and Alturas Malls. Withdrawing cash is convenient, with 49 banking units and ATMs scattered around the city and municipalities (Province of Bohol and German Development Service 2010, 8). Communications are convenient, with telecommunications companies providing mobile and Internet services.

II Governing Bohol Tourism

As mentioned earlier, tourism is a major industry in Bohol. Concerned with reducing the province’s poverty incidence, the provincial government considers tourism as one of the means to achieve economic growth. Adopting the concepts and strategies of pro-poor tourism, local government officials and planners look to tourism to uplift the socioeconomic condition of poor local communities through employment, sharing of income, and growth of local entrepreneurship while at the same time conserving the province’s natural resources (Province of Bohol and German Development Service 2010, 1). To achieve these goals, it is crucial for the local government to build institutions and craft legislation.

II-1 Institutionalizing Tourism

Establishing institutions for nature-based tourism strengthened Bohol’s tourism development. With the aim of developing a general framework for tourism development, a memorandum of agreement was signed between the Soil and Water Conservation Foundation and the provincial government of Bohol in 2005. Through the Provincial Planning and Development Office (PPDO), the Bohol Environment Management Office (BEMO), and the BTO, preparatory steps were taken for the formulation of the Biodiversity Conservation and Ecotourism Framework Plan of Bohol as mandated under the Bohol Environment Code of 1998.

The partnership project involved national agencies, particularly the DOT and the Department of Environment and Natural Resources (DENR). European development agencies assisted by providing technical and financial support. These agencies included the German Development Service (DED) and Soil and Water Conservation Foundation (SWCF) for technical support; InWEnt for financial assistance; and the UNDP-GEF-SGF Program and the European Union, both through SWCF (Province of Bohol and German Development Service 2010, 2).

To provide technical assistance during the formulation of the tourism framework plan, the provincial government of Bohol established a multi-sectoral Ecotourism Technical Working Group. This was composed of regional and provincial government agencies—such as the DENR, DOT, BEMO, PPDO, and BTO—and nongovernmental organizations. Organizers provided modular training for LGUs, NGOs, local communities, academe, and the private sector from March to November 2005. The training focused on topics such as ecotourism and biodiversity, ecotourism product development, marketing and promotion, and monitoring and evaluation (Province of Bohol and German Development Service 2010, 3).

The workshop produced the Bohol Ecotourism Club, composed of representatives from local governments, NGOs, local communities, and the private sector. Serving as a “prime mover” and “watchdog” for ecotourism activities in the province, the body ensures the inclusion and implementation of ecotourism principles in municipal tourism development projects. It also seeks to educate the public on ecotourism and to recommend acceptable ethical standards on tourism development projects in Bohol. One of the organization’s roles is to be a “communities’ mentor” to guide people to see alternative income-earning opportunities through tourism (Province of Bohol and German Development Service 2010, 3).

The project came to be known as the Biodiversity Conservation and Ecotourism Framework Plan of Bohol 2006–2015. It served as a bible for investors, people in the tourism business sector, municipal executives, planners, and NGOs in the province for their tourism development and biodiversity conservation projects. Guidelines included principles, regulations, standards, best practices, and ethics for tourism activities that the government considered to be in line with its vision.

Specialized agencies composed of national, provincial, and local government units, NGOs, and organizations from the private sector are in place to promote and facilitate the development of tourism in the province. One is the Provincial Tourism Council. The council was originally composed of more than 50 members—60 percent from the private sector and 40 percent from the government. Before this body was created, a Committee on Tourism was an integral part of the Sanguniang Panlalawigan (provincial council). During that time there was an independent Provincial Investment Office, which had a section for the tourism sector until 1997.

Intending to run for mayor, the Committee on Tourism chairperson of the Sanguniang Panlalawigan decided to turn over the responsibilities of the committee to the Provincial Investment Office. In 2007 the tourism section of the investment office became a separate provincial government entity. This was when the tourism industry started to grow, and the former office was no longer adequate to accommodate the growing needs of the industry. Now, the Bohol Tourism Office (formerly the Provincial Tourism Office) functions as the secretariat of the Provincial Tourism Council.

Since all tourist sites are under the administration of LGUs, the provincial government cannot develop tourist attractions on its own. However, it oversees the overall tourism development activities in the province and provides for the needs of LGUs. The BTO has become the advice-giving and coordinating body of the province for tourism development. The BTO has specific responsibilities. First, it helps LGUs and the private sector in developing their own tourist sites. It also orients planners regarding policies and other issues concerning tourism in the province. It accepts tourism project proposals from LGUs and provides advice and suggestions concerning the viability and marketability of such projects. Second, being the marketing arm of the provincial government, the office employs forms of communication such as posters, brochures, and videos to promote Bohol tourism to the world. Seeing the potential of proposed tourism projects, the office also provides clients for local tourism businesses.

Third, the BTO organizes basic skills training for tourism and hospitality services. In coordination with other government agencies, such as the Technical Education and Skills Development Authority (TESDA), the office organizes seminars and workshops for LGUs, community organizations, and other tourism practitioners to enhance their services. Training includes basic culinary arts, customer service, tourist guiding, and operation of cottages and accommodations. The office also coordinates closely with other government agencies like the DOT for professional and financial resources, especially in organizing seminars, and the DENR on issues concerning protected areas that are now being utilized as tourist attractions.

The Provincial Tourism Council and the BTO have limited power. Although these institutions are under the Office of the Provincial Governor, they cannot take decisions regarding implementation of policies, nor can they regulate tourist activities. Officers are elected, but members meet regularly only twice a year. Core group members meet regularly, and in special cases they discuss pressing issues.

Another government agency that is involved in the province’s tourism industry is the Protected Area Management Board (PAMB) under the DENR. The body is composed of barangay captains (village chiefs) and municipal mayors of localities enclosed within protected areas. One-fourth of the entire island of Bohol (75,766 hectares) consists of protected areas (Province of Bohol and German Development Service 2010, 11–12). Many of these have become tourist sites, including the Chocolate Hills, Man-made Forest in Bilar, Loboc Watershed, Tarsier Sanctuary in Corella, and 15 marine sanctuaries within the seas of Panglao, Dauis, and Baclayon.

As the governing body for deciding on matters related to policy and the administration of protected areas, the PAMB reviews project proposals and tourist activities to check that they comply with the set standards for ecological conservation. The body also decides on budget allocations (Province of Bohol and German Development Service 2010, 15). Coordinating closely with the BTO, the PAMB discusses with development planners on issues related to developing tourist sites in protected natural environments.

II-2 Enacting Tourism

Aside from institutionalizing tourism, the Bohol provincial government also enacts policies and environmental ordinances for tourism development. This legislation aims to ensure the protection of natural and cultural resources in order to help the tourism industry. Such ordinances are put in place in response to national legislations (e.g., Protected Areas System in the Philippines [RA 7586 or NIPAS Act of 1992]) that promote ecological conservation and ecotourism. Bohol pioneered a provincial legislation, the Bohol Environmental Code of 1998, to protect the natural environment, which has become a major component of its tourism industry. This code has become a model for other local governments in the country.

In 2007 the Act to Declare the Province of Bohol as an Eco-cultural Tourism Zone (RA 9446) was promulgated. This law mandates the DOT, the provincial government, and the city of Tagbilaran to coordinate closely in developing and promoting tourism in the province. Coordination involves formulating development plans, protecting natural and cultural resources, consolidating political powers, providing technical and material assistance, and partnering with private and nongovernmental agencies. The law produced the Bohol Tourism Master Plan, which “would be a unified direction of the province to further harness and sustain its vast tourism potential” (Province of Bohol 2007, 1). This law was further strengthened by the promulgation of the Tourism Act of 2009 (RA 9593).

Since 1995 there have been at least 165 provincial ordinances, resolutions, and policies related to tourism development. Many of these concern coordination among different LGUs, particularly with municipal mayors, NGOs, and private agencies. These ordinances urge and encourage partnerships among stakeholders in developing and governing tourist activities. In 2017 the province prepared the Bohol Surprise Tours program, which highlighted 12 new local ecotourism destinations. This program showcases the livelihood activities of host communities as tourist sites. The same year, the province—along with the DOT, the United States Agency for International Development, and private sector representatives—launched the province’s new branding: “Behold Bohol.” This branding aimed to project the revival of Bohol after the 2013 earthquake.

Developing Bohol tourism is a collaborative effort between the provincial government and municipalities. Through the BTO, the provincial government provides municipalities with technical assistance. Technical support includes training of local tourism officers and staff, advertising and packaging of products, and mapping of possible tourism resources. The provincial government also helps in constructing roads leading to tourist destinations. Though the provincial governor heads the entire province, the municipal mayors still have the power to decide the direction of local tourism development. In this sense, the municipalities have greater influence than the provincial government. However, the provincial government provides the general framework and legislative mechanisms to encourage the growth of tourism in municipalities.

After the implementation of the Bohol Tourism Master Plan, LGUs at the municipal level started to develop their own tourism programs and activities. Since LGUs administer most of the tourist sites, they have control over these areas in terms of management. LGUs either coordinate with private agencies to provide environments conducive to tourism, or they develop and manage touristic enterprises by themselves.

Loboc municipality provides an example of collaborative tourism. The town is known for its river cruise. The tourism project is a product of a partnership among the LGU, donor agencies, private investors, and local community organizations. The LGU provided the necessary facilities around the tourism complex, including building the river port for boats and floating restaurants, developing the tourism office and terminal, and providing access and a huge parking area. Private businesses manage the cruise, the shops, and the floating restaurants. Local community organizations participate through musical and cultural performances held along the riverside. Foreign government donors sponsor the lighting in the river’s vicinity.

The Abatan river tour is an example of an exclusively LGU-managed tourism enterprise. The project involves the four neighboring municipalities of Cortes, Maribojoc, Balilihan, and Catigbian. The tour features a cruise through the mangrove forest along the river connecting these municipalities. It includes a visit to waterfalls and local villages, and cultural presentations at the Tourism Center. The coastal municipalities of Panglao, Dauis, and Baclayon have also initiated a similar partnership, called Padayon. The three towns are located within the Bohol Marine Triangle, where there are five major marine ecosystems (see Green et al. 2002, 48). This collaborative project aims at environmental preservation for tourism development.

II-3 Tourism Leadership

Leadership plays an important role in the growth of tourism. The tourism industry of Bohol would not be possible without the leadership of local politicians. Prominent local figures helped bring Bohol tourism to where it is now. The three main personalities were Rene Relampagos, Erico Aumentado, and Edgardo Chatto. With political will and shared vision, these leaders were able to continue what their predecessors had started, despite their differences in political affiliation.

The laying of the groundwork for tourism development in Bohol can be attributed to Relampagos. He has served as a Provincial Board member (1989–92), vice governor (1992–95; 2019–), governor (1995–2001), and member of the House of Representatives (2010–19). During Relampagos’s term as governor, the Bohol Environmental Code (Province of Bohol 1998) was promulgated, which created the BEMO. The code is considered to be the first of its kind in the Philippines and became a model for other provinces in the country. This legislation became the ground on which tourism policies and guidelines sprouted.

During Relampagos’s term as governor, concerns over environmental protection and management were brought to the fore. These gained primary importance in policy making and in formulating development programs for the province. Care for the environment became the starting point for Bohol to engage in ecotourism as a model for tourism development. During Relampagos’s term, the province collaborated with various international and national government agencies, NGOs, and local communities.

What Relampagos prepared, Aumentado cultivated. Aumentado defeated Relampagos in the 2001 gubernatorial race. He started as a member of the Provincial Board (1967–86), then became the vice governor (1988–92), a congressman (1992–2001; 2010–12), and the governor of Bohol (2001–10). In 2001 Bohol was considered one of the poorest provinces in the country. Aumentado saw the potential in tourism as a means of poverty reduction. During his term he placed Bohol on the tourism map, and eventually the province emerged as one of the top tourist destinations in the country.

Aumentado continued what his predecessor had started, establishing ties and crafting development plans. Through collaborative work among local and national government agencies and NGOs, Aumentado’s administration produced the Biodiversity Conservation and Ecotourism Framework Plan of Bohol 2006–2015. The plan came about as a response to Executive Order No. 111 (EO 111) (Estrada 1999), which laid the guidelines for ecotourism in the country. The framework became the basis for development projects and activities in the province. During Aumentado’s administration the Bohol Arts and Heritage Code (Province of Bohol 2008) was also promulgated. This code provided the legal basis for the promotion and development of culture-based tourism.

Aside from establishing legislative and institutional mechanisms, Aumentado improved the basic infrastructure of the province. He fixed the circumferential road (the Carlos P. Garcia Circumferential Road) and the minor roads connecting the municipalities, which made transport and access to tourist destinations faster and more convenient. Pacifying the Communist insurgency in Bohol was also considered a great achievement of the former governor. He died in December 2012.

A lawyer by profession, Chatto has served as a member of the Provincial Board (1980–86), mayor (1988–95), vice governor (1995–2001), congressman (2001–10; 2019–), and governor (2010–19). The greatest challenge Chatto faced as governor was the 2013 earthquake. The 7.2 magnitude earthquake left the province with a high number of casualties and heavily damaged roads, bridges, houses, and buildings. Tourist sites and cultural structures, including the Chocolate Hills complex and many of the century-old heritage churches, were heavily damaged.

Through the help of international agencies, Chatto was able to rehabilitate the province. The Behold Bohol project highlights how Bohol reemerged as a tourist destination after the tragic earthquake. During Chatto’s administration, Panglao-Bohol International Airport was also inaugurated. Though Chatto belongs to the opposition party, his support for the Duterte administration gives him a political advantage in pursuing his plans and projects.

III Selling Tourism: The Case of the Local Government of Danao

The town of Danao is in the central part of Bohol. It is located around 66 kilometers (the fastest route) northeast of Tagbilaran City and can be reached by car in around two hours. The town has 17 barangays and had a population of 17,890 in 2015, with 3,364 households. It has an average income of PHP90 million and in 2016 had an Internal Revenue Allocation amounting to around PHP75,526,524. The main source of livelihood in Danao is basic farming. With the LGU-run tourism development, Danao rose from being a sixth-class municipality in 1999 to a fourth-class municipality and ranks first in Bohol and the region in income generation efficiency.

III-1 From Insurgency to Hospitality

Before tourism was developed in Danao, the town was known for its political insurgencies and poverty. The province of Bohol was an insurgent hotbed from 2000 until it was declared insurgent free in March 2010 (Torres 2011, 1). Several attacks and gunfights took place in the province, including raids of government and business centers that were related to insurgent groups. The extreme poverty in the area, especially in farming communities, formed a seedbed for ideology-based conflict. This was the experience of people for decades, although this phenomenon was not something new for Danao. Historically, the town was the headquarters of the group of Fernando Dagohoy, the leader of the longest revolution in Philippine history (1744–1829).

Danao was known also for its poor, malnourished, and low-educated population. In 2003 it was considered the poorest municipality of Bohol and one of the poorest in the country, with a score of 57.2 on the poverty index (National Statistical Coordination Board 2009). Some people survived on small-scale traditional farming and charcoal making. Others moved away to work as domestic help and laborers, undermining family life. With these social and economic conditions, Danao became a pilot area for national government assistance. Government agencies started to introduce livelihood projects among the local people. However, local communities found the assistance insufficient, and the help made people more dependent on government support rather than motivating them to exert the effort to improve their livelihoods.

Today, the local government of Danao is noted for its tourism enterprises. The LGU-run tourism program came to be known as E.A.T. Danao (Eco, Educational, Extreme Adventure Tour). The program’s activities take place at Danao Adventure Park, around 7 kilometers from the town center. The landscape includes cliffs, caves, rivers, rock formations, and century-old trees. These natural features provide a unique venue for outdoor adventure activities, including trekking, kayaking, caving, cliff plunging, zip-lining, rappelling, and root climbing. Visitors can also enjoy the “Sea of Clouds,” a formation of fog and clouds suspended near the tops of neighboring mountains in the early morning.

Then Municipal Mayor Jose Cepedoza floated the idea of having a tourism enterprise in 2001. The idea was realized through his successor, Mayor Louis Thomas Gonzaga, and led to the opening of the park in 2006. Informants said that the concept of an adventure park came about after the mayor experienced AJ Hackett Bungy Jumping in Queenstown, New Zealand. The country offers several adventure activities, particularly on its mountainous terrain. The mayor shared the plan with his advisers and formed a team to conduct a feasibility study. After the death of Mayor Gonzaga in 2016, his mother, Natividad, took office and is continuing the project.

Danao Adventure Park is a product of collaboration and partnerships among stakeholders. The tourist activities started with caving and mountain trekking, until groups of tourists saw the potential of the place. River-based activities were added later. Danao LGU started to connect with adventure enthusiasts, government agencies, and tour businesses for support. Danao’s fame spread, and government agencies—including the DOT and DENR—came to acknowledge the potential of the park.

The DENR helped Danao with resource inventory. The DOT assisted the LGU with product development and marketing. The Department of Trade and Industry helped with the making of souvenir items, while the TESDA helped with the training of local personnel in tourist services. Tour businesses in Bohol and private individuals also helped. Tour agents, Web bloggers, and adventure enthusiasts assisted with the product test run, product development, and marketing. The World Bank and the Development Bank of the Philippines also assisted.

The development of Danao tourism is a result of local participation. Local people were involved in the planning and implementation of the project. During the initial stages, they worked together with private agencies and individuals. LGU employees and officials contributed extra hours of work without pay. Barangay officials encouraged their communities to do voluntary work. Civil society organizations helped on the ground without pay. Volunteers helped with clearing the areas where the adventure park would be established, landscaping, and marketing adventure tours. They also started to act as tour guides (Jensen 2010). Local leaders learned through feedback from visitors and tourists how to improve the place and services. This spirit of cooperation led to a sense of community ownership among the local people.

III-2 Tourism Benefiting Local People

The main sources of income from tourism activities in Danao include revenues from individual entrance and parking, adventure activities, and accommodation services. At the time of this study, entrance fees were around PHP40 and parking fees PHP10–30. Adventure activities cost around PHP350 per person, aside from the more expensive “Plunge,” which costs PHP700. Danao Adventure Park has accommodations ranging from PHP600 to PHP1,000 per night. The park also offers adventure packages, which cost PHP1,500–3,500 per person and may include food and accommodations.

LGU-run tourism was able to contribute to the economic and social well-being of the local people. It took two years for Danao to profit from its LGU-run tourism industry. Based on municipal records provided by the Danao LGU, in 2009 Danao had an income of around PHP4.8 million from tourism-related enterprises. The figure grew to PHP21.25 million in 2012. In 2010 the LGU started to give back to the local people what had been gained through their cooperation. However, after the great earthquake hit Bohol in October 2013, Danao experienced a decrease in income due to the low number of tourists. The LGU also had to spend huge amounts on repairing tourist facilities. In 2014 the number of tourists plunged to 7,261 from 25,531 the preceding year. Danao is slowly regaining its visitors. From January to October 2017, there were 23,042 tourist arrivals.

Tourism has provided alternative means of livelihood and social services for the community. Benefits from tourism come in the form of livelihoods, employment, and social services. Social services include scholarship programs, subsidized hospitalization programs, free use of ambulances, supplemental feeding, and health insurance programs. Danao Adventure Park employed 13 local guides in 2006. The number grew to 35 in 2008 and continued to increase to 45 in 2009. Today, local tourism directly employs more than 100 local people as tour guides, accommodation and food service staff, and maintenance and support personnel. Other local people who are earning an income from tourism are the People’s Organizations, which provide food to the LGU-run restaurant and sell souvenir items to visitors. In the area of education, the LGU started the Iskolar sa Torismo (Scholars of tourism) program in 2011. At the time of this study, 83 college students were receiving scholarships in various state colleges and universities in the province. The scholarship program has produced 12 graduates since its inception.

Most of the benefits from tourism go toward health services. The subsidized hospitalization program helps poor patients with their medical fees. From 2011 until the time of this study, 221 people had benefited from the program. The subsidy for the health insurance program had benefited around 4,000 people. The LGU’s free ambulance service has been supported by revenues from tourism activities since 2011. However, the supplemental feeding program for preschoolers ran for only a year.

Aside from the economic and social benefits, tourism has created environmental awareness among local people. People have started to participate in ecological preservation activities. They have stopped cutting trees for their former livelihood of charcoal making. In a personal interview, Mayor Natividad Gonzaga argued that aside from the material benefits gained from tourism, the most valuable outcome was the regaining of pride among the people of Danao. She emphasized that tourism had brought back pride to the place, and the municipality had evolved from being identified as backward and poor to attracting people from around the world with its natural and cultural wonders.


This study examines the changing role of governments in tourism development. Governments play a crucial role in the development of the tourism industry. Local governments have evolved from being passive to more active actors in the industry. From merely providing laws and building infrastructure, governments now manage their own tourism-related businesses. In past decades, the management of tourism was entrusted to the business sector. Multinational corporations and private businesses controlled the operation of resorts, hotels, and other tourist services with minimal intervention from the government. Now, LGUs are competing with private operators.

Entrepreneurial LGUs are a new phenomenon. From governing tourism, LGUs are now also selling tourism. Aside from tax revenues, local governments are gaining additional income from their self-managed tourism businesses, and at the same time they provide employment to local people. This new trend challenges the traditional role of governments in tourism development. It raises questions over how LGUs can carry out governance as well as do business at the same time. With their political advantage, are LGUs more effective than their private counterparts in managing tourism and delivering its benefits to communities?

To illustrate this new phenomenon, this study highlights the case of the tourism industry in the province of Bohol in the Philippines. It examines how LGUs in Bohol can perform both political and corporate functions in tourism. First, the study explores how the provincial government lays the foundation for the development of tourism in its local destinations. Second, this study examines the case of the municipality of Danao as a model for how a once-poor town could grow to become an LGU. With Danao’s natural beauty, its culture, and the cooperation of the local people, the LGU of Danao was able to harness the economic, social, and environmental benefits of tourism.

Bohol has evolved from being a poor to a high-income-generating province with the growth of local tourism. Tourism development has also become a tool to address the problem of political insurgency, which affected people of the province for decades. The province has become one of the top tourist destinations in the country. Its natural beauty and colorful cultures have attracted both domestic and international tourists. Despite the disruption brought about by the great earthquake of 2013, the number of tourist arrivals continued to grow through the years.

The provincial government set the ground for tourism to grow in Bohol. It institutionalized tourism by organizing collective action among various government units, nongovernmental agencies, and local people. Collaboration among stakeholders created political mechanisms that governed tourism and at the same time encouraged LGUs to engage in tourism development projects. Aside from governing tourism, multi-sectoral institutions enable local executives and their communities to obtain the necessary knowledge and skills to manage and operate tourism-related businesses. Tourism has become embedded into local governance.

Aside from institutionalizing tourism, the provincial government of Bohol has provided legislative mechanisms that directly impact tourism. Bohol pioneered a tourism code for regulating tourism development. This code has become a model for other LGUs in the country. Enacting tourism provides a solid legal basis for regulating tourist activities and development. The Bohol tourism code has become a framework for the provincial tourism development plan.

Institutional and legislative mechanisms could not have been efficient without the leadership of Bohol’s local executive. This study highlights the crucial role of three local politicians in the growth of tourism: Relampagos, Aumentado, and Chatto. With their political will and openness to collaboration with other agencies, they were able to put Bohol on the global tourism map.

The municipality of Danao illustrates how an LGU is able to carry out governance as well as do business. From being a poor town, Danao has evolved into a top income-generating municipality in the region. From being a hotbed of insurgency, it is now a top adventure tourism destination in the province. Danao tourism development is a result of leadership and collective action. Collaboration among stakeholders has transformed the once-sleepy town into an ecotourism playground. The LGU, with its political advantage, built its own tourism business through collaboration with different government agencies, NGOs, businesses, and private individuals. This collaboration facilitated the planning, marketing, and operation of tourist services. Thanks to government-run tourism businesses, local people are now participating in and enjoying the rewards of the industry.

Close collaboration enabled the development of tourism in Bohol. The growth of the industry would not have been possible without collaboration among the provincial government, municipalities, and private sector. Although this collaboration was challenged by issues of power relations, particularly between the provincial and municipal agencies, these issues were addressed through constant communication among leaders. Legislative and technical assistance from the provincial government is crucial since it enables municipal governments to engage in the industry. Municipal leadership is crucial in encouraging communities to participate in the tourism industry. The provincial government provides the face of Bohol tourism to the world, while municipal governments provide the actual experience.

This study has mainly explored the wider view of tourism in Bohol. A grassroots-level study of the experiences of local households with the growth of tourism in their localities would be relevant. Examining the political and moral economy of local tourism development would also generate insights into the dynamics of local tourism development.

Accepted: December 15, 2020


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Vol. 10, No. 2, Meynardo P. Mendoza


Contents>> Vol. 10, No. 2

Conjugal Mayorship: The Fernandos and the Transformation of Marikina, 1992–2010

Meynardo P. Mendoza*

*Department of History, School of Social Sciences, Ateneo de Manila University, Leong Hall Building, Ateneo de Manila University, Loyola Heights, Quezon City 1108, Philippines
e-mail: mpmendoza[at]

DOI: 10.20495/seas.10.2_255

From 1992 to 2010, during the mayoral terms of Bayani and Maria Lourdes Carlos-Fernando, Marikina underwent an extensive transformation. The husband-and-wife team transformed it from a sleepy, semi-agricultural third-class municipality into a model city and the recipient of many awards and distinctions. Aside from providing the physical infrastructure needed to lay the foundation for the city, the Fernandos also transformed the residents by promoting a culture of order and discipline, and later on introducing corporatist practices in the delivery of basic services. In the process, Marikina became sustainable from a financial and environmental standpoint. This paper argues that Marikina’s transformation can be attributed to the following: first, that the skill sets the mayors possessed matched the city’s needs at the time of their tenure; second, that Marikina’s resurgence coincided with the reforms implemented after the transition to democratic rule starting in 1986, in particular, the passage of the Local Government Code; and, third, that Marikina experienced a continuity of policies even if there were changes in leadership. The city did not suffer from what may also be termed as “cancel culture,” wherein gains made by the previous administration were negated as a result of highly polarized politics. The paper further argues that aside from agency, Marikina’s development was also conjunctural. Marikina’s success may be attributed to the confluence of interests among stakeholders; a phenomenon termed policy coalition.

Keywords: Marikina, local transformation, policy coalition, good governance, model city, local politics


Marikina’s Great Leap Forward occurred when Bayani Fernando (or BF, as he is called by locals) became the mayor of Marikina in 1992. But unlike the Great Helmsman, Bayani could not use charm and ideology to remold his vision, for he did not possess those attributes. Rather, he styled himself after another Asian strongman of another mold, the neo-Confucian leader Lee Kuan Yew, whose authoritarian style of governance made Singapore what it is today. Singapore, the bustling, clean, and modern city where discipline and respect for authority reign supreme, became the model for Marikina’s transformation. Thus, Bayani Fernando may well be Marikina’s version of Lee Kuan Yew. Both Lee Kuan Yew and Bayani command respect and admiration for their achievements, but certainly not affection. Mao Zedong, on the other hand, had a cult-like following and was treated as an icon even though he led the country to destruction along with the Red Guards. And while Mao and Bayani were succeeded by their spouses, Maria Lourdes (or Marides) is no Jiang Qing. Marides was elected by a big majority, possessed great talent not in drama but in management, and did not belong to a Gang of Four. And while Bayani may have utilized some of the more persuasive practices of Singapore and China in governance, Marikina’s success lay in the cooperation of other stakeholders—business, labor, nongovernmental organizations—who found themselves sharing a common issue and working with the local government to achieve a common goal.

On one level, the husband-and-wife team transformed Marikina by laying the infrastructure groundwork to remodel the city into something new. It has clean and orderly streets with wide sidewalks and bike lanes; motorists following traffic rules and regulations; residents paying their taxes before the deadline; a rehabilitated river park where residents can jog, stroll, or simply gather for family reunions or group meetings; and civility in public spaces. This was hardly the image Marikina had earlier. Until the early 1990s, it was a sleepy, laid-back third-class municipality where visitors came only for its shoe shops. After 18 years, the Fernandos had transformed Marikina into a vibrant model city, so much so that it was adjudged one of the best-managed cities in the Philippines and among the best choices to invest in and raise a family (Vera 2008, 28). After the end of the Fernandos’ terms, Marikina received many awards and distinctions.

On another level, the husband-and-wife team also undertook a sort of cultural revolution. In the Fernandos’ vision of the future, urbanization needed to go hand in hand with public order and decency in public spaces. The husband-and-wife team imposed discipline and public order in the form of urbanidad (roughly translated as “urbanity” or “civility”) or the aesthetic sense of living in a city. Gone are the days when men spat, drank, and urinated in public. Women can no longer hang out their laundry for the public to see. Drivers obey street signs. To provide residents with constant reminders, sidewalks have been inscribed with edicts.

I Marikina’s Geography and Politics

The area now known as Marikina was founded as a mission area by Jesuit missionaries around 1630 (Fabros 2006, 15). Its original inhabitants settled near the river, a tributary of the Pasig River, which linked San Mateo and Montalban in the north to Manila. The first church was established in present-day barangays Barangka and Jesus de la Pena at the foot of the Ateneo de Manila University. Old-time residents claim that Marikina’s boundaries extended to 15th Avenue in Cubao until the creation of Quezon City in 1937.1) In fact, President Manuel Quezon’s former Marikina rest house is now the site of the Light Rail Transit 2 Santolan Station. By 1773, Marikina had been given as a land grant to the Tuason family (Fabros 2006, 16), Chinese mestizos whose descendants include Miguel Arroyo, husband of former President Gloria Macapagal Arroyo.

Marikina may be divided into two areas. The First District consists of nine barangays and has a land area of 850.53 hectares, or 39.56 percent of the total, while the Second District has seven barangays but a larger land area, with 1,297.47 hectares or 60.44 percent of the total (Marikina City 2020). The First District is the town center, composed formerly of four barangays—Sta. Elena, Sto. Niño, San Roque, and Calumpang—and straddles the southern part of the Marikina River (see Fig. 1). This is Marikina’s old quarters, where the first settlement took place. This is also where the munisipyo (municipal and later city hall), the main church, market, hospital, and sports center are located. As can be expected, this is where old families reside; their businesses (shoes, retail, small- to medium-scale industries) and professions (medicine, dentistry) have made them the municipality’s elites. Longtime residents of Marikina may be distinguished by their chinito (Chinese-like) features, as many are descended from Chinese migrants who settled in Marikina from the middle of the seventeenth century. As pioneer settlers who control the local economy, they may also be said to dominate or control politics.



Fig. 1 Marikina City Map

Source: Marikina City,, accessed March 28, 2017.


Until the early 1970s, the First District was notorious for its many dance halls or cabarets. Long before Ermita, Pasay, and Quezon City became Manila’s red-light areas, Marikina was the red-light district. Marikina was at the end point of the Pasig Line of the American colonial-era tranvia (electric rail) system. Because of the area’s remote location, colonial officials favored placing these entertainment facilities in Marikina instead of the downtown area. Thus, for many young men Calumpang became the mecca for another rite of passage.

Because of its wide-open spaces and proximity to Manila, the Second District (Parang, Malanday, and Concepcion) drew numerous businesses to set up their factories there in the late 1950s and early 1960s. These included Fortune Tobacco Corp., BF Goodrich rubber and tire company, Arms Corp. of the Philippines, Eagle Electric, Holland Milk Products, Goya Chocolate Factory, and Mariwasa Tiles and Ceramics. Purefoods also set up shop, but in the First District. As a result, factory workers from many parts of the country started migrating to Marikina.

At the same time, the Second District’s wide-open spaces attracted another type of business: real estate. Beginning in the late 1960s and early 1970s, developers opened up new subdivisions and low-cost housing projects to solve Manila’s housing backlog. Foremost among them were the Marikina Subdivision, Provident Villages, SSS Village, and Rancho Estate. As newcomers to Marikina, it took some time before residents of these new homes could integrate and organize, first as neighborhood associations and later as a voting bloc. Thus, for a long time Marikina’s local officials almost always came from the First District. Even with a larger voter base, prospective candidates from the Second District were handicapped by having none of the traditional electoral networks or campaign machinery that candidates from the old political families in the First District possessed. This disadvantage ended only in 1992, when Romeo Candazo teamed up with Bayani Fernando to run for congress.

Bayani was no stranger to politics. His father, Gil, had also been the Marikina mayor—from 1947 to 1959. As a young boy, Bayani may have had his first exposure to how Marikina should be run. However, he had another calling. He studied civil engineering at the Mapua Institute of Technology, one of the top engineering schools in the country. Thereafter, he founded his own construction company, BF Corporation, becoming a major player in the construction industry. In the 1970s and 1980s local politics was not an option, as martial rule precluded elections and popular participation.

After the Aquino administration came to power, local elections were introduced in 1987. Bayani decided to try his luck, fueled initially by his boyhood dream to revive the stagnant Marikina River and make it a center for community activities (Damazo 2002). Being a neophyte, he lost to Rudy Valentino, the administration’s chosen candidate. Cory Aquino’s popularity was at an all-time high, and whoever she endorsed was ensured of victory. Valentino’s term, however, was lackluster. Not only did Marikina stagnate, but the town became notorious for a series of heinous crimes, including rape, murder, bank robberies, and extrajudicial killings.

Undeterred, Bayani ran again in 1992, this time campaigning on a platform of “an industrial and government-friendly, happy, working-class community” (Villaluz and Sanchez 2017). Bayani capitalized on his being an engineer, wearing his trademark construction helmet during the campaign, and came up with the catchy battle cry “BF gets it done!” The message worked, and his campaign gained momentum. The people of Marikina were fed up with the incompetence of the previous administration. Bayani’s gung-ho attitude and emphasis on discipline resonated with voters, who handed him a landslide victory. His centerpiece program, the Save the Marikina River Project, also appealed to voters. Unlike grandiose programs or projects that were promised at every election but seemed unattainable, Bayani’s project seemed like a doable one given his experience and expertise. Being a newbie candidate also had its advantages. One was that Bayani dodged the trapo (traditional politician) tag and was even supported by progressive forces, among them the Kilusang Mayo Uno.2) Not having many resources to count on, Bayani forged alliances with several sectors based on his vision to include the business community and the Iglesia Ni Cristo.

II The Marikina Way, 1992–2010

For Bayani, Marikina’s transformation necessitated a strong emphasis on order and discipline. He likened his emphasis on discipline and meticulousness to the “broken windows” theory. As the theory explains, an unnoticed broken window, however small, if left unrepaired shows an uncaring attitude on the part of the house owner. If unchecked, this attitude becomes contagious and spreads to others. In practice, this meant rehabilitating and renovating Marikina’s poor infrastructure to allow discipline and order to set in. Bayani said:

There ought to be law and order to put everything in order, and without it there will be iniquity and worse, anarchy. Order is the key to change and progress. When the order is pervasive, people think and behave with civility and urbanity. There can be urbanity only when order is pervasive. (Fabros 2008, 17)

On many occasions, the new mayor could be seen berating those who disregarded Marikina’s ordinances in public.

To restore order and discipline on Marikina’s congested and chaotic streets, Bayani reclaimed the easement designated for pedestrians from illegal structures, parked vehicles, and vendors. To do this, the city council passed a resolution that classified all materials and illegal structures in public conveyances (streets, sidewalks, riverbanks) as garbage, and therefore apt for disposal (Fernando 2007, 11). With this legal mandate, it became possible to reclaim public spaces and enhance mobility. After establishing the necessary right-of-way, Bayani started concreting and asphalting Marikina’s notorious roads. Later, a standard pattern and color were used to pave sidewalks in the whole city. Bike lanes were incorporated between roads and sidewalks. Next came big-ticket items such as renovating the public market and city hall and setting up a new health center and satellite centers in each barangay, covered courts, new school buildings, and much more. Great attention was paid to Bayani’s pet project—the Marikina City River Revival and Park Project. The river was first dredged of silt and garbage, then aerated to remove foul odor and revive fish stocks. Both banks were developed for joggers and picnickers, and restaurants were invited to set up shop in the newly developed area. This project was so successful that it won many awards and citations and received distinguished visitors, both local and foreign.3)

To keep residents physically fit and active, Bayani redeveloped the Marikina Sports Center. Aside from the full-length tartan-covered track oval, this facility also has an Olympic-size swimming pool, a baseball field, and a football field. Marikina was lucky to inherit this facility from the province of Rizal. Formerly called the Rodriguez Sports Center, the facility was created to host the 19th World Softball Championships in 1971 as well as the inaugural edition of the Palarong Pambansa in 1974. But when Metro Manila was created in 1975, Marikina ceased to be part of Rizal Province and joined the new entity. Rizal lost its premier sports facility, to the advantage of Marikina. Bayani further enhanced the facility by erecting a new building for basketball, volleyball, table tennis, and aerobics and spaces for physical education classes. The track oval is open 24 hours a day, while other sports facilities are closed for only six hours daily.

Marikina’s swift physical transformation could be greatly attributed to Bayani’s engineering experience. Unlike other mayors whose education or background was in law or medicine, Bayani knew at once what needed to be done and how to obtain the necessary resources. He applied the principles he used in his company and his work methods to the City Engineering Office (see Table 1). Inefficiency and corruption in government infrastructure projects became things of the past. For the first time, Marikina experienced how it was to be rebuilt as if it was a privately contracted project. In this manner, corporatist practices in the private sector worked well when applied to public service (Tordecilla 1997, 17–18).


Table 1 Bayani’s Guide to Leadership



Bayani also promoted the practices of a clean and green city. Waste segregation was introduced: green bags for compostable materials and black bags for recyclable materials. Specific days were set for which garbage bag was to be collected. Offenders—those who put in the wrong waste material—could expect their garbage to be refused or returned. Students and residents were reminded of Marikina’s strict anti-littering policies so that it became practice for many to hold on to their trash until they saw a garbage can. In one of his reelection campaigns, instead of handing out campaign leaflets Bayani handed out metal tongs in his signature green color with a reminder for people to pick up their own litter. Aside from restoring order and addressing Marikina’s deficient and dilapidated structures, Bayani also focused on a seeming disregard for what old-timers called urbanidad. Resolutions were passed that prohibited spitting, urinating, drinking alcoholic beverages, and strolling around shirtless in public areas (Lorenzo 2007). There was even a ban on hanging out laundered underwear exposed for the public to see.

Bayani’s success in transforming Marikina into a model city was due, to a large extent, on the passage of the 1991 Local Government Code. By granting local chief executives more leeway in managing their cities/municipalities, mayors became in a sense more powerful than the president of the republic. While the power of the purse belonged to Congress and not to the president, at the local level the chief executive had the power to decide where to allocate resources or what projects or programs to include in the budget and implement. In many ways, Bayani was able to use this newfound capability. Another contributing factor in Bayani’s success had to do with Fidel V. Ramos’s election to the presidency. Ramos and Bayani had much in common: they were both methodical and sticklers for detail when it came to planning and execution; they also favored infrastructure development, an admirable work ethic, and commitment to discipline. Even their public image was identical: a folded barong tagalog with a hard hat, denoting the willingness of a public executive to roll up his sleeves and do the spadework, or an image of a hands-on manager.

Local chief executives can deliver more and become electable if they are able to access funds and support from the center. As Alfred McCoy (1994) and Patricio Abinales (1998) have pointed out, while local elites are the supreme authority in their locality, they are also dependent on their relations with the central power or the state for their survival. Eventually, Bayani’s hard work and brand of service, along with the visible improvements he made, caught the attention of Malacanang.

III Public Goods and Civic Virtues

Like the ancient Indian ruler Asoka, who reminded his constituents of Buddhist teachings through the construction of the Rock and Pillar Edicts, Bayani inscribed tenets of his philosophy on sidewalks to remind the people of Marikina of them even after his term ended. Sidewalks were painted red to convey a strong message (see Fig. 2). Among the messages Bayani imparted were the following:



Fig. 2 Sidewalks Are Marked with Reminders or Edicts in the Form of Slogans.

Source: Author’s personal photo.


- Pantay Pantay Kung May Disiplina (Discipline leads to Equality);
- Disiplina Nagsisimula sa Bangketa (Discipline starts at the sidewalk);
- Magbihis ng Angkop at nang Igalang Ka ng Iyong Kapwa (Wear proper attire to gain respect);
- A walkable city is a healthy city;
- Marikina: a bicycle-friendly city;
- Marikina: a city of government and business-friendly working-class people; and
- Work hard, work well, and work together.

While other cities abroad may have used this strategy, it was a novel idea in the Philippines. Not only were the messages original and innovative, they also reminded citizens that the government was always present and watching. As people walked past these messages, the messages became part of their subconscious, reminding them of the city’s rules and edicts. Most important, Bayani was able to convey that there was a public space where there were rules and norms and that public facilities built by the city government were public goods. They were not for individual use but for the common good.

After reaching the maximum allowable three terms in office, Bayani was succeeded by his wife, Marides, who ran Marikina for the next nine years, from 2001 to 2010. Like in Singapore, where Lee Kuan Yew made way for his son to take his place—thanks in part to Goh Chok Tong’s holding the line until Brig. Gen. Lee Hsien Loong was mature enough—Bayani asked his wife to take his post and continue the project he had started. After all, if a woman could continue the succession in running a business corporation or even a revolt (Gabriela Silang) after the death of her husband, why not in public office!

If Bayani’s term as mayor was focused on improving Marikina’s physical infrastructure, Marides’s term was spent on consolidating the gains made by Bayani and making sure the city became sustainable financially and environmentally. Her term in office was made easier by Marikina becoming a city on December 8, 1996 by virtue of Republic Act 8223. Under the Local Government Code, cities have more leeway in running their affairs than municipalities do; they also have a bigger share of the Internal Revenue Allotments (IRA) of the national budget.4) Marides was no ordinary housewife or a pushover. She was the daughter of Meneleo Carlos, one of the most successful local entrepreneurs in the country. Carlos attended Cornell University, where he obtained a degree in biochemical engineering in the 1950s. He set up a business empire focused on the production of fiberglass, resins, polymer, and other industrial products. Like her father, Marides also went to the Ivy League school, where she obtained a master’s degree in business management. With her outstanding education and extensive experience running a corporation, Marides was able to further push the transformation of Marikina by coming up with a management system that set the standard for governance in a highly urbanized setting. For her efforts, she was nominated as one of the finalists for World City Mayor in 2008. By the time Marides completed her three terms in 2010, Marikina had received numerous awards both locally and internationally.

Marides emphasized the concept of a healthy city. A healthy city is not only clean but has the facilities for an improved quality of life, such as parks, sports facilities, water treatment plants, a waste management facility, etc. A healthy city is one that promotes a healthy lifestyle. With the city’s motto of “A healthy city leads to a sustainable city,” the initial intention was to rehabilitate the city to make it livable and habitable. But the concept evolved to financial viability, ensuring the city’s standards could be maintained with sufficient funding (Vera 2008, 29). Marikina City provided each family with a health passport—a family record that contained details of each family member’s check-ups, vaccinations, and dental examinations and the nutritional services available at the city health office.

Because of Marides’s corporate background and experience in running a manufacturing firm, her natural inclination was to lead an organization and deal with partners and customers whose satisfaction she had to always take into consideration. Thus, her attitude toward public office was not to shake hands and dole out money but to manage city hall and its employees like a corporation—to deliver its products, which consisted of basic services (Siao 2013). Because Marikina residents were her clientele, she treated them as customers. While customers may not always be right in such a setting, they can certainly demand quality service. And this Marides was keen to fulfill. The mayor instituted a number of feedback mechanisms to gauge the delivery of basic services in terms of courtesy, timeliness, and efficiency. She instituted a “one-strike” policy, meaning city employees could face disciplinary measures or even dismissal if they were subject to complaint. Another aspect of corporate management that she carried into public service was the delegation of powers, making sure that everyone became part of a team and did his or her job.

Marikina’s success under the leadership of the Fernandos may also be attributed to the continuity of the programs and leadership style. What had been started during Bayani’s early years was continued and built upon so that there was ample time for the initiatives to take root and develop. Likewise, the drive for excellence and innovation among employees, and the culture of discipline and urbanity among citizens, became established. A set of doable programs and projects, rootedness in the community, a middle-class constituency that was articulate and politically active, and a system of elections every three years added to the equation. Bayani and Marides Fernando invested heavily in empowering Marikina City by strengthening the administrative and field support services of the city, the pillars that made up the delivery of basic services and the long-term viability of the local government unit (LGU), by allocating sizable funds for capital goods (engineering equipment, riverboats for rescue and relief operations, and ambulances), infrastructure (medical, educational, and sports facilities), as well as capacity building and training. The husband-and-wife team invested in strengthening the capability of Marikina in the long term. While political will has always been mentioned as a key factor in effectively running LGUs, there are limits to what political will can achieve if the foundation is weak and wanting. An analogy may be made to a cart driver beating an old and weary horse. Political will may be important, but so is the means or the capability to deliver services.

IV Policy Coalition through Common Interests

Marikina City is unique in having a statue in honor of a known Communist, Filemon “Ka Popoy” Lagman (see Fig. 3). Moreover, Marikina presents a unique case where labor unions, businesses, and the LGU formed an alliance and institutionalized a tripartite body. If relationships between these groups were marked by enmity in the past, what brought them together was quite unexpected—the ill effects of globalization. In the late 1990s and early 2000s, the processes of globalization were being felt more and more in the Philippines. Liberalization, or the entry of foreign goods and services, and the need for greater competition to do away with inefficient, expensive services were becoming the norm. Local businesses that benefited or were protected by the previous trade regime became wary and disturbed. In Marikina, the moribund shoe industry now faced the prospect of demise and extinction. This fear was not without basis. The national government, through the Department of Trade and Industry (DTI), favored an approach based on comparative advantage. Like Darwin’s concept of survival of the fittest, industries that could not keep up with the competition would naturally wither away. What the DTI favored was the so-called One-Town-One-Product approach. Instead of pouring resources into unprofitable industries, the DTI advocated for specialization, concentrating on products that the town could excel in producing. For Marikina, this meant closing the century-old shoe industry and opening up new business ventures.



Fig. 3 A Statue Dedicated to Filemon “Ka Popoy” Lagman, Former Labor Leader, Communist Cadre, and Co-founder of the Partido Manggagawa (Workers Party), Who Worked Out an Amicable Relationship between Business, Labor, and the Marikina City Government during Bayani’s Term.

Source: Author’s personal photo.

Note: The statue is undergoing repainting, obscuring the hammer-and-sickle emblem.


Globalization has its underside too. Opening windows may let in fresh air, but it also lets in flies and other insects. In the case of Marikina, smuggled and dirt-cheap Chinese-made shoes, some as cheap as 60 pesos a pair, started flooding the market. This caused deep concern not only among business owners but also among shoe workers and the Marikina city government. In late 1999, progressive groups wary—or critical—of the ill effects of globalization initiated the formation of the Free Trade Alliance. This group was composed of labor federations, NGOs, advocacy groups like the Freedom from Debt Coalition, members of the academic community (notably from the University of the Philippines’ School of Labor and Industrial Relations), and many other like-minded individuals. It comes as no surprise that the chairman was the notable former Senator Wigberto “Bobby” Tanada, whose nationalist credentials were without reproach. By the early 2000s, a common ground between business and labor had been established and a partnership began to take shape.

This collaboration led to the formation the following year of the Philippine Employment–Labor Social Partnership, Inc. (PELSPI), an advocacy group focusing on economic policies and development. The mechanism instituted by the group was to arrive at a social dialogue among partners. PELSPI attracted big business actors, among them the chambers of commerce and business federations, the Employers Confederation of the Philippines, and Marcos-related industrialists such as Lucio Tan, owner of Fortune Tobacco Corp. Because Meneleo Carlos, Bayani’s father-in-law, was the chairman of one of the big business federations in the country, he became part of the consultative process. Carlos’s influence among businessmen enabled Bayani to bring together concerned business and workers groups to dialogue and achieve industrial peace in Marikina (Mendoza 2018).

The framework for cooperation was capsulized in the slogan “Marikina—Bayan ng Masasayang Manggagawang Kaibigan ng Industriya” (Marikina—home of happy workers friendly to industries). To institutionalize this mechanism, Bayani set up the Workers’ Affairs Office (WAO), which also acted as the secretariat of the tripartite body. In a way, the WAO assumed the role of the Bureau of Labor Relations and the National Labor Relations Commission of the Department of Labor and Employment because any strikable labor issue passed through it first for dispute resolution. A key factor in the success of tripartitism in Marikina may have been Bayani’s pragmatism. As a mayor well rooted in the community, Bayani was able to differentiate the different levels of radicalism within the labor movement, and identify which among these he could speak to and negotiate with. He did not meddle directly in labor problems. Rather, he let the WAO handle them. He may have been dictatorial in other aspects, but with this tripartite body Bayani consulted first before making a move, even if his decisions did not please the business and labor sectors. In the end, Bayani saw the importance of a cooperative labor sector when it came to attaining industrial peace, a key ingredient for a business-friendly environment (Magtubo 2018).

In the same manner, labor also demonstrated pragmatism in dealing with business and the Marikina city government. Labor groups belonging to the Sanlakas/Bukluran ng Manggagawa/Partido ng Manggagawa were open to negotiation and compromise at the shop (factory) level even if they positioned themselves as radicals at the national level. By working with businesses and the LGU, they received support or resources for mobilization, education, organizing, and other purposes (Magtubo 2018). Being pragmatic himself, Bayani did not interfere with, or oppose, the radical posturing of labor groups at the national level so long as they made Marikina peaceful.

V What Is Local Is Not Always National

All politics is local! So goes the famous dictum describing politics in the Philippines. This may be a truism, as the efforts of the Fernandos to replicate their success in local governance at the national level did not meet with the same level of success. If policy coalition was a factor in Marikina’s transformation, the same could not be said at the national level. On the contrary, Bayani’s projects and programs for the metropolis were met with resistance and hostility. Clearly, the constituency at the national level was so diverse that a minimal amount of consensus among stakeholders could not be reached. Furthermore, interest groups opposed to his plans for change gravitated toward each other and formed a strong lobby against his policies. The same may be said of the teaming up between Richard Gordon and Bayani Fernando as presidential and vice-presidential candidates in the 2010 elections. Despite showcasing the successes of both Olongapo and Marikina Cities, the team fared badly when the election results came in.

Because of Bayani’s success in Marikina’s transformation, he was appointed chairman of the Metropolitan Manila Development Authority (MMDA) in 2001 by President Gloria Macapagal Arroyo. There were high expectations from residents and the business sector for him to turn Manila into a clean and orderly metropolis. As soon as Bayani assumed office, he undertook almost exactly the same projects and approach he had in Marikina, naming it Metro Gwapo (Good-looking metro). In theoretical terms, Metro Gwapo aimed to increase the metropolis’s livability by achieving safety, efficiency, accessible amenities, and pleasant surroundings. In practical terms, the project meant no obstructions, no litter, no decay, no diseases, no stink, and no discourtesy (Lopez 2007, 18).

As in Marikina, what Bayani wanted to do right away was to clear the metropolis of illegal settlers, sidewalk vendors, grime, and crime as well as rebuild the city’s waterways and infrastructure. Clearing operations targeting sidewalk vendors and illegal settlers near waterways became common, much to the consternation and anguish of those affected (Kusaka 2017). U-turn slots, separate bus lanes, concrete barriers separating private from utility vehicles, and traffic constables in uniform dotted the streets of the metro. In addition, much of the signage bore the color pink, a reminder to residents to bring the metropolis to the pink of health.

Bayani’s close association with the president enabled him to acquire additional funds to undertake projects. There was a command center to monitor traffic, the recruitment of more traffic enforcers, the acquisition of more equipment to support operational requirements, the widening of main thoroughfares to ease traffic congestion, the dredging of heavily silted rivers and waterways, the operationalization of pumping stations to mitigate flooding, and even the establishment of motels for employees and stranded commuters in need of short-term lodging (Lopez 2007).

Yet, after several years in office Bayani was able to achieve only a modicum of success in his planned vision for the metropolis. As expected, resistance from street vendors and urban poor in public conveyances was reported vociferously in the media. The negative image created of Bayani (a dictator, heartless, anti-poor, and a tyrant) would impact him later when he ran for national office (Kusaka 2017). The biggest stumbling block to Bayani’s vision, however, came from the mayors themselves. Apprehensive that the reforms being initiated by Bayani would impact on their constituents and governance (traffic, garbage collection, etc.), Metro Manila mayors resisted by insisting that the role of the MMDA was consultative and that, unlike them, the chairman was not an elected official, did not have the people’s mandate, and thus could not force them to obey.

Unlike many local politicians, Bayani was a loyal member of the Lakas-NUCD, the party of Presidents Ramos and Macapagal Arroyo. When Joseph Estrada won as president, Bayani did not switch parties even though the former San Juan mayor derided Lakas-NUCD members. This party loyalty, along with Bayani’s efficient and effective leadership, endeared him to President Macapagal Arroyo. Like many politicians, however, Bayani did not hide his desire to secure national office in the 2010 elections. He believed that he possessed the attributes of a leader: experience, vision, and commitment. Unfortunately for him, his chosen party had other plans. Because Bayani was not considered winnable, the party chose instead the young, energetic, and charming Defense Secretary Gilbert Teodoro, even though he was not a party member. During the Lakas-NUCD national convention, Bayani was not even considered as Teodoro’s running mate.

The party’s decision angered Bayani, and he left Lakas-NUCD permanently. He teamed up with Gordon, former Olongapo City mayor, in the 2010 elections and ran as his vice-presidential candidate. Before Marikina’s transformation under Bayani, Gordon had transformed Olongapo into a model city. Gordon also managed the transformation of the former Subic naval station into an economic zone and freeport. The team capitalized on their success stories. They chose the catchy name “The Transformers” and projected an image of strong leadership and political will. Timing, however, was not on their side. Because they exhibited qualities that were so close to the unpopular president’s, their candidacy did not resonate with voters’ preference. The pair lost miserably: Bayani ended up fourth out of eight candidates.

Aside from the negative publicity he generated as MMDA chairman, Bayani fared badly because he was pitted against veteran Senators Loren Legarda and Mar Roxas as well as Makati Mayor Jojo Binay, a longtime human rights lawyer. When asked during political debates about national issues such as foreign policy, economy, and security, Bayani could not respond. Not only did Bayani lack the eloquence of his rivals, the debates exposed his lack of knowledge beyond local concerns. Unfortunately for him, Bayani showed voters that while he was well versed in running a city, the same could not be said if he took on national office. During the televised debates, all Bayani could muster was the appeal to discipline and obedience to authority, demonstrating to voters that his perspective was very localized. While attention to detail in running a locality proved its worth when he was mayor, the same could not be said should he be elected as vice president. In short, he was not qualified for the position he aspired to.

Bayani’s failed run for national office coincided with Marides’s exit after reaching her three-term limit as mayor. Shortly after, the couple returned to the private sector, focusing on their construction enterprise. Their only child did not show any interest in entering politics, thus ending the Fernandos’ venture into politics.5) This case is atypical of familial politics or dynastic rule in Philippine politics (Quimpo and Kasuya 2010). While many experiences of familial politics in the Philippines have been marked by inequality, poverty, and even being contrary to good governance, Marikina’s is quite the opposite.


There are a number of possible reasons for why the Fernandos’ mayorship did not fit the pattern of political dynasties or dynastic politics. As discussed above, their ascent to office was not inherited but won through elections. Their successors have not necessarily enjoyed cooperative relations with the Fernandos while maintaining the legacy of reform policy. Second, no other member of the family ran for office to continue the Fernandos’ hold on power. Third, while dynasts usually inherit their position and come to public office unprepared or unqualified, the Fernandos brought with them technical and managerial skills as well as long experience in the private sector. It may seem that the Fernando brand of leadership became a thing of the past when the husband and wife left local politics. But the standards set by them became the benchmark by which to measure an aspiring local chief executive (Gregorio-Medel et al. 2007). In the end, the people of Marikina would not expect less from their mayors, expecting them to provide services similar to those that they had received from the Fernandos, if not better.

Marikina’s success may also be attributed to the support the residents gave to the Fernandos. Bayani’s style of leadership resonated well with the mindset of Marikina’s residents. It may be argued that Bayani’s management style appealed to the city’s mostly middle-class residents. For a long time, political leadership and control came from longtime residents of the First District: they dictated the values to the new arrivals in the city. So when Bayani pitched the concept of urbanidad, it was not an alien idea. Rather, it was a common and respected value that the old residents took to heart. Thus, Bayani’s campaign regarding urbanidad was simply a reiteration of an old value in an old setting that was being eroded by rapid development and an influx of migration.

It is doubtful whether this approach or appeal to civility can take root in the much bigger cities of Metro Manila. The departure of old-time residents and the massive influx of migrants from rural areas settling in blighted communities have produced a different demographic, shifting government spending away from capital goods to more basic services. The wide disparity in economic standing and orientation has created a very diverse constituency that makes governance complicated. In contrast, Marikina is still the small municipality that it once was and has a large degree of homogeneity in civic norms. In this sense, the Fernandos were able to govern for a long time and enable Marikina’s transformation because of the consent of local residents.

Accepted: December 15, 2020


The author wishes to acknowledge the generosity and kind consideration of Prof. Takagi Yusuke and the Graduate Research Institute for Policy Studies (GRIPS) for the opportunity to collaborate on this project. The author likewise acknowledges the support given by the secretarial staff and resource persons who made this project possible and gratifying. The author would like to dedicate the paper to Ms. Corazon dela Paz Forteza, former librarian and head of the Personnel Department who died while serving the City of Marikina.


Abinales, Patricio N. 1998. Images of State Power: Essays on Philippine Politics from the Margins. Diliman, Quezon City: University of the Philippines Press.

Adamos, Pompeyo C. III. 2007. Local Chief Executive’s Political Leadership and Private Voluntary Organization’s Participation: A Case Study of the “Save the Marikina River Project.” Master’s thesis, Ateneo de Manila University.

Damazo, Jef. 2002. Bayani the Hero., accessed June 12, 2017.

De la Paz, Amelia. 2017. Interview by Meynardo P. Mendoza, November 8.

Fabros, Dann. 2008. The Marikina Way. Philippines Free Press, August 2, pp. 16–22.

―. 2006. Pursuit of Excellence. Philippines Free Press, December 2, pp. 14–24.

Fernando, Bayani. 2007. Doing the Right Thing in Marikina. Biz News Asia 5(41) (November 12–19): 10–22.

Gregorio-Medel, Angelita Y.; Lopa-Perez, Margarita; and Gonzalez, Dennis T., eds. 2007. Frontline Leadership: Stories of 5 Local Chief Executives. Quezon City: Ateneo School of Government; Makati City: Konrad-Adenauer-Stiftung.

Kusaka Wataru. 2017. Moral Politics in the Philippines: Inequality, Democracy and the Urban Poor. Singapore: NUS Press; Kyoto: Kyoto University Press.

Lopez, Antonio S. 2007. Super Governor: He Is Rebuilding Metro Manila. Biz News Asia 5(41) (November 12–19): 18–21.

Lorenzo, Isa. 2007. Marikina’s (Not-So-Perfect) Makeover. iReport, Good (Local) Governance. January 12. Philippine Center for Investigative Journalism., accessed January 23, 2021.

Magtubo, Renato. 2018. Interview by Meynardo P. Mendoza, Marikina City, January 8.

Marikina City. 2020. Marikina City: The Shoe Capital of the Philippines., accessed February 29, 2021.

McCoy, Alfred, ed. 1994. An Anarchy of Families: State and Family in the Philippines. Loyola Heights, Quezon City: Ateneo de Manila University Press.

Mendoza, Maria S. 2018. Interview by Meynardo P. Mendoza, Quezon City, January 6.

Ocampo-Salvador, Alma M. 1997. Local Budgeting, A Closed-Door Affair: The Case of the Municipality of Marikina. In Demystifying Local Power: Perspectives and Insights on Local Government Processes, edited by Letty C. Tumbaga, pp. 29–42. Quezon City: Ateneo Center for Social Policy.

Palisoc, Marilou P. 2000. Improving Local Fiscal Administration through the 1991 Local Government Code: The Case of Marikina City. Master’s thesis, Ateneo de Manila University.

Quimpo, Nathan Gilbert; and Kasuya Yuko. 2010. The Politics of Change in a “Changeless Land.” In The Politics of Change in the Philippines, edited by Kasuya Yuko and Nathan Gilbert Quimpo, pp. 1–20. Manila: Anvil Publishing.

Siao, Felyne. 2013. Because We Want to Make Marikina Even Better. Rappler. March 19., accessed July 26, 2016.

Tordecilla, Roberto B. 1997. People’s Participation in Crafting Award-Winning Local Government Programs: Local Planning in Marikina and Irosin. In Demystifying Local Power: Perspectives and Insights on Local Government Processes, edited by Letty C. Tumbaga, pp. 5–28. Quezon City: Ateneo Center for Social Policy and Public Affairs.

Vera, Millie. 2008. The Power to Transform. New Vanity Magazine 15(3): 19–30.

Villaluz, Vanessa C.; and Sanchez, Joseph C. 2017. Innovations in City Development: The Marikina Experience. In Transforming Local Government, edited by Ma. Regina M. Hechanova et al., pp. 73–85. Quezon City: Bughaw (Ateneo de Manila University Press).

1) Interview with Amelia de la Paz, November 8, 2017.

2) Before the split within the Communist Party in the Philippines.

3) For a detailed discussion on the topic, see Pompeyo C. Adamos III, “Local Chief Executive’s Political Leadership and Private Voluntary Organization’s Participation: A Case Study of the ‘Save the Marikina River Project’” (master’s thesis, Ateneo de Manila University, 2007).

4) For studies on Marikina’s fiscal administrative and budgeting systems, please see Ocampo-Salvador (1997) and Palisoc (2000).

5) In the 2016 general elections Bayani ran for a congressional seat in Marikina and won, representing the city’s First District in Congress.


Vol. 10, No. 2, Kusaka Wataru


Contents>> Vol. 10, No. 2

Rise of “Business-Friendly” Local Elite Rule in the Philippines: How the Valdezes Developed San Nicolas, Ilocos Norte

Kusaka Wataru*

*日下 渉, Graduate School of International Development, Nagoya University, Furo-cho, Chikusa-ku, Nagoya 464-8601, Japan
e-mail: kusaka[at]

DOI: 10.20495/seas.10.2_223

This paper aims to explain why reform-oriented local politics has gained ground in the Philippines. It has been argued that local politics in the Philippines is characterized by dynastic elites who employ a patron–client relationship, exploitive rentseeking, and coercion and violence. However, a more reform-oriented local politics has emerged in many parts of the country since around the 2000s. What is the driver for the rise of reform-oriented local politics? Does this form of politics weaken or strengthen the local political dynasties? This paper answers the first question by arguing that links between the global neoliberal economy and local policy entrepreneurs have facilitated the rise of reform-oriented and business-friendly local politics. For the second question, it claims that local elites who become successful policy entrepreneurs adopting the new business-friendly politics are likely to further entrench themselves and perpetuate their dynasty by utilizing private capital investment. These arguments are based on the case of the Valdez family in the municipality of San Nicolas, Ilocos Norte.

Keywords: local politics, business-friendly, good governance, rent-seeking, elite democracy, political economy, real estate business


Researchers have observed that Philippine local politics is characterized by an “elite democracy” in which oligarchic elites monopolize political power by controlling poor constituents through clientelism coupled with coercion and violence; they also accumulate wealth through exploitive rent-seeking. However, this traditional view cannot explain the rise of more reform-oriented local politics in which local elites seek good governance and local economic development. This paper aims to address two questions related to the change.

First, what is the driver for the rise of reform-oriented local politics? Previous studies have emphasized the importance of political leadership. Aser Javier (2002) attributes the emergence of local governments’ public entrepreneurship to the initiative of local chief executives who make use of the opportunities and power given to them by decentralization, with case studies of Marikina City, the province of Bulacan, and the municipality of Irosin. Emma Porio (2012) also emphasizes the initiatives of city mayors in Metro Manila in implementing networked governance with NGOs and business groups, emphasizing discourses of participation, empowerment, capacity building, and consensus building to deliver better services to constituents in order to be competitive to demands for economic growth and social and environmental governance. Agarie Hideo (2017) reports that in General Santos City, a new reform-oriented politician emerged due to the initiative of NGOs, people’s associations, professionals, and civil servants’ trade unions. Ma. Regina M. Hechanova et al. (2017), examining eight reform-oriented local governments—Albay Province, Bohol Province, Mandaluyong City, Marikina City, Naga City, San Jose City (Nueva Ecija), Municipality of Dumingag (Zamboanga del Sur), and Municipality of Upi (Maguindanao)—identify transformative leadership with visions, strategic programs and initiatives, and citizen engagement as drivers of change. Hara Tamiki (2019) demonstrates how a progressive political coalition composed of the Liberal Party and Akbayan defeated a political dynasty in Siquijor Province through “People Power volunteers” and bottom-up budgeting projects during the Benigno “Noynoy” Aquino administration. A quantitative study by a Japanese research team asserts that mayors who frequently meet their constituents and hold development councils are likely to achieve good performance (Kobayashi and Osaki 2019; Nishimura 2019).

These explanations highlighting political leadership and initiative are convincing but, do not explain the structural factors that have allowed local elites to become more reform-oriented. This paper argues that economic liberalization and the global economy have created a new political arena in which the pursuit of enticing investments from the private sector through business-friendly politics has become more critical for local elites than adhering to traditional exploitive rent-seeking. In other words, the nexus between the changes in economic structure and initiatives of local “policy entrepreneurs” (Takagi 2021) has facilitated the rise of reform-oriented and business-friendly local politics.

Second, do the new economic structure and the rise of reform-oriented local politics weaken or strengthen local political dynasties? To answer the question, it is important to note that local elites’ power bases have shifted from a reliance on landownership and state resources to private resources of investors. With this shift, local political dynasties may become less stable as the importance of monopoly over state resources decreases. Also, economic development can enable constituents become more independent from the local elites by providing them of new private resources. For instance, Raymund John P. Rosuelo (2017) clarifies that urbanization and influx of the middle class into gated subdivisions formed new local constituents, who eroded a political clan’s long-standing dominance in Cainta, Rizal. However, it is also possible for local political dynasties to utilize the flow of private capital to strengthen their power base; this is supported by case studies. Sakuma Miho (2012) notes the continued dynastic rule of the Osmeñas in Cebu City, who successfully created jobs and increased tax revenue by attracting foreign investment to the special economic zone of Cebu Bay reclaimed with official development assistance from Japan. Porio (2012) identifies the paradox that local governments with traditional leadership in Metro Manila tend to transform local governance to become more efficient, innovative, transparent, and accountable to the needs of their constituents in order to remain competitive.

This study supports the latter scenario based on the case in Ilocos Norte, where I confirmed that local elites adopted the new mode of business-friendly governance and succeeded in enticing private capital investment to entrench themselves and perpetuate their dynasty. I also explore conditions that would frustrate the continuation of business-friendly elites’ rule and usher in more open and competitive local politics. For this research, I carried out a total of five field surveys lasting about two weeks between 2007 and 2018 in the municipality of San Nicolas and Laoag City, in the province of Ilocos Norte.1)

I Changing Landscape of Political Economy

I-1 Shifting of Local Elites’ Power Base

Many studies have tried to identify the power bases of Filipino local elites who successfully captured the state and maintained their power for generations. The origin of traditional elites can be traced back to the early American colonial era, when emerging Filipino-Chinese mestizos purchased huge plantations from the departing Spanish religious orders that accumulated lands to seek profits in the international cash crop market (Anderson 1988). The emerging elites entrenched themselves through the lucrative export of cash crops, mainly sugar, to the US market and through the monopolization of political positions through the electoral democracy installed by the American colonial government.

Studies of rural local politics in the pre-martial law era emphasized elites’ landownership and patron–client relationship with poor constituents as their power base (Lande 1965; Agpalo 1972). They discussed an urban setting, where a vast number of domestic migrants moved from rural areas and the land ownership was not concentrated; the emergence of “machine politics” was observed, in which “new men” utilized resources obtained from national politicians to consolidate their constituents’ vote for their political party or faction (Machado 1971; 1974). While the agrarian patron–client relationship is more long term and personal, this urban machine politics is more instrumental and specific to election time. Democratization in 1986 helped to revive such urban machine politics in many localities, including the cities of Metro Manila (Magno 1993; Gloria 1995).

John Sidel (1999) contributed to a theoretical turn by arguing that local elites’ power base is neither landownership nor a patron–client relationship but is in fact found in their access to state resources, including allocation of national revenue, use of rent-seeking, and violence. He argues that the local elites who monopolize access to state resources have ruled over poor constituents in the structural condition of “primitive accumulation of capital” in which resources are concentrated in the state. Kawanaka Takeshi (2002) supports the importance of access to state resources for elites’ power, yet he presents a different perspective in terms of methods of rule. While Sidel emphasizes the local elites’ violence and coercion with the cases of Cavite and Cebu City, Kawanaka explains how Mayor Jesse Robredo’s political machine efficiently distributed services to organized constituents in Naga City.

Although the theoretical turn toward state resources is important, the condition of the state’s monopoly of resources on which these arguments are premised has become increasingly irrelevant in many localities. This is because globalization and economic liberalization have radically changed the structural condition of what Sidel called “primitive accumulation of capital” and have promoted capital accumulation in society—not only in Metro Manila but also in many smaller cities. Continuously increasing remittances from Overseas Filipino Workers (OFWs) have increased the number of constituents who are independent of the clientelist relationship with local elites.2) The remittances have also expanded purchasing power of OFW families and the size of local markets, which has attracted inward investment of private capital, both domestically and from foreign investors.3) Thus, the state no longer monopolizes resources, and private capital has increasingly become essential for local elites to consolidate their rule.

Coinciding with the changing economic environment was the decentralization introduced by the Local Government Code of 1991, which gave local governments enhanced discretional authority to tax, issue local bonds, borrow from financial institutions, and engage in development projects in collaboration with the private sector. In general, decentralization provides incentives for local governments to compete for a prosperous local economy (Weingast 2009, 280). In the Philippines’ case, limited devolution of resources from the national to local governments, despite the fiscal decentralization, has intensified the race among local governments to attain investments by providing the private sector with exemption from regulations, tax privileges, and long-term guarantees of profits (Holmes 2016, 124–129).

It is clear that local elites have found new incentives in the changing environment. If they are successful in enticing investments from the private sector, they can stimulate the local economy, create employment, and increase local revenue, all of which are useful in consolidating their electoral holds. It has become irrational for them to maintain the traditional practices of red tape and demanding grease payments from the private sector in exchange for permitting business operations. This new rule of the game introduced by the global economy has pressured local elites to become more business friendly.

This new trend is seen in the fact that each year there are around 150 entries from local government units (LGUs) for the Galing Pook award (Galing Pook Foundation 2017, 3). Since 1993 the Galing Pook Foundation has given this award to local governments that initiate outstanding or trailblazing innovations in local governance. However, Ronald Holmes (2016, 129–131) notes that not all local governments are keen to adopt good governance even when they fail to generate local revenues. He explains that the unconditional Internal Revenue Allotment (IRA) from the national government has led to complacency among local leaders, who do not improve public services, causing “flypaper effects” (money sticks where it hits).4)

Andreas Lange explains that the divergence between progressive and regressive local politics is determined by differences in local economic structures. In areas where economic activities are urbanized and diversified, there are likely to be more local elites competing for support from the electorate. Intensified competition gives elites incentives for local economic growth that provides benefits to constituents. By contrast, in areas where economic activities rely on agricultural and state resources, a limited number of dynastic elites entrench themselves through exploitive rent-seeking without being pressurized by the electorate and rival elites, and the economy stagnates as a result (Lange 2010).

I-2 Real Estate Boom in Neoliberal Economy

For progressive local elites, a crucial requirement to attract the private sector is securing and providing urban lands for them. The real estate business, which has recorded a boom since 2003, is the second-fastest growing industrial sector only behind mining as a separate subsector in the country (Bello et al. 2014, 35–66).5) The real estate boom is visible in the active construction of IT parks, shopping malls, and residential towers not only in Metro Manila and its suburbs but also in smaller cities.

A driver for the growth of the real estate business is remittances from OFWs. Remittances almost quadrupled between 2000 and 2016, from US$6.96 billion to US$26.9 billion. As Antoinette Raquiza (2014, 231) clarifies, the growth in the service sector is marked by a remittance-led economy in which business conglomerates branch out to meet the demands created by OFW families who spend money on real estate, retailing, gaming, tourism, education, and health care. Of the OFW remittances, 30 percent is estimated to be invested in real estate (Bello et al. 2014, 46). To seize the opportunity and diversify traditional sources of wealth, established business elites, including Henry Sy, Lucio Tan, and John Gokongwei Jr., have made a full-scale entry into the rapidly growing real estate market within the last two decades, while new entrepreneurs such as Andrew Tan, Manuel Villar, and Andrew Gotianun have built wealth primarily in the real estate business.

Another driver for urban real estate development is the rapidly growing global business process outsourcing (BPO) industry, in which the Philippines, India and China are the leading countries. In 2016, BPO centers in the Philippines generated revenues of US$25 billon, contributing to 9 percent of the country’s GDP growth (Shead 2017). The boom in the BPO sector strengthened international companies’ demand for office space (Bello et al. 2014, 45–46; Raquiza 2014, 230). The BPO business in the Philippines started in 1997 when the real estate tycoon Andrew Tan transformed unoccupied high-rise buildings into the Eastwood City Cyberpark following the Asian financial crisis (Raquiza 2014, 234–235). He was followed by other business elites, such as Lucio Tan, the Ayalas, and the Gokongweis. They successfully lobbied to include BPO facilities as part of the special economic zones authorized by the state to enjoy tax incentives.

According to Raquiza, investment in real estate helped these business elites dramatically increase their wealth accumulation. She explains that their venture into real estate was nothing but an attempt to seize the third most distinct business opportunity, which emerged in the early twenty-first century, when the economy was driven by liberalization and globalization. This followed the first period of the American colonial era—in the early twentieth century—when the production and export of agricultural raw materials and semi-processed goods consolidated the wealth of traditional elites, and the second period, after the post-war independence, in the 1950s, when Filipino entrepreneurs took over departing Americans’ retail trade businesses (Raquiza 2014: 231–232). The current, third, opportunity was formed by the global capital flow into the country and neoliberal state policies that “liberated” lands from the state, domestic manufacturing, and agriculture. Many state lands were privatized, structural adjustment programs negatively affected the old manufacturing industry of import substitution, and the conversion of land use from agricultural to commercial became easier (Bello et al. 2014, 47–48).

However, this neoliberal economy does not mean a departure from rent-seeking and cronyism that characterized the previous political economy. Despite the dominant discourse of free market competition, real estate and construction businesses are protected from foreign capital competition by economic nationalist institutions, including the 1987 constitution. Rent-seeking is still important because real estate is one of the commodities most regulated by the state (Bello et al. 2014, 35–66). Political influence plays a significant role in the following processes: the privatization of state lands, conversion or rezoning of land uses, tax abatements, public service provision, and the construction of infrastructures that affect land value. Edsel Sajor (2003, 98–99) argues that during the real estate boom in Cebu City in the 1990s, the urban planning became about dealmaking with private interests rather than preserving public interests through regulation. Congressmen have exploited their legislative power when diversifying into real estate business (Coronel 2003). The three billionaires in the House of Representatives had real estate businesses in 2017 (Rappler 2018). The owner of Vista Land, Manuel Villar, who served as congressman for three terms and senator for two terms, is the prototype of the new breed of politician.6) He reportedly exercised political influence over public works in order to inflate the value of his lands (Rufo 2010).

Walden Bello et al. (2014, 53–55) insist that land is still the elites’ source of wealth but their economic base has shifted from rural, cash crop-oriented activities to urban development. However, not all traditional elites have been successful in adjusting to the changing business environment. For instance, old landed elites in Metro Manila such as the Tuazons, Aranetas, and Ortigases are no longer leading economic players due to their failed strategy of speculatively holding on to idle assets.7) They are now selling their urban lands to bigger developers.8) Bello et al. (2014, 55) argue that the key for Filipino capitalists to successfully accumulate wealth has become their ability to mobilize large amounts of capital to meet globalized sources of demand.

I-3 Globalized Local Economy in Ilocos Norte

The changes in the political economy have reached from Metro Manila to smaller cities. Ilocos Norte is an ideal place to examine their impact on local politics because of the province’s heavy reliance on international migration and remittances from OFWs. The province is administratively composed of 21 municipalities, one component city, and the provincial capital of Laoag City. Ilocano is the common language of the region. The following historical description of the region is derived from the works of Nagasaka Itaru (2009; 2013).

In Ilocos Norte Province, which lacks large plain lands, agriculture could not support the increasing population. This pushed many males to migrate to sugarcane plantations in Hawaii and fruit farms on the US mainland from the beginning of the twentieth century, during the American colonial period. Among the approximately one hundred thousand Filipinos who migrated to Hawaii between 1915 and 1946, 54 percent were from the three Ilocano-speaking provinces of Ilocos Norte, Ilocos Sur, and La Union (Young 1981, 360). Although the American government imposed a quota to limit the number of Filipino immigrants in 1934, the quota was removed by the Immigration and Nationality Act of 1965, and the number of Filipino migrants increased again. In the 1960s, two-thirds to three-fourths of the Filipinos in Hawaii and the US mainland were estimated to be Ilocanos (Lewis 1971, 6). Since the 1980s, migration to Italy has become popular. Ilocanos were the biggest group among the OFWs until the 1990s, when the number of international migrants rapidly increased in other provinces (Nagasaka 2009, 91).

Remittances from OFWs has become the main source of income in the local economy. The population engaging in agriculture in the province continuously decreased from 52.4 percent in 1992 to 45.2 percent in 2000 and 27.4 percent in 2016. Tobacco and garlic were once profitable cash crops in the region, but imports and smuggling of cheaper products from China have negatively affected their production (Molina 2013; Clapano 2019).9) The decrease in selling price has made these cash crops unprofitable due to the high inputs and labor required for cultivation. Growth in the manufacturing industry has stagnated, as it has in many parts of the country, although a few factories continue to operate: the San Miguel Beer and Coca-Cola plants in the municipality of San Nicolas since 1980 and the tomato-processing plant of the Northern Foods Corporation in the municipality of Sarrat since 1984. Reliance on international remittances is reflected in the fact that Laoag City had 16 bank branches for a population of 66,000 in 1975 (Abat 1984, 80); this number of banks per capita could be higher than in Manila. By 2006, the number of bank branches had increased to 29. According to bank managers, branches in Laoag have much bigger deposits than branches in other areas, reflecting the huge amounts of remittance and transfers of pension from the United States (Nagasaka 2013, 361).

Remittances support the locals’ new consumption behaviors. Nagasaka’s 2008 household survey in a village located 15 kilometers away from Laoag showed that 82 percent of the villagers received remittances. Nagasaka notes that urban or middle-class lifestyles unimaginable 10 years ago have spread in the village. An increasing number of villagers complete higher education, pay for water services, and own a motorbike or private car. They drive to Laoag, withdraw remittances from bank ATMs, and eat out. The way that OFWs invest in land has also changed. While it was previously common to buy lands for agriculture or housing in their home village as traditional “prestige goods,” an increasing number of OFWs have purchased real estate in Laoag for their own housing or commercial investment since the 2000s (Nagasaka 2013).

In 1992 there was only one fast food store and one big grocery store in Laoag, but today many shops and businesses can be seen. Investment in the city has increased since the 2000s against a backdrop of enhanced purchasing power of OFW families and intensified competition in Metro Manila, which has pushed investors to seek new opportunities in smaller cities such as Laoag. However, the commercial district of Laoag is small, impossible to expand, and expensive due to the geographical constraints imposed by the adjacent Laoag River. Therefore, a new commercial district has formed in the neighboring municipality of San Nicolas, only 3 kilometers away from the city beyond the Laoag River to the south, including a big shopping mall called Robinsons Place Ilocos (originally Robinsons Ilocos Norte; hereafter the Robinsons). Car showrooms for Honda, Nissan, Kia, Hyundai, Chevrolet, Toyota, and Ford have been built along the road connecting Laoag City and Batac City through San Nicolas.

The Robinsons Group was founded by John Gokongweis Jr., the Chinese-Filipino business magnate. He started by establishing a food-manufacturing company, Universal Robina, in 1954; this grew to become one of the largest food and beverage companies in the country. The group diversified into real estate (Robinsons Land) in the 1980s, an airline (Cebu Pacific) and shopping mall (Robinsons Mall) in the 1990s, and many other sectors. Robinsons Mall has increased its branches, expanding from Metro Manila to smaller cities and China; there were 51 branches as of 2018. The Robinsons, which opened on December 3, 2009, is the first and largest shopping mall in the Northern Luzon Region and has a floor area of approximately 22,220 square meters.

When the mall opened, there were concerns that the size of the local population might not support the business. However, its sales in January 2010 were more than double the initial estimate. While this was attributed to the newly opened mall’s attractiveness to customers during the Christmas season, one year later sales were still growing steadily.10) By January 2010, all 54 spaces were occupied. About 80 percent of them were being used by companies based in Manila or those directly run by the Robinsons, and the remaining 20 percent were owned and run by local businesspeople. The mall’s shop lease manager cited the following reasons for its success: there were no competing large-scale shopping malls in the province; local consumers’ purchasing power was boosted by remittances from OFWs; the mall displayed a wide range of goods, including some previously unavailable in the region; and it was the most convenient place to shop for those who had cars, as it had a large parking area.

Real estate development in the area is also impressive. The Robinsons Group built an expensive gated subdivision with a pool and clubhouse in the suburb of Laoag City along the road to Laoag airport.11) Then Senator Manuel Villar also developed his Camella Homes along the airport road. Most of the lots were quickly purchased by families supported by remittances from overseas.

II Business-Friendly Politics of the Valdezes

II-1 Valdez Family

The site where the Robinsons and other commercial facilities were built was called the Valdez Center, named after the Valdez family, a local elite clan in San Nicolas. I argue that the Valdezes, especially the two brothers Alfredo and Hilario, played the role of policy entrepreneurs and had a major role in developing the municipality.

From a historical perspective, local elites in Ilocos Norte could not own a significant amount of land because the region lacked expansive plains suitable for large-scale plantations.12) This provided opportunities for new local elites to emerge through violence during World War II and through higher education after the war. The Valdezes are one of them. Hilario Valdez, who lived in the second half of the nineteenth century, married Chrispina, a sister of former President Ferdinand Marcos’s grandfather. One of their children, Simeon Marcos Valdez, gained influence by leading the anti-Japanese struggle as a battalion commander of the 15th infantry regiment and served as a congressman for 14 years after the war (Velasco 2006). Angela Valdez, Simeon’s sister, married the father of former President Fidel Ramos. Consequently, Simeon was an uncle to both presidents, Marcos and Ramos. After democratization in 1987, one of Simeon’s relatives, Alfredo Valdez Sr., a retired soldier who became a municipal councilor, was appointed officer-in-charge as mayor of San Nicolas by Corazon Aquino’s administration, but he was soon replaced by Marcelo Batangan. Until Alfredo’s namesake son Alfredo Jr. won the mayoral election in 2004 after three other mayors,13) no clan could establish dominance.

Despite the Valdez family’s relationship with powerful political clans, Mayor Alfredo Valdez Jr. emphasizes his middle-class professional origins. He was born in Laoag in 1961 and moved to San Nicolas, his mother’s hometown, during childhood. After finishing high school locally, he studied pharmacy at the Far Eastern University in Manila and became a medical doctor. While working at the Veterans Memorial Medical Center in Quezon City, he obtained a master’s degree in hospital management from Ateneo de Manila University. Upon returning to San Nicolas, he worked as a hospital consultant. Encouraged by a local priest, friends, and his brother Hilario, he ran for the mayoral election and won the position in 2004. He has explained that he wanted to remedy such problems as the deterioration of public order and financial mismanagement. He was reelected unopposed in 2007 and 2010. In the 2013 election, Alfredo switched to vice mayor due to the 1987 constitutional limit of serving in the same position for no more than three consecutive terms spanning nine years. His wife, Melanie Grace Valdez, won the election as mayor. Alfredo came back as mayor in the 2016 election and was reelected in 2019, both times unopposed. Since 2010, the Valdezes have assumed the position of vice mayor as well.

In the process of consolidating the family’s power, Alfredo’s brother Hilario, a leading local entrepreneur, played a key role in attracting investment to the municipality, which fueled local economic growth. Hilario studied law at San Beda College and became a lawyer. Recognizing his contribution to the electoral victory of Fidel Ramos to the presidency in 1992, Ramos appointed him as deputy administrator of the National Tobacco Administration and a board member of the National Food Authority. While handling issues related to farmers, he became disillusioned by the tedious procedures of the government. He resigned from both positions and started a shipping and cargo logistics business in 1994. The following year, Hilario expanded his business into his hometown with the establishment of the Venvi Group of Companies, which ventured into agribusiness and then real estate (Guillermo 2006). He suggested his brother Alfredo run for the 2004 mayoral election to create a business-friendly environment.

II-2 Making of the Valdez Center14)

Hilario saw the economic potential in 20 hectares of underutilized, agricultural, low-lying land, which was frequently flooded during the rainy season and would remain waterlogged for a month afterward. This land has now developed into the Valdez Center. Accumulation of the lands started in 1997 when Carlito Abadilla, a local elite in the municipality of Banna, sold 4,000 m2 of the family land to Hilario to finance the clan’s election expenses the following year. To address concerns among board members of the Venvi Group that this development plan would cost a lot, Hilario argued, “What is more important is the good location. If the site is in a bad location, even if the development is easy, the business will be difficult” (Guillermo 2006). When certain lands were purchased, he petitioned the provincial government to allow the moving of soil from the adjacent Laoag River to increase the height of the land to prevent flooding.

The most difficult problem in the course of development was the acquisition of titles to the land. A lot of land was registered in the 1920s and 1930s, and many of the titleholders were deceased, along with their children and grandchildren. In some cases, when the Venvi Group was negotiating the purchase of land from an owner, another person would come forward claiming to own the same piece of land and demand payment. Consequently, the group had to negotiate with multiple claimants and go through the process of judicial titling, which took a lot of time and work. It also took considerable time for the Department of Environment and Natural Resources to process administrative titling and for the Department of Agriculture to convert land use from agricultural to commercial. About 60 percent of the process of acquiring the land title for the Valdez Center was completed by January 2009, and 80 percent by February 2019.

It is not rare in large-scale development projects in the Philippines for coercion and violence to be used against residents who oppose land sale or relocation. However, my research into the development of the Valdez Center did not uncover such stories. Rather, it appears that the former landowners earned a profit by selling their land.15) Several times I heard such jokes such as “My grandfather used to own land there, but he sold it to buy a buffalo carriage. If he had not sold it, I would be very rich by now.” The Venvi Group also provides jobs in the Valdez Center to families of landowners, to encourage them to sell their land.

From the beginning, Hilario had a view to develop the site into a commercial district. When some progress was made in developing the land, he asked SM Department Store, the leading mall business—owned by Henry Sy—to build a shopping mall. However, the negotiations broke down, because while the Venvi Group proposed constructing its own commercial facilities and operating a joint venture with SM Department Store, the latter demanded a 50-year lease of the entire land and a monopoly on the shopping mall business. After this, Hilario discussed the business plan with the Gokongweis’ Robinsons Group, and in 2005 they reached a basic agreement for a joint venture, which was finalized the following year. Based on the agreement, in 2007 the Venvi Group first built a commercial facility named 365 Plaza (originally 365 Mall), and in December 2010 the Robinsons Ilocos Norte opened for business.

Following the success, the Venvi Group, which become the biggest corporation in the province, further expanded its businesses in the Valdez Center. In 2011 it built the first condominium in Ilocos Norte, Balai Condominium, consisting of one nine-story building and two four-story buildings with a swimming pool. All the units were purchased while the condominium was still under construction, mostly by migrants living in Hawaii as accommodations for temporary returns home or as rental investments.16) The meat shop Freddo was constructed to promote the Venvi Group’s pork industry. Vivien Hotel started operations in 2018 in 365 Plaza. In a space beside the hotel, the Venvi Group enticed Casino Filipino-Ilocos Norte owned by Philippine Amusement and Gaming Corporation, targeting Taiwanese and Chinese mainlanders. The Venvi Group also built an IT park, to which it successfully enticed big American BPO companies: Expert Global Solutions (renamed Alorica Ilocos) in 2014 and Accenture in 2015.17) In order to provide accommodation for workers in the Valdez Center, it built the Vesa Hall, composed of four buildings that could accommodate 198 people, in 2019. In the Robinsons, the Valdez Center also hosts such government offices as the Department of Foreign Affairs’ passport center, the Social Security System, and the Technical Education and Skills Development Authority. Thus, the Valdez Center has become a one-stop shop for many purposes, from shopping, eating, working, and living to applying for government services.

Thanks to the real estate development and opening of new businesses, the number and value of real properties have significantly increased. The surge in commercial land and building values between 2008 and 2017 is impressive (Table 1).


Table 1 Comparison of Real Properties in San Nicolas


Source: Office of Municipal Assessor, Municipality of San Nicolas (2018).


II-3 Business-Friendly Politics

The economic development in San Nicolas is partially attributable to the area’s geographic attractiveness to investors: it is located at the major transportation interchange in the province of Ilocos Norte and has easy accessibility to Laoag City and Laoag International Airport. Compared with Laoag City, whose commercial district is small and unsuitable for redevelopment, San Nicolas has the advantage of having vast lands along the major road that are suitable for developing large-scale commercial districts.

However, it is wrong to ignore Mayor Alfredo Valdez’s initiative for what he calls “business-friendly” politics.18) The concept seems to be derived from the “Most Business-Friendly Local Government Unit Award,” which has been given by the Philippine Chamber of Commerce and Industry (PCCI) since 2002 to promote good local governance and improvement in the business environment under the theme of “What’s good for the citizenry is good for business.” Among the one hundred LGUs nominated each year, San Nicolas won the prize in the level 1 municipality category in 2009, becoming the first winner of the award in Ilocos Norte. The municipality also received the award for three consecutive years in 2012, 2013, and 2014, which made it the first Hall of Famer of the award in Ilocos Norte. The selection criteria in 2009 were twofold: first, “good governance,” which refers to encouraging trade and investments through both “quality customer service,” based on simplified, efficient, and seamless business-related procedures, and “public–private sector partnership” for the formulation and implementation of local developmental plans; and second, the realization of “competitiveness” in terms of “investment promotion,” “micro, small and medium enterprise development,” and “quality management systems and innovation” (Philippine Chamber of Commerce and Industry 2009). By 2016, revised business friendliness indicators included “anti-red tape act,” “fiscal transparency,” and “trade, investment, and tourism promotion” (Philippine Chamber of Commerce and Industry 2016).

Alfredo’s initiative has been in line with these indicators of the PCCI.19) Eradicating conventional rent that was exploiting state resources for public projects was a prerequisite for him to put in place new reforms. Immediately upon being elected in 2004, he revoked a plan of the previous administration to build a public market with a loan of 36 million pesos, which he criticized as an inappropriately high price due to collusion with the construction company. The municipality then completed construction of a public market with its own funds without resorting to a loan in 2010.

In order to attract investors, Alfredo implemented a series of reforms. First, he had the municipal council draft and pass the Investment Incentive Code in 2004, the first legislation of its kind in the region, to facilitate investment procedures and provide tax reductions for five years to new investors.20) Hilario also made use of his business network in Manila to bring investors to San Nicolas. Second, Alfredo eliminated the conventional practice of politicians and officials demanding grease money in exchange for licensing and approval for investors. Third, he realized a “one-stop shop licensing center” by eliminating red tape and quickly providing licenses and approvals necessary for business. When investors visited the municipality, rather than letting them go back and forth between various bureaus, he would convene a meeting in the mayor’s office with all related officials in attendance. He said this was also effective in preventing wrongdoing on the part of officials. Fourth, he made sure to maintain security to reassure investors. As validation of this, San Nicolas was recognized as having the Most Outstanding Municipal Peace and Order Council in 2006 by the National Police Commission. Security is particularly important for luring BPO businesses, which operate in the middle of the night due to differences in time zones from the United States.

II-4 Impacts on the Local Economy

The development of the Valdez Center has had various impacts on the local economy. The most positive impact is its huge contribution to job creation. Although some contractors were from Manila, five hundred to six hundred locally hired construction workers worked on building the Robinsons, while two hundred worked on building Balai Condominium. They commuted in the beginning by public transportation but later by newly purchased motorbikes. As of 2019, more than ten thousand people regularly worked as construction workers, salespersons, security guards, and so on in the Valdez Center.21) BPO offices have greater potential to provide jobs with higher salaries to young college graduates. Alorica Ilocos increased its number of employees from nine hundred to 1,500 in 2019.22) To attract workers, it provides 13,000 pesos for relocation assistance. Accenture initially employed two hundred people, increased that number to around one thousand by 2019, and was set to offer five thousand jobs. These BPO companies have pointed to the wealth of talented students and young professionals as a reason for choosing Ilocos Norte to host their branches (ABS-CBN News 2015; Adriano 2015; 2018; Manila Times, April 27, 2016; Provincial Government of Ilocos Norte, Communications and Media Office 2016).

Alfredo also intends to create synergy between San Nicolas’s traditional pottery (damili) industry and newly attracted businesses, which would remind the public that modern design and traditional crafts could go hand in hand (Manila Times, July 28, 2009). Having exempted pottery business operators from paying taxes,23) he asked the Robinsons to use locally produced red bricks for the mall’s exterior and part of the interior. The municipality also invited a volunteer pottery artist from Japan International Cooperation Agency to develop new products that would be attractive for tourists to buy as local souvenirs.

Some local businesspersons found new business opportunities in the Robinsons, but local businessmen I interviewed in 2010 and 2011 were having difficulty adjusting to the new business.24) A Chinese Filipino restaurant owner who invested 700,000 pesos to set up an outlet in the food court complained that the high rent and mandated use of high-quality materials were burdens on his business. Another Chinese Filipino who ran a restaurant in the mall admitted that his business was in the red because of the high rent and expensive utilities and that he would consider withdrawing if the rent did not come down.25) Because of this situation, many local business owners were still in a “wait and see” mode with regard to assuming tenancy in the mall.26)

Investments by big business from the outside also brought threats to existing local businesses. Before the opening of the Robinsons in 2009, there was some opposition to the plan from grocery stores in San Nicolas and an old local department store in Laoag, but there was no serious political opposition. After the opening of the Robinsons, local retail businesses were adversely affected. The 5-Sisters Superstore, a local department store in Laoag, tried to win back customers by improving its stock and increasing sales, but it eventually closed and leased its premises to SM Savemore, which opened in 2011. Vendors at the public markets in Laoag and San Nicolas were also affected by the Robinsons’ opening.27) In particular, those dealing in groceries complained about reduced sales, but they tried to secure suki (regulars) with friendly sales talk and by providing services that department stores could not, such as discounts and free replacement of defective products. They also tried to attract customers by emphasizing that their products were cheaper and fresher than those found in the mall.28)

Yet the biggest reason why many local businesses were able to survive despite aggressive investment by the mall businesses was that local residents receiving remittances from abroad had enough purchasing power to sustain both old and new commercial facilities. Locals generally welcomed the Robinsons as it provided a new place for consumption and entertainment. The rich and middle classes enjoy shopping for luxurious items as well as the convenience of making a significant number of purchases in a single trip because of the mall’s large parking lot, which is a contrast to the congested commercial districts in Laoag. The poor come with their families on holidays to have meals in inexpensive restaurants and indulge in a bit of shopping in an air-conditioned space.29) Yet many consumers use shops closer to their home or workplace to buy items they use daily and the public markets to buy fresh foods.

II-5 Contribution to Local Revenue and Public Services

New businesses have made important contributions to the tax revenue of San Nicolas, which does not enjoy a big share of the IRA from the central government due to its classification as a second-class municipality.30) The amount of IRA to local governments is determined by their classification based on area, population, and income. For instance, Vintar, having the largest area in the province, is classified as a first-class municipality and received 80 million pesos of IRA in 2009, whereas San Nicolas, which has the second-smallest area in the province at 40.18 km2, received only 43 million pesos that year. A municipality can significantly increase its share of IRA by gaining cityhood, which requires satisfying one of two requirements: having an area of 100 km2 or a population of 150,000, or generating a local income of 100 million pesos for the last two consecutive years.31)

It is unrealistic for San Nicolas, which had a population of only 33,642 in 2007 and 36,736 in 2015, to meet the population requirement. Thus, San Nicolas has sought to raise local revenue through its business tax, the largest source of tax revenue.32) Since 2005, the year after Alfredo was elected mayor, San Nicolas’s local revenue has increased dramatically despite the tax reduction for new investors. The increase in local sources of income has outstripped the increase in IRA, which has led to a significant decline of IRA dependency to around 50 percent or even lower (Table 2). Considering the national average of IRA dependency at the municipality level was 78 percent in 2004 and 77 percent in 2016,33) it is clear that San Nicolas has achieved a financial status relatively independent of central government funding.



By making use of the increased local revenue, the municipality has improved public services, which has helped it win many awards in various fields of good governance. Trophies and certificates for more than sixty awards are exhibited in the municipality hall, which is constructed with locally produced red bricks and ornamented with traditional products. A virtuous cycle is identified: initiatives for good governance yield awards; awards attract investment; and investment increases local revenue to support the betterment of public services, which attracts new awards.

In terms of infrastructure, the municipality implemented the Small Water Impounding Projector “Catching Rain” Program, which utilizes the indigenous and environment-friendly technique of earth dams, water reservoirs, and irrigation systems for agriculture in the municipality, where there are no natural bodies of water for irrigation. This program won the Galing Pook award in 2017 (Dela Cruz 2017b; Galing Pook Foundation 2017, 17). For environmental rehabilitation, to address the rapid increase in waste and garbage generated by economic development, the municipality in 2012 started constructing a sanitary landfill, which came into operation in 2015. This was a progressive initiative, considering that more than 85 percent of LGUs still used open dumps as of 2016, despite the Ecological Solid Waste Management Act of 2000 enjoining LGUs to convert open dumps into sanitary landfills (Senate Economic Planning Office 2017).

In the field of cultural services, in order to enhance public awareness about the cultural heritage of the local pottery industry, the municipality honored the master craftswoman Paulina “Nana Paul” Rangcapan as a Municipal Living Treasure in 2016 (Municipal Ordinance No. 2016-05). Her story is highlighted in the museum Museo San Nicoleño, which was set up in a historical water reservoir building in 2017 in time for the quadricentennial of San Nicolas’s independence from Laoag (Sembrano 2018). A municipal officer explained that the pottery industry was an important part of San Nicolas’s cultural heritage; even though the Spanish colonial government tried to annex San Nicolas to Laoag, the necessity of managing the pottery industry helped San Nicolas to maintain its independence.34) The municipality also institutionalized the Damili Festival, in which each barangay performs native dances; required elementary and high school students to learn the art of pottery as part of the curriculum; and purchased an old Spanish-style building to preserve the structure and named it Balay San Nicolas. Such programs act as a conduit for tourism development. The municipality became a finalist for the Galing Pook Award for Outstanding Governance Program for its cultural heritage program in 2015. Moreover, Alfredo encouraged and facilitated Manuel Aurelio, a local intellectual, to publish a second edition of his book titled The History of San Nicolas (Aurelio 2013).

As for health and sanitation, the municipality has provided funds to extend health insurance to those not previously covered by PhilHeath: informal workers and unenrolled women about to give birth.35) It has held medical-dental missions and blood donation drives to provide medicine and medical assistance to the people. The Department of Health conferred the National Sandugo Award on the municipality in 2013 and 2017 for actively promoting voluntary blood donation (Dela Cruz 2013; 2017a). In the education sector, the municipality has worked with the San Nicolas Express BIN-I Foundation, a goodwill organization founded and chaired by Alfredo, to provide scholarships to less fortunate students. San Nicolas was also adjudged a National Kabalikat awardee by the Technical Education and Skills Development Authority in 2013 for its outstanding promotion and enhancement of technical education and skills development (Dela Cruz 2013).

II-6 Race for Investment among Local Governments

According to Alfredo, another advantage of being less dependent on IRA is that local chief executives like himself can withstand harassment from higher-ranking politicians. A feud with the Marcoses, the distant relatives and the most powerful clan in the province, is a serious threat for the Valdezes.36) The Marcoses, who have monopolized the governorship of Ilocos Norte since 1998, was not always supportive to the development of the Valdez Center. The Venvi Group’s application to the provincial government for tax incentives was rejected.37) The Venvi group also had to develop the basic infrastructure for services such as electricity and water by themselves. Imee Marcos, who served as the governor from 2010 until she was elected to the Senate in 2019, declined the Venvi Group’s application for a quarry permit for two years while issuing permits to other businesses. When two senators distributed farm-to-market road funds to the provincial government, Imee did not allocate the funds to San Nicolas. Perhaps frustrated by the Valdezes’ achievements, Imee demanded that investors not invest only in San Nicolas. As if to appease the governor, Alorica opened a small office in Laoag, and Casino Filipino installed several machines in the Plaza Del Norte Hotel and Convention Center which was constructed in Paoay by Imee’s brother Bongbong when he was the governor. The feud with the Marcoses eventually made Hilario to run for a congressional seat but lost to Eugenio Angelo Barba, who was backed by the Marcoses in the 2019 election.

Such conflicts between political clans should be understood in the context of competition over investment, not just as personal matters. Imee herself situated the rise of business-friendly politics as the third stage of development of the province, following the first stage when her father, President Ferdinand Marcos, developed the province through aggressive public spending on infrastructure in the 1970s, and the second stage when remittances from OFWs contributed to the local economy from the 1990s to 2000s, which she believed was not sustainable due to the high social cost of draining the population. In the current third stage, where “small government” is celebrated, local governments seek sustainable development by collaborating with the private sector. The BPO business is especially important because it can prevent university graduates from leaving the province and can increase the purchasing power of young workers. Thus, Imee emphasized that winning the “race towards FDI (foreign direct investment)” was essential, and it was no longer only ASEAN countries that competed for FDI but also local governments in the Philippines.38)

Apart from enticing investment, Imee added another method for the local government to function as an enterprise: pursuing profit in such fields as tourism.39) However, there are still legal and political limitations that discourage local governments from seeking profit as an enterprise.40) Thus, attracting investment is so far the most important strategy.

The impressive successes of San Nicolas have sparked a race for investment among local governments in the Province. Laoag City, whose mayoral position was ruled by the Fariñas clan from 2004 to 2019, legislated the Investment Incentive Code in 2008, four years after San Nicolas, and tried to entice mall businesses. Although its scale is much smaller than that of the Robinsons, the SM Savemore opened in the city in December 2011, replacing the old 5-Sisters Superstore, which was followed by the opening of SM Hypermarket in October 2012. To host the latter, Laoag City renovated the Ilocano Heroes Memorial Hall. In return, SM Department Store donated 1.5 million pesos to Laoag City General Hospital and 300,000 pesos for the renovation of St. William’s Cathedral (Orosa 2012). Puregold Supermarket, a large-scale grocery store run by the Chinese-Filipino businessman Lucio Co, opened its doors in November 2012.

However, the series of big investments in congested Laoag drew opposition in several forms. Local businesses and the Laoag Market Vendors Association opposed the opening of large-scale grocery stores in the city. In response to their anxiety, Laoag City claimed that it could not prevent local development and proposed that local businesses take up tenancy in the malls.41) The strongest protest was against Laoag City’s decision to demolish the historic structure of Laoag Central Elementary School, which was built in 1929, and offer the land to Puregold. The land had originally been donated to the city for educational purposes by the diocese of Laoag. Growing opposition from the school’s parent-teacher association, the community, and the local business sector forced the provincial board to impose a moratorium on the demolition of the heritage structure in 2009 (Arzadon 2009). To avoid further delay in opening, Puregold eventually agreed to downscale its original plan and built its supermarket beside the school.

III Local Politics and Private Capital

III-1 Reexamining Rent in Local Politics

A characteristic of the business-friendly politics in San Nicolas is the close link between politics and business formed by the Valdez brothers. Although Hilario had made a conscious effort not to intervene in politics,42) the two brothers clearly made use of rent to further develop the Valdez Center. It would not be feasible to accumulate and develop the huge lands without strong support from the local government because the business needed to go through many complex procedures to get various kinds of permits. However, the use of such political power by an economic actor is usually regarded as rent-seeking, which harms the economy. In that case, why did the use of rent by the Valdezes promote the development of the local economy instead of harming it?

According to the mainstream neoclassical economic theory, rent essentially harms the economy because it gives incentives for economic actors to indulge in rent-seeking, inefficiently spending resources for unproductive purposes such as lobbying, petitions, and donations, as opposed to profit-seeking, in which resources are utilized for productive purposes in the market, thus contributing to economic development. On the other hand, there are arguments that some forms of rent have produced more benefits than costs, contributing to economic growth in East Asia and Southeast Asia, contrary to the dominant neoclassical view (e.g. Chang 1994; Khan 2000a; 2000b; 2006; Kang 2002). According to Mushtaq Khan, it is possible to measure the different economic impacts of rent by subtracting the cost of rent-seeking from the benefits of rent. While a positive difference signifies that rent is “value-enhancing,” a negative difference shows that rent is “value-reducing” (Khan 2000a; 2000b; 2006).

In the Philippines, rent-seeking has been identified as a major obstacle to economic development. Paul Hutchcroft (1998; 2000) argues that oligarchic elites have engaged in predatory rent-seeking from the state for their self-interest at the cost of economic rationality and the general welfare of the nation. He also states that privatization of businesses previously controlled by the state did not lead to the abolition of predatory rent-seeking because it produced new rent—the state’s licensing of the entry of private capital—which could be utilized by companies enjoying the most favorable political connections to take advantage in bidding and negotiation (Hutchcroft 2000, 241). Rent-seeking in the Philippines is expensive and unproductive because so many actors compete for rent; the state is weakened by many authorities informally intervening in and influencing the formal bureaucracy. This condition makes the outcome of rent-seeking so unpredictable that beneficiaries of rent pursue narrow self-profit instead of investing in development that contributes to broader interests (Hutchcroft 2000; Kang 2002).

In stark contrast to the general description of the Philippine political economy, however, it is undeniable that value-enhancing forms of rent have worked in the case of San Nicolas. This can be attributed to two factors. First, the cost of rent-seeking has been at its minimum because of the high predictability of its outcomes at the level of local government, where the number of actors is limited and negotiation with a chief executive with strong leadership is reliable. Rent-seeking from the central government is much more complex and incalculable due to the many informal authorities involved. In the case of San Nicolas, the family tie, coupled with the shared vision and interests of the Valdez brothers, has made the cost of rent-seeking little to none. Another factor making rent-seeking inexpensive is the changing economic structure. The cost of rent-seeking is likely to become more expensive in a setting where the state monopolizes resources or provides lucrative business opportunities and a number of companies are competing for rent, as in the case of overbidding for a public project. However, private capital has become more dominant over state resources and local governments are not always in the position to choose investors. In the new setting where many local governments compete to attract private capital to their localities, the cost of rent-seeking to companies must be much cheaper.

Second, the rent utilized by the Valdezes for the development of the Valdez Center produced general benefits to the local economy because the Valdezes tapped the potential of the local market rather than monopolizing it. The enticement of the international BPO companies further expanded the local market by strengthening the purchasing power of its workers and families. Furthermore, the Valdezes succeeded in creating and maintaining a competitive market. They did not put undue pressure on other private capital and instead used their own businesses as instruments to attract new investment from Manila and abroad. They explained that investors would not be interested in investing in a large expanse of empty land and therefore it was necessary for the Venvi Group to create some successful examples with their own money.

Yet, the economic impacts of rent can change over time, and value-enhancing forms of rent can become value-reducing (Khan 2000b). At least three negative scenarios are conceivable for San Nicolas. If investment in the municipality further increases and multiple companies compete for business permits from the local government, the cost of rent-seeking may balloon, and this may take away from the benefits of the rent. Also, if demand in the local market becomes close to saturated, the businesses of the Valdezes and other companies that enjoy rent may prevent the development of other private capital and inhibit the competitive market. Lastly, a change in local political leadership may seriously disturb the conditions that have kept the rent productive. The weakness of local bureaucracy under the “spoils system” of the Philippines, in which high-ranking local officials’ tenure is dependent on electoral outcomes, raises the risk.

III-2 Changes and Continuity in Elite Rule

Sidel stated that the structural condition of the state’s monopoly of resources helped local elites to entrench their power through access to the state. This paper argues, however, that conditions have changed as private resources have accumulated in society—not only in Metro Manila but also in many smaller cities—through international remittances and investments by the private sector since the 2000s. The new structural conditions have provided local elites with an incentive to switch their political dominance strategy from predatory rent-seeking for state resources to enticement of private sector investments. The new strategy enables local elites to enhance their revenue, improve public services, and receive awards, which further attract investment. The Valdez brothers were the pioneering policy entrepreneurs who first adapted the new strategy in Ilocos Norte.

However, the new structural condition does not always produce policy entrepreneurs who practice reform-oriented local politics throughout the Philippines. Given that the new strategy is not always available for local elites who do not enjoy geographic conditions suitable for commercial development, the gap between progressive and regressive local governments will become bigger. Even in cities with potential for investment, not all local elites can smoothly change the conventional way of doing politics. Aggressive enticement of investment without sufficient coordination can also invite local opposition, as seen in the case of Laoag. Thus, it can be argued that the new structural condition provided local elites with a new rule of a game in which those who succeeded in adapting themselves to the new rule became dominant and those who did not do so began failing.

This study also confirmed the tendency that business-friendly local politics strengthens the power base of dynastic local elites. The case of San Nicolas suggests that business-friendly politics facilitates the emergence of a new type of local dynasty. The fact that Alfredo won reelection unopposed in 2010, 2016, and 2019 shows that the Valdezes were able to establish a dynasty through reform-oriented politics in the municipality, whose political landscape had once been so competitive that none of the ambitious clans had been able to build a stable dominance.

For more established dynasties such as the Marcoses, the changing structure of the political economy may have provided a new challenge. Yet, Imee was confident in the dynasty’s stability, insisting that local governments ruled by long-standing dynastic elites were more advantageous to economic development through business-friendly politics. This was because stable, strong leadership enabled them to implement a long-term plan, while competition among many interests, coupled with frequent changes in leadership in national politics as well as more competitive local politics, could stagnate development.43)

Although it may be tempting to dismiss Imee’s argument as mere self-justification for dynastic elites, the study’s findings affirm her view. Theoretically, the presence of many actors and unpredictability in electoral politics increase the cost of rent-seeking, which tends to have a negative impact on the economy. On the contrary, dynastic local politics limits the number of actors and unpredictability in politics, which can reduce the cost of rent-seeking and thereby produce a positive outcome. Empirically, this study exemplifies that local elites can strengthen their hold on power through business-friendly politics by managing the channel of capital inflow, providing more job opportunities, and improving public services.

However, a change in the way local elites allocate resources to constituents and the way the latter evaluate the former may eventually lead to more pluralistic local political competition. In traditional clientelist and machine politics, local elites directly distribute resources to their followers for votes as a token of their personal “kindness.” In contrast, in business-friendly politics, local elites indirectly benefit a broad range of constituents, beyond their narrow political affiliation, through economic and social development. This can make constituents more independent of local elites and thereby weaken the latter’s direct control. Moreover, because constituents value performance and competence in the local elites, even established dynasties may fail if they fail to perform for the people. Although this study does not have data showing such signs, new studies on failed or weakened dynasties in the new environment of a political economy would reveal conditions for change.

Accepted: December 15, 2020


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Velasco, Melandrew T. 2006. Uncle Sim: The Life and Times of Simeon Marcos Valdez: World War II Hero, Lawyer, Lawmaker, Patriarch, Uncle of Two Presidents. Quezon City: Media Touchstone Ventures.

Weingast, Barry R. 2009. Second Generation Fiscal Federalism: The Implication of Fiscal Incentives. Journal of Urban Economics 65(3): 279–293.

World Bank. n.d. Foreign Direct Investment, Net Inflows (BoP, current US$) – Philippines., accessed January 24, 2020.

Young, James P. 1981. Migration and Education in the Philippines: An Anthropological Study of an Ilocano Community. PhD dissertation, Stanford University.

1) I am deeply grateful to Nagasaka Itaru, Ariel Tejada, and Mario Tejada for facilitating my research.

2) The amount of remittances from OFWs increased from $694 billion in 1985 to $18,763 billion in 2010 and $28,943 billion in 2018 (Philippine Statistics Authority).

3) The net flow of foreign direct investment into the Philippines increased from $12 million in 1985 to $1.07 billion in 2010 and $9.802 billion in 2018 (World Bank, n.d.).

4) Holmes also notes that real property tax collection on idle lands tends to be low because the financial and political process of land valuation is more costly than a possible increase in revenue from taxes, due to the limited power of local governments to set tax rates.

5) Current prices of real estate, renting, and business activity according to the gross national income and gross domestic product recorded double-digit growth except from 2008 to 2009.

6) Manuel’s son Mark became the secretary of public works and highways in the Duterte administration despite the family’s interest in real estate. Manuel’s wife, Cynthia, who was reelected to the Senate in 2019, chairs the Senate’s Agriculture and Food Committee despite the Villar family’s interest in converting agricultural lands into the family’s subdivision project sites.

7) Speculation was a major strategy they used for accumulation, because of the high and secure returns coupled with failure of the state to collect idle land taxes due to penetration of the elites’ interest (Goss 1998, 91–92; Cardenas 2011, 17).

8) Sajor (2003) points out that while the Osmeñas and Aboitezes, the two traditional landed elite families in Cebu, became real estate developers, other landed elites speculatively held on to their lots without developing or selling them and thus lost out on business opportunities.

9) Production of tobacco declined by an average of 5.36 percent annually from 2001 to 2007 (Espino et al. 2009).

10) Interview with Pia Guirre, shop lease manager of Robinsons Ilocos Norte, February 2, 2011.

11) Those who offered land for residential development were local elites. According to Nagasaka (2013), the owner of a local department store called 5-Sisters purchased the land a long time ago from the Agcaoilies, an old elite family, and sold it to the Robinsons for their subdivision, whose units were sold for 2.9 million to 6.6 million pesos in 2010.

12) The elites previously held a relatively large amount of land in the province of Ilocos Norte, but due to the practice of divided inheritance, the size of their landholding decreased (Nagasaka 2009, 57).

13) They are Benjamin Madamaba (1988–92), Angelo Barba (1992–2001), and Manuel Hernando (2001–4).

14) The description here is drawn from interviews with Alfredo Valdez (February 1 and 8, 2010; February 19, 2019); Hilario Valdez (February 20, 2019); Ed Mar Vincent Bonoan, former municipal councilor of San Nicolas and deputy leader of the operation team, the Venvi Group (February 7, 2010); and Guirre.

15) According to Bonoan, there were cases in which some residents tried to extort an excessive amount of money from the Venvi Group using false documents.

16) The reason why the group built a condominium when there was plenty of land to build houses was so that migrant workers returning home temporarily could enjoy peace and quiet as well as privacy. The units ranged in size from 47 m2 to 170 m2 and were sold for prices ranging from 1.1 million to 3 million pesos in 2010.

17) Alorica Inc., a California-based customer service company, acquired Expert Global Solutions in 2016. Accenture’s branch in Ilocos Norte was the third after Manila and Cebu.

18) A municipality official who had served three mayors also noted that it was after Alfredo was first elected that various reforms were started under the banner of being “business friendly” (interview with Reidemor Bumanglag, head of human resources, municipality of San Nicolas, January 31, 2011).

19) The following discussion is based on interviews with Alfredo Valdez, February 1 and 8, 2011.

20) San Nicolas Investment Incentive Code of 2004; interview with Bonoan, who drafted the bill, on January 28, 2011.

21) The Venvi Group directly hired five hundred to six hundred workers as of 2019.

22) Alorica Ilocos offered 390 pesos a day for new workers, which was much higher than the minimum wage of 310 pesos in the region in 2019.

23) Licensing requirements are also exempted for pottery business operators except for those who produce bricks that construction companies purchase with official documents.

24) Rent varies from one business type to another. In 2010, for a restaurant the monthly rent was 600 pesos per square meter as well as a small percentage of total sales.

25) He expected that if a new large-scale shop opened in Laoag City, the Robinsons would reduce its rent in order to retain tenants.

26) Interview with Robert Bismonte, president, Laoag/Ilocos Norte chapter, Philippine Chamber of Commerce and Industry, on January 29, 2011.

27) However, the revenue from the Laoag public market decreased by only a small margin after the Robinsons’ opening because the city administration made efforts to prevent tax flight by strictly monitoring shipment to the market and sales. On the other hand, merchants in the Laoag public market demanded a reduction in rent from Laoag City because the loan of 140 million pesos to build the public market in 1999 had been paid off in July 2009 and because the merchants’ sales had been reduced with the opening of the Robinsons. As for vendors in the San Nicolas public market, because the market opened in November 2010, it is impossible to compare revenues before and after the Robinsons’ opening.

28) A vendor dealing in clothes said that her products were cheaper for “everyone,” in contrast to the more expensive products at the Robinsons, partly due to the latter’s high rent. A chicken vendor said that because chickens sold at the Robinsons were frozen, she was trying to compete by selling as much fresh chicken as possible.

29) The shop lease manager claimed that tenants at the Robinsons were chosen to cover all classes of customers (interview with Guirre).

30) When Alfredo assumed the mayoral position in 2004, San Nicolas was a fourth-class municipality.

31) In Ilocos Norte, Batac was granted cityhood by Congress in 2007 even without satisfying the income requirement, but the Supreme Court revoked the decision in 2008. Batac regained cityhood in 2010 after the Supreme Court nullified its previous decision.

32) Coca-Cola paid the highest business tax of an annual 6 million pesos, which was followed by the Robinsons’ 3 million to 3.5 million pesos from 2010 to 2017 (interview with Henry Ulep, treasurer, San Nicolas, January 27, 2011 and November 26, 2018).

33) Bureau of Local Government Finance, Department of Finance (2004, 20; 2016). The average IRA dependency of the municipalities in Ilocos Norte also decreased from 73.4 percent in 2009 to 52.2 percent in 2016.

34) Interview with Richie Cavinta, February 19, 2019.

35) See Municipal Resolution No. 2019-52, which was enacted to comply with the National Health Insurance Act of 2013.

36) Interviews with Alfredo Valdez and Hilario Valdez, February 19 and 20, 2019.

37) The Ilocos Norte Investment Board pointed out that Venvi had acquired land titles for only 2 to 3 hectares of the 20 hectares for which the application had been made (interview with Bismonte).

38) Interview with Imee Marcos, February 3, 2011.

39) Imee pointed to Governor Ray Villafuerte of the province of Camarines Sur as a successful example. The governor put back profits gained from promoting tourism into school-building projects.

40) Imee criticized that Jesse Robredo, secretary of the Interior and Local Government of the Benigno Aquino III administration issued three memorandums to constrain local governments’ economic independence.

41) Interview with Joshua Paulino, head of Management Authority of Laoag Public Market, February 1, 2011.

42) Interview with Bonoan, January 28, 2011.

43) Interview with Imee Marcos.


Vol. 10, No. 2, Takagi Yusuke


Contents>> Vol. 10, No. 2

Policy Making after Revolution: The Faces of Local Transformation of the Philippines

Takagi Yusuke*

*高木佑輔, National Graduate Institute for Policy Studies (GRIPS), 7–22–1 Roppongi, Minato-ku, Tokyo 106–8677, Japan
e-mail: y-takagi[at]

aling Pook Awards by

DOI: 10.20495/seas.10.2_199

The decentralization process trigg Congressional Record. Quezon City: House of Representativered by the Local Government Code of 1991 resulted in local politicians rising to the national political arena in the 2016 Philippine elections. A former mayor of Davao City was elected to the presidency and the widow of a former Naga City mayor to the vice presidency. These cases reflect various political dynamics, including bossism, patronage politics, a developmental authoritarian regime, and a grassroots democracy. Beyond typological studies on local politics, this chapter reveals the transforming nature of local politics by scrutinizing policy making and policy implementation at the local level. Local policy makers become policy entrepreneurs when they find innovative ways to implement existing policies in particular local contexts or when they create new local policies. The policies may take on their own nature, or a built-in nature, via new institutions and changing expectations that outlast the term of political leaders. After reviewing conventional knowledge to understand the transforming nature of local politics, this chapter provides a brief case study of the coalition politics behind the Local Government Code of 1991. Policy coalitions—made up of politicians, bureaucrats, civil society activists, and businesspeople—work to make and implement policies at the national and local levels.

Keywords: local politics, reform policy, policy entrepreneurs, policy coalition, decentralization, built-in nature, local transformation, the Philippines


The decentralization process triggered by the Local Government Code of 1991 resulted in local politicians rising to the national political arena in 2016. A former mayor of Davao City was elected to the presidency, and the widow of a former Naga City mayor was elected to the vice presidency. A former mayor of Makati City also led the presidential race in 2015, but he lost in the end. The 2016 election results were more striking than previous election results. Almost all the presidents prior to the implementation of the local government code had experience serving as senators with nationwide electoral districts.

It is, however, misleading to paint the fruits of the reform as one color. President Rodrigo Duterte and Vice President Leni Robredo represented two different types of local leadership after decentralization. Mayor Duterte was famous for his iron-fisted approach toward rebels and vigilantes in Davao City, and his ruling style was investigated by the national government’s Commission on Human Rights. Meanwhile, Mayor Jesse Robredo, the vice president’s late husband, was known for a reform-oriented governance that empowered local residents, which was admired by local and international observers (Kawanaka 2013; Parreño 2019). Local politics are diverse enough to allow iron rule by strongmen as well as a democratic governance that encourages citizens’ participation.

The early literature on local governments is dominated by claims that bossism characterized local governments. In a compilation about local political bosses, Alfred McCoy (1994) emphasizes that the weak Philippine state has failed to penetrate into society. Political families, also called clans or dynasties, have maintained their power bases through illegal or extralegal ways, such as violence. McCoy emphasizes social forces such as family, while John Sidel (1999) points out the significance of the American colonial state’s institutional legacy of elected local officials who dominate economic resources and administrative prerogatives.

The discourse based on the weak state, or bossism, does not cover Philippine politics’ entire nature. The investigative journalism exposing bossism and warlordism represents a space for freedom of speech and a right to know, a space sustained by brave journalists. Based on Sidel’s bossism framework, leading Filipino journalists have exposed stories about local bosses throughout the country (Lacaba 1995).

Moreover, the story of policy making reveals an interesting context where policy makers exploit bossism or warlordism in reform politics. Jose Almonte, an influential presidential adviser to President Fidel Ramos, pointed out the use of publications on dynastic rule to generate public support for dismantling the telecommunication sector’s monopoly in the early 1990s (Almonte 2015, 241). Policy makers such as Almonte exploited studies on dynastic rule to carry out reform and successfully dismantled the telecommunication industry’s monopoly, revealing the political dynamics beyond those of a simple oligarchy.

We can expect contested politics among oligarchs, bosses, and reformers (cf. Quimpo 2008). Against the dominant discourse of a weak state, several policy reforms appear in tax laws, peace building, social policy, and budgeting at the local level (Sidel 2014; Takagi 2017; Hara 2019). McCoy (1994) refers to the Mafia’s resilience in Italy to highlight illicit activities in Philippine local politics. Italian local politics, however, were characterized not only by the Mafia but also by a rich history of social capital accumulated by the local civil community (cf. Putnam 1993). Local politics in the Philippines may be as diverse as Italian local politics.

As shown in Jose Magadia’s (2003) study on social capital, citizens actively engage with public issues in places with a dense civic community. In a study on social capital in local Philippine politics, Kobayashi Jun and Osaki Hiroko (2019) found that local political leaders with strong ties to residents performed well in social service delivery, while those with strong ties to the central government performed well in administration. Using the same data set, Nishimura Kenichi (2019) argues that most local governments with councils performed better than those without.

In the following sections, this chapter seeks to appreciate various local political practices and to understand the transformation of local politics by highlighting policy making. The first section critically reviews existing literature on local politics and argues that there may be pockets of local transformation where policy entrepreneurs work locally for reform, despite the presence of a developmental authoritarian state, a patronage-driven state, and a weak state in other parts of the country. The second section elaborates the concept of policy entrepreneurs and coalition politics to shed new light on Philippine politics through a case study on making the Local Government Code of 1991. The third section examines the cases studied and clarifies the practices of local policy entrepreneurs and the nature of local coalition politics in each case.

I Varieties of Local Political Practices: Beyond the Weak State

A critical review of the existing literature reveals some clues about political development in local settings. In his insightful paper on local Philippine political economies, Emmanuel de Dios classifies local leadership into three types: patrons and patronage (clientelism), bosses and violence (warlordism), and brokers and national resources (De Dios 2007, 166–177).

First, local leaders in a system of clientelism often depend on landownership and exploit the huge socioeconomic gap between themselves and their constituencies. Patrons can dominate physical forces by appointing local police or by organizing private militias; they can achieve political stability but cannot provide socioeconomic development. De Dios (2007) repeatedly mentions cases where landlords dominate large farm areas and exploit patron-client relations with minimal social burden to their clients. Other scholars point to machine politics, in which professional politicians provide material benefits only to constituencies in cities (Machado 1972). Patrons in rural areas and machine politicians in cities both engage in patronage politics, whose ideals oppose politics based on contested programs or platforms of political parties (Kitschelt 2000).

Second, bosses are local leaders who maximize violence to stay in power. In his influential study on bossism in the Philippines, Sidel (1999) emphasizes the political legacy of American colonial state building after independence. As a result of the peculiar sequence of colonial state building—introducing local elections before making a national bureaucracy—elected officials dominate the nation’s economic and coercive resources. Thereafter, local political leaders consolidate their power against the national administration because national politicians depend on local politicians for voter mobilization. Based on bossism, the Philippines has a predatory state that mostly fails to use legitimate violence and fails to consolidate the rule of law.

Third, brokers are local leaders who excel at bringing national resources to local areas. They impose initiatives from above and fail to represent the people’s voices through political parties. De Dios highlights Mayor Tomas Osmeña of Cebu, who developed the city by establishing a special economic zone and consolidating his power base as the head of the Osmeña family.

The typology of de Dios is an excellent starting point to consider a new perspective on local politics and the Philippine state.1) Tellingly, he recognizes the economic development under brokers and bosses while criticizing socioeconomic performance under patronage politics or clientelism. For instance, de Dios recognizes socioeconomic development under the rule of strongmen such as Mayor Rodrigo Duterte of Davao City and Governor Juanito Remulla of Cavite Province. We can hardly expect socioeconomic and political development within a weak state and oligarchy, so de Dios provides a hint of a new perspective.

Fig. 1 highlights the differences between de Dios’s argument and the previous weak state argument, which also differs from his trifold typology of local leadership.



Fig. 1 Varieties of Local Political Leadership and the State beyond the Weak State

Source: Author based on De Dios (2007).


The y axis shows the degree of socioeconomic development, and the x axis shows authoritarian versus democratic regimes.

The first quadrant depicts socioeconomic development and no political violence. The detailed case studies on each leadership type reveal a mixture of individual initiatives, supporter organizations, and policy sets. In the case study on Mayor Osmeña of Cebu City, Sakuma Miho (2012) describes an evolving developmental strategy led by the mayor. Osmeña worked hard for the Metro Cebu Developmental Project to grow Cebu City’s coastal area after the 1987 elections. Learning from the failed project in the 1960s, Osmeña designed the government-led developmental project and successfully borrowed 12.3 billion yen from Japan’s Overseas Economic Cooperation Fund. Osmeña maximized the Local Government Code of 1991, which allows local governments to contract a loan without intervention by the national government. In 2008, Cebu City finally turned its deficit into a surplus to manage the economic zone and provide social services to its citizens. One may argue that the mayor represents the Osmeña clan’s dynastic rule, but the Osmeña clan also has competition. The Garcias emerged as a competing political force in Cebu politics from the early 2000s (Pabico 2007).

Mayor Robredo’s much-lauded leadership of Naga City could be a better example of the first quadrant. Robredo built his professional career before running for political office. He created an innovative financial scheme for owners of small- and medium-sized businesses while raising tax collections from the big businesses in the city. He also invented a conditional aid scheme to help the urban poor with medicine and funerals (Kawanaka 2013). Kawanaka Takeshi criticizes Robredo’s machine politics, but we cannot underestimate Robredo’s innovative policy-making achievements when considering other local machine politics.

Mayors Osmeña and Robredo achieved socioeconomic development, but others in machine politics or family politics failed at developmental projects. Two types of family politics and machine politics apparently exist: static and transformative. In the static politics of Fig. 1’s fourth quadrant, leaders focusing on redistributing existing pies merely transferred slices of pie from the central government to local governments and reproduced the existing socioeconomic stagnation. Meanwhile, in transformative politics, political leaders do not depend on the existing socioeconomic structure but rather seek transformation, which may lead to the area’s socioeconomic development. Notably, Osmeña supported the local government code’s creation, while some politicians opposed decentralization to avoid disturbing local power bases (Katayama 2001, 117).

In the second quadrant, political leaders achieve socioeconomic development but depend on violence and suppression. This combination typifies a developmental authoritarian leadership, which was historically a common type of national leadership in Southeast Asia, such as Indonesia under Suharto, Thailand under Sarit and Thanom, and so forth. As de Dios points out, economic development in Cavite Province fits into this type of leadership. Governor Remulla of Cavite Province exploited experts’ knowledge of the Japan International Cooperation Agency when he invited Japanese foreign direct investment (FDI) in the 1980s.2) Besides, Remulla worked with the top Filipino technocrat at the time, Cesar Virata, who was born in Cavite and served as finance minister and prime minister under the Marcos administration (Coronel 1995, 4, 11). He obtained FDI while suppressing opposition with an iron fist (Coronel 1995).

Another famous example of a local developmental authoritarian regime can be found in Davao City under Mayor Duterte. Duterte was first appointed by the revolutionary government of President Corazon Aquino in 1986 and was then elected in 1988, when the city of Davao was called the “murder capital” of the Philippines because of its clashes among the Communist insurgents, anti-Communist cults like Alsa Masa, and several criminal syndicates. Aside from empowering the local police, Mayor Duterte apparently “outsourced” an anti-criminal campaign to private gunmen, which evolved into the so-called Davao Death Squad (Parreño 2019, 128–131, 177–195). While he adopted an iron-fisted approach against violence in the city, he sought economic development through FDI following the model of Singapore under Lee Kwan Yew (Parreño 2019, 173–174). Highlighting the achievements in Davao, Duterte climbed the ladder to the presidency of the Philippines in 2016.

In the third quadrant, we can assume a classic type of weak state that has failed in democracy and socioeconomic development. We may also call such a state predatory since it emphasizes the role of institutions rather than the social structure (Sidel 1999). Differences exist between developmental authoritarian leadership and predatory authoritarian leadership, with the latter failing to achieve economic development. Nationally, President Ferdinand Marcos failed socioeconomically, especially in the 1980s, but he might have equaled other leaders, such as Suharto and Sarit, in abuse of political power. In the Philippines, lists of bosses exist in the weak state at the national and local levels (cf. McCoy 1994; Lacaba 1995).

In the fourth quadrant, de Dios distinguishes local economic development under patrons from a developmental authoritarian state (the second quadrant), using the examples of Tarlac and Cavite Provinces (De Dios 2007, 182). In both provinces, Japanese capital provided direct investments in the 1980s. In Tarlac, the Japanese electronics company Sanyo had relations with then President Aquino, who did not dismantle her family’s plantation (Hacienda Luista) in the province. Tarlac and the surrounding provinces failed to maximize opportunities from being adjacent to the National Capital Region, but Cavite became a center for manufacturing exports and enjoyed economic growth. According to de Dios, the difference might have resulted from differing political leaderships in the two provinces: the Remullas could not dominate Cavite’s urban political economy, while the Aquino and Cojuangco clans maintained dominance through landownership (De Dios 2007, 182). Not much could be expected from the patronage-driven state leadership in Tarlac.

With examples fitted into each quadrant of Fig. 1, we now shift the discussion from why the Philippines has a weak state in general to why some areas have successfully freed themselves from authoritarian rule and socioeconomic underdevelopment—toward the first quadrant in Fig. 1. In the following section, we highlight the transformative role of policy making in emerging states.

II Policy Making as Institution Making

II-1 Policy Entrepreneurs in Local Politics

In transforming states in Fig. 1, someone made a difference. In this special issue, we focus on the role of policy makers who become policy entrepreneurs by creating new policies or finding new ways to implement existing policies. In his classic work on policy studies, John Kingdon (2003, 196–208) highlights the roles of certain policy makers, calling them policy entrepreneurs. Policy entrepreneurs invest their resources into policy-making processes because of certain interests and values, and for the simple joy of participating in the process (Kingdon 2003, 123). Lobbyists work for existing interests, but policy entrepreneurs make a difference through policy making. Scholars focusing on the role of policy entrepreneurs, therefore, highlight policy-making innovations.

Kingdon focuses on national policy entrepreneurs, while this special issue looks at local policy entrepreneurs. Locally, policy entrepreneurs may find new ways to implement existing policies. The Philippine Local Government Code of 1991, for instance, allows local governments to carry out various initiatives, but it is poorly utilized by local practitioners. Local policy entrepreneurs are not necessarily the same as policy makers with new ideas. Policy entrepreneurs interpret an existing policy in a local context to create a new local policy initiative.

We examine policy entrepreneurship in its implementation and creation. Local policy entrepreneurs find ways to implement national laws locally. Those who helped make economic zones in the Calabarzon area exemplify policy entrepreneurs who utilized the national government’s development policy to enhance the local economy. Policy makers also create new laws at the national and local levels that are designed for local development via the national government’s actions. Those who worked on the Local Government Code of 1991 exemplify this type of policy entrepreneurship.

II-2 The Built-in Nature of Reform Policy at the Local Level

In the weak state framework, political players do not focus on policy making and implementation. They may neglect the achievements of their predecessors and fail to consolidate reform initiatives, resulting in a weak state. Against this backdrop, Filomeno Sta. Ana, who has worked for tax reform beyond the administration, argues that policy making is part of institution making. If institutions are sets of rules shaping people’s behavior, public policy is an example of an institution (Sta. Ana 2010).

The built-in nature of reform policy may appear in institutions, organizations, and people’s expectations. Ma. Regina M. Hechanova et al. (2017) provide a candid collection of transformations in eight local governments—provinces, cities, and municipalities—that received a Galing Pook Award. Table 1 summarizes their findings.


Table 1 Transformation of Local Governments


Source: Based on Hechanova et al. (2017).


Reviewing this rich case study shows some instances of consolidation of the reform policy beyond the terms of individual politicians, whose terms are limited by law to a maximum of three (or nine years in total). In other words, case studies of local transformation reveal a series of continuous reforms beyond the term limits of particular politicians, as a result of the built-in nature of local policy making.

Local policy entrepreneurs succeeded in ensuring the continuation of their policy innovations beyond their limited terms in office in two ways. First, the successors came from the incumbents’ families or close aides and followed their predecessors’ initiatives, as expected. The cases of Marikina in 2001 and Mandaluyong, Bohol, and Naga exemplify this pattern.

More intriguing are the cases where competitors simply followed or expanded upon their predecessors’ policies. Notably, the successor of the reform-oriented mayor of Marikina City actually ran against the candidate nominated by the mayor, but the successor maintained similar policy initiatives as the previous mayor after winning the 2010 elections (see Chapter 3).

How did policy initiatives survive a political power struggle in the latter cases? Succession comes from the reform policy’s built-in nature. For instance, the Italian Agency for Development Cooperation introduced a community-based disaster preparedness program in Albay Province under Governor Romeo Salalima in 1989 (Amo and Felipe 2010; Alampay 2017, 15). After Joey S. Salceda was elected governor in 2007, he added climate change to the existing disaster risk reduction and management program and established the Climate Change Academy–Disaster Risk Reduction Training Institute. Salceda advanced the program and was elected co-chair of the board of the Green Climate Fund of the United Nations Framework Convention on Climate Change in 2011 (United Nations Framework Convention on Climate Change, n.d.). Salceda once again fought against Salalima in the 1998 elections and improved upon, instead of abolishing, his predecessor’s initiative, illustrating how the issue survived a political power struggle.

II-3 The Policy Entrepreneurs’ Coalition for the Local Government Code of 1991

Coalitions of Policy Entrepreneurs

When policy entrepreneurs form a coalition to make a new law, they can make a big difference. In his study on educational reform and reproductive health lawmaking, Takagi Yusuke reveals that policy coalitions under the Benigno Aquino administration were made up of policy entrepreneurs from within and outside the government. The policy coalitions achieved policy reform in certain areas even without a program-oriented political party with a party platform to formulate a full set of reform policies. This was because policy coalitions can play a similar role as political parties in a certain program through continuous efforts for policy advocacy, making, and implementation (Takagi 2017).

Policy coalitions become especially powerful when they can go beyond the immediate stakeholders. In educational reform and reproductive health lawmaking, advocates can enlarge their coalitions by framing issues in terms that the business community understands (Takagi 2017). In this subsection, we review the creation process of the Local Government Code of 1991 to see an emergence of policy coalitions comprising advocates with local autonomy, anti-Marcos politicians, and technocrats working for liberalization and privatization.

Economic Bureaucracy

Significantly, some economic planners worked for decentralization before the democratization (Hill et al. 2007, 11–12). As Alex Brillantes and Abigail Modino point out, policy makers under the authoritarian regime could achieve administrative dis-concentration but not political decentralization (Brillantes and Modino 2015). The planners prepared for reform despite neglect or political machinations by then President Marcos.

In December 1986, after democratization that February, the National Economic and Development Authority (NEDA) published the Medium-Term Philippine Development Plan, 1987–1992. The planners clearly identified “decentralization, checks and balances, and minimal government intervention in economic activities, as well as the need to provide for necessary infrastructure facilities and basic social services” as the principles governing the government’s role and structure (Republic of the Philippines, NEDA 1986, 38). The plan mentioned three paths to achieving decentralization. First, more power would devolve from the central government to local governments. Second, regional and local governments would be strengthened as focal points for local development. Third, the government would encourage people’s participation.

Notably, the NEDA proposed this plan when the government was under heavy pressure to avoid expansionist fiscal measures. The NEDA discussed, for instance, the employment implications of market-oriented reforms, such as trade liberalization, tax reform, and public sector reform, and some cabinet members emphasized an employment-oriented economic policy (Republic of the Philippines, NEDA 1986, 36). The planners prioritized market-oriented reform over poverty eradication, although they recognized poverty eradication as “the ultimate aim of development efforts” (Republic of the Philippines, NEDA 1986, 3).

The planners discussed regional development in greater depth in the plan’s second chapter, titled “Regional Development and Physical Planning Framework,” but they did not forget about fiscal constraints. In the chapter, the planners examined problems and strategies to deal with each of the 13 geographical regions’ issues in Fig. 2.



First, the planners highlighted poverty as a critical problem throughout the country, and they pointed to the widespread poverty in the Visayas area, or Regions VI, VII, and VIII (Republic of the Philippines, NEDA 1986, 50). They also mentioned the gap in the incidence of poverty within the country: the National Capital Region had a 43.9 percent poverty incidence, but Region V’s (Bicol’s) hit 73.2 percent (Republic of the Philippines, NEDA 1986, 50). In poverty-stricken regions such as Bicol, planners suggested developing the rural hinterlands and upland areas by diversifying crops (Republic of the Philippines, NEDA 1986, 71). To achieve this goal, they proposed developing off-farm employment opportunities in livestock-based enterprises in Masbate, in agroforestry industries in Catanduanes, in wood-based industries in Sorsogon and Camarines Norte, and so on.

Second, when it came to productivity, only the National Capital Region and Region IV (Southern Tagalog) exceeded the national average; Regions II (Cagayan Valley), V (Bicol), and VIII (Eastern Visayas) remained the least productive (Republic of the Philippines, NEDA 1986, 50). The planners suggested utilizing existing resources more efficiently in low-productivity regions. In Region II (Cagayan Valley), for instance, the authorities prescribed expanding and intensifying unutilized and underutilized croplands via irrigation, farm-to-market roads, and so forth (Republic of the Philippines, NEDA 1986, 67). The planners presented three categories of agricultural products to be promoted: products with existing comparative advantages (such as unhusked rice and white corn), products with linkage potential (such as tobacco and coffee), and products with high nutrients. The last category reflects the lack of highly nutritious foods in the region.

Third, off-farm income, indicating economic transformation from an agrarian economy, ranged from 61 percent in Regions IV (Southern Tagalog) and VII (Central Visayas) to 33 percent in Region XII (Central Mindanao).3) The Cavite–Laguna–Batangas Growth Corridor was established in Region IV so that provinces could absorb FDI. Region VII’s Cebu City is an urban center, along with Mactan International Airport, which has an export-processing zone.

The NEDA plan’s last chapter points out the necessity of administrative reform. The planners criticized previous decentralization efforts for their “conflicting tendencies” of reform orientation and stated that “greater and meaningful decentralization, therefore, will have to be a major policy agenda for this plan period” (Republic of the Philippines, NEDA 1986, 393). In its recommendations, the NEDA listed issues to consider, such as transferring authority over social services and local infrastructure projects from the central government to local governments, increasing Internal Revenue Allotments (IRA), increasing freedom for local development plan making, and so forth (Republic of the Philippines, NEDA 1986, 404).

In addition to the reform’s possible positive outcomes, planners worried about bossism. The plan, in fact, refers to “the need to minimize the evils of local oligarchies, nepotism, and corruption” (Republic of the Philippines, NEDA 1986, 405). The planners suggested policy makers should encourage citizens’ participation to mitigate the evils, though they did not elaborate further. The policy makers recognized the issues of local politics, which were addressed by the Aquino cabinet’s local minister, as discussed below.

Revolutionary Government

Another significant development toward local governance reform evolved within the Corazon Aquino administration and gained special momentum from the People Power Revolution. Minister Aquilino Pimentel Jr. began purging incumbent elective officials in local governments that were dominated by affiliates of the Kilusang Bagong Lipunan (KBL, New Society Movement), President Marcos’s party, and appointing officers in charge (Nemenzo 1988, 227). With Pimentel’s draconian measures, 76.3 percent of governors, 66.7 percent of mayors, and 42.7 percent of town mayors were purged within two months (Asano 1992, 239). Pimentel’s actions were controversial because he aggressively removed local KBL politicians and seemed to have appointed close affiliates of his party, PDP-Laban. Within anti-Marcos factions, the United Nationalist Democratic Organization, led by Vice President Doy Laurel, had 37 seats, and Pimentel’s PDP-Laban had only 10. The KBL, however, occupied 124 seats in the assembly (Asano 1992, 233). Defense Minister Juan Ponce Enrile Sr. accused President Aquino of working toward peace with the Communist Party and its New People’s Army and demanded that some of the officers in charge in local governments be replaced (Nozawa 1987, 293).

Over time, Pimentel lost influence in both the cabinet and his own party. He was forced out by Peping Cojuanco Jr., brother of Corazon Aquino, as the president of PDP-Laban in October 1986 and subsequently resigned from the cabinet amid the power struggle between President Aquino and Defense Minister Enrile in December the same year (Asano 1992, 241, 244). Pimentel would be elected senator in 1987 and play a vital role in making the Local Government Code of 1991, but his being once replaced by the president shows he was not the only policy maker working for decentralization.

Pimentel was not the sole voice for local autonomy within the administration. Aquino appointed members of the constitutional commission, which supported decentralization. Article X of the 1987 Constitution covers local government. Section 3 of the article states, “The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization.” In the articles, the framers clearly state that local government units can create their own resources via taxation, fees, and charges in addition to a certain allotment from national taxes (Sections 5 and 6, Art. X, Constitution).

Aquino actively promoted decentralization and organized the Cabinet Action Committee on Decentralization to examine powers and responsibilities to be given to local governments in May 1988. The committee implemented the Pilot Decentralization Project to examine the feasibility of reform (Matsuda 2011, 6). Notably, President Aquino worked closely with Dr. Ediberto de Jesus, who established and managed the Rural Development Management Program at the Asian Institute of Management in 1977. President Aquino appointed de Jesus as the presidential adviser on rural development and asked for a government-wide nongovernmental organization liaison system, including the NEDA Focal Point in 1988 (United Nations Food and Agriculture Organization 1994, 48). The presidential office was heavily involved in rural development, and on September 8, 1988 the president certified several administrative measures to increase the IRA to local governments (House of Representatives, July 24, 1990, 93).

Congress and the Making of the Local Government Code of 1991

Pimentel, who resigned as local government minister and was elected senator in 1987, worked in the senate to establish the local government code (Brillantes 2003; Matsuda 2011). Meanwhile, in the lower house, the Committee on Local Government prepared the bill for two years before submitting it to congress on June 6, 1990 (House of Representatives, June 7, 1990, 761). Crafting the code took time, and the bill’s deliberation was delayed because some members of congress feared losing influence in their own local constituencies (Fukushima 1991, 328). After continuous criticism from her own administration, President Aquino convinced congress to work on the local government code in 1990.

Congressman Celestino Martinez of Cebu served as chair of the Committee on Local Government and sponsored the bill in a speech on June 7, 1990 (House of Representatives, June 7, 1990, 755). Martinez emphasized four points: fiscal decentralization via IRA reforms and decentralization via deconcentration, devolution, and citizen empowerment.

Through deconcentration, lawmakers stipulated how national departments delegated authority to regional, district, and field offices. This reflected criticism of the previous Local Government Code of 1983, which prescribed that national departments and agencies could delegate authority only to their own local branches (House of Representatives, June 7, 1990, 757).

A distinguishing feature of the code is its trust in the electoral process rather than in meritocracy or technocracy. In his sponsorship remarks, for instance, Congressman Hilario L. De Pedro III of South Cotabato clarified the difference between administrative decentralization and political devolution by quoting Speaker Ramon Mitra:

As Speaker Ramon Mitra himself has observed, the bulk of power in government is concentrated in the sectoral line agencies which are run by nonelective Manila-based functionaries with little empathy for ordinary Filipinos. . . . It is high time that the fulcrum of political power shifts away from imperial Manila to our local governments. (House of Representatives, June 7, 1990, 758)

De Pedro’s emphasis on politics rather than administration is intriguing, and it aligns with his support of the local government code. Lawmakers apparently believed in the legitimacy and capacity of elected officials rather than in a professional bureaucracy.

Devolution confers a national government’s power and authority to a local government (House of Representatives, June 7, 1990, 756). The local governments’ functions cover a range of activities, including the construction of administrative halls, roads, bridges, and schools and the establishment of day care centers, health centers, public markets, and cemeteries (House of Representatives, June 6, 1990, Sec. 20).

Concerns about local oligarchs arose during discussions on this issue. Congresswoman Socorro Acosta of Bukidnon, who founded a local NGO for microcredit in her region and was one of the sponsors of the bill, spoke about the risk of domination by political elites and countermeasures against this risk in the code (House of Representatives, June 7, 1990, 761–762; Mukherjee 2007). She argued that lawmakers had prepared a recall mechanism and used NGO participation in local development councils as safeguards against domination. Additionally, she expected the local government code would provide opportunities for political education and enhance political leaders’ capabilities.

Generally speaking, lawmakers were optimistic about their trust in NGOs, reflecting the atmosphere right after democratization led by the People Power Revolution. Regarding citizen participation, lawmakers mentioned the arrangements of elections, the recall of local politicians, the participation of local education boards’ management, and the participation of NGOs in the planning processes for development (House of Representatives, June 7, 1990, 756).

While the Local Government Code of 1991 was being made, a coalition advocating for local autonomy began emerging. First, economic managers concerned about the country’s financial conditions prepared a medium-term development plan that clearly promoted decentralization to enhance local governing capacities without large government expenditure. Second, President Aquino and Local Government Minister Pimentel were very interested in local autonomy in the context of democratization or departure from dictatorship and supported the constitution, which promoted the same principles. Third, Senator Pimentel and some legislators worked in congress to institutionalize decentralization by highlighting the role of local politicians and civic participation in governance.

II-4 Local Development after Decentralization

The policy coalitions for decentralization helped local governments to see the fruits of reform through the passage of the Local Government Code of 1991. Brillantes, who was instrumental in decentralization, argued that it yielded good and best practices in many local governments (Brillantes 2003). Good practices properly implemented existing policies, and the best practices were creative policy making by local practitioners. Resonating with the Local Government Code of 1991, the Galing Pook Foundation assessed local governments’ performance. Figs. 3 and 4 show the achievements of local governments.



Fig. 3 Galing Pook Awardees by Category (1994–2014, n = 392)

Source: Galing Pook Foundation (various years).




Fig. 4 Galing Pook Awards by Region (1994–2014, n = 392)

Source: Galing Pook Foundation (various years).


Fig. 3 illustrates the activity fields awarded by the foundation. Environmental protection, health and sanitation, and local economic development were the top three areas awarded. When it comes to indigenous people and labor dispute resolution, however, good and best practices appear difficult to find.

Fig. 4 shows the awarded local governments by region. As of 2018, the Philippines had 16 regions. According to Fig. 4, Region VII (Central Visayas) received the most awards. In our case study, we examine Bohol in this region, focusing on its ecotourism promotion and poverty eradication measures. The National Capital Region received the second-largest number of awards. In our case studies, Marikina City exemplifies reform-oriented governance and environmental protection in this region. Meanwhile, two autonomous regions, the Cordillera Autonomous Region and the Autonomous Region in Muslim Mindanao (ARMM), were the lowest performers. As will be discussed in Chapter 5, people in the ARMM face more difficulties than those in other regions, but some people are moving forward to make a difference by cooperating with military officers implementing civil-military operations.

In terms of human development, we can observe improvement in general, although the gap between the national average and Muslim Mindanao is still wide, according to Fig. 5.



Fig. 5 Philippine Subnational Human Development, 1990–2017

Source: Global Data Lab (n.d.).


While moderate improvement in human development may be observed throughout the country, improvement does not occur automatically. As we will see from the summary in the next section and more details in succeeding chapters, policy entrepreneurs and their coalitions make a difference at the local level.

III In Search of Local Policy Entrepreneurs

In this special issue, we encounter policy entrepreneurs with and without policy coalitions. Chapter 2, on San Nicolas, Ilocos Norte, details Mayor Alfredo Valdez’s innovative leadership. Valdez worked toward business-friendly governance to encourage local and international investments. Valdez’s administration built the Valdez Center to entice one of the country’s largest retailers: Robinsons. Working coalitions led by mayoral initiatives and supported by private businesses began to emerge. Further, the administration took advantage of opportunities presented by the growth in the local economy via remittances from Filipinos working abroad. The San Nicolas case exemplifies the uncoordinated efforts of policy entrepreneurs and private businesses.

In Chapter 3, on Marikina City in the National Capital Region, the author finds that reform-oriented governance originated with a couple who retained power for almost two decades. The mayors maximized opportunities created by the Local Government Code of 1991 by encouraging local governments to work directly with international donors to improve the city’s socioeconomic conditions. In this chapter, Mendoza argues that the successive mayors were not trapped by “cancel culture” but developed reform policy based on their predecessors. This case exemplifies a coalition of local politicians, business leaders, and labor leaders who collaborated to mitigate liberalization’s negative impact.

Chapter 4, on Bohol Province, highlights coordinated efforts among the provincial, city, and municipal governments to eradicate poverty by promoting ecotourism. Bohol Province orchestrated efforts to promote ecotourism, which increased economic development and freedom from a Communist insurgency. It is an impressive successful case of local transformation through policy entrepreneurship.

Finding coalitions is difficult in Sulu, in the ARMM, where civil authority largely failed to provide peace and order, as the author discusses in Chapter 5. Instead, the military provides de facto governance in Sulu by emphasizing a civil-military operation promoting social welfare. The governance, however, depends on a military leadership that is usually stationed in Sulu for two years or less and can change the operation’s emphasis from a “search and destroy” operation to a civil-military operation or vice versa.


As a critical review of the literature on local politics, this chapter sheds new light on local practices in the transforming Philippine state. In a transforming state, policy entrepreneurs and policy coalitions may collaborate to make a difference through policy making. Policy entrepreneurs may be able to build in reform initiatives through innovative policy making and policy implementation.

Policy entrepreneurs can make a bigger impact when they create a coalition covering various societal interests. The Local Government Code of 1991 resulted from continuous efforts by various policy makers, including economic planners, legislators, the president, and professionals working for rural development. The policy coalition established foundations for local development, some of which have been awarded by the Galing Pook Foundation.

The following chapters will show the practices of various local actors in creating a transforming state at the local level. They reveal individual policy entrepreneurs or coalitions of practitioners who collaborate to make a difference in local governance.

Accepted: December 15, 2020


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1) De Dios criticizes all three types of leaders because they do not guarantee accountability for leadership as a functional party system does. Party politics might guarantee accountability, but party systems have failed to capture the changing nature of constituencies even in older European democracies and the United States.

2) I appreciate Miriam Grace Go for her insights on the local development of Cavite.

3) Data on the NCR’s off-farm income are not shown in the plan, but statistics for the country in general are shown: 50.2 percent (Republic of the Philippines, NEDA 1986, 53).


Vol. 8, No. 3, HARA Tamiki


Contents>> Vol. 8, No. 3

Defeating a Political Dynasty: Local Progressive Politics through People Power Volunteers for Reform and Bottom-up Budgeting Projects in Siquijor, Philippines

Hara Tamiki*

* 原 民樹, Faculty of Commerce and Economics, Chiba University of Commerce, 1-3-1
Konodai, Ichikawa-shi, Chiba 272-8512, Japan
e-mail: tamiki.h.1985[at]

DOI: 10.20495/seas.8.3_413

Despite its much-touted agenda to fight poverty and corruption, the Aquino administration was not able to produce good results during its term at the national level. However, some political forces and policy reforms that emerged with the administration achieved remarkable change at the local level. This paper explores the case of Siquijor Province, where an entrenched political dynasty was defeated in the 2013 and 2016 elections by candidates supported by the Liberal Party and its allied forces, Akbayan, and analyzes factors that brought this change by focusing on activities of People Power Volunteers for Reform, the impact of bottom-up budgeting projects, and the mobilization of powers of the national government through personal relationships. It also notes achievements of the Aquino administration at the local level, provides a critical perspective to the elite democracy discourse that sticks to a static view of Philippine politics, and clarifies local practices by progressive forces that confront oligarchy.

Keywords: political dynasty, oligarchy, local politics, progressive politics, People Power Volunteers for Reform (PPVR), bottom-up budgeting (BUB)


Panahon na para ipasa ang isang anti-dynasty law (It is time to pass an anti-dynasty law),” Philippine President Benigno “Noynoy” Aquino III said in his last State of the Nation Address on July 27, 2015 (Sabillo 2015). Despite the provision in the 1987 Philippine constitution prohibiting political dynasties, no law has been enacted to implement it.1) Aquino’s statement was interpreted mainly as an implicit criticism of Vice President Jejomar Binay, who was seeking to lift term limits for elected officials and planning to run for the next presidential election in 2016.2) Aquino’s appeal for the enactment of the law sounded ironic because he himself was a scion of the Philippines’ most famous dynasty. Nevertheless, Aquino knew well that his supporters were calling for some form of an anti-dynasty policy. Columnists and scholars often criticize political dynasties in various media, and it is a common view that political dynasties in the Philippines have too much power and need to be constrained in some way.

From a general point of view, political dynasties’ influence has been strengthened rather than weakened over time. Table 1 shows that ratios of members of Congress who belong to political dynasties have increased as a long-term trend since the People Power or EDSA (Epifanio de los Santos Avenue) Revolution.3) The anti-dynasty bill proposed by the 16th Congress (2013–16) was shelved due to opposition from powerful lawmakers (many of them dynasts themselves).


Table 1 Political Dynasties in Selected Philippine Congresses


This has sustained a framework that regards the post-EDSA period as the restoration of elite democracy. As JPaul Manzanilla points out:

what has been achieved in the Philippines thus far is the return of formal democracy, oftentimes called “oligarchic politics,” “cacique democracy” and “elite democracy” where a freewheeling democratic system has further entrenched the landed and business few who made officialdom bow to their interests. (Manzanilla 2016, 13)

Certainly, elite democracy has continued until today, and political dynasties have retained control over the formal democratic system that people regained through the revolution.

At the same time, however, elite democracy is neither static nor changeless. While recognizing the limited possibilities for change during the post-EDSA period, several studies focus on positive changes after the revolution: “The Philippines may, in fact, now be entering a potentially significant phase as popular forces, challenging the rule of oligarchic elite, strive to deepen the democratization process and institutionalize people power” (Quimpo 2008, 7). On the other hand, many studies view the People Power Revolution as a political event with a clear beginning and end. Scholars such as Nathan Quimpo think of it as a long-term development of progressive visions created during the anti-Marcos movement.

When we consider the legacy of People Power today, the Aquino administration (2010–16) is a remarkable time to be examined because Noynoy Aquino was an icon of “New People Power.” Corazon Aquino, his mother and the original icon of People Power, passed away in August 2009. The subsequent national mourning and memory of her era pushed her son to become a presidential candidate and gave him a strong support base. On May 10, 2010,

Noynoy Aquino was elected president of the Philippines with a landslide margin. The media and civil society agreed: it was “People Power masquerading as an election.” Indeed, for many Filipinos, the elections sparked memories of the recent past, specifically the bloodless revolution of 1986. (Claudio 2013, 2)

Noynoy Aquino became not only the new icon of national memory but also a catalyst of common political agendas among his support groups through the election campaign. While some people were skeptical about his main promise of poverty reduction, his active support groups took it seriously and hoped to contribute in a practical way to reducing poverty. Aquino’s New People Power vitalized grassroots organizations and created the possibility to “deepen the democratization process and institutionalize people power.”

Even after Aquino finished his term, these aspects of his administration were not well analyzed. It is necessary to examine how New People Power, vitalized through the election campaign of 2010, has materialized itself and what political impact it has had. Therefore, this paper will argue the case of Siquijor Province, where a political dynasty was defeated in elections by Aquino’s Liberal Party (LP) and its coalition party, Akbayan.4) Akbayan was a primary working force in Aquino’s election campaign and sought progressive reforms within the formal democracy. In its General Program of Action, the party stated that it would intensify its “engagement in the mainstream political arena and towards continued mainstreaming of Akbayan as an alternative national political party” (Akbayan 2009, 1); by doing so, “Akbayan can gain more influence and have better chances of having its policy proposals implemented on the ground” (Akbayan 2010, 5).

This case study will clarify how the New People Power initiated by this coalition during the Aquino administration worked—with progressive forces confronting political dynasties and the dynamics of Philippine politics. Specifically, three aspects of the local politics of Siquijor will be discussed. First, People Power Volunteers for Reform (PPVR), which was established primarily as a support group for Aquino’s presidential election campaign, organized local people for local elections in the province. This contributed to the defeat of the political clan in the 2013 elections and prepared the stage for the effective operation of new policies created by the Aquino administration. Second, the bottom-up budgeting (BUB) project, which was designed to improve transparency of government projects and meet local demands more effectively by promoting local associations to join the decision-making process, consolidated LP-Akbayan’s support base and secured their second victory in the 2016 elections. Third, those grassroots efforts became successful with support from the national government through personal ties. Joel Rocamora, the local campaign manager of the LP-Akbayan camp in Siquijor as well as the chief of the National Anti-Poverty Commission, played a crucial role in this.

Political dynasties have been a major topic in the literature on Philippine politics. Alfred McCoy’s An Anarchy of Families (1994), a prominent and classic work in this field based on intensive historical research, clarifies how political clans emerge, succeed, and entrench themselves. While arguing how clans mobilize various means such as guns, goons, and gold—the so-called 3Gs—in order to maintain their power, the book focuses on the key role of family and kinship in organizing political forces in this country. It made a significant contribution to revealing the central characteristics of Philippine politics, which compose a framework of the elite democracy discourse. However, it hardly mentions the cases where political families lost their power. When it refers to those cases, the loss of power is always attributed to inter- or intra-family conflicts. During the era the book discusses, reformist forces that challenged political dynasties were still underdeveloped.

While McCoy describes political dynasties mainly as social forces, Sheila Coronel and her co-authors in The Rulemakers (2004), edited by the Philippine Center for Investigative Journalism, treat them more as legislators. As is well known, both houses and local governments in the Philippines have been dominated by a wealthy few since colonial times. Holding seats in Congress from generation to generation, political families have made full use of their legislative power to sustain their dominant positions. By examining the many roles legislators play, such as making laws, vetting presidential appointments, examining the budget, and spending pork barrel funds, the authors of this book give us a comprehensive picture of how Philippine politics works between politicians and their constituency. Moreover, they pay attention to the emergence of progressive forces through party-list elections. In spite of its institutional limitations, they conclude that the party-list system paved the way to change a political landscape dominated by a few elites.5) However, they were not able to find clear changes or outcomes as of 2004. Therefore, they rather emphasize the reality that reform-minded legislators elected from party lists are absorbed into traditional politics.

More recently, Raymund Rosuelo (2017) argues how long-standing political dynasties can erode, using the case of the municipality of Cainta in Rizal Province. I agree with his following observation:

While there have been a large number of scholarly contributions to the study of political families in the Philippines, a vast majority of past and recent scholarship has tended to focus on the dynamics that lead to the perpetuation of political families in power. Academic discussions have tended to privilege the durability aspect of entrenched political clans. (Rosuelo 2017, 192)

Emphasizing the impact of socioeconomic changes such as urban migration, he points out that the influx of new settlers into middle-class communities made room for new political actors to challenge dominant clans. This social factor is undoubtedly important to explain recent changes in the political geography of the country. However, in Rosuelo’s study the actor that defeats the entrenched clan is another political clan. The erosion of a political dynasty is attributed only to inter-clan competition, like McCoy’s argument. Although Rosuelo is well aware of social factors that displace old rulers, he dismisses new political factors such as the emergence of progressive forces.

Despite the aforementioned dominant tendency in Philippine political studies, there have been some studies on progressive change in local politics. Focusing on changes in socioeconomic situations such as urbanization, Kawanaka Takeshi (1998) takes the case of Naga City and elaborates Mayor Jesse Robredo’s progressive style of organizing constituents. This is a pioneer work in this field. However, although Kawanaka discusses the progressive characteristics of Robredo’s governance, he makes the assumption that political power is monopolized by elites. In this sense, his argument is a sophisticated version of the political machine discourse, which is still within the elite democracy discourse. Contrary to that, this paper will focus on the dimension where the monopoly of political resources is dismantled by democratization from the bottom up.

Quimpo (2008) also provides rich case studies on progressive practices in local politics. In a broad context, this paper might just add a new case to his argument. Yet there has been an important change in the institution of local politics after Quimpo conducted his research: BUB.6) While he mentions several local institutions by which Akbayan organized people, those institutions were still insufficient to confront oligarchy at that time. As discussed below, after the Aquino administration began, Akbayan gained a strong institutional weapon that could be made use of for its local practices. This paper will treat the new stage of local politics after Quimpo’s study and clarify the evolution of the institutionalization of New People Power.

In a broader context, this study will shed light on a new dimension of Southeast Asian politics. In considering political contestation in the region, two common factors have been recognized. First, historical legacy—defined mainly by the Cold War—has hindered the development of large-scale, independent civil society organizations linked to political parties. Second, powerful elites have tried to block political opposition by various methods (Rodan 2015, 117). Relatedly, many political scientists studying Southeast Asia have emphasized the persistence of clientelism despite the progress of modernization (Tomsa and Ufen 2013). However, recently each country in the region seems to be transforming its traditional political structures on various levels and in various directions. This paper makes a remarkable case for how a political force can break those shackles. It will help to understand the reform emerging in Southeast Asia.

The first section gives an overview of Siquijor Province and the Fua clan, a political dynasty in the province. The second section focuses on the activities of PPVR and examines why the Fua clan lost in the 2013 elections. The third section discusses how BUB projects were conducted on the island and how they contributed to the Fua family’s second defeat in the 2016 elections. The fourth section looks at Rocamora’s role in mobilizing the power of the national government. In conclusion, I argue some implications of the case of Siquijor and the emerging dynamics of Philippine politics.

Overview of Siquijor Province and the Fua Clan

Siquijor is a small island in Central Visayas, south of Cebu Island. It is ranked 79th of 81 provinces in terms of population and land area. It had 95,984 residents and 68,988 registered voters in the 2016 elections (Commission on Elections 2016). Agriculture is the biggest source of employment on the island, which produces coconuts, corn, root crops, bananas, and mangoes. Though small in scale, fishery is also an important source of income, with Siquijor having around 6,000 fishermen. There used to be some mining sites in Lazi and Maria, but all operations have been closed down because of poor reserves. Siquijor has only some small-scale enterprises engaged in trading, metalworking, food processing, etc. (National Economic and Development Authority 2008, 29–30). Although the island is becoming a major tourist spot, it still receives far fewer tourists than neighboring islands such as Cebu and Negros. Currently, Siquijor is classified as the fifth income class, which means that it is an economically small-scale province along with many other provinces.7) In the early 1990s Rocamora, a political scientist born in Siquijor, described its social class composition:

Siquijor has a small “upper class” of politicians, senior bureaucrats, a few professionals and Chinese traders who would be “middle class” in the larger islands. The majority of the people barely survives on rocky, hilly land and depleted fishing grounds. In between are government clerks and teachers and petty traders moldering in frustration and boredom. It would be difficult to organize class struggle on the island because income differences are not large. But there is a large pool of educated young people waiting to be tapped for socio-economic projects. (Rocamora 1992, 10)

These characteristics were fairly consistent until recently. The province’s economy remained underdeveloped over the decades, and people suffered from poverty and a lack of economic opportunities.

The clan that governed this stagnating island for 27 years until 2013 was the Fua family. The Fua clan started to gain dominant political power in the province immediately after the People Power Revolution. Orlando Boncawel Fua Sr. was appointed as the officer-in-charge governor of Siquijor in 1986 by the Corazon Aquino administration because he had belonged to the anti-Marcos camp until Marcos was ousted.8) He ran for the 1987 congressional elections, defeated his rivals with an overwhelming majority, and was reelected in 1992 and 1995. His background was not that of a traditional landed elite but that of an emerging professional and businessperson. He first became a lawyer and later began to manage a transport company in the province.9) Because means of transportation between Siquijor and the other islands were limited, shipping services were very profitable during that time (Teehankee 2001, 61).

Fua Sr.’s son, Orlando “Shane” Anoos Fua Jr., also started his career as a lawyer and then held a post in local office in 1995. Because his father finished three consecutive terms in 1998, he ran for congressman and won. In the typical way that political dynasties reproduce themselves, the Fua family continued to take the congressional seat over generations. In addition, Fua Sr.’s siblings and relatives consistently occupied important local posts in the province until 2013.

Although the clan had been in power for 27 years, and even though its members had a background in business, they did not succeed in establishing a strong economic base on the island. This can be symbolically understood by the fact that the municipality of Lazi, where the Fua clan is based, has been the poorest area among the municipalities in the province (Table 2). In addition, Lazi has the lowest number of households with electricity (Table 3). Rocamora points out the following:


Table 2 Annual Income by Municipality (December 2013–January 2014)


Table 3 Households with and without Electricity (December 2013–January 2014)


The Clan mainly engaged in petty corruption focused on “SOP” [standard operating procedure] from public works, and illegal economic activity, gambling, drugs and smuggling. Its attempts to develop businesses, shipping and gasoline and diesel distribution, have failed. Because the Clan blocked investments that it could not make money from, the Siquijor economy has stagnated for most of the last two decades. . . . As a result there is a palpable sense of frustration and a hunger for change among the people, especially the middle class. (Rocamora 2013, 1)

During my interviews, a man who was a captain of a barangay (the smallest administrative unit in the Philippines) in Larena told me, “The 2010 elections were really quiet. There was no actual opposition, no choice. Everybody knew who would win.” As Table 4 shows, the Fua family obtained an overwhelming number of votes in 2010.10) Fua Sr. and Fua Jr. gained 67 percent and 83 percent of the votes, respectively. However, there was a drastic change in the next elections, in 2013. The Fua family lost most of the important local posts as well as the congressional post, and LP candidates replaced all of them. What led to this? The next section will examine the question by focusing on an emerging grassroots movement, People Power Volunteers for Reform.


Table 4 Election Results in 2010


Penetration of PPVR and LP Machinery

When Noynoy Aquino was elected as the president by a huge margin in 2010, there was a sense of anxiety and suspicion toward the new administration among Marxist forces. Responding to an interview, Frank Pascual, a member of the Laban ng Masa (struggle of the masses) party list, pointed out:

For the ruling class, Noynoy is the best choice, especially after GMA (Gloria Mapacagal-Arroyo, the former president). Reducing corruption can be good for big business, but whether it translates into benefits for the people is another matter. . . . The Cory Aquino presidency was installed by a different phenomenon, a mass upsurge against the dictatorship. Noynoy does not have that kind of flexibility to pursue the people’s agenda. (Mohideen 2011, 71)

On the other hand, his victory was substantially sustained by people’s high aspiration for a clean and reliable government. A member of the Partido Lakas ng Masa (power of the masses), Sonny Melencio, said:

Noynoy’s victory is a confirmation that the main issue in the election was the high-handed corruption of the Arroyo regime. People voted for Noynoy because they were sick and tired of the never-ending cases of graft and corruption involving the Arroyo family and their sycophants. Noynoy’s campaign slogan “Kung walang corrupt, walang mahirap” (If no one is corrupt, no one will be poor) may not be true, as poverty emanates not mainly from corruption but from class exploitation and class rule—but it rings a bell and has attracted a broad number of people to support Noynoy in the election. (Mohideen 2011, 69)

From the beginning, the Aquino administration was ambivalent. Even when Aquino stepped down from the presidency, while he was severely criticized for his ineffectiveness in alleviating poverty and his incomplete fight against corruption, he maintained relatively high approval ratings until the end of his term—this was an unprecedented phenomenon in the post-EDSA period.11) Whichever aspect is emphasized, these national-scale discussions overlook a remarkable reality the Aquino administration created, which is that there emerged many people who sensitively responded to people’s voice calling for change and spontaneously worked to actualize Aquino’s agenda at the local level. They were organized as People Power Volunteers for Reform (PPVR). When assessing the Aquino administration, PPVR’s local achievements should be taken into account.

PPVR was originally organized in order to support Aquino’s presidential election campaign in 2010. It established chapters all around the country and worked as machinery for the candidates of LP and its allies. PPVR’s activities, however, continued even after the election. One of the origins of PPVR’s ideas can be found in a suggestion for the Aquino administration proposed by Karina Constantino-David, who had been exercising leadership in organizing a network of development NGOs in the fields of urban poor, women, childcare, housing, and so on since the late 1980s. Because of her rich experience working in civil society, she was appointed as the chairperson of the Civil Service Commission during the Arroyo period. But Constantino-David took a critical stance against Arroyo toward the end and later became a national convener of PPVR. Constantino-David claimed that while Philippine civil society was characterized by “poverty and disparities in wealth, power and opportunity” and “cynicism and suspicion formed due to years of failed expectations,” there was a “proven capacity of volunteerism” and “the need to convert the volunteers mobilized for electoral victory into a force that can be a partner for sustained reform.”12) Adopting this idea, PPVR officially set out its charter after Aquino’s victory. The preamble of the charter declares:

While we have an interest in how these critical institutional and political developments unfold in relation to moving forward with the “walang corrupt, walang mahirap” reform agenda, we must also recognize that we—the groups mobilized by the issues and inspiration of the Noy-Mar campaign—are also interested in building what we now assert as “the people power component of P-Noy’s governance.” We are interested in how the people power movement of which we are a part can become an organized and active partner of P-Noy’s governance in realizing the “walang corrupt, walang mahirap” promise. While we are obviously interested in how well our government agencies function and how well our elected political leaders perform in realizing reforms, we are also interested in how we ourselves can become part of the realization of these reforms. We do not have to be appointed or elected to positions in government in order to help realize the promise of change; we can help in our groups and networks that got Noynoy elected president.13)

For PPVR members, “walang corrupt, walang mahirap” was not political rhetoric but a practical purpose to pursue in their actual lives. They seriously made up their minds to realize it as foot soldiers. PPVR started to reach out to various groups such as women’s organizations and fisherfolks associations as well as individuals at the local level. They encouraged local people to organize themselves as an association and tried to pave the way so that anti-corruption and anti-poverty policies rightly benefited the people. In other words, PPVR empowered people and built mass bases to make Aquino’s reforms work effectively from the bottom up.14)

In Siquijor, PPVR started to operate in 2011 with around 30 leading members. Most of them were not from LP but from Akbayan. They set up chapters in all six municipalities with a variety of positions. For example, in the San Juan municipal chapter, the municipal leaders council consisted of positions such as lead convener, co-convener, secretary, treasurer, auditor, public information officer, youth sector representative, project development and livelihood committee, senior citizens representative, women’s representative, and fisherfolks representative.15) In terms of activities, the chapter facilitated, for example, the San Juan Fisherfolks Forum with Senator T. J. Guingona of the Senate Blue Ribbon Committee and also helped form the San Juan Fisherfolks Alliance. For the women, the chapter provided technical assistance through the formation of the San Juan Pantawid (Bridging) Leaders and Kapamilya (Family) Alliance and organized them to participate in a motorcade and rally to mark the International Women’s Day celebration held at the San Juan Social Center. The chapter also supported out-of-school youths and encouraged them to get organized to engage in government projects.16) PPVR also sought to work at the municipality level. For instance, Maria had suffered from a poor water supply system for a long time. In 2016 the Maria municipal chapter helped to get funds from Kalahi-CIDSS to build tanks, wells, and water pipes.17)

In general, what PPVR did at the field level was listen to people’s needs and empower people to organize associations so they could collectively improve their lives. In the beginning it was not easy to contact people. In a private conversation, a PPVR member recalled:

At first, people avoided talking with us because of fear of political harassment from the Fua clan. But as a result of our patient efforts, they gradually started to listen to us covertly. Usually one PPVR member had a conversation with two or three people under a mango tree on the outskirts of a barangay.

It took PPVR a long time to awaken people’s initiative. However, because the Fua clan had done almost nothing for the development of the province and because the people had given up hope for a better life, once change happened, it immediately bore fruit. Many associations sprouted like mushrooms after a rain. PPVR tried to turn these associations into support bases for the coming elections. PPVR members began to tell people that they could make an alternative choice in the next elections to end corruption and authoritarian rule by the clan and gain access to more economic opportunities. PPVR continued its efforts for two years before the 2013 elections.

During the election campaign of 2013, the sectoral groups worked effectively. A women’s association gathered some 2,500 women for the International Women’s Day activity in March 2013, just two months before the elections. Due to anger over illegal fishing financed by the clan, fisherfolks associations were active in the campaign against the clan. Youth organizations were set up in all six municipalities, based on the P-Noy scholarship program. The LP Angels, composed of female college students, accompanied candidates and gave dance performances in rallies. A young boys team, the LP Devils, worked as stagehands during the campaign. They produced homemade propaganda materials such as banners made out of sacks with various slogans calling for support for LP. They put those banners and posters on walls and poles all around the island at midnight. Some members of the LP Devils were recruited from a boxing club in case of an attack from the clan’s goons. In addition to these practices, PPVR and the LP machinery succeeded in penetrating the barangay level and employed unique propaganda campaigns.18) All of these efforts encouraged people to make an alternative choice in the elections.

PPVR dismantled the Fua clan’s domination slowly and broadly from the bottom up over two years. The outcome manifested in the election results. As Table 5 shows, the Fua clan’s candidates for important posts were resoundingly defeated by LP candidates. In each race, the margins were approximately 5,000 votes. This number shows the substantial influence that PPVR established from 2011. It is apparent that PPVR’s penetration played a crucial role in the election results.


Table 5 Election Results in 2013


Implementation of BUB Projects

LP’s electoral victory in 2013 was impressive. However, constituents’ support for LP-Akbayan was still not solid enough. PPVR members felt that the triumph might have been only a temporary expression of dissatisfaction and that the Fua clan would try to recover power in the next elections. To prevent the Fua family from reviving and to ensure LP-Akbayan’s reelection, they needed to consolidate local organizations and show people more specific reliability. Backed by the national government, they received a timely and useful weapon: the BUB program. They started a new challenge to meet the aforementioned goals by making full use of this program. In this section, we will explore how the BUB program contributed to strengthening the mass base that PPVR had established in Siquijor.

BUB was set up in 2012 with the preparation of the 2013 National Expenditure Program and started to operate in 2013. Its basic framework is that the national government provides funds for local development projects planned through participatory processes at the local level. It was originally proposed and driven by Robredo, who implemented governance reforms as Naga City mayor and then worked as the secretary of the Department of Interior and Local Government under Aquino from 2010 to 2012. After his death in an airplane accident, his ideas were carried forward by Rocamora, who was appointed as the chief of the National Anti-Poverty Commission (NAPC) by Aquino. The general features of BUB are as follows:

First, it is seen as a component of its budget reform thrusts that are aimed at making the national government budgeting process more responsive to local needs. Prior to the introduction of the BUB, the national government budgeting process was primarily driven by the national government agencies that implement the budget although the Regional Development Councils provide LGUs a limited venue to input into the process. Second, the BUB is also viewed as part of the democracy/empowerment reform as it opens another avenue for people’s participation in local planning and budgeting and for generating demand for good governance at the local level. Third, it is also perceived as part of local governance reform in the sense that it provides incentives for good local governance. (Manasan 2015, 2)

Because corruption and poverty were the key issues that the Aquino administration promised to tackle, they had to take concrete action to promote reforms. Aquino was also seeking to change the budgeting system for local development projects because budget allocation systems such as the Priority Development Assistance Fund (PDAF) had been thought of as a hotbed of corruption for a long time.19) Through encouraging people’s participation and making the budgeting system more sensitive to people’s needs, it was expected that BUB could prevent corruption and alleviate poverty. Hence, it can be seen as one of the central policies to realize President Aquino’s slogan “walang corrupt, walang mahirap.”

There are several steps that need to be taken before implementing BUB projects. The first is social preparation: “Capacity building activities” need to be organized by civil society organizations (CSOs) and the Human Development and Poverty Reduction Cluster.20) Through these activities, facilitators ensure that people can understand what BUB is, how it can contribute to their lives, and how they can participate in the process. The second step is collection of relevant economic and social data: local government unit (LGU) staff collect relevant information to ensure that projects work effectively. Third, a Local Poverty Reduction Action Plan (LPRAP) workshop needs to be conducted: LGUs organize workshops to put the LPRAP into concrete shape based on the collected data, with active participation from CSOs (Fig. 1).21) The fourth step is identification of priority poverty reduction projects: The expanded LPRAP identifies priority projects to be funded by LGUs based on the discussions in the workshops. Fifth is the endorsement of CSOs: the list of priority projects must be attached with an endorsement of CSOs from the community to prove their participation in the process. Sixth is approval by the Sangguniang Panlalawigan (municipal council): the Sangguniang Panlalawigan must approve the list of priority projects. The seventh step is submission of the list of local priority poverty reduction projects: the endorsed list must be submitted to relevant institutions such as the National Anti-Poverty Commission and scrutinized (DBM-DILG-DSWD-NAPC Joint Memorandum Circular No. 1 2012, 4–7).


Fig. 1 Discussion under Way in a LPRAP Workshop


It is evident that the BUB process sufficiently ensures CSOs’ participation in various stages. This plays an important role in inspiring people to participate. In Siquijor, many CSOs have been newly organized since 2013 and are actively engaged in the BUB process. Based on my research, as of May 2016 there were 215 organizations in the province. Although not all organizations were formed for BUB, it is clear that BUB encouraged more and more people to establish new ones. Some of the CSOs are the Siquijor Coconut Farmers Multi-Purpose Cooperative, Goat Raiser Association, Barangay Olave Neighborhood Electric Association, Handicapable Association of Maria, Lazi Habal-habal (motorcycle taxi) Drivers Association, and San Juan Souvenir Item Makers Association.

Some assessment reports on BUB say that the process does not work well in certain areas because of inactive CSOs and incompetent facilitators. In my interview with a facilitator who worked around Visayas, he said, “If governors or mayors are not cooperative with BUB, it’s very difficult to make it work. Especially in cases where they are [in] opposition to LP, projects are sometimes disturbed by political reasons.” Contrary to such cases, the BUB process in Siquijor has been relatively smooth and well organized. One reason seems to be that the governor and several municipal mayors have been members of LP since 2013. Another reason might be PPVR’s active facilitation of people’s participation. They kept propagating the utility value of BUB and urged people to propose projects. A member of PPVR said, “PPVR itself is not important. We are trying to become middlemen or mediators for people. Our mission is just making roads so that government projects can benefit people.”

As a result of this sort of effort, unique ideas were sometimes raised in LPRAP workshops. For instance, there was a project proposal for building a “People’s Center.” The rationale was written as follows:

As observed in the result of the NAPC BUB Workshop in the town of Siquijor, different sector representatives proposed programs that will solve identified issues. As such, there is a common necessity to have facilities to conduct these programs. However, it will not be that effective if these facilities are geographically dispersed. Therefore, we propose the People’s Center—a centralized facility that promotes coordination to the Youth, Women, Senior Citizen, PWD, Informal Sector, Fishermen/Farmer and CSO/Cooperative while at the same time, providing them spaces for their own programs and services. (Document obtained from a PPVR member)

The proposal included a handmade design (Fig. 2). This indicated that people were aggressively trying to utilize BUB projects for their community.


Fig. 2 A Hand-drawn Map of the People’s Center


Siquijor Province had 35 approved projects in 2013, 141 in 2014, 99 in 2015, and 58 in 2016. The projects were aimed at, for example, alternative livelihood high-value crop production, livestock and poultry production enhancement, organic fertilizer production, infrastructure support to agriculture and fishery production, computer literacy program for out of school youth, improvement of existing barangay health stations, and so on. Funds for the projects varied—from less than 20,000 pesos for small projects to one million to more than four million pesos for big ones. Because poverty reduction is a key purpose of BUB and many projects were livelihood related, the projects largely succeeded in diversifying sources of income and contributed to increasing income levels of the people.22)

This tangible change seems to have increasingly strengthened support for anti-dynasty forces. While BUB is a nonpartisan policy and has benefited pro-Fua residents as well, everyone knows that BUB was initiated by the Aquino administration and materialized by pro-LP parties such as PPVR. In this sense, as discussed below, the BUB program was also a new type of patronage. Therefore, it is easy to imagine that BUB consolidated the political base PPVR had established since 2011. The results of the 2016 elections were predictable in this context (Table 6). Although there was a split within LP, all candidates supported by the local anti-dynasty machinery again won the important positions.23) The Fua dynasty was decisively undermined by the accumulation of small efforts to improve people’s lives.


Table 6 Election Results in 2016


Joel Rocamora’s Role

So far the discussion has focused on how the LP machinery and BUB projects built their political base from the bottom up to confront the Fua clan. The democratic aspect or the “progressiveness” of the LP-Akbayan camp might have been overemphasized. Many readers may know that any major change in the Philippines’ political landscape could not take place in this way alone. Although participatory democracy operated well in Siquijor, this became possible only because national political power influenced local politics through personal relations. This section clarifies the role Rocamora played in defeating the Fua clan during the Aquino administration.24)

Rocamora was born in Siquijor. He worked as a political analyst in several institutions and was one of the founders of Akbayan. He had already begun to organize a small opposition group against the Fua family on the island before Aquino became president, but this first attempt did not succeed. The situation was changed drastically by Aquino’s victory in 2010. Because Rocamora and Akbayan worked hard for Aquino’s election campaign and then Akbayan became a coalition partner of the LP, some Akbayan cadres were invited to the cabinet. Risa Hontiveros, who was defeated in the senatorial election of 2010 by a narrow margin, was initially the candidate for secretary of NAPC, but she could not take the office because of the law prohibiting the appointment of a losing candidate to any office in government within one year after the elections in which s/he lost. Thus, instead of her, Rocamora was appointed as secretary of NAPC in September 2010.

According to Garry Rodan, NAPC was

established in 1998 with a legal mandate for selecting official representatives of the fourteen “basic sectors.” This gave NAPC representatives and its council official status in negotiating with government agencies and provided a venue for organized encounters between sectors and government. NAPC has remained one of the smallest state agencies, with a limited budget. Its opportunities thus rest principally on its relationship with other actors inside and outside the state. (Rodan 2018, 150)

Making use of this unique position, Rocamora first negotiated with the secretary of the Department of Public Works and Highways and asked him to check the flow of money to the Fua clan through public works. Because the Fuas’ main source of funds was embezzlement of money for public works, this move made it difficult for the clan to gain funds for the next elections. In addition, one day the secretary of the Department of the Interior and Local Governance consulted Rocamora on whether a candidate for the local head of the department in Siquijor was adequate or not. The secretary asked, “Do you know him? Is he OK?”

Rocamora answered, “Yes, I know him. I recommend him to be appointed.”

While the man had seemed to be neither pro-Fua nor pro-LP, later he came to know he had been appointed partly thanks to Rocamora. This appointment also helped to block projects benefiting the Fua camp. Furthermore, when Rocamora talked with the regional police director in Siquijor, he said, “The instruction from on high is to help the LP win.” Then, during the election campaign, Rocamora told local police and military, “Money of the Fuas will go through this house and that house. So you deploy guards in front of the houses so that they cannot distribute money.”

As the secretary of NAPC, Rocamora facilitated several projects in Siquijor to build and vitalize CSOs. For example, he facilitated a project to set up community vegetable gardens. NAPC got mayors to approve a half-hectare for the project, then provided seeds and organic fertilizer, and had professionals teach farmers how to plant vegetables. After the first planting, the seeds went to the farmers. Now they can have vegetable gardens in their backyard. Instead of buying vegetables from Negros or Cebu, people are able to save money and expand their livelihoods by planting their own vegetables. Six hundred to 700 families were involved in this project. Rocamora said, “If you want to organize people, you have to be able to provide concrete things like fishing nets or vegetable gardens. That was the first time this kind of organizing took place in Siquijor.” Through these projects, NAPC set the stage for PPVR to work. Obviously, this direction was taken over and strengthened by the introduction of BUB.

Regarding Rocamora’s role in Siquijor politics, there are three points to note. First, the connection with the national government was crucial. As many other local clans do, the Fua clan switched its party affiliation to gain support from the national government. In the 2010 elections, the Fua family were in the Arroyo camp. After the Arroyos were defeated in the elections, they lost backing from the national government and the president. This allowed the new ruling parties, LP and Akbayan, to penetrate into the Fua clan’s bailiwick. As the Fua family had probably enjoyed until 2010, at this time LP and Akbayan were able to access material and immaterial resources provided by the national government. This was obvious in the roles played by Rocamora and NAPC in Siquijor. In this sense, John Sidel’s argument of “bossism” is valid here. His contribution to Philippine political studies was to clarify that the strength of local bosses relied on the state apparatus (Sidel 1999). Although the case of Siquijor is not predatory like Sidel’s case studies, it would have been more difficult for LP and Akbayan to win the local elections without an effective connection with the national government.

Second, Rocamora and the LP-Akbayan camp engaged in a kind of patronage politics. As mentioned in the previous section, formally BUB was designed as a nonpartisan policy. However, every voter regarded it as patronage from LP. When briefings on BUB were held in barangays, there were always big banners with pictures of Aquino’s face and his political slogan. Before the elections of 2016, Benjamin Diokno, the secretary of budget and management in the Duterte administration, said, “The Bottom-up Budgeting (BUB) program is being heralded by the Aquino administration as real reform; in reality, it is a tool for political patronage, a way of capturing political support at the grassroots level” (Editorial 2017). As noted in the comment by a BUB facilitator above, non-LP local leaders did not cooperate in materializing BUB projects. This was because they had no reason to assist LP in delivering patronage.25)

Third, personal connections exerted a big influence on the transformation of the political landscape. As mentioned above, LP-Akbayan’s local campaign became possible because Rocamora succeeded in dismantling the Fuas’ power base by using connections with secretaries of various departments. If he had not been a member of the cabinet and from Siquijor, things would have been very different.

All these aspects were characteristics of traditional Philippine politics. However, Rocamora and Akbayan were deeply aware of that. Responding to my interview, Rocamora said, “If you want reform, you have to operate in the old political terrain. No choice.” This pragmatic view was unique to Akbayan’s strategy, which was in sharp contrast with other leftist groups such as the Communist Party of the Philippines. Rocamora’s role in Siquijor politics was a clear example of this strategy.

However, there was some conflict over this strategy in the party. Although some reforms became possible under the coalition between Akbayan and the Aquino administration, this relationship led to a clash of opinions on how to deal with the administration. Akbayan members such as Ricardo Reyes and Walden Bello claimed that President Aquino was betraying his promise of “good governance” and pursuing neoliberal economic policies that were damaging to the poor. They asked the party to break up with Aquino in order to protect the party’s fundamental values and interests. However, the party leadership refused. Finally, Reyes and Bello left Akbayan. From a certain point of view, engaging in a pragmatic strategy means compromising one’s own principles. Making a coalition might change into cooptation. In this sense, operating “in the old political terrain” was risky.

Yet Rocamora was well aware of what Akbayan could do with political power. In my interview, he continued, “But once you win, then you can start to make changes.” After Akbayan won in the 2013 elections, he tried to transform the decision-making system:

In public works, all over the Philippines with few exceptions, decisions on what projects are funded are made by congressmen and a few government officials. Once we won in 2013, we began participatory broad infrastructure planning. We organized and invited the chamber of commerce, municipal mayors, church people and people from universities to come. And we discussed what projects we would build.

The culture of traditional politics cannot change overnight. Akbayan needed to accept that reality to win the elections. However, Rocamora and local activists in Siquijor believed that if they continued to make efforts to materialize participatory democracy, it would lead to genuine reform in the long term. This was the style of progressive politics in Siquijor that defeated a political dynasty.


After the collapse of the Fua clan’s domination, the economic situation in Siquijor changed a lot. Business investments from outside the province started to come to the island. Because investors had been disgusted over the bribes necessary to have their investment approved, the appearance of new local leaders was seen as the beginning of a fair business environment. The first supermarket in the province opened in Larena. While young people used to leave the island to find jobs, they could now work in their home province. Because the scholarship program was expanded under the Aquino administration, the rate of college enrollment on the island also increased. While a carpenter’s daily wage used to be 200 pesos, today it is 300 pesos due to the increased demand for labor.

In this paper, focusing on PPVR’s activities, utilization of BUB projects, and Rocamora’s role in Siquijor Province, I argued how a political dynasty’s power base was dismantled. It is now clear that if a political dynasty is not actively engaged in improving the lives of the people in its bailiwick and if it loses support from the national government, it is very vulnerable to a counterforce that tries to organize people with specific economic benefits and has connections with the national government. In a social situation where political and economic power is disproportionally distributed, democracy cannot be ensured by the representative system alone. It is indispensable to foster active CSOs and to encourage people to participate in the decision-making process in order to alleviate the tremendous inequality. In this sense, what the LP-Akbayan camp did in Siquijor can be called progressive.

The decentralization policy by the Local Government Code in 1991 has also been seen as one of the legacies of People Power because it includes the provision that promotes the participation of NGOs and people’s organizations in the local development process. From a different point of view, however, decentralization was a measure to win over local elites to the national government during the Cory Aquino administration and to help strengthen their domination in each locality (Abinales 2010, 398–399). Progressive forces were not able to deal with this situation because their vision to change the political structure focused only on the national level (Abinales 2010, 394–395). They did not understand the local dynamics of Philippine politics. However, looking into the case of Siquijor, Akbayan seems to have found a way to work effectively at the local level.

Certainly the structure of elite democracy was not broken up during Aquino’s administration. Overall, the administration’s anti-poverty and anti-corruption policies had incomplete results. It is well known that LP has many members from political dynasties (in this sense, we cannot regard LP itself as a progressive force). Nevertheless, it is also a fact that progressive forces such as local members of the LP-Akbayan camp in Siquijor have confronted the authoritarian system at the local level in a pragmatic way. This can be seen as People Power being part of a long democratization process. Philippine politics is not a changeless world. To grasp its dynamics, we need to pay more attention to local practices and the small changes they bring about.

Accepted: September 6, 2019


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1) In general, the term “political dynasties” is defined as “traditional political families or the practices by these political families of monopolizing political power and public offices from generation to generation and treating the public elective officers almost as their personal property” (Park 2008, 120).

2) Aside from his well-known aspiration to be the next president, Binay was building his own political dynasty in Makati. This seemed to be another important reason why he wanted to lift term limits.

3) The EDSA Revolution was the popular political movement that toppled the dictatorship of President Ferdinand Marcos in 1986. It is also known as the People Power Revolution or February Revolution. This movement supported Corazon Aquino as the new president and led to the restoration of democracy in the Philippines.

4) The Liberal Party is the second oldest extant political party in the Philippines. Founded in 1946, it made up one side of the two-party regime together with the Nacionalista Party after independence and has produced many presidents, such as Manuel Roxas, Elpidio Quirino, and Diosdado Macapagal. While it has been led by wealthy elites, not a few members of the party are liberal and pro-development. Akbayan (Akbayan Citizens Action Party) is a social democratic party founded in 1998. Unlike the Communist Party of the Philippines, Akbayan has held an unfavorable opinion on armed struggle and focused on activities within formal democracy that revived after the EDSA Revolution. The party has had a few congressmen in each national assembly, mainly through party-list elections. Its main agenda is the pursuit of participatory democracy and participatory socialism.

5) Party-list election is a system that aims to ensure that marginalized sectors are represented in Congress. Twenty percent of seats in the House of Representatives are allotted to candidates from registered parties organized by various social groups such as indigenous people, urban poor, and peasants. Each party can get a maximum of three seats based on the rate of votes obtained.

6) Making the budgeting process transparent and participatory was a very important and long-awaited reform. However:

Despite the Local Government Code passed in 1991, experience has shown that engaging civil society in the budgetary process has yet been fully operationalized. Unlike civil society participation in subnational planning, civil society participation in subnational budgeting is still lagging behind. The Institute for Popular Democracy points out that “the budget process in many local governments across the Philippines remains prone to patronage, corruption and abuse of power, being highly dependent on informal processes and power relations within and outside the municipal building halls.” (Brillantes 2007, 56)

7) A fifth income class (out of six) is a province whose average annual income ranges from 90 million to 180 million pesos. The number of members of the Sangguniang Panlalawigan (municipal council) is determined by this classification.

8) “Officer-in-charge” refers to a temporary post in local government appointed by President Corazon Aquino to replace Marcos loyalists. This practice continued from the ouster of Marcos until the local elections in January 1988.

9) Julio Teehankee categorized political clans into three groups: traditional, new, and emerging. He placed the Fua family as an emerging political clan. He defined the categories as follows:

Traditional political clans are those who have had more than two generations that served in the legislature; and/or have been politically active since the American colonial, Commonwealth, and Post-War Republic periods (1907–1972); and mostly belong to the rural elite whose principal sources of wealth have been land ownership and export plantation agriculture. New political clans have had at least two generations serving in the legislature; and/or they rose to prominence during the period of Marcos’ constitutional authoritarianism (1972–1986). Most of them benefited economically from their close ties with the dictatorship. Emerging political clans also have had two generations in the legislature; and/or they emerged in the political arena during the post-EDSA period (1986–present). Most of them are middle-class professionals and entrepreneurs who entered politics during the Aquino and Ramos administrations. (Teehankee 1999, 17)

10) The Fua family had close ties with President Gloria Macapagal Arroyo in the 2010 elections. They ran under Lakas Kampi CMD, which is the party Arroyo belonged to.

11) In spite of this, it should be noted that Rodrigo Duterte won the 2016 presidential elections by negating Aquino’s appeal of a “straight path,” and Mar Roxas, who was endorsed by Aquino as his successor, was no match for Duterte. This indicates that Aquino’s legacy is not necessarily positive for many Filipinos.

12) Quoted from Karina Constantino-David’s for-internal-use presentation material “Opportunities and Constraints for Reform under the Aquino Administration.” While Constantino-David had an influence on the formation of PPVR, she established and managed independent civil society organizations during the Aquino administration. Therefore, she had no direct relation to politics in Siquijor.

13) Quoted from “Charter of People Power Volunteers for Reform,” an internal document of the organization.

14) Although there are only a few provinces where PPVR played a critical role in building effective electoral bases, it was more active in Negros Oriental than in Siquijor. With the LP camp splitting in the province, PPVR worked as an active organizer of election campaigns.

15) These are based on PPVR’s internal document “Officers Directory and Municipal Leaders Council (San Juan Municipal Chapter).”

16) These are based on PPVR’s internal document “Project Track Record and Activities (San Juan Municipal Chapter).”

17) Kalahi-CIDSS (Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services) is one of the poverty reduction programs led by the Department of Social Welfare and Development. It started in 2003 and was expanded under the Aquino administration.

18) Akbayan and PPVR did not establish any organizations formally affiliated with Akbayan from 2010 to 2016. All organizations that worked as the LP machinery were nonpartisan or explicitly showed the name of the LP. However, Akbayan members mainly ran those organizations. In this sense, the boundary between the LP and Akbayan was ambiguous. This seems to have been because Akbayan’s activists tried to make full use of the potential of their coalition partner as a pragmatic strategy.

19) While Aquino made an effort to reform the PDAF system, ironically, the biggest scandal that he faced during his term was a PDAF-related one. Aquino’s approval ratings began to decline after the misappropriation of huge amounts of PDAF money through fake NGOs was revealed in 2013. Although Aquino himself was not directly responsible for it, some Filipinos regarded him as incompetent in dealing with PDAF matters.

20) In the BUB process, civil society organizations are defined as including

non-government organizations (NGOs), People’s Organizations (POs), cooperatives, trade unions, professional associations, faith-based organizations, media groups, indigenous people’s movements, foundations, and other citizens groups formed primarily for social and economic development to plan and monitor government programs and projects, engage in policy discussions, and actively participate in collaborative activities with the government. (DBM-DILG-DSWD-NAPC Joint Memorandum Circular No. 1 2012, 4)

The Human Development and Poverty Reduction Cluster is an agency of the national government charged with implementing BUB together with the Good Governance and Anti-Corruption Cluster.

21) The LPRAP is

the LGU plan which contains programs and projects collectively drawn through a participatory process by the LGU with CSOs and other stakeholders, and which will directly address the needs of the poor constituencies and the marginalized sectors in the city or municipality. (DBM-DILG-DSWD-NAPC Joint Memorandum Circular No. 1 2012, 4)

22) Responding to my interview, a woman who was a leader of several associations in San Juan said that the daily income of the beneficiaries of BUB projects increased 20 percent on average due to diversified livelihoods.

23) Jay Pernes was a candidate who ran for congressman from LP in 2013. He was originally a doctor and later turned into a businessman. Because he had been working for a long time outside Siquijor island, he did not have any economic or corrupted bonds with the Fua family. He had a very good personality and strong sympathy with the Aquino administration’s anti-corruption, anti-poverty policy. Therefore, he was a promising candidate for the LP camp. However, just one day before the election in May 2013, he died of a heart attack. His wife, Marie Pernes, was hastily made a substitute candidate and won. However, the problem was that she was not as good a candidate as her husband had been. After she became a congresswoman, she and her local supporters became embroiled in an issue involving money. She insisted that the local machinery stole her husband’s money during the election campaign. In addition, she did not have any motivation to promote reforms or improve the lives of the people. Consequently, the local LP camp was not able to support her in the next elections. Nevertheless, the national LP headquarters gave her official recognition as a congressional candidate in the 2016 elections, only because she was an incumbent congresswoman. The local LP camp in Siquijor did not obey this and decided to support an independent candidate, Ramon Rocamora. Even though Marie Pernes ran from LP, the local LP machinery supported another candidate. That is why the winner of the congressman position in 2016 was an independent candidate, but the same machinery and the same local movement contributed to his victory.

24) This section is based on an interview of Joel Rocamora by the author.

25) However, a column in the Philippine Daily Inquirer called it “hypocrisy.” After he was appointed to his position, Diokno himself justified reallocating project funds in favor of allies of President Duterte and financially punishing opponents. Patronage politics persist in every administration. Although it is common to condemn patronage as “dirty politics,” there is no country where patronage does not exist between politicians and their constituency. A more realistic perspective for political studies is not to question whether something is patronage or not but to explore how patronage is used.


Vol. 8, No. 1, Yogi Setya PERMANA


Contents>> Vol. 8, No. 1

Politicizing the Fear of Crime in Decentralized Indonesia: An Insight from Central Lombok

Yogi Setya Permana*

* Centre for Political Studies, Indonesian Institute of Sciences (LIPI), Gedung Widya Graha, Jl. Jend. Gatot Subroto, Kav. 10, Jakarta Selatan 12710, Indonesia
e-mail: gejlikpermana[at]

DOI: 10.20495/seas.8.1_99

In the study of contemporary local politics and the dynamics of decentralization in Indonesia, there is insufficient research on how political actors integrate both psychologically and emotionally as a strategy to gain power at the local level. This paper explores the way in which the emotion labelled “fear of crime” embodies local power, specifically in the Central Lombok District of West Nusa Tenggara Province. Efforts have been made to investigate how the fear of crime emerged and was disseminated, as well as how the politics of fear appeared and functioned in a social setting. This paper argues that fear can be socially constructed through talk of crime and politicized in the context of local elections by elites through informal security groups or individual datu maling, two entities that I refer to as “fear entrepreneurs.”

Keywords: fear, crime, informal security groups, local politics, violence, local election


This study investigates the link between politics and the fear of crime. The author analyzes how elites in Central Lombok use fear when seeking power, such as in local elections for the heads of districts. Along with the implementation of decentralization and regional autonomy as well as direct local elections of local government heads (pemilihan kepala daerah or pilkada) in Indonesia after 1998, the dynamics of local politics have been in the spotlight in academic debates about political transition and democratization.

Scholarship on fear of crime and politics suggests several salient points on how the former influences power competitions such as elections. However, there has been no research scrutinizing the link between the fear of crime and the outcome of local electoral politics in Indonesia. Most studies of local politics in post-New Order Indonesia have focused on contestation among political actors at the local level who used various strategies, resources, and networks, including religious sentiment (Buehler 2016), vote buying and money politics (Aspinall and Sukmajati 2016), mobilizing kinship structures (Savirani 2016), bureaucracy (Choi 2014), customary institutions (Van Klinken 2007), women’s organizations (Dewi 2015), and violent vigilante groups (Wilson 2015; Bakker 2016).

However, research is lacking on how political actors use psychological and emotional strategies to gain power at the local level. The psychological factor referred to in this research is fear, especially the fear of crime. The fear of crime in post-Suharto Indonesian local politics has not been widely studied. This is surprising, as crime has been documented as being prevalent in Indonesian daily life. Based on data from the Central Bureau of Statistics (BPS 2016), the nationwide crime clock for 2015 reads 00.01″29″″, which means that a crime occurs every 1 minute 29 seconds.

Central Lombok is an appropriate place to more deeply investigate the link between electoral politics and fear of crime. This is because Central Lombok has a high crime rate and an extensive informal security network, both of which are conducive for disseminating the fear of crime. The issue of crime and the existence of informal security groups in Lombok’s political environment have been cited by scholars of the region. Although not explicitly discussing the link between the emotional aspect and electoral politics, prior studies provide significant insights into the existence of informal security groups in Lombok local politics. They explain how these groups intertwine with politicians to gain power in the region.

John McDougall (2007) conducted an in-depth observation of the intersection between underground crime networks and informal security groups such as AMPHIBI and Buru Jejak Kumpul. His empirical research has contributed to a contextual understanding of the emergence and political economy of violent groups in Lombok. His work also describes the economic networks in addition to historical and cultural insights into crime, particularly regarding theft in Lombok. J. J. Kingsley (2012) focuses on the link between religious leaders called Tuan Guru and informal security groups such as AMPHIBI and Hezbollah in local politics. Adam Tyson (2013) analyzes the effects of decentralization on the existence of a faith-based vigilante group named AMPHIBI. AMPHIBI has become significant in political contests where the organizational network can be used effectively as an instrument to mobilize political support. Kari Telle (2013; 2015) examines how informal security groups in Lombok obtain significant influence and recognition in social life so as to more easily access state resources.

Communities in Central Lombok District, where the primary livelihood derives from agriculture, encounter problems that threaten their assets, especially livestock. At the time of the political transition in 1998, the number of criminal cases in Lombok increased drastically—the number of cases registered in the Lombok court system doubled from 1997 to 1998 (Kristiansen 2003, 122). The social unrest during the political transition impacted the tourism industry in Lombok, which saw a decline in the number of foreign visitors. The unemployment rate on the island was high, with only 17 percent of workers employed in the formal sector (ibid.). This contributed to increased crime on the island. The police, as the state agency with authority over security, were relatively ineffective in dealing with burglaries. The number of thefts in Lombok remains high to this day.

When the state failed to provide adequate security, informal security groups emerged to fill that role. It is no coincidence that Lombok is reputed to have the highest number of informal security groups of any region in the Indonesian archipelago. The largest number of groups is located in Central Lombok, where approximately 25 percent of adult men are active members of such groups (McDougall 2007; Telle 2015). Lombok communities prefer informal security groups to resolve their security problems. Some members of these groups are also famous for their magical abilities that can allegedly be used against thieves. In the eyes of local communities, these informal security groups legitimately capture and punish thieves, conducting this community-sanctioned violence outside of state frameworks.

In a situation where there is a collective fear of crime, political actors who provide solutions to security problems become very influential in the community. Once direct local elections were introduced, individuals elected as district heads became closely connected to informal security groups. This background suggests that investigating how the fear of crime is employed in the local political context remains essential to exploring the ways in which fear of crime shapes local power. To fulfill this main objective, this paper will discuss how fear of crime is constructed in society and how the politics of fear emerges and functions in social life, as well as the ways in which the consequences of this fear have changed recently. I argue that fear can be socially constructed through talk about crime and politicized in local elections by the elites through informal security groups and individual datu maling, two entities that I refer to as “fear entrepreneurs.”

Theorizing the Linkages of Politics and Fear of Crime

Fear of crime can be applied as a source of legitimation for successful social and political control (Svendsen 2008, 111; Dammert 2012, 31). If crime can be converted to general political interests, it can become a crucial issue in elections. Response to crime is one of the most important criteria for evaluating a government’s performance (Dammert 2012, 31). Elites typically take advantage of public anxiety about crime to serve their political interests. In the West, politicians have often used the threat of crime to win support at election time. In the 1979 UK election Margaret Thatcher politicized the fear of crime to achieve victory. She used the tagline “Feeling safe in the streets” as a campaign theme that successfully attracted British voters (Jackson et al. 2006, 8).

Fear of crime as a topic of scholarly discussion and public debate began to appear in the 1960s (Furedi 2006; Jackson et al. 2006). In the decades until the 1980s, governments made a significant effort to understand and control this kind of fear, especially in the United States and United Kingdom (Jackson et al. 2006, 3). As US President Johnson noted in the presidential report on crime in 1965, the US government needed to conduct studies and surveys to gain a deeper understanding of this phenomenon. The observation was triggered by political and social contexts such as increasing social protests, racial discrimination, assassinations of political leaders, and the stigma about young, poor African Americans as perpetrators of crime (Dammert 2012, 29). A similar situation was observed in the UK, where inner city riots in the 1980s initiated massive media coverage of crime and its implications for British society (ibid., 30).

In the constructivist sense, fear is socially constructed through language. Humans circulate fear socially through language, using language to internalize and express their feelings about fear, particularly in their interactions with each other. This means that the experience of fear is different for humans compared to animals. Specifically, it means that a sense of danger can be communicated over a great distance. A distant danger can be accepted as a direct threat to human well-being. As communication of this kind of threat depends on words, which may be misinterpreted, human beings can end up creating an imaginary threat (Svendsen 2008, 25). In turn, this imaginary threat can create a fear that shapes cultural norms within a specific community. Fear influences how people organize their everyday life so that they can anticipate potential threats. Routine action to anticipate threats transforms into a standardized practice of living. Moreover, repetition of stories about fear can influence general perspectives on life. It is even possible for specific fears to become a culture’s basic characteristic (ibid., 19).

As fear is social and relational (Barker 2009, 267), it can be contagious (Svendsen 2008, 14)—that is, it can be transmitted socially. For instance, hearing the story of a criminal being discussed by other people can lead to feelings of fear (Barker 2009, 267). Fear is created from people’s testimony about threats. Moreover, people tend to exaggerate threat, with the consequence that rumors often portray danger as more acute than the actual situation warrants.

Like other forms of fear, fear of crime spreads in daily life through ordinary discourse, rhetoric, routines, and the mass media (Lupton and Tulloch 1999, 513). As suggested by Teresa Caldeira (2000, 19) in her research on “talk of crime” in Sao Paulo, Brazil, fear can arise from everyday conversations, commentaries, discussions, narratives, and jokes with crime as their subject. Thus, the general contagion effect of fear applies strongly in the fear of crime.

In his classic work on fear during the 1789 French Revolution, Georges Lefebvre (1973) emphasizes the role of what he calls “relays” in spreading the fear of crime discourse across a wider area. As he writes, fear could reach almost all the regions of France only because of the help of these relays, which included doctors, dancing masters, merchants, priests, couriers, postmen, municipal officers, military commanders, and militia members. Traveling up to hundreds of kilometers, these people distributed stories of crime to the people they met on their journeys (Lefebvre 1973, 161).

The talk, rumors, and even myths about crime that circulate in certain communities do not exist only in relation to crime. They also reflect the broader political situation (Lupton and Tulloch 1999, 512). Discourse about fear of crime influences how people define whom and what they should fear (Barker 2009, 267). Based on Caldeira’s research in Sao Paulo, public discourse through narratives of crime creates stereotypes and prejudices about groups of people called nortenos as being perpetrators of crime. Similarly, public discourse engineered by the ideology apparatus during Suharto’s New Order Indonesia created a long-lasting stigma toward former members of the Indonesian Communist Party, which was crushed in the bloodshed of 1965 (Heryanto 2006). They came to be perceived as ghosts that needed to be feared but eliminated at the same time. Thus, there is a need to understand how power is involved in constructing discourse, and it is essential to understand the political interests involved in the fear of crime discourse.

The Social Construction of Fear in Central Lombok: Talk of Crime

People in contemporary Central Lombok are concerned over the pervasiveness of theft. Not only livestock but also motorcycles are common targets of theft. Motorcycle theft occurs in all areas, including remote villages. In addition, people fear the sadistic behavior of thieves. The strong impression that the police are incapable of offering protection only serves to exacerbate people’s fears.

Based on statistics from the local police and the Statistics Office of Central Lombok District, theft cases consistently dominate Central Lombok’s list of crimes. Theft dominated the criminal case list for the entire Central Lombok region from 2004 to 2013. The highest percentage occurred in 2006, when theft accounted for 58 percent of the 52 types of criminal cases handled by police (BPS Lombok Tengah 2006, 274). In 2007, Central Lombok Police received 103 reports of motorcycle theft, of which only three cases were resolved as seen from Table 1. Table 1 shows that the high incidence of motorcycle theft continued until 2010, reaching 252 cases in that year. The police were able to resolve only 33 of these cases (BPS Lombok Tengah 2010, 233).


Table 1 Criminality Rate in Lombok Tengah District 2006–10


Limitations on the number of police personnel is often cited as a reason for their inability to overcome rampant motorcycle theft.1) Central Lombok Police officers numbered about 800 in 2013. They are responsible for security in a region with over 800,000 inhabitants (BPS Nusa Tenggara Barat 2014, 259). This ratio is well below the ideal ratio of 1:400 police to civilians specified by the United Nations.

However, the most crucial issue is people’s reluctance to report crime to the police due to complicated, long, and costly bureaucratic processes. Many victims of crime are ordinary farmers who rarely deal with bureaucratic systems and are consequently wary of involvement with the police. An exception to this is the increasing practice of hiring mediators to help victims at police stations. These mediators mostly come from NGOs and are already accustomed to dealing with police under the banner of “people’s advocacy.” People assume that asking for help from NGO activists will facilitate their dealings with the police.2) NGO activists are believed to ensure that the investigation process will be shortened and not involve any additional cost. Many local people believe that asking an NGO activist for help is much cheaper and easier than going to a police station on their own.3) They only give the activist a small amount of money or offer goods as a sign of gratitude, but they experience no coercion from the activist.

The rampant criminal acts committed by young thieves in Central Lombok frighten all members of society. Younger thieves are reputed to be more sadistic in the way they conduct their operations. There have been several cases of theft and robbery accompanied by sadistic violence. On July 29, 2015 cattle thieves (allegedly 10 individuals) killed a man named Sumirat in Kateng village when he attempted to pursue them. Sumirat was stabbed several times and sustained injuries on different parts of his body, including his hands, waist, chest, and thighs ( 2015).

Instead of information about crime being spread through mainstream communication channels such as television or newspapers, the primary medium for spreading fear is a traditional construction called the berugak. Berugak are usually located in front of the house and are used instead of a living room. There is no concept of a separate space for a living room in the architecture of traditional Lombok houses. Therefore, the berugak functions as a place to receive guests and strangers. The use of berugak is influenced by the high incidence of robbery or theft in Lombok, a pattern that has historical precedent. By receiving guests in the berugak, a householder reduces the opportunity for outsiders to see valuable property inside the house.

The berugak is a place to exchange information, including stories about criminal cases. Locals discuss brutal murders in these spaces, and this information passes from berugak to berugak in different villages. By the time they are delivered, most stories are already filled with distortions. Each person adds to or modifies the story based on their own interpretation. In berugak conversations I was often encouraged to share stories of crime related to the villagers’ experience. I discussed my concerns about the safety of personal belongings, especially after the theft that occurred in the house where I had been staying.

Berugak talk of crime not only spreads fear but also produces it. Everyone is free to speak about criminal cases with their own personal interpretation. Fact and fiction become mixed in berugak crime talk. People in berugak do not question the validity or accuracy of the crime stories they hear from others. On the contrary, everything is assumed to be true; people are more excited about discussing crime stories if they are more frightening than usual.

Recently, people in Central Lombok have been concerned with cases of violent criminal acts carried out during robberies. Thieves have not hesitated to hurt or even kill their victims. Residents in the village of Jago reported that they preferred to stay in their homes even if their neighbor was being robbed and screaming for help. They preferred to save themselves rather than helping to capture the thieves. An informant told me that a few nights after he had helped to capture a thief, his house was terrorized by the thief’s associates. He could not bear this intimidation and decided to go to Malaysia as a migrant worker.4)

A criminal case that was much discussed in berugak and attracted a great deal of public attention in Lombok was the heartless murder of Sumirat, mentioned above. Sumirat was an ordinary farmer from Kateng village, in the subdistrict of southwestern Praya. His killing caused great anxiety among residents because they felt that this sort of tragic incident could happen to anyone at any time.

People in berugak also discuss which areas are considered crime-prone or dangerous. These discussions can transform into intense debates. Everyone is free to agree or disagree with the opinions of others. Such talk can affect understandings of the level of security in a particular region. On one occasion in a berugak, I told people about my travels around the Central Lombok region, particularly the dam near Batujai village. Initially I thought it was safe as I did not experience any crime. However, people in the berugak warned me that the area was notorious for crime, especially motorcycle theft.

The stories discussed by people in berugak are passed on through families. Family members pass them on to neighbors, schoolmates, or friends in their prayer group. The stories spread quickly from house to house and village to village. In the end, berugak talk of crime can spread to the entire Central Lombok region. Distances between towns are small enough that residents meet each other easily.

With the high incidence of crime in Central Lombok, fear spreads quickly through discussions about crime, especially discussions held in berugak. Conversations about crime that are held in everyday life cause people to worry constantly. Although not everyone experiences crime directly or becomes a victim, the circulation of crime stories generates the emotion of fear. Berugak structures are a primary node for enabling the spread of fear, leading to a collective phenomenon. Fear in society has the potential to be exploited in local politics and provide benefits for certain political actors.

The Rise and Fall of Lalu Wiraatmaja a.k.a. Mamiq Ngoh, Kingpin of Central Lombok’s Informal Security Groups

When Lalu Wiraatmaja ran in the 2005 Central Lombok direct elections for local government head (pemilihan kepala daerah or pilkada), he understood very well the advantage of using informal security groups as part of his political machine. Better known by his nickname, Mamiq Ngoh, he was a pivotal figure in Central Lombok’s informal security groups. He was widely reputed to have a close relationship with Buru Jejak Kumpul. Mamiq Ngoh is an aristocrat from the Praya House of Nobles. He inherited a standing as the leader of the local aristocracy, and his family are traditional leaders in Central Lombok. The founder and leader of Buru Jejak Kumpul, Amaq Raisah, has been loyal to the Praya aristocratic families. Amaq Raisah’s family served as the trusted guards of Praya aristocrats in the past. Due to his influence, Mamiq Ngoh was appointed as the chairman of the Informal Security Groups Communication Forum when it was established in 2004. He became an adviser and protector of various informal security groups throughout Central Lombok.

Buru Jejak Kumpul is the oldest informal security group in Central Lombok. It has branches, called units, in hundreds of villages around the region. A coordinator leads each of the units, which have varying numbers of members ranging from the dozens to the hundreds. Unit coordinators use amateur radio to communicate with members who are spread across villages, and to communicate with headquarters in Bilelando village. They use amateur radio as it is cheaper and more efficient than other types of communication, including mobile phones. Radio amateurs only need electric power and an antenna. Buru Jejak Kumpul became an organization prototype that was subsequently imitated by other emerging informal security groups, such as Elang Merah (Red Eagle) and Pakem Sasak.

Local people request these groups to provide security for their cattle. However, there is a price to be paid. For each head of cattle, people pay an annual fee of 250,000 rupiah to Buru Jejak Kumpul. Thus, if a person has five head of cattle he has to pay 1.25 million rupiah annually. A cow is worth around nine million rupiah. In accepting this payment, informal security groups accept responsibility for the assets’ security. If cattle is stolen, the group is obliged to hunt down and recapture it. Protected clients are given a sticker with a Buru Jejak Kumpul logo to attach to the front of their houses. The group does not hesitate to use violence. Captured thieves are routinely taken to a location, usually the group’s headquarters, to face a “trial” and punishment. Most forms of punishment involve physical violence, such as amputating parts of the body or even extrajudicial killings.

Mamiq Ngoh became the point of reference for informal security groups, obtaining an influential position among them. He was the person to whom these groups would address complaints if they faced problems. Almost every night Mamiq Ngoh’s house was crowded with members of various informal security groups, who came with problems ranging from internal organizational issues to relationship difficulties among groups. Mamiq Ngoh did not hesitate to mediate between conflicting groups to make peace. He also frequently became a mediator for groups facing problems with local authorities and the police.5) This close relationship with informal security groups was the primary element in Mamiq Ngoh’s strategy of contesting in local elections.

Mamiq Ngoh was elected as the head of Central Lombok District in the 2005 local elections. This was the first direct election of a local government head in decentralized Central Lombok. Many leaders of informal security groups joined Mamiq Ngoh’s campaign team, some of them officially registered with the Regional Election Commission. Thousands of informal security group members demonstrated their explicit support for Mamiq Ngoh by escorting him when he registered as a candidate at the Regional Election Commission office (Lombok Post 2005). The informal security groups intimidated other candidates and their supporters with a series of public campaigns involving thousands of members. It was a public show of force in the streets of Central Lombok.

Informal security groups secured votes for Mamiq Ngoh at the grassroots level in ways other than the public show of force. It appears that Mamiq Ngoh used informal security groups to mobilize voters at the village level.6) He ensured that the population would vote for him through the network of informal security groups that spread into remote villages. His supporters did not hesitate to intimidate other candidates’ supporters, disrupting their campaigns.

Mamiq Ngoh also used security as a central propaganda element in his campaign to attract votes in Central Lombok villages. He used the citizens’ fear of criminal acts and theft as a way to attract support, creating the impression that he could ensure security in Central Lombok better than the other candidates could. Mamiq Ngoh himself cannot be separated from the image of a tough guy or jago. A member of his campaign team told me that Mamiq Ngoh had been a famous thug when he was young and fought with many people.7) This is why his supporters believed he was the only candidate who could deal with violent crime in the region.8) There was a strong belief that if the people wanted to be safe from crime, they should vote for Mamiq Ngoh.9)

By utilizing security as the central theme for campaign propaganda, Mamiq Ngoh aroused concerns among local people: they worried about their safety if they did not vote for him. They were intimidated by threats from members of informal security groups.10) If Mamiq Ngoh was defeated in a particular village’s election, that village would receive no protection from thieves. Voters understood that no one would provide security for them if they did not follow the group’s directions. Neither could any institution guarantee the safety of their cattle, apart from these informal security groups.

However, there were two factors that led to a dramatic decline in the number of votes for Mamiq Ngoh in 2010: the rivalry among informal security groups and public distrust over the issue of crime. Mamiq Ngoh’s image of providing a solution to the security problem was in tatters. The political machine that he previously relied upon, informal security groups, began to be viewed negatively. People started questioning their integrity when many thieves joined these groups and even sought their protection. Although the crime rate was still high, Mamiq Ngoh could no longer plausibly use it to attract votes.

Rivalry among informal security groups and public distrust over the issue of crime have led to a decline in the popularity of informal security groups over the last six years. Conflict among informal security groups is common as they each protect their members from thieves. Conflicts occur also when a thief belonging to a particular informal security group is caught by members of another group. The thief’s friends then demand his release. They do not hesitate to attack each other to protect their friends if caught. If the captured thief has already been subjected to violence, his friends take revenge. The rivalry among informal security groups was triggered also by Mamiq Ngoh’s favoritism toward Amaq Raisah when it came to resource distribution. According to several informants from informal security groups, Mamiq Ngoh paid attention to channeling resources (such as financial support) only to Amaq Raisah. He showed no concern for other groups even though they had also contributed to his 2005 success. This led to dissatisfaction among several informal security groups.

It can be seen that the social position of informal security groups has drifted a long way from their original rationale. The initial purpose of the groups was community-based self-protection, as police could not be relied upon to provide effective security against crime and theft. Gradually many thieves themselves became members of these groups.11) A thief whom I interviewed claimed he had joined various informal security groups.12) He joined them because he wanted protection from other groups. He was afraid of the violence and torture that was inflicted by members of informal security groups on captured thieves. He took care of his obligations to other group members, such as paying a certain amount of money at particular times. Local sources told me that thieves were initially allowed to join the groups so that they could be controlled; however, in the end this was impossible.13) The informal security groups ended up supporting the thieves.

After thieves began to join informal security groups, members of the public increasingly came to doubt the integrity of the groups. Initially the public supported the presence of informal security groups, as they believed they would provide protection despite their brutal behavior. However, public distrust developed as the groups began providing shelter for thieves, who continued their depredations. Theft and crime continued, but this time they also involved informal security groups, either directly or indirectly.

Widespread public distrust of the informal security groups was not beneficial for Mamiq Ngoh’s political career. Informal security groups were the backbone of his 2005 campaign: he won votes by portraying himself as a figure capable of restoring security to Central Lombok. As a patron of informal security groups in Central Lombok, he could not be separated from the presence of these groups. When doubts arose regarding the integrity of informal security groups, this also eroded trust in Mamiq Ngoh. This distrust reflected the fact that the crime rate did not diminish significantly after he became district head. Theft still dominated the criminal cases handled by police one year after Mamiq Ngoh had been elected (BPS Lombok Tengah 2006, 274). The high rate of motorcycle theft lasted until the end of Mamiq Ngoh’s term in office in 2010. The police managed to solve only 33 cases of motorcycle theft out of the total of 279 cases in the entire Central Lombok region (BPS Lombok Tengah 2010, 233).

The Changing Contours of the Security Landscape: The Existence of Datu Maling

Things have been different from the early 2000s, when people no longer completely trusted informal security organizations but rather shifted their hopes to individual figures who were considered to have more integrity. These individual figures, popularly known as datu maling, tend to avoid affiliation with any particular informal security organization. Therefore, they can be more independent and flexible in determining their political direction.

A datu maling is a senior thief who has stopped stealing. He is usually someone who was renowned for courage and strength when still active as a thief in his youth. With the protection and security they provide, datu maling are influential as local strongmen in the neighborhood, both in everyday social life and in politics. Datu maling also protect the population in inter-village conflicts, often leading villagers who want to attack another village. Therefore, they are respected not only by the local people but also by younger thieves.

The strong influence of datu maling in Central Lombok relates to Lombok’s historical precedent of defining thieves as respected and feared persons. This situation may have resulted from the Balinese occupation of Lombok in the precolonial period. Lombok people could not resist the Balinese in the eighteenth century, and Balinese aristocrats consolidated their power over large areas of Lombok (Van der Kraan 2009, 5). In these circumstances the theft of Balinese property emerged as a form of resistance, with thieves targeting the property of Balinese nobles. During the Balinese occupation the people of Lombok did not consider stealing a criminal act. Thieves were regarded as taking back their property (reclaiming rights) that had been forcibly taken from them by Balinese aristocrats.

This historical precedent from the time of the Balinese occupation has influenced present-day local perspectives toward stealing. As some of the informants pointed out, the Balinese occupation enabled the development of local values—particularly among Sasak men—which place a premium on efforts to seize something rather than asking for it. Stealing or theft became a sort of initiation process into adulthood for some people. Stealing is highly appreciated since it requires courage, strength, and self-defence capabilities. Within this context, men with practical skills to steal things are thus perceived to be capable of looking after a family. While this argument might not represent the whole picture of local perspectives on stealing, it is not rare to find such a point of view among Sasak men. Hence, regardless of historical and sociological accuracy, it provides some of them with cultural justification for stealing.

The work of datu maling is similar to that of informal security groups when it comes to providing security services to residents. According to my local informants, people who want to secure their livestock (such as cows) make a mutual agreement with datu maling. These agreements include profit sharing. This sharing between the client and the datu maling is varied in form and usually agreed on through a process of negotiation. Usually the datu maling receives a share of the fees from the sale of livestock. The client also provides the datu maling with household goods such as cigarettes and sugar each week, in addition to an extra bonus once a year on Eid Al-Fitr.14) If a motorcycle is stolen, the client asks the datu maling to track it. The types of people who use a datu maling for security services are not just local farmers and ordinary villagers; many of them come from the highly educated middle class. An informant who works as a lecturer at the local university shared that he had asked a datu maling for help securing his cattle in the village.15)

With their position as protectors and providers of security, datu maling have become highly respected and feared figures. Therefore, these individuals have symbolic capital that allows them to earn money and prosperity even though they have retired from stealing. In some villages in the southern regions of Central Lombok, several datu maling have noticeably large houses compared to their neighbors. Their houses are mostly located in prime locations, such as on a hilltop. This reflects the respect that datu maling receive from local society.

Their symbolic capital brings datu maling financial benefits not only from ordinary people but also from the political elite. With their respected social status, individual datu maling become reference points for local people when choosing their political orientation. In the current Indonesian electoral system, candidates who run for election take advantage of notable figures such as datu maling to mobilize votes. A datu maling will ask residents in the neighborhood, and the people whom he protects, to vote for a particular candidate. This arrangement is similar to those of informal security groups in the past. People worry that if they refuse the directions of a datu maling their safety will be threatened. Datu maling can be described as “vote brokers” who are ready to mobilize votes on demand. Candidates in direct local or legislative elections lobby for datu maling to join their campaign team, and they compete to get the largest number of datu maling on their team. Candidates who have many datu maling on their team are more confident of winning.

However, datu maling are quite different from informal security groups when it comes to loyalty to particular political figures. A datu maling is not tied to a single patron or political figure, as was the situation with informal security groups, especially the Buru Jejak Kumpul group. Datu maling’s political calculations are based on pragmatism and profit. Informal security groups operated under an organizational banner, so they were relatively dependent and inflexible in their political maneuvers. In contrast, datu maling operate alone, without any specific organizational label, and without hundreds of members to be accommodated. Thus, a datu maling experiences more freedom and independence in determining his political preferences.

The independent political orientation and pragmatism of datu maling can be illustrated by the case of Mamiq Rahman (pseudonym). In the 2005 Central Lombok election he supported Mamiq Ngoh, who was elected as district head. However, in the 2010 election Mamiq Rahman shifted his support to Suhaili even though he came from southern Central Lombok, a region considered to be a support base for Mamiq Ngoh. As Mamiq Rahman revealed to me, Suhaili himself came to Rembitan village to ask for his support, inviting him to join his campaign team.16) Suhaili provided financial assistance and campaign equipment to Mamiq Rahman for use in the village. Suhaili’s personal visit to Mamiq Rahman’s house was effective in changing his political orientation. Suhaili was more serious about approaching Mamiq Rahman than Mamiq Ngoh, whom Mamiq Rahman had supported in the 2005 election. Mamiq Rahman ended up asking villagers to follow his decision to vote for Suhaili rather than Mamiq Ngoh. He told the people he could not ensure Rembitan’s security if they did not vote for Suhaili. Since the region where Rembitan village is located is prone to criminality, many local people there worry about security. In the end Suhaili won in the village, and Mamiq Rahman received a payment and was invited to a celebration at Suhaili’s house.17)

Datu maling provide support to politicians or candidates who offer the most attractive deal. Based on information from my local sources, the pay-off varies from money and recognition to protection and legal assistance.18) Therefore, money is not the only objective sought by datu maling. A local politician told me that the deal he made with the datu maling who supported him in the election for local parliament members in 2014 was not based on financial assistance. Rather, it was based on protection.19) By his admission, he did not give money to any of the datu maling. Instead, some of the datu maling contributed to financing his nomination process.20) Those datu maling hoped that if a politician was elected they would obtain assistance for any legal problems. Almost all datu maling have low education levels, so they feel they need help from politicians in any legal process. They also want to receive recognition from society. Politicians are expected to help datu maling gain recognition, for instance, by arranging public events that involve them.

Preliminary Conceptualization of Fear Entrepreneur

The Central Lombok case is an example of how some people use fear of crime as a strategy to gain an electoral advantage. These people seek both financial benefits and political privileges. In Central Lombok, security, which should be a public good provided by the state, has been “privatized” by certain individuals and groups. Individuals and informal security groups sell security to those who are willing to become customers. These security sellers do not hesitate to use violence in their work. In this way, private individuals have largely replaced the state as a legitimate entity by monopolizing violence. Violent civil groups seem to enjoy legitimacy to perform acts of violence against criminals in the name of public security.

Individual figures or groups that provide security services are not unique to Lombok. They can be found in many places in Indonesia, such as Jawara in Banten and Forum Betawi Rempug in Jakarta. Political changes that occurred after the fall of Suharto resulted in the state losing significant control as the center of power over violence and coercion. Social groups took on the state’s role when it came to controlling violence, positioning themselves on the blurred line between legal and illegal activity (Bakker 2015).

Mainstream explanations for the emergence of these so-called vigilante groups suggest they are a consequence of the political transition after the New Order ended and democratization policies—such as decentralization and local direct elections—were implemented (Hadiz 2010, 133; Wilson 2015, 2). The most prominent explanations present them as predatory vigilante groups seeking economic resources, especially in the informal economy. Whereas criminal gangs in Suharto’s era were generally perceived as unconnected to religious groups, in the Reformasi era observers became conscious of criminal gangs with an overtly Muslim orientation and notions of morality. They adapted to the new political system to maximize the profits from predatory economic objectives and express their political ideology (Wilson 2008).

However, previous explanations are not adequate to portray specific practices that occurred in the Central Lombok case. Hence, I prefer the term “fear entrepreneur.” Like business entrepreneurs, fear entrepreneurs aim to collect as much profit as possible. Individual figures such as datu maling and informal security groups use people’s fear for the sake of accumulating benefits, which include money and other privileges. Within this system, they can achieve prosperity and access to political elites. Through established relations with politicians, they can access resources from governmental authorities.


Fear is not only a consequence of the body’s biological or metabolic workings but is also socially constructed. Fear of crime can spread collectively. Fear became contagious and spread in Lombok through the “talk of crime” that took place, especially in the berugak. These berugak were scattered in many places. Local people discussed stories, rumors, and even gossip about theft and criminality. Even if they had not experienced criminal action directly, people involved in such talk became afraid. Through the talk of crime, the discourse about crime and theft (including considerations of what constituted crime and how it should be responded to) were discussed freely. Berugak were a primary node that enabled fear to spread widely, so that it became a collective phenomenon.

In 2005 informal security groups seemed to be the dominant force in Central Lombok electoral politics. They were both a source of fear and an assurance to the public of protection against greater fear. They have not disappeared, but they have fragmented and no longer form a coherent political bloc. They were undone by the contradiction between their criminal role and their role as protectors against criminality. Datu maling have taken their place, but the same contradiction applies to these newly important figures. It is expected that they too will become less significant in the future.

In conclusion, politicians must fulfill the demands for civil groups in the context of decentralization and direct local elections. Ultimately, people at the grassroots level are the most disadvantaged. By relying on private individuals and organizations for public requirements like security, they are vulnerable to abuses of power. The state should be able to provide decent security services and monopolize the use of legitimate violence, in line with the principles of democracy and human rights.

Accepted: August 16, 2018


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1) Interview with Lalu Sugiartha, Security and Intelligence Office–Central Lombok Police, May 29, 2013.

2) Interview with Ikhsan Ramdhani, local NGO activist, July 3, 2015.

3) Interview with Ikhsan Ramdhani, local NGO activist, July 3, 2015.

4) Interview with Jago village resident, confidential name, June 30, 2015.

5) Interview with Mamiq Ngoh, Central Lombok District head 2005–10, May 29, 2013.

6) Interview with former secretary of Buru Jejak Kumpul, confidential name, June 4, 2013.

7) Interview with a former member of Mamiq Ngoh’s campaign team, confidential name, July 3, 2015.

8) Interview with Bustomi Taefuri, a former NGO activist and politician, July 3, 2015.

9) Interview with a local journalist, confidential name, July 31, 2015.

10) Interview with a local journalist, confidential name, July 31, 2015.

11) Interview with Lalu Syamsir, former state prosecutor and vice chairman of West Nusa Tenggara Province Legislative Council 2009–14, June 23, 2015.

12) Interview with a criminal perpetrator who had just been released from prison, confidential name, June 27, 2015.

13) Interview with Lalu Syamsir, former state prosecutor and vice chairman of West Nusa Tenggara Province Legislative Council 2009–14, June 23, 2015.

14) Interview with Alfian, lecturer at Universitas Mataram, July 1, 2015.

15) Interview with Alfian, lecturer at Universitas Mataram, July 1, 2015.

16) Interview with Mamiq Rahman (pseudonym), a datu maling, July 31, 2015.

17) Interview with Mamiq Rahman (pseudonym), a datu maling, July 31, 2015.

18) Interview with a member of the legislative council from southern Central Lombok, confidential name, July 12, 2015.

19) Interview with a member of the legislative council from southern Central Lombok, confidential name, July 12, 2015.

20) Interview with a member of the legislative council from southern Central Lombok, confidential name, July 12, 2015.


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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―. 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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Waspada. October 15, 2010. Usut kasus pajak PT Indo Palapa [Investigating PT Indo Palapa case].

―. May 7, 2010. 150 Tokoh Masyarakat Tionghoa Siap Menangkan Ajib-Binsar [150 Chinese community leaders prepared to help Ajib-Binsar to win].

―. 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.