SOUTHEAST ASIAN STUDIES: political economy

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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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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. 8, No 2, Trissia WIJAYA


Contents>> Vol. 8, No. 2

Chinese Business in Indonesia and Capital Conversion: Breaking the Chain of Patronage

Trissia Wijaya*

* Asia Research Center, Murdoch University, 90 South Street, Murdoch, Western Australia 6150, Australia
e-mail: trissiawijaya92[at]; trissia.wijaya[at]

DOI: 10.20495/seas.8.2_295

Taking issues from mainstream research, which has overly coalesced the discussion around patronage-ridden relationships and money politics, this paper argues that democracy has restructured the pattern of state-ethnic Chinese business relationships into a dispersed network, due to the dynamics of capital convertibility within varying scales of power and interests. Offering a unique perspective on capital conversion, this paper aims to debunk the orthodox view of Chinese capital as being merely money that accommodates politics. The revival of Chinese conglomerates in the political-economic life of Indonesia in the aftermath of crises was subject to capital in various forms: economic capital, socio-political capital, ideas, and knowledge. At the time of capital restructuring, an ever-increasing dispersed network of Chinese businesses demonstrated that their position was neither higher than politics nor independent of it, yet the arrangement allowed them to dovetail well with various forces and power holders in a pattern of horizontal connection.

Keywords: political economy, Southeast Asian studies, state-business relationships, patronage, capitalism, Indonesian Chinese, democracy

I Introduction

From petty traders to emigrant workers in the first half of the twentieth century, who struggled over the Japanese occupation and the rise of economic nationalism in Old Order Indonesia, ethnic Chinese and their business firms have long maintained a presence in the trajectory of Indonesia’s development (Robison 1986; Thee 2006). The New Order regime under Soeharto made overtures to Chinese capital acumen to back the regime’s development policy, and a small group of Indonesian Chinese capitalists were co-opted as business clients of the New Order power holders from 1966 onward (Coppel 1983). This patronage-ridden state-business relationship—egregiously dubbed “Cukong and Mr. Ten Percent”1)—paved the way for Chinese capitalists to be more active in the economic sector at the expense of their political rights and cultural freedom. Being patronized by Soeharto, they did extraordinarily well in wielding resources (Vatikiotis 1993). For instance, the cukong’s coalition (comprising many ethnic-Chinese businessmen) was endowed with a $6 billion timber industry, along with cheap access to forest resources and virtual immunity from forestry regulations for decades (Barr et al. 2010). Among the capitalists in the coalition, Prajogo Pangestu, the head of the Barito Pacific Group, controlled 5.5 million hectares of the world’s tropical rainforests and became the largest borrower of state funds: his loans amounted to more than $1 billion (Dauvergne 2005). Soeharto’s longtime business associate Liem Sioe Liong became the undisputed king of Indonesian agricultural commodities, banking, and cement, while his company, the Salim Group—with a market capitalization of $8 billion in 1990—accounted for roughly 5 percent of Indonesia’s GDP (Schwarz 1994).

At the beginning of the new millennium the Asian Financial Crisis, followed by a full-blown political crisis, had severe consequences in Indonesia—for the capitalist group in particular. On the one hand, they suffered from high debt; some of them were even left technically bankrupt or without working capital (Purdey 2005). On the other hand, the consolidation of democracy gave rise to a list of reformasi mandates in which the capitalists sought to reposition themselves in a new mode of conducting political business. The former Foreign Investment Law 1967 and Domestic Investment Law 1967—which had been astutely manipulated by power holders for allocating concessions, business licenses, and other material benefits for cukong—were revised into Law No. 5/1999 Stipulating the Ban on Monopolistic Practices and Unfair Business Competition (Thee 2006; Chua 2008). In tandem with the IMF liberalization package and increasing need for foreign investment, many skeptical pundits predicted that Indonesian Chinese capitalists, with their over-reliance on patronage ties, would not be able to withstand the onslaught of competition on a global scale (Suryadinata 2006).

Despite the sweeping political, economic, and social changes, the Indonesian capitalists continued to do well in business and even achieved record profits during the post-authoritarian regime. On the 2017 Forbes Indonesia Rich List, only 8 of the 50 people were non-Chinese. The remainder were all Indonesian Chinese businessmen—both new players and politically connected Chinese capitalists from the Soeharto era. Clearly, this illustrates how ethnic-Chinese-controlled conglomerates have grown and become an integral part of the democratic regime. How can these contradictory outcomes be explained, since democracy and economic restructuring would be expected to lessen the Chinese businesses’ competitive advantage? Does the patronage network remain relevant in the post-Soeharto era, or is there a new pattern in the state-Chinese business relationship?

Drawing upon both primary and secondary research materials, this paper unpacks those questions by reintroducing Chinese business into the notion of capital and, with it, accumulation and all its effects on state-business relations. This paper argues that the “fall of capital” embedded in the patronage network led to the rise of a new form of social and economic capital that enhanced Chinese capitalists’ bargaining power and simultaneously restructured state-business relations. The decentralization and economic restructuring due to reformasi generated economic and social capital that was vital for the expansion of Chinese economic capital. Chinese capitalists had greater opportunities to tap into the lucrative sectors from which they had been restricted during the New Order (see Dieleman and Sachs 2008; Dieleman 2011). In a nutshell, restored civil rights are often viewed simply as social capital, yet they have been used as a powerful tool for political leverage and for pursuing economic interests.

As a result, the greater flexibility in converting capital (adapting the function of a particular form of capital to make it serve a given purpose) amidst political changes has ultimately restructured patronage into a dispersed network. The dispersed network assumes that Chinese capitalists’ position is neither above the government’s nor independent of politics, and the government’s position is neither above the capitalists’ nor independent of economics. Such a network has enabled Chinese capitalists to dovetail well with any (economic, social, and political) forces or groups/interests and power holders in a pattern of horizontal connection. Any Chinese capitalists, whether new or old, embedded in the dispersal arrangement can play a dual role—both as patron and as agent—depending on the forms of capital they possess and the political circumstances. This new arrangement demonstrates not only shifts in power configurations but also changes in the sociopolitical characteristics of orthodox patronage relationships tailored in the New Order era.

The following section identifies gaps in knowledge, particularly the tendency to over(focus) on the literal meaning of Chinese capitalism in the Indonesian political arena. It introduces a critical context by inserting the concept of capital convertibility into the picture and putting forth a conceptual framework to better analyze how the dynamic of capital convertibility has restructured state-business ties. The third section elaborates on the nexus of the state and Chinese business during the New Order era. The fourth section discusses the new political arena resulting from democracy through which capital conversion takes place. For purposes of analysis, the section is thematically divided into three subsections: (1) the politics of unity in diversity, (2) diversification of political power, and (3) the politics of globalization and nationalism. The last section discusses the trajectory of capital conversion in state-Chinese business relationships and concludes with a summary of the main findings.

This article makes two primary contributions. First, it provides a fresh perspective on the political-economic debate over Indonesian Chinese business through an analysis of capital conversion. By delving into the dynamics of the sociopolitical and economic capital of Chinese business, this paper offers a nuanced, contextual understanding of how Chinese capital has revived in the aftermath of reformasi and since then been converted according to its content, spaces, and viability within various forces in Indonesia. Second, it contributes empirical evidence of the actual dynamic of capital conversion in restructuring the state-Chinese business relationship and reshaping the politics of development in Indonesia. Without neglecting the fact that democracy has given rise to new Chinese business elites at the local level, the term “Chinese business” in this paper refers to top-listed ethnic-Chinese-controlled conglomerates. The argument presented here depicts an overview of Indonesia’s past and contemporary economic development trajectory, in which Chinese conglomerates (cukong and new big players) have become an important, if not decisive, component of development.

II Critique and Analytical Framework

This section aims to establish an analytical framework that underpins the revival of Indonesian Chinese capitalism and identifies changes in the state-Chinese business relationship in the scheme of capital conversion. Mainstream camps tend to underpin Chinese capitalism with pragmatism or unlimited flexibility in political business dealings (Cragg 1995; Hui 1995; Ong and Nonini 1997; Hamilton-Hart 2005) in a bid to ensure survival in the midst of political changes. This is also aligned with the term “ersatz capitalist” coined by K. Yoshihara (1988), projecting the “flexibility” of Chinese businesses in running roughshod over their counterparts. Yoshihara describes Southeast Asia’s Chinese businessmen in a pejorative way. Insofar as the businessmen perceive life as a matter of adaptation, they cultivate informal networks of “ersatz” protection, including collusion with ruling elites, when the legal system fails to provide adequate protection.

Accordingly, regarding the political transformation in Indonesia, a vast amount of literature laments the institutional deficits and inadequacies in the face of competing coalitions of interest and power (McLeod 2000; 2010; Schwarz 2004; Aspinall and Klinken 2010). The new commercial and competition laws designed in haste after the fall of Soeharto proved to be much easier to manipulate than the previous versions because regulations were skewed in favor of entrenched commercial interests in the less predictable environment of democratic Indonesia (Rosser 2002; Hadiz 2003; Aspinall 2005; Fukuoka 2012; Mietzner 2013). Another camp identifies significant changes in the patronage-ridden relationship after the political transformation in Indonesia, where Chinese businesses insinuated their position into the political machinery surrounding prevailing oligarchs (Winters 2013) as well as non-oligarchic forces (Mietzner 2014). In one instance, Indonesia’s new era of democracy was dominated by oligarchic elements, including the circle of political-business families operating from the New Order regime that leveraged power relations of wealth and authority (Hadiz and Robison 2004). In another instance, there was a significant influx of non-oligarchic forces in contemporary Indonesia that became active in the national and local political domains and challenged the oligarchy (Ford and Pepinsky 2014; Mietzner 2014). C. Chua (2008) pinpoints a twofold approach most Chinese capitalists adopted to accommodate such political dynamics. First, they continued with business as usual, taking advantage of their capital and skills. Second, they sought multiple patrons (unlike during the previous era, when Soeharto was the sole patron) in order to withstand political instability. This approach helped to tailor a new pattern of state-business relations that was often associated with “money politics.” The latter to a great extent resonated with the new pattern of state-business relations that W. L. Chong (2015) identifies at the local level. So far as Chinese capitalists remain oriented to their habitus in which the predatory political-business system has been nurtured, they continue to reshape the system in a bid to safeguard their capital and position (Chong 2015).

Although scholarly literature largely depicts current conditions in the Indonesian political economy, it is by no means static. The majority of literature situates the state and Chinese capitalists in a framework of syllogism—in which money is always the vehicle for Chinese capitalists to cope with sudden shifts in the political system, while the state is the predator that seeks legitimacy and power by capitalizing on Chinese money. Simply put, the literature tends to generalize the symbiotic relationship between power holders and Chinese business in the context of conventional features of Chinese capital and consequently can lead researchers down the wrong analytic path. Such a generalization also hinders scholars from acknowledging the interplay of various forms of capital—economic capital, socio-political capital, ideas, and knowledge—that have affected Indonesian Chinese capitalists’ endeavors and their relationship with the state. In hindsight, we need a proper concept to analytically link capital dynamics with changes in the state-business relationship.

Drawing inspiration from P. Bourdieu’s “The Forms of Capital” (1986), I am keen to take his reasoning of capital conversion into account. Bourdieu does not neglect the fundamental existence of economic capital, but he laments scholars who reduce every type of capital to economic capital. For Bourdieu, the notion of capital extends beyond its economic constraints and takes into account a wide variety of resources, such as political, social, and cultural. Economic capital refers to material resources that can be turned into money or property rights. Social capital stands for networks of contracts that can be utilized to leverage one’s social position. Cultural capital consists of non-material goods such as knowledge and ideas, skills, and expertise that can be converted into economic capital (Bourdieu 1986, 243). Political capital refers to a subtype of social capital that has the capacity to mobilize social support (Bourdieu and Wacquant 1992, 119). In essence, the convertibility of different types of capital is the actual basis of social-power relations that reshape the dynamic of power struggles, as Bourdieu (1993, 73) argues:

The field of power is the space of power relations among agents and institutions who own enough capital to share leading positions in the different fields (especially the economic and cultural fields). It is the site of struggles among the holders of different kinds of capital or power. . . . The stakes in these struggles are the rules of transformation or conservation of the different kinds of capital, their comparative values, which themselves rule, at any moment, the forces which can be invested in these struggles.

In other words, differing combinations of capital serve to constitute the resources necessary for the production of other types of capital. For example, social capital such as personal ties with power holders can be converted into economic capital in the form of land or money, either directly or via gathering economic capital for a political purpose such as a campaign fund, in exchange for officials’ discretionary favors to expand the business (Bourdieu 1991; Swartz 2013). Relatedly, convertibility hinges upon the varying degrees of accumulation and the value of different elements of capital. Regardless of its form—be it cultural, social, political, or economic—capital can be materially effective only if it is appropriated by a given agent and the agent has a network of connections where he can effectively mobilize the capital he possesses (Bourdieu 1991). In Bourdieu’s words (1986, 252), forms of capital other than social capital

can be obtained only by virtue of a social capital of relationships (or social obligations) which cannot act instantaneously, at the appropriate moment, unless they have been established and maintained for a long time, as if for their own sake and therefore outside their period of use.

How Bourdieu’s capital conversion relates to the state-Chinese business relationship is the way in which varying combinations of capital embedded in any given state-business relationship, such as a long-standing patronage-ridden relationship, have been maintained as well as simultaneously transformed. If neoliberal pundits see the patronage network in terms of institutional flaws, I instead interpret it as a site of struggle among the holders of different kinds of capital during the New Order. Chinese political vulnerability itself appeared to be a form of social capital that was less harmful for Soeharto’s leadership, and thus it gave leeway for Chinese businessmen to expand their economic capital and nurture solid dyadic politico-business ties. However, such relations are not static, as there are always sites of struggle. State transformations, specifically due to democracy, led to the reconfiguration of power and interests; thus, the value of each form of capital was redefined in varying scales of social-power relations. The renewed capital conversion would finally reinforce the inclusion and exclusion of particular actors in state-Chinese business relationships and subsequently create new patterns of relationship.

To better understand how capital conversion has restructured the patronage system in Indonesia, it is worth using the features of patron-client ties developed by J. C. Scott (1972) as a basis for comparatively assessing shifts in state-Chinese business relations. There are three additional distinguishing features of patron-client ties: (1) their basis in inequality, (2) their face-to-face character, and (3) their diffuse flexibility. The basis in inequality refers to an imbalance in exchange between the two partners that reflects the disparity in their relative wealth, power, and status. In this context, the most embedded characteristic of reciprocity is that the patron unilaterally supplies goods and services that a potential client needs for their survival and well-being while simultaneously demanding compliance from the client who has been enjoying those scarce commodities (Scott 1972; 1977). The balance of reciprocity depends mostly on the competitiveness among patrons and the value of services the client brings. If the client has highly valued services to reciprocate with, or if he can choose among competing patrons, or if he can theoretically manage without the patron’s help, the balance will be close to equal. On the contrary, if the client has weak bargaining power or has a few exchange resources to spoon a monopolist-patron, the patron-client ties tends to be coercive (Scott 1972; 1977; Scott and Kerkvliet 1977; Wolters 1983).

The second feature of this dyadic tie, its face-to-face character, relies on the quality of the relationship. Reciprocity that takes shape over the long term eventually nurtures a solid patron-client bond with trust, voluntarism, and affection between the partners. The roots of reciprocity are not simply limited to mutual advantage but are associated with a mutual devotion and values that thrive among both sides because of the endurance of the patron-client framework (Scott 1972; Roniger 1994). The third salient reflection of patronage relationships is that they are “multiplex.” They are diffuse, “whole-person” relationships rather than explicit, impersonal-contract bonds (Scott 1972). The needs and resources of the patron, as well as the nature of the exchange, may vary widely over time, so the language of flexibility is paramount (Gamson 1968). Table 1 presents a tentative framework to analyze how the interplay of different forms of capital has affected the characteristics of the above-mentioned features and resulted in a centrifugal network of state-Chinese business relationships.


Table 1 Fundamental Features of State-Business Relationship in Indonesia


III The New Order: A Long-Lasting Patronage and Indestructible Economic Capital

While a democratically elected politician knows how long he will face the challenge and leave the oath, authoritarian leaders like Soeharto were fundamentally insecure because they could face a challenge at any time. Political legitimacy based on pembangunan, or the “development” mandate, thus became the nerve center of Soeharto’s vision. To build the economy from scratch, Soeharto acknowledged that the regime had to avoid risky decisions by distributing resources—such as licenses to invest and additional credits—to reliable partners (Vatikiotis 1993; Chua 2008). Clearly, a small group of ethnic Chinese businessmen with whom Soeharto had developed the nucleus of a military financial base prior to the New Order was the right choice (Australia, DFAT 1995). The group included Liem Sioe Liong, Bob Hasan, Prajogo Pangestu, and Eka Tjipta Widjaja, whose economic capital could be put to good use for accomplishing pembangunan without posing any threat to Soeharto’s political power. Consequently, the government’s policies resulted in a heavy concentration of wealth in the hands of a few trusted cukong and indeed became an enabling factor in the rise of Chinese capitalists (Robison 1986; Schwarz 2000).

R. Robison and Vedi Hadiz (1993) labeled this convenient relationship between Soeharto and Chinese capital as dirigisme (dirigisme), a relationship in which the economy was led by one man and a bunch of cronies, which eventually fostered the great leap forward of well-connected cukong to big conglomerates. To a greater extent, such a dirigiste economy nurtured the much-touted patronage network, which was originally tailored by politico-bureaucrats and Chinese capitalists from the Old Order. The patronage-ridden relationship allowed policy formulation and resource distribution to be concentrated in the hands of certain political elites and economic actors, including well-connected cukong.

Yet the relationship was by no means static. Over a period of time, the political dynamics of development and resistance during the New Order reshaped the composition and role of actors embedded in the patronage network. What did not change was that Soeharto remained the sole locus of political power who managed the network. During the oil boom period, the nature of the state-business relationship was much simpler. If Japan’s recipe for pursuing its remarkable development was strongly related to the much-touted robust iron triangle established between the bureaucracy, business groups (keidanren), and the ruling Liberal Democratic Party (Johnson 1995), Indonesia under Soeharto also unwittingly had an informal institution like the iron triangle interlinking Soeharto, the military, and cukong. Those three stakeholders simply took the lead as the “pilot ministry” in directing development. At certain levels of policy making, technocrats or the “Berkeley Mafia”2) were also involved, but they had no greater influence than Indonesia’s iron triangle. In short, the source of patronage was not concentrated on the Istana Merdeka (presidential palace), because the process of establishing long-running patron-client relations rested outside the official layers and instead centered on Rumah Cendana (Soeharto’s residence) (Rosser 2002; Borsuk and Chng 2014).

Interestingly, the “cooperation” between the military and cukong made the state more coherent in its policies and autonomous from social interest groups. The military, represented by “Soeharto men” worth their salt, would get the green light from Soeharto to engage in income-generating activities while Soeharto remained the principal patron (Rieffel and Pramodhawardani 2007, 32). Thus, they were among the most powerful figures in controlling capital, as they could either take the lead as stakeholders of a project or function as “security guards” for cukong (Crouch 2007; McLeod 2010). Having provided the Chinese with the usual litany of favors—such as tax breaks, state bank funding, trading licenses, and introductions to foreign investors—the military displayed its political avarice as it also gradually became the capitalist and coalesced around cukong businesses (Crouch 2007). Powerful generals, such as the “finance generals” Alamsjah Ratu Prawiranegara, Sudjono Humardani, Suryo Wiryohadiputro, and Sofjar, and the “money spinner” Ibnu Sutowo would have at least one cukong to partner with (Borsuk and Chng 2014).

Sudjono Humardani, one of Soeharto’s top fix-it men in the early New Order period, reportedly arranged a series of joint ventures between leading cukong and major Japanese investors, for example, bringing together Toyota and William Soeryadjaya (Tjia Kian Long) and Matsushita and Tjaheb Gobel (Schwarz 2000; Abbott 2003). Sofjar, who controlled Yayasan Dharma Putra Kostrad and Yayasan Trikora, established Bank Windhu Kencana, Seulawah, and Mandala Airlines utilizing a capital injection from Liem Sioe Liong (Crouch 2007). Obviously, the four finance generals held the top positions in the bank management: Sofjar was president director; Alamsjah was director; and Suryo and Sudjono were the chairman and vice chairman respectively (Borsuk and Chng 2014). Suryo also served as president director of the government-owned Hotel Indonesia and was given permission to build the Mandarin Hotel in Jakarta, in which Liem Sioe Liong became the main shareholder (ibid.). The money spinner, Sutowo, also had shares in PT Sarana Buana Handana, a logging company partnering with Bob Hasan, and in PT Atlas, a large paper milling venture that also had Bob Hasan as well as Sutowo’s son Ponco and Japanese companies as stakeholders (Ismantoro 2014).

Such solid ties between the military and cukong, which were supported by Soeharto, underwent changes particularly after the oil boom. There are two turning points worth emphasizing here. First, Soeharto’s favored treatment of Chinese economic capital evoked popular discontent with the New Order and led to widespread protests. In response to the threat of growing opposition from the economic nationalist and Muslim groups, Soeharto apparently decided to modify his policy on Chinese capital and promote a pribumi-favoring policy so as to maintain political stability. The Presidential Decree (“Kepres”) No. 14 of 1979, which was amended and reissued as Kepres 14A and Kepres 10 in 1980, gave the “weak economic group,” a code phrase for indigenous businessmen, priority in obtaining certain government contracts (Robison 1986; Schwarz 2000). A new team, known as Team 10, was set up to decide on project allocations. Headed by Sudharmono, the powerful state secretary, and Ginanjar Kartasasmita, the team gave great leeway for prominent pribumi businessmen to get government-related contracts; these businessmen included Aburizal Bakrie, Fadel Muhammad, Iman Taufik, Jusuf Kalla, Fahmi Idris, Hashim Djojohadikusumo, and Subagio Wiryoatmodjo (Winters 1996; Schwarz 2000). The second turning point was the emergence of “Soeharto Inc.,” the business empire linked to the Soeharto family. The growing economy provided opportunities for Soeharto’s family to create monopolies and toll-gate enterprises (Smith 2001). As of 1998, Soeharto Inc.’s wealth concentration consisted of 417 listed and unlisted companies, particularly state-controlled ones (Claessens et al. 1999).

The affirmative-sounding policy and the increasing share of the Soeharto family in the Indonesian development trajectory did not necessarily impede the accumulation of Chinese capital or erode the long-running patronage network. The two turning points discussed above neither broke down the Soeharto-Chinese network nor diminished Soeharto’s position as an indispensable source of support to Chinese capital. This was possibly due to two underlying reasons. First, in the beginning of the 1980s, technocrats urged Soeharto to issue deregulations in some industries, including banking, transport, trade, and manufacturing, so as to parlay non-oil exports (Sato 1994). While the technocrats’ objective was purely to liberalize the economy, the deregulation package in turn allowed cukong to amass capital, particularly after the lifting of restrictions on the Jakarta Stock Exchange. As a result, almost every Chinese business group founded one or more private banks, and thus their dependence on funds from state banks also decreased slightly (Chua 2008). Accordingly, soon after the world price of Indonesian oil plunged—from $32 per barrel at its peak in 1982 to a low of $9 per barrel in 1986—Soeharto set forth an export-oriented policy that encouraged the private sector, including his cukong, to inject more capital into non-oil products so as to allow the economy to rebound (Habir 1999). When it came to pushing exports, Chinese gained the upper hand as they controlled the economic resources that everyone wanted at the time, namely, sources of credit in the banking and leasing sectors (Borsuk and Chng 2014). In other words, Chinese capital became an integral part of state capital, which was required for advancing pribumi businesses. The established wealth of the Chinese, and their importance, further strengthened their utility in Soeharto’s eyes. On the one hand, considering their political vulnerability, Chinese businessmen simply dovetailed their economic capital into the new political arena that was swayed by pribumi entrepreneurs and Soeharto’s family (Shin 1991). To a greater extent, they even committed to reinvigorate Soeharto Inc. and rolled out what Robison and Hadiz (2004) termed “capitalist oligarchy.” For example, in 1984 President Soeharto’s youngest son, Tommy Soeharto, established the Humpuss Group, which was notorious for its favoritism and patronage rather than talent or professionalism. One of Humpuss’s business dealings was the acquisition of Sempati Air. Established by PT Tri Usaha Bhakti (a military-controlled business group subsidized by prominent Chinese businessmen), it was the first private airline allowed to operate jet aircraft in Indonesia. In 1989 two companies obtained shares in the airline: PT Nusamba, a group controlled by Bob Hasan, got 35 percent; and Humpuss obtained 25 percent (Liddle 1999; Schwarz 2004). Meanwhile, besides Bank Central Asia, Liem also maintained links with Siti Hardiyati Hastuti Rukmana (Tutut) through a stake in Indocement and Citra Marga Nusaphala Persada (CMNP), her toll-road company that operated the Jakarta inner city roads (Davidson 2010). In short, the presence of Chinese capital was too big to ignore, and it nurtured the network through which Soeharto patronized Chinese business in order to prioritize the overriding development focus on non-oil sectors.

The growth in trust between Soeharto and cukong has become invaluable social capital for both parties to pursue their respective interests. The value of this dyadic relationship should not be overlooked. Three decades of an indestructible patronage relationship that has weathered various political and economic headwinds has transformed the quality of the relationship from a material-oriented one into an interpersonal-based one. For example, in October 1990 Soeharto ordered Ginanjar Kartasasmita to dissolve a consortium of pribumi-owned companies led by the CNT group (which Kusumo Martoredjo, Agus Kartasasmita, Ponco Sutomo, and Wiwoho Basuki were part of) to build a joint petrochemical project with Mitsui and Toyo Engineering of Japan in Cilacap, Central Java (Schwarz 2000). Soeharto ordered Ginanjar to make Liem Sioe Liong and Prajogo Pangestu the principal domestic partners in big ticket projects. That decision was their payoff for having bailed out Bank Duta the month before (the bank was owned largely by charitable foundations headed by Soeharto). Between late 1988 and September 1990, it had reportedly lost $420 million in high-risk foreign exchange speculation (Kingsbury 2005; Matsumoto 2007). The two tycoons were believed to have put up ready cash to compensate for the foreign exchange losses of the bank, whose major owners were three foundations connected to the president. Pangestu was also believed to have paid for a monorail at the Taman Mini theme park, a pet project of Tien Soeharto (Ascher 1999; Borsuk and Chng 2014). The cukong had raised the expense of winning the president’s patronage by lavishing the first family with favors. Despite Ginanjar’s reluctance to obey the order, the deal was done, Liem and Pangestu became the domestic partners for Japanese companies, and the pribumi business lobby inevitably was devastated.

The nature of Soeharto-cukong ties has been somewhat upgraded to a more voluntary one. Chinese capitalists frequently helped Soeharto accomplish some of his national development goals, for example, by investing in sectors that private enterprise inherently avoided. For instance, the Salim Group invested in the Krakatau steel-making facility, which eventually went bankrupt (Lim and Stern 2003). This was viewed as Liem’s attempt to return Soeharto’s favor. Following the 1980s post-oil boom there was a recession in Indonesia, which slashed cement consumption; this affected Liem’s cement plants. To cover the severe losses, the government came to the rescue by merging Liem’s fie cement plants into a holding company, Indocement Tunggal Prakarsa. The government paid $325 million for a 35 percent share of the company, which accounted for 44 percent of the country’s cement capacity (Dieleman and Sachs 2008).

In sum, despite the growing inclusion of new actors such as pribumi entrepreneurs, the state-business relationship during the New Order was largely mundane. The patronage network centered on Soeharto, who held supreme authority to terminate deals, ink new concessions, as well as weaken opposition. No matter how large and powerful cukong became, they represented no political threat to Soeharto and thus were tacitly embedded into a “long-established social contract” with the leader. Economically powerful pribumi businessmen, on the other hand, could represent a threat and become a potent political faction. As Salim Said (2016, 21) argued: “Soeharto is like Stalin. First he eliminated the left, and then moved on to the rest of the political spectrum. Then he divided the Muslims and finally he turned on the minorities.” Nonetheless, the 1998 Asian Financial Crisis threw Soeharto a curveball and consequently created desperation among his protegees. For some in the optimist camp, the reform brought about a fair environment for the Indonesian political economy. For the critics, however, the aforementioned social contract was renewed and it restructured the state-business relationship amidst the extension of various forms of capital, as will be elucidated in the following section.

IV Democracy: A Political Arena Riven by Struggles over Capital Convertibility

The 1998 Asian Financial Crisis caused a paradigm shift in the well-connected Chinese business portfolio. Not only did the dramatic effects of the crisis enforce a restructuring of Chinese business, but even populist forces in the country demanded structural reform, such as liberalization and a reduction of the government’s role in the economy, since there was a growing perception that the crisis was the result of political failures, including overly close business-government relations (Suryadinata 2008). As such, one of the reform products, namely, democracy, was expected to establish a more arms-length relationship between business and government and reduce opportunities for favoritism and corruption (McLeod 2000; 2010). While democracy could have limited Chinese business’s flexibility in exerting the art of political dealing with ruling elites, what we got on the ground was divergent political and economic approaches with varying outcomes that did not point back to the initial mandate of democracy.

The nexus between business and politics, established within networks of patronage, has been showing signs of moving beyond its origins. The post-Soeharto political constellation has paved the way for diverse institutional structures that are complex and fragmented, if not contradictory (Heryanto and Hadiz 2005). It embodies diverse groups of newly incorporated politico-bureaucrats, subnational business groups and elites, and counter-elites, while reaffirming the position of old political elites (Robison and Hadiz 2004; Ford and Pepinsky 2014). Given the growing vested political interests of various actors, cukong’s economic capital cannot immediately be converted into wealth accumulation solely by virtue of the cukong’s relationship with certain power holders, as happened in the Soeharto era. Democracy instead opened up a new political arena where Chinese businesses came to mesh with various socio-political forces. This encouraged them to diversify their political opportunities beyond the patronage-ridden relationship as well as to convert their social, cultural, and economic capital based on scales and scopes of interest. That kind of political arena appeared to be less “discriminatory” than the one during Soeharto’s period. It gave various economic actors—new and old—greater flexibility to skillfully convert their capital and ultimately envisage a nuanced version of the state-business relationship. This section is divided into three parts that aim to examine three features of the new political arena through which old and new Chinese big business leveraged various forms of capital and restructured the state-business relationship.

(1) Restored Civil Rights and Politics of “Unity in Diversity”

While discussions about SARA3) were forbidden under Soeharto, during Gus Dur’s administration the nascent pluralism gained a distinct place in society, and civil rights for Indonesians of Chinese descent were restored (including the rights to use the Chinese language and establish political parties) (Lindsey 2005; Suryadinata 2008). It created a trickle-down effect, as the change in minority policies had a tremendous effect on all people categorized as Chinese—either mediocre Chinese or big players in business (Chua 2008). Political protections for the rights of ethnic Chinese simultaneously created social benefits for tycoons to leverage economic resources.

Chinese businesses—which were previously admitted as part of the elite within the crony system—have positioned themselves as rakyat4) who are socially responsible for the consolidation of democracy. For example, given that the issue of race and religion must have been discussed openly after reformasi, businesses have been extensively using the media to promote “unity in diversity.” Such a move was intended to prevent opposition forces from using ethnic clashes for political ends. When the Tempo journalist Harymurti was found guilty of naming the businessman Tomy Winata in a story that suggested Winata—who had strong ties to the military and Soeharto’s family—stood to benefit from a fire that destroyed a Jakarta textile market in 2003, not only did Winata’s supporters attack the Tempo offices, but Winata’s lawyers also filed a series of civil and criminal complaints against the magazine (Woodier 2009). In this way, Chinese businesses tended to see court trials as a legitimate weapon to curb the press as well as set back the opposition, instead of merely refusing to comment or relying on their patron to solve the problem as happened during the New Order era.

Under fire for having exploited Indonesian resources and created uneven development, Chinese businesses now attempt to position themselves with a more independent, open, and benign image. Starkly different from their previously demonized image of siphoning off funds to Soeharto’s yayasan (foundation), most Chinese businesses now set up their own foundation as part of CSR (corporate social responsibility) programs, acting as key stakeholders of Indonesia’s developmental trajectory with strong responsibilities toward the broader community. A myriad of activities and services, including scholarships, green economies, technical assistance, emergency relief, and so forth, can be publicly accessed. For example, the Sinarmas Foundation of Eka Tjipta Widjaja’s Sinarmas Group, Tanoto Foundation of Sukanto Tanoto’s Raja Emas Group, Arta Graha Peduli Foundation of Tomy Winata’s Artha Graha Group, and Bakti Barito Foundation of Prajogo Pangestu’s Barito Pacific are instrumental in showcasing the companies’ good business ethics to the people rather than their image of colluding with power holders.

Another unintended consequence is the establishment of non-party organizations. Ethnic-based parties and sociopolitical organizations were banned at the time Soeharto officially assumed power in 1966. Yet the 1998 riots and the effects of reformasi generated a greater ethnic and political consciousness among Indonesia’s ethnic Chinese. One significant turning point in the state-Chinese business relationship was the establishment of non-party organizations that are considered less contentious for Chinese capitalists to exercise their civil rights and gain a collective political position. These include Perhimpunan Indonesia Tionghoa (Chinese Indonesian Association), Panguyuban Sosial Marga Tionghua Indonesia (Indonesian Chinese Clan Social Association), and Perkumpulan Pengusaha Indonesia Tionghoa (Indonesian Chinese Entrepreneurs Association, Perpit), whose board of supervisors and members are mostly prominent tycoons (Soebagjo 2008; Suryadinata 2008; Setijadi 2016).

In fact, the organizations actively defended the enforcement of Indonesian civil rights (social capital) to parlay the affiliated companies’ economic capital, rather than engaging in purely cultural and philanthropic activities. The organizations’ practices brought more benefits to big business rather than pursuing the pure commitment of the country to guarantee civil rights to all levels of Chinese society. The organizations’ extensive activities included maintaining close relationships with different levels of government on behalf of the “non-party organization” and hosting many Chinese trade delegations that visited Indonesia, as well as conducting visits to cities and provincial areas in China (Setijadi 2016). More important, these organizations have become key instruments for Chinese businesses to expand their social capital by building networks with businessmen, regional government officials, and local chambers of commerce in China (ibid.; Suryadinata 2017). This also strengthens the organizations’ collective political position during decision-making processes.

Thus, unlike the informal “iron triangle” during the Soeharto era, the post-reformasi Kadin (Indonesian Chamber of Commerce) enabled Chinese business to ostensibly be involved in a legal institutional framework. Kadin has a close partnership with the government and has become influential in policy formulation. Chinese business’s authority is reflected through the organization’s structure. Based on an interview I conducted with a former Kadin staff member, the most defining policy is not issued by the chairperson (this position always goes to an indigenous businessman); instead, it is issued by vice chairpersons (WKU) who are divided into different specializations. Indeed, most strategic sectors are managed by prominent big businessmen who wield extensive know-how and capital. Kadin’s management structure in 2016 included five prominent cukong (mostly second-generation Chinese businessmen), among others: (1) James Riady (second generation of the Lippo Group) served as WKU Education and Health; (2) the agribusiness and forestry sectors were led by Franky O. Widjaja (second generation of Sinarmas); (3) the industry sector was led by John Darmawan (Astra); (4) Riady’s son-in-law, Dato Sri Tahir (founder, Mayapada Group), served as WKU Investment; and (5) Hendro Gondokusumo (Intiland Group, previously the Dharmala Group) held a position in the most lucrative sector: property. Meanwhile, the old players and some media-shy tycoons such as Anthony Salim and Prajogo Pangestu occupied the supervisory board (Muhammad Idris 2015). The board is the highest division from where financial support comes, given that Kadin is not subsidized by the state. The cukong’s active participation in Kadin projects a more benign public image. Compared to the informal discussions carried out at Cendana House in the past, the cukong’s presence in Kadin demonstrates transparency in the way the institutions they belong to work under democracy.

Not least important, in their pursuit of “unity in diversity,” Chinese businesses have also been engaging with Islamic groups, the new extra-political forces growing stronger since democracy. James Riady and Sofjan Wanandi repeatedly called for the business sector to engage with Muslim organizations in order to create a conducive atmosphere in Indonesia while fostering economic development. Speaking at the 2016 National Coordinating Meeting of Nahdlatul Ulama (NU), the largest Sunni Islam movement in Indonesia, Riady also acknowledged Lippo’s contribution in the development of the NU head office in Jakarta (Berita Satu, November 19, 2016). More interestingly, the Lippo group recently joined with NU to build Syubbhanul Waton Hospital in Magelang Regency, Central Java (Berita Satu, March 21, 2018). The spirit of pluralism is certainly welcome as it promotes inclusive and participatory development in advancing the health sector in Indonesia. Yet, politically speaking, the way the private sector engages with extra-political forces in this way somewhat illustrates a killing-two-birds-with-one-stone approach. On the one hand, the strategy is driven purely by economics to extend the hospital network into a Muslim-dominated region; on the other hand, it is aimed at accommodating the vested interests of emerging social forces that have considerable leverage in reshaping the Indonesian political economy.

Furthermore, Ahok’s blasphemy case during the re-election of the Jakarta governor in 2016 led business groups to indirectly forge further alliances with the influential Muslim group. The rise of Islam as part of “identity politics” is a double-edged sword for Chinese business (Williams 2017). Islam is a social force that on the one hand could push Indonesia toward a more pluralistic society and encourage civic engagement, but on the other hand it has the potential to be engineered as a political tool to promulgate a counter-hegemonic force against restored civil rights for ethnic Chinese. As has frequently been mentioned in recent political discussions, the verdict in Ahok’s case showed that there are invariably opportunistic politicians who continue to use religion to achieve their political goals and up the ante with the sensitive issue of ethnic Chinese.5) In hindsight, this kind of political dynamic has additional implications upon the Chinese business approach, in which Chinese capitalists skillfully capitalize on unity in diversity and put a great effort into dovetailing their social capital with the interests of emerging forces in a bid to keep their business operations separate from the public face of the pure-ethnic-Chinese business empire.

(2) Diversification of Political Power: Who’s the Horse, and Who’s the Jockey?

In an interview for a book about property developers, Ciputra, one of Indonesia’s top Chinese property developers, implicitly vindicated the symbiotic relationship between him and Jakarta’s then governor, Ali Sadikin, during the New Order period: “I have the philosophy that I am a horse and the jockey is the Jakarta governor. If I want to be used, I have to be a horse that’s good . . . A good horse will be used by any master” (cited in Harefa and Siadari 2006, 106). The entrenched privileges received by Chinese capitalists under the New Order are gone for good. The end of the monopoly of unlimited authoritarian power upended the well-established symbiotic arrangements between big business and the state. State power was much too fragmented, and thus it became impossible to have a single committee with all business, political, and bureaucratic interests in one basket (Chua 2008). In retrospect, the politically patronized Chinese business group are no longer dependent on Golkar, Soeharto, and powerful military groups.6) Who is the horse and who the jockey has become a blur.

Owing to decentralization, the forging of new alliances involving politico-bureaucratic elements has extended to the local level. Consequently, Indonesia’s political economy remains appropriated by state institutions and resources that are rife with political avarice and business interests. The system has unveiled a new trend of political ambitions. For example, small- and medium-scale businessmen who were either forcibly or voluntarily involved in graft to facilitate their business are now developing more lofty ambitions, such as expanding their business opportunities by seeking political office (Mietzner 2009). Likewise, some middle-level civil servants have been chasing after more than mere administrative power and are seeking to wield direct political power by contesting local elections. Bearing in mind how power has been reorganized and how more diverse players are involved in the game, most ethnic Chinese business representatives whom I talked to admitted that both old Chinese businesses and new Chinese businesses born after reformasi now must maintain many jockeys in various ways instead of acting only as a strong horse. Even they have in some way become jockeys for a specific horse.

By and large, varied approaches to playing the horse-and-jockey game are enmeshed in different scales of power and interest. Firstly, more inclusive and participatory political parties and parliaments (Dewan Perwakilan Rakyat) have become the main locus of political power and state institutions—in stark contrast to the pre-Soeharto era, when elites other than Golkar and Soeharto’s men were mainly ornamental (Hadiz 2003). While that kind of political constellation posed challenges to Chinese conglomerates, particularly those that were adept at relying on the central government, democracy has to some extent given business groups more options to accommodate powerful vested interests and their associated political parties. Some Chinese businessmen have even become visible parts of the interests. They have a broader political base and thus quickly convert their wealth power into political capital or vice versa.

Borrowing party dichotomies developed by T. Reuter (2015), the direct involvement of Chinese businesses in political parties can be categorized into two patterns. The first is partai milik pribadi, a party created for the purpose of serving as a political tool for a private individual who wants to gain power within the DPR or as president, or both. Examples are Gerindra, founded by Prabowo Subianto and his billionaire younger brother Hasyim; the National Democrat Party, founded by Metro Group media tycoon Surya Paloh; and the Hanura Party of the wealthy former General Wiranto and his media tycoon friend Hary Tanoesoedibjo. Hary has even established his own party, named Perindo, whose branch representatives are spreading across 80,000 villages in Indonesia (Baker and Salna 2018). Hary, the new Indonesian Chinese conglomerate that emerged after the financial crisis, has been rolling out a non-mainstream political approach that the low-profile Soeharto cukong would never undertake. Having his own political party, Hary has been flexibly accommodating political dynamics and widening the scope for political maneuvering to curry favor with proper coalition partners and stiffen his spine, particularly in the legislature. While he joined the Prabowo camp in the previous election in 2014 and provided the latter with powerful media forces to compete against Jokowi, he surprisingly threw his support behind Jokowi’s bid for re-election in 2019.

Another pattern of involvement in political parties is through sewa kendaraan or “renting vehicles.” In Indonesia, electoral campaigns are expensive as state subsidies for political parties have been reduced since 2009 by almost 90 percent (Mietzner 2009; 2013). Meanwhile, parties have to conduct expensive opinion surveys in order to identify their nominees for the elections, shelling out hundreds of billions of rupiah for consultants, opinion polls, and media advertisements (Rinakit 2005). One egregious example is that of the PDI-P campaign costs, which reportedly reached Rp 376.3 billion in 2009 while the party received only around Rp 1.5 billion in state subsidies at the national level (Mietzner 2015). Consequently, political parties have become highly “transactional” and rely upon donations from individuals or corporations. Based on the 2011 party law, parties can receive Rp 1 billion ($91,000) from individuals and up to Rp 7.5 billion from corporations every year (Mietzner 2007; Ufen 2008).

Against this background, in tandem with restored civil rights, some Indonesian Chinese business groups have openly “rented” an established party to accumulate both political and economic capital. For example, the National Awakening Party (PKB) appointed the prominent Chinese businessman Rusdi Kirana as its new deputy even though he was an outsider. Since then, the party’s political advertisements have regularly appeared on national TV with, of course, Rusdi’s face all over them. PKB Chairman Muhaimin Iskandar admitted: “Many Islamic parties, including the PKB, had been unable to compete with larger parties as they had no money to run massive political advertising campaigns ahead of this year’s elections” (Khoirul 2014). Meanwhile, taking advantage of the official recognition of civil rights for Chinese, Rusdi claimed that he had decided to enter politics because he wanted to preserve equal business opportunities (for all Indonesian people) as he had enjoyed during the post-reform era (Saragih 2014). Like Rusdi, a number of other businesspeople have claimed that their involvement in politics is driven primarily by social rather than economic motives (Christine Franciska 2014). Among them is Indonesia’s current trade minister, Enggartiasto Lukita. Enggartiasto, a well-known Chinese property developer as well as the commissioner general of PT Unicora Agung, jumped ship in 2013 from Golkar to the NasDem party, one of Jokowi’s coalition parties, and has been the head of foreign relations for NasDem since. He claimed that his objective in joining NasDem was not to seek a legislative seat but rather to implement a transformation of the Indonesian economy through the party (Aditya 2014). Indeed, his ultimate position as Indonesian trade minister, instead of a mere lawmaker of the party, carries a warning against creating sharp dichotomies between business and politics.

Another approach in horse-and-jockey games is splitting political loyalties to accommodate diverse pairs of political-bureaucratic relationships emerging outside the national realm. Decentralization has undoubtedly changed the structure of the national political economy as a result of constant power struggles among local elites and levels of government over control of natural resources and policy making (Hadiz 2003; Aspinall and Klinken 2010). Actors with different backgrounds and interests are vying for political leverage, but no one knows who will ultimately win given the spirit of democracy. Relatedly, business groups—regardless of whether they are Chinese or pribumiowned—particularly those that do not rent or own political parties, like Rusdi and Hary, tend to divide their political loyalties into all-encompassing political blocs. For example, Chua (2008) vividly elaborates the “political network sharing” between the family and relatives of “old players.” In the case of the Wanandi family (Gemala Group), Sofjan favored Golkar and Jusuf Kalla, while his brother, Jusuf Wanandi—the founder of CSIS—tended to secure relationships with Megawati. In the case of the Riady family (Lippo Group), James Riady courted the actual power holders while his father, Mochtar, sided with the opposition leaders (Chua 2008, 126). In another example, it is an open secret that Tomy Winata is close to Megawati through his business connections with her late husband, Taufik Kiemas (Wessel 2005, 81), while he maintains strong ties with former President Yudhoyono through T. B. Silalahi, one of Yudhoyono’s closest associates, his key adviser, and former president commissioner of his Bank Artha Graha (Chua 2008, 126). Prior to the upcoming presidential election, the tycoon’s outmaneuvering of political loyalties has been too dynamic to capture. Speculation was rife that Tony endorsed the Jokowi-Ma’ruf pair after a photograph of the tycoon, holding a white shirt that read “Jokowi Amin 01 Indonesia Forward,” went viral on November 25, 2018 (Jakarta Post, November 27, 2018). Nevertheless, it is useful to remember an offensive point raised by Winata in an interview with Chua (2008, 76):

Up to now businessmen don’t want to be seen as supporting just one party . . . It will be the end for many businessmen who supported the wrong person. You cannot put all money on one horse, because the uncertainty of winning is too high. Beside this the president now changes at least every 10 years.

Amidst the growing number of political parties in Indonesia, many Chinese businesses hold tight to long-standing parties such as PDI-P and Golkar while simultaneously engaging with relatively young parties. Thanks to the legacy of the New Order, despite Soeharto’s fall, Golkar and its affiliates have not yet been left in the dust and are still significantly represented in the legislature. PDI-P, which has strong elements of a mass-based party and Megawati Soekarnoputri as a major drawcard for voters, has been dominating internal decision-making processes (Tomsa 2013, 33). Both parties have strong political bases in peripheral regions, especially in East and West Kalimantan, Sulawesi, and the central belt of Sumatra, where extractive industry projects are mainly located (ibid.; Simanjuntak 2014).

Rich businessmen do not have an issue with the growing necessity to donate money for elections (Mietzner 2015). Even though the bulk of campaign funds are referred to as donations, in fact they are investments of social capital aimed at yielding a bigger slice of the economic pie in the future. An ethnic Chinese businessman once told me in an interview that when funds are granted, tycoons normally expect that the politicians or elites with whom they co-allied will reward them with big projects should they win the election and have a hand in resource distribution. However, an electoral loss of a tycoon-backed candidate is not a zero-sum game. Given the unpredictability of politics, the candidate might win in other regional elections and thereby give the tycoon a return on his investment. In addition, having employed a diverse network of political support, Chinese businesses have political backup at different levels of government and interests.

The important role of Chinese in the development of the Indonesian real estate sector is a case in point. Benefiting from the rise of the Indonesian urban upper middle class, Chinese conglomerates have had property as one of their core businesses over the past decade. Among others, Tomy Winata’s Artha Graha Group, which pioneered Sudirman Central Business District development in Jakarta through its subsidiary PT Danayasa Arhatama, recently listed an additional 19 subsidiaries focusing on property and infrastructure (Indonesia Investment 2015). Chinese businessmen have acquired not only economic capital but also political connections at the local level. As local governments have greater discretion in matters of urban development, the tycoons have rapidly expanded their real estate business into both niche markets and residential markets in smaller provincial cities (Dieleman 2011; Arai 2015). Along the way, this has led to bribes in exchange for permits or for bypassing regulations. As M. Dieleman (2011, 77) wrote, based on her interviews with a former minister, “Developers bankroll the local elections by sponsoring candidates . . . If you are a rich developer, you can buy all the candidates, so that you are sure whoever wins is your man.” The arrest of Lippo Group executive Billy Sindoro, along with a government official from Bekasi Regency, in connection with the development of the Meikarta project in October 2018 illustrates the intensified political support Chinese businesses have built and maintained on an ongoing basis. Sindoro, consultants, and an employee allegedly bribed West Java’s Bekasi Regent, Neneng Hasanah Yasin, a total of Rp 13 billion ($855,613) in exchange for property and other permits for the planned Rp 278 trillion Meikarta project7)—the largest undertaking in Lippo’s 68-year history (Tani 2018).

Aside from positioning their capital in political fragmentation, Chinese businesses also took different approaches to accommodate diverse pairs of political-bureaucratic interests. To some extent, this replicated the practice of amakudari in Japan8)—the way business groups recruited former politico-bureaucrats based on their specialization and vital knowledge of the rules of the game and put the latter in the highest levels of management. During the mid-2000s, the upper management of the Lippo Group consisted of former Minister of Domestic Affairs Suryadi Sudirja, former Minister of State-Owned Enterprises Tanri Abeng, and former IBRA Deputy Farid Haryanto, who were co-opted as directors. Ginanjar Kartasasmita serves as deputy chairman of the Lippo Group, and Theo L. Sambuaga, the parliament member and former minister of public works and public housing, is the president commissioner of Lippo Karawaci Tbk—one of Lippo’s key real estate subsidiaries (Berita Satu, December 14, 2015). Indofood, the mainstay of the Salim Group’s business in Indonesia, has Bambang Subianto, the former minister of finance, as an independent commissioner (Reuters Finance 2018a). Obviously, Tomy Winata, who had strong connections with the military, appointed Kiki Syahnakri, the former vice head of the Indonesian Army, as the president commissioner rather than himself (Reuters Finance 2018b). In sum, the relations between horses and jockeys can be like playing chess at different tables. Each table represents a different set of elements with varying political arrangements, and the businessmen are required to deal with those different arrangements by converting their capital. They are aware of the consequences that the various arrangements might generate and are keen to skillfully capitalize on them.

(3) Privatizing Globalization, Socializing Nationalism

Democratization and globalization have contributed to the transformation of the national state as well as capital acting through it, whether Chinese or pribumi. The conflicting nature of those two events is apparent. On the one hand, the traditional principle of public interest in a globalizing market is that economic policy should protect and preserve competition as the most appropriate means of ensuring the efficient allocation of resources and protection of local industries. State technocrats and political elites, needing to maintain legitimacy in a democratic system, therefore tend to adopt national rhetoric and locally geared policies (Warburton 2017). On the other hand, the liberalization of state policies along with the global flow of capital has, to some extent, led to increasingly globalized circuits of capital accumulation that extend beyond the state’s control (Burnham 2006). Globalized circuits of capital accumulation tend to oppose protectionism and favor a regime of global free trade and investment. As such, what tends to happen is that outward-oriented, pro-globalization coalitions between businesses, politico-bureaucrats, and political parties become pitted against inward-oriented groups devoted to maintaining the status quo. An integral job of Chinese business is to accommodate both outward- and inward-oriented forces, which yield a myriad of opportunities as well as challenges.

Facing new challenges under popular mobilization and electoral politics, the government introduced a range of nationalist policies in the extractive sector—ranging from export bans to forced foreign divestments—in a bid to attract voters. For example, the enactment of Law No. 4/2009 under the Yudhoyono presidency fundamentally restructured the industry and reinstated the state’s authority to force companies to pay more tax, increase loyalty rate, and require foreign companies to divest their shares.9) More tellingly, in 2013 the Ministry of Energy and Mineral Resources introduced a new regulation that compelled oil and gas companies to use more local providers of goods and services. The following year, Yudhoyono went ahead and put a large number of oil and gas service sectors, including onshore drilling and piping and construction services, on the Negative Investment List so as to limit foreign shareholdings (Negara 2015; Warburton 2017).

Unlike Soeharto’s risk-averse policies regarding the mineral, coal, and energy industries, which gave priority to foreign investors, this wave of economic nationalism gave opportunities to Chinese tycoons to diversify their business portfolio. The early 2000s was also a time of low global coal prices, which allowed local businesses—including Chinese businesses—to acquire assets from foreign miners. For example, the Adaro Group, which is considered an “Astra reunion,” gained prominence as Indonesia’s largest coal company through acquisitions and foreign divestment deals (Erwide Maulia 2017). Among other divestment decisions, in 2016 BHP Billiton sold its 75 percent stake in the IndoMet project in East and Central Kalimantan to Adaro, as Indonesia’s regulatory framework was difficult for international companies to negotiate. Adaro, which previously acted as BHP Billiton’s joint venture partner and owned a 25 percent stake from 2010, now fully owned the coal-mining project (Reuters, June 7, 2016). One of Soeharto’s cukong, Prajogo Pangestu, also diversified his company into the mining sector. In 2012 Prajogo’s Barito Pacific signed $393 million to PT Thiess Contractors to develop coal mining in Central Kalimantan, Muara Teweh (Thiess website 2012). Eka Tjipta Widjaja gained a foothold in 38,165 hectares of coal mines in Jambi, South Kalimantan, and Central Kalimantan through Sinar Mas’s subsidiary Golden Energy Mines. The subsidiary also acquired shares of the British-owned coal investment company Asia Resource Minerals, which ultimately made it the major owner of Berau Coal Energy in East Kalimantan (Neil 2015; Warden 2015). While scrupulously focusing on its mainstream business, the Salim Group mobilized its subsidiary PT Adidaya Tangguh to manage coal and tin mining in Maluku. In March 2016 the Djarum Group, collaborating with the Wilmar Group of Martua Sitorus—a prominent Chinese Indonesian businessman—took over 95 percent of shares in PT Agincourt Resources, a gold-mining company in Martabe, North Sumatra, that was previously owned by G-Resources of Hong Kong (Kompas, December 7, 2015). A new player, the MNC Group belonging to Hary Tanosoedibyo—who seamlessly diversified his media empire—also acquired PT Nuansacipta Coal Investment, which focused mainly on coal mining (Didik Purwanto 2013). Economic nationalism yielded important resources necessary to back up Chinese economic capital, particularly in the extractive sectors that were restricted during the Soeharto era.

Despite the buoyant economic capital of Chinese business gaining traction on lucrative extractive projects, practices on the ground often reflect a varying pace and nature of capital convertibility. As mentioned in the previous section, by figuratively riding many horses, wealthy businessmen were able to have more diversified entry points to access the state actors, and hence to access licenses and contracts, which enabled them to expand their business empires (Warburton 2017). However, as the state became fragmented, the interests of business and different levels of government were not always easily aligned. As decentralization led to the substantially expanded power of local business and political elites, the line between business and politics at the local level became increasingly hazy. The social capital possessed by Chinese conglomerates has its limits, and there was thus somewhat of an impasse when it came to dealing with the increasingly chaotic power relations at the local level. It was not uncommon for local companies, owned by either pribumi or ethnic Chinese, to cash in on the rise of economic nationalism and convert their strong connections with local elites into economic capital (Choi 2012; Chong 2015). This recent development trend led to the rise of local capture, a condition under which local business elites capture or influence local economic and/or political institutions that constrain Jakarta-based Chinese conglomerates’ business expansion (Schulze and Sjahrir 2014).

For example, in the mining sector the IUP, a general license to conduct mining business activities in a designated area, is not issued by the central government; instead, the issuing authority depends upon the location of the mine infrastructure. If the mine infrastructure is located across more than one province, the IUP is issued by ministers. If a project is based in a regency or city, the mayor holds the authority to issue a license (PWC Indonesia 2016). No one knows for sure whether licenses inked at the national level will be honored by provincial or district authorities. In other words, city mayors—many of whom rise to power through money politics—have the power to issue and expunge licenses over hugely lucrative concessions. What follows is local capture. Many local political candidates who have personal connections with local businessmen or established politicians need support from local businesses. Once elected as local leaders, they repay the business elites in the form of contracts, projects, and even local policies. The most recent case involving the Salim Group vividly epitomizes the dynamics as well as the limits of Salim’s social capital in a particular area. The SILO Group, which is reportedly affiliated with the Salim Group and Agung Sedayu Group through its CEO, Effendy Tios, has held coal concessions on Laut Island in South Kalimantan since 2010. However, according to a report published by Tempo magazine (2018), the operation was circumscribed as the South Kalimantan governor, Shabirin Noor, revoked the license with the intention of handing it to his closest ally, Andi Syamsuddin Arsyad (known as Haji Isam), who ran oil-palm estates in the region. Reportedly, the mining licenses were sold to Haji before the regional head election was held. The ownership dispute has become complex as Haji is an important figure who has control over bureaucratic politics in South Kalimantan and enjoys the support of police officers. While the Salim Group, through its subsidiary Aetra Air, recently returned to the Jakarta water concession scene after almost 20 years (Jakarta Post, August 31, 2017), it seems that its capital convertibility in South Kalimantan is out of kilter.

Despite struggles over capital conversion in the mining sector, Chinese businesses have been forging the internationalization of their economic capital in a more innovative way. Their activities are no longer tied to centralized political power. Instead, new business trends they promote entail a rearticulation of economy and polity that supersedes cross-border mobility of capital. Old players, such as the Salim and Sinar Mas Groups, while often demonized as using “shadow companies” to hide their links to deforestation and unfair methods of concession (see AidEnvironment 2018), do a complete about-face publicly when it comes to the recent trend of industrialization, namely, the digital revolution. The big conglomerates portray themselves simply as entrepreneurs who have attained affluence and therefore have a responsibility to help others march toward the promotion of liberalization and globalization. Many of Soeharto’s cukong have become active in funnelling their capital toward digital services and venture capital to fund start-ups and early-stage companies that are believed to have long-term growth potential. The Lippo Group has made a noteworthy move through its sponsorship of Venturra Capital, which has $150 million to invest in start-ups in Indonesia, and Southeast Asia in general (Dion Bisara 2015). In a similar vein, Sinar Mas has been a key investor in Ardent Capital, a venture capital firm that has built e-commerce companies worth over $350 million throughout Southeast Asia and globally (Horwitz 2014). The richest conglomerate in Indonesia, the Djarum Group, also has its tentacles in tech investments through Global Digital Prima. Global Digital Prima has put money into many notable tech start-ups, ranging from digital communities, media, and commerce to solution companies such as, Gojek, Kaskus, Kumparan, and Merah Putih (Aruna Harjani 2012). This trend does not merely imply that Chinese businesses have staked a claim in the development of digital services. Rather, it demonstrates how they have been able to simultaneously shelter the expansion of their economic capital under the guise of economic nationalism and liberalization.

In sum, despite local constraints, democracy has led to the rolling out of economic and political ventures through which Chinese businesses have carved out varying degrees of capital conversion to suit their interests. Under such a complex, contradictory, and antagonistic interaction of capital and interests in the country, these businesses have skillfully appropriated political dynamics driven by both market and non-market discourses and practices and ultimately restructured the state-business relationship.

V Summary: Toward a Dispersed Network

An important point, as mentioned earlier, is that the state-Chinese business relationship is not static; it is driven by the varying pace and nature of capital conversion at the regional, national, and even international levels. The form of capital itself is varied—ranging from economic resources to social and cultural capital—and has waxed and waned over the years to eventually create a unique pattern of state-business ties. As such, democracy is not an end in itself but rather a new political space in which capital values are restructured and subsequently converted by various actors to suit their interests. Consequently, changes in the composition of interests and bargaining power of actors with varying degrees of capital at their disposal have redefined the state-business relationship.

As summarized in Table 2, it is clear that three features of the state-business relationship have undergone a fundamental transformation. First, regarding the basis of equality, unlike during Soeharto’s administration, when Chinese businesses were more vulnerable than patronage-minded generals and politicians, democracy has strengthened the former’s bargaining power due to dramatic political shifts that have led to the dominance of the political sphere by business interests. A series of reforms, such as foreign divestment and restored civil rights, in turn, have created opportunities for Chinese business to harness an increased inflow of resources. Equally important, in terms of degree of reciprocity and value of services, the story is no more restricted only to monopolist patrons (prominent generals, Soeharto, and the Cendana family) that pledged monopoly rights and granted licenses to their well-connected cukong in return for favors in the form of company shares, funding for yayasan, or the bailing out of state-owned companies and helping Soeharto to accomplish certain unrealistic development plans. Democracy with the fragmentation of power has demonstrated that the president and military are not the nerve center of the state-business relationship; a wide range of “services” have been offered by mixed actors, including political parties, parliament members, and local authorities with bargaining power. To a greater extent, Chinese businesses even now can establish and manage their own political party.


Table 2 Mapping the State-Business Relationship


Second, in the realm of face-to-face character, it is apparent that the old patronage system has “higher qualities” of dependencies and loyalties than the recent one. Beyond the symbiotic relationship, somehow patronage brought a certain degree of volunteerism to the fore. The unbridled strong bond between Soeharto and his cukong showed that the roots of reciprocity were not simply limited to mutual advantage but were genuinely associated with a mutual devotion stemming from the enduring patron-client framework and shared values between both sides. In contrast, democracy downgraded the “qualities” of state-business ties. A series of unintended consequences deriving from democratic consolidation, such as liberalization, restored civil rights, and economic nationalism, have continuously created opportunities for cukong to gain a foothold in the political sphere. Thus, the bonds between Chinese business and the state seem more pragmatic and moderate. Additionally, given the capricious political environment, where nobody can predict who will be the next leader, the relationship lacks intensity as it is presumed to be short-term, dependent on how long the politician will be in office or how long a project will take.

The last feature of the relationship that has changed is flexibility. While a democratized Indonesia has witnessed a diversification of power, a decrease of military affiliations with politics, as well as the emergence of groups such as Islamic political parties and radical movements, Chinese businesses have skillfully managed to remain at the center of the diverse political constellation and minimize their political vulnerability. They wield influence in lucrative sectors of the economy and have significant shares in the media industry, which is a form of political capital required by politico-bureaucrats during their campaigns. As a result, they have greater space to maneuver in situations of either unpredictable political clout or contentious political choices.

As a corollary to the varying pace and nature of capital conversion, the orthodox formation of patronage has been broken up into a centrifugal network. As shown by the diagram in Table 2, the hierarchical patronage with Soeharto at the top has been diminished. The new pattern of state-Chinese business relations demonstrates chaotic horizontal connections among forces and interests, including Chinese business. Neither the Chinese position nor the state’s is higher, as neither of them has absolute bargaining power. What remained unchanged was the flexibility in converting capital in accordance with political dynamics.

The arguments posed in this research can be a never-ending discussion on the arc of economic development in Southeast Asia. Paradoxically, despite creating economic growth, the relationship between politics and business is not rule-based; rather, it is a concession-based relationship that has enabled actors to survive in all political weather. On the surface, as nations develop further and their politics and business become more stable, we tend to lose sight of the details of the nation’s development path. It is largely due to the common perception that has been developed to the point that the state-business relations should have been somewhat professionalized. We might have been thinking about how politics in the democracy era and Chinese business might interact in systems that are relatively depoliticized. Taking a different approach, this research has broken the myth and contributed to knowledge on the political spectrum of Asian economic development amidst the ebb and flow of capital.

Accepted: April 12, 2019


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1) “Cukong” refers to the politically well-connected ethnic Chinese businessmen whom Soeharto granted access to state resources, contracts, and other material benefits in exchange for their support of the regime, including 10 percent of business commission to Soeharto’s family and relatives.

2) “Berkeley Mafia” is the term given to a group of US-educated Indonesian economists whose policy recommendations brought Indonesia back from poor economic conditions and the brink of poverty in the mid-1960s.

3) SARA stands for issues regarding ethnicity, religion, and race in Indonesia.

4) Rakyat in this context refers to people, yet it has connotations of nationalism.

5) Prior to running for the 2017 Jakarta gubernatorial election, the incumbent governor at that time, Basuki Tjahja Purnama (Ahok), an ethnic Chinese and staunch Christian believer, was accused of conducting blasphemy by certain Islamic groups, including Front Pembela Islam (Islamic Defenders Front) and Majelis Ulama Indonesia (Indonesian Ulema Council). A video of Ahok’s speech on Pramuka Island in the Thousand Islands District went viral via a variety of social media platforms. In the speech, on the topic of his own tenure, Ahok told his audience that they should not vote for him in the upcoming election if they felt that their Islamic faith prohibited them from doing so. He cautioned people that if they voted for him and neglected the mandate of Surah Al-Maida 51, the resulting guilt they felt may even cause them to have a stroke. Regardless of the manipulative action of the opposition in making the video, Ahok was ultimately punished for insulting the Qur’an for political gain and sentenced to two years’ jail.

6) Golongan Karya (Golkar) was the ruling party from 1973 to 1999 under Soeharto’s New Order regime. Soeharto, as chairman of the executive board, had the highest authority in the party.

7) Meikarta, dubbed the “Shenzhen of Indonesia,” is the Lippo Group’s flagship project. It involves 10 global institutions developing 273,000 square meters of land in the satellite town with an investment value of $550 million. Collaborating with the China State Construction Energetic Corporation, Lippo envisioned Meikarta in Cikarang, Bekasi, to be one of the largest manufacturing hubs in Indonesia and a modern city with complete infrastructure.

8) Amakudari refers to ties binding the bureaucracy and private corporations whereby government officials retire into top positions in Japanese companies. T. J. Pempel (1998) sees amakudari as the development and maintenance of ties between private interests and certain ministries of the central government.

9) On January 12, 2009, Indonesia under Yudhoyono passed Law No. 4 of 2009 Regarding Mineral and Coal Mining, putting an end to the Mining Law 1967. It is a cornerstone in the management of mineral- and coal-mining areas in Indonesia. Under the new law, mining rights are regulated under a licensing system and take the form of Mining Business Permits, or IUP (Izin Usaha Pertambangan). In accordance with the mandate of Law No. 4 of 2009, a mining area is an area that has the potential for minerals and is not bound by the limits of government administration or part of national spatial planning. It also can be an area that has potential licensing by local authorities in coordination with ministries and the House of Representatives.


Vol. 7, No. 3, KHOO Boo Teik


Contents>> Vol. 7, No. 3

Introduction: A Moment to Mull, a Call to Critique

Khoo Boo Teik*

* The National Graduate Institute for Policy Studies, 7-22-1 Roppongi, Minato-ku, Tokyo 106-8677, Japan
e-mail: khoo-bt[at]

DOI: 10.20495/seas.7.3_271

The year 2017, which marked the 60th year since the Federation of Malaya emerged from colonial rule to become a new nation, was a compelling moment to reflect on important social, economic, cultural, and political developments and changes that had taken place. Some changes were realized more or less as planned, while others were unforeseen. Some fulfilled hopes, but others scuttled expectations. Many brought lasting outcomes but many more only transitory impacts. This chapter serves as the introduction to a volume of articles that views Malaysia’s multidimensional social transformation through lenses of “divides and dissent” to appraise key moments, incidents and expressions of contention, and trends of conflict that have shaped society and politics. The areas and issues covered by this exercise of critical reflection are ethnicity and class, political economy, federal-state relations, Islamism and Islamist practices, law and the judiciary, women’s participation in politics, art and pedagogy, and the emergence of new streams of sociopolitical dissent.

Keywords: Malaysia, ethnicity and class, political economy, federal-state relations, Islamism, law and judiciary, women’s participation, art and pedagogy, sociopolitical dissent

The year 2017 marked the 60th year since the Federation of Malaya emerged from colonial rule to become a new nation. The appropriateness of commemorating August 31, 1957, the date of Merdeka or Malayan independence, instead of September 16, 1963, the date of formation of the Federation of Malaysia, as National Day was sometimes—and with reason—disputed by people in Sabah and Sarawak, which joined Malaya and Singapore to form Malaysia.1) Yet there was (more than) a historic ring to “60 years” that made 2017 a compelling moment to reflect on important social, economic, cultural, and political developments and changes that had taken place, many of which had Malayan and not just Malaysian roots. Some of those changes were realized more or less as planned,2) while others were unforeseen.3) Some fulfilled hopes,4) but others scuttled expectations.5) Many brought lasting outcomes,6) many more only transitory impacts.7) Whatever their sources, internal or external, and however they might have begun, in clarity or in doubt, those changes in their totality had transformed the nation and society from their original state.

Fresh Lenses of “Divides and Dissent”

At a time like this, a standard way of reflecting on the processes of national and social transformation and their consequences is to observe, accounting-like, a record of “continuity with change” or create a register of “change with continuity.” This volume of essays does not tread such a path of commemorative self-reassurance! Instead, the essays view Malaysia’s multidimensional social transformation through contrarian lenses of “divides and dissent” to appraise key moments, incidents and expressions of contention, and trends of conflict that have shaped society and politics.

Even so, this volume does not contain a call to celebrate instability or rejoice in discord. Suffice it for clarification here to recall that after Merdeka, every 10th year before 2017 had seen a major manifestation of social divide and political dissent. In 1967 there was the hartal in Penang, the unplanned but violent by-product of which presaged the much worse eruption of interethnic violence in Kuala Lumpur on May 13, 1969. “May 13” itself supplied the state with the justification for the radically transformative but politically divisive New Economic Policy. In 1977 the federal government’s imposition of Emergency rule over Kelantan terminated the collaboration between the United Malays National Organisation (UMNO) and Parti Islam Se-Malaysia (PAS, Pan-Malaysian Islamic Party) in the ruling coalition, Barisan Nasional (BN, National Front). The revived UMNO-PAS antagonism, moreover, reshaped the contours of PAS’s internal politics and established new parameters for the politics of Islam. Ten years later, UMNO suffered a profound crisis of leadership that split the party and convulsed the entire political system, affecting state and society from the peninsula to Sabah and Sarawak. From the split came a precedent: dissidents forced out of UMNO would mobilize to defeat their former party. A decade after that, the East Asian financial crisis sparked a disaster of political economy that impaired Vision 2020, Prime Minister Dr. Mahathir Mohamad’s ambitious project of socioeconomic advancement, and generated waves of political ferment that have not receded to this day. And in 2007, a trinity of mass demonstrations, separately organized by the Bar Council, the Coalition for Clean and Fair Elections (BERSIH), and the Hindu Rights Action Force (HINDRAF), set in motion the momentous “tsunami,” or the opposition’s unprecedented gains in the general election of the following year.

There were, of course, many other divisive incidents and dissident articulations in the intervening years. Some were more serious and threatening or, conversely, more promising than others. The objective of this volume is to use the theme of “divides and dissent” to look at society afresh by picking out social, economic, and political tensions that have been embedded only to surface in sharp controversies, astounding incidents, or portentous trends. By analyzing the tensions in certain sectors, the contributors to this volume explain how some of the tensions have been resolved and why others have remained unsettled.

Three points about this volume should be made at the outset. First, it is not meant to be a comprehensive 60-year recitation of familiar background and overworked issues. Second, focusing on divides and dissent in sociopolitical transformation does not presuppose conformity with any particular theoretical or paradigmatic stance. Third, not all tensions are assumed to be dismal or ominous; some may provide the impetus for rethinking social change or redirecting institutional reform. As such, each contributor to this volume has been free to be selective (of issues, incidents, and actors), subjective (in vantage point), and, if necessary, searing (in commentary and evaluation) while observing scholastic standards. The goal is a collection of bold and personal but coherent interpretations of the divides and dissent in Malaysian society.

The Structure of the Volume

No social schism in Malaysia has seemed as natural and intractable as its ethnic divide. Ethnicity is invasive in its social life and pervasive in the study of its politics. Still, as Abdul Rahman Embong (Chapter 2) stresses, ethnicity no less than class is a social construct and paradigm. In fact, ethnic and class divides are historically constituted, grounded in political economy, and moored to state policies that, wittingly or otherwise, provoke dissent in different classes, groups, and organizations. Besides, there has always been a complex contestation between ethnicity and class not only “as social facts, policies, and programs” but also “as paradigms, or ways of thinking and analysis.” In the 1980s, for example, UMNO’s ideologues re-fashioned the “plural society and ethnic bloc” thesis as an ideology of ketuanan Melayu (Malay supremacy) by manufacturing notions of Malay “first-ness” and original ownership of the land to legitimize ethnically determined claims on power and privileges. Yet class is ever present in ownership and control of wealth, state-capital relations, transformation of the middle and working classes, politics and civil society organizations, and the workings of globalization. For Rahman, ethnic-class contestation is expressed in the competing visions and struggles of political coalitions that arose or disappeared at different historical moments. In recent times, that contestation and its accompanying dissent partly compelled state economic planning, which long entrenched ethnicity in policy direction and programmatic design, to incorporate “income class categories” to address the class dimensions of “social exclusion and income inequality.” In that continuing contestation lies a hope that Malaysia may not be “trapped in the ethnic paradigm” and Malaysian studies may not be skewed by the “ethnic prism.”

In fact, ethnicity and class and the state interact to produce ruptures and conflict, as Jeff Tan (Chapter 3) demonstrates with his schematic four-phase depiction of economic development from 1957 to 2016 in terms of cycles of accumulation and conflict. For each phase the state was impelled to allocate rents for accumulation and accommodation to balance economic growth with political stability. But emergent Malay intermediate classes tilted the balance toward redistribution, intensifying contestation over rents, factionalizing UMNO, and fragmenting patron-client networks. Politically, the accumulation-accommodation dialectic produced episodic conflict in or around 1969, 1987, 1998, and 2016. Economically, pressures for redistribution subverted the state’s ability to deploy rents for productive accumulation, in manufacturing, say, and diverted learning rents from technological and industrial upgrading to accumulation in unproductive sectors. But the economy could not deliver high enough growth rates to sustain redistribution when manufacturing, previously the engine of growth, faltered. Recent long-term declines in GDP growth, Tan contends, reflect the cumulative effects of unproductive accumulation, including premature deindustrialization. At the center of this situation stands the core constituency of UMNO and the state, namely, the Malay intermediate classes. Large segments of them, unable to rise as a successful Malay capitalist class, rely on rents and state protection for quick profits from unproductive accumulation. The state cannot now undo its previous neglect to enforce discipline or performance targets. The state seeks instead to lead the accumulation process again via government-linked corporations (GLCs). Tan concludes, however, that the turn to GLCs as a politico-economic response to the failure of Malay capital rigidifies current accumulation preferences and reinforces the shift from higher-level manufacturing.

Sabah and Sarawak, as Faisal Hazis (Chapter 4) shows, have always faced a peculiar divide in their relations with the federal government. Three factors periodically remold those relations. First, there is history. When Malaysia was formed, Sabah and Sarawak were accorded “safeguards”—the “Twenty Points” for Sabah and “Eighteen Points” for Sarawak—or a large degree of state government control of many matters elsewhere administered by the federal government. Second, there is geography. Their physical separation from the peninsula, the locus of federal power and a more advanced economy, rarely eases resentments in Sabah and Sarawak over their domination and neglect by the federation. Third, the states have been ruled by local strongmen who, despite their different interests and agendas, personify the two states’ continual attempts to juggle amity with autonomy vis-à-vis the federal government. Thus, Faisal suggests, the divide between Sabah and Sarawak, and the peninsula crucially rests on center-periphery-like negotiation over power, resources, and the strongmen’s reliability. Out of this comes an amalgam of “domination, contestation, and accommodation,” in Faisal’s view the leitmotif of Sabah and Sarawak’s uneasy 54 years in Malaysia. Rules have been set and reset to manage this elite-level divide before. The situation, however, has become more complex. Sabah and Sarawak, long taken for granted as the BN’s vote banks, are more assertive, Faisal observes, now that BN and the opposition are virtually stalemated in the peninsula. And, if they seem remote from the post-1998 dissident ferment on the peninsula, Sabah and Sarawak could yet experience a contrasting divide as “pockets of resistance” oppose the corruption, abuse of power, inequitable growth, land grabbing, and shrinking democratic space associated with local strongman rule.

Islam as faith and as official religion does not in itself create a contentious divide where the constitution guarantees freedom of worship for adherents of other religions, who form almost half the population. But as Ahmad Fauzi Abdul Hamid (Chapter 5) observes, an interplay of Islam and politics in public space over 60 years has created intra-Muslim and interreligious rifts. One source of the divisiveness is discursive. It lies in an unrelenting engagement by an assortment of politicians, commentators, scholars, bureaucrats, and civil society activists in a discourse of Islamic politics to impose social control or to express dissent. By essentializing Islam for political interests, that engagement arrests the evolution of concepts of “religion” and “secularism” and hardens boundaries between what is considered Islamic or un-Islamic. Here, contemporary Islamic discourse in Malaysia inclines toward a severe politico-legal direction that consigns the philosophical and spiritual aspects of Islam to the periphery of the Malay-Muslim religious worldview. When it is defined, interrogated, and essentialized through institutional lenses, Islam invariably bears politico-legal coloring. A practical consequence is to undermine a “much-cherished multiculturalism and pluralism” by systematically marginalizing non-Muslim and unorthodox Muslim voices. Another source of divisiveness is policy making that “professes fealty to Islam” while adopting an ideology of Islamism or Wahhabi-Salafi-driven political Islam that is preoccupied with the legalistic injunctions and prohibitions of Islam. Without an internalization of Islam as a religious faith in all its civilizational manifestations, Ahmad Fauzi cautions, it would not be difficult at the present juncture for Islamism to acquire “a little addition of jihadism” and turn toward violent extremism.

In a common law system, Azmi Sharom (Chapter 6) notes, the judiciary bears considerable responsibility for minimizing “partial and imbalanced decision making” to prevent unnecessary conflict and maintain “enough space for dissent.” On this score, and especially in recent times, Azmi Sharom argues, landmark cases show the Malaysian judiciary to have failed. For instance, court rulings on several cases of religious controversy ignored unambiguous constitutional provisions, such as the freedom of worship, or disingenuously interpreted the constitution without offering sound legal reasoning or firm historical foundation. To that extent, the judiciary has not lessened but effectively exacerbated the interreligious divisiveness (to which Ahmad Fauzi’s essay also refers). Nor can the judiciary be credited with upholding democracy. Judges have mostly treated dissent with suspicion rather than protect it by rigorously testing laws that were enacted to quell dissent against fundamental principles of democracy. The constitution does not have an encompassing statement of a “higher ideal,” but, Azmi Sharom argues, other historical documents show the nation’s founders aspiring toward an ethos of equality among citizens. When judges proffer literalist interpretations of the law bereft of a higher ideal, however, they undermine respect for fair electoral choice or transparent decision making. Finally, Azmi Sharom insists that in a nation saddled with ethno-religious schisms, the judiciary is duty-bound to protect the spaces open to lawfully conducted, alternative, and dissident viewpoints on controversial matters. He declines to speculate on judges’ motives but concludes that the judiciary has failed to perform that duty.

Across social divides posed by ethnicity, class, religion, and gender, Malaysian women have never been politically quiescent. They have been involved in a full spectrum of pre- and post-independence political activity, whether they belonged with the establishment, the opposition, or nonpartisan civil society. The prominence of women in the movement for electoral reform, BERSIH, for example, is evidence of their continuing political presence. Yet their representation in formal political positions is not commensurate with their record of activity. Among Southeast Asian parliaments, Malaysia’s has one of the lowest proportions of women as parliamentarians. Maznah Mohamad (Chapter 7) suggests, though, that women’s involvement in formal politics has taken on novel characteristics since new divides and fresh waves of dissent emerged from 1999. She explores the specificities of women’s ground-level experience in formal politics to explain what really goes on at the everyday level when women navigate politics that is not favorable to their presence. She asks how women’s involvement in formal politics can be expanded via social, political, and administrative processes that can cohere as a strategy for strengthening their electoral advantage. Those processes include the collaboration between women’s civil society and state political actors, the cultivation of clientelist and patronage relations, and the maintenance of a cohesive multiparty opposition coalition. Such a combination, Maznah contends, could have a bearing on subsequent “formalization” of women in politics. Drawing from current practices and conscious of the tenuousness of political alliances in the present state of politics, she regards some form of a gender quota mechanism as being part of a more reliable method of increasing women’s representation.

The political ferment of the past three decades or so found many forms of dissident creative expression, in literary work, art, theater, film, cartoons, and even posters and banners used in demonstrations. Simon Soon (Chapter 8) posts a reminder, however, that intersections of creativity and dissent need not be demarcated by individual rebellion or precipitated by moments of political crisis. Soon reflects on some artists’ projects of “building a critical mass” that depart from the standard narrative of art and politics that links artistic output to critical juncture. With an eye on historical conditions, he examines the thoughts and actions, motives and impacts of at least two generations of artists who have moved from the politics to the art of pedagogy. Soon’s subjects cover established artists of international repute, individual figures of dissident art, and loosely structured reading or study or experimental art groups. These subjects form a broad countermovement to the institutionalization of art and pedagogy by dissenting against conventions of postcolonial higher education within. From Soon’s perspective, movements of the “art of pedagogy” spurn the sociocultural codes and political decorum of institutions of art in search of an alternative mode of creativity attuned to the current sociopolitical situation. Dissent within the ranks of creative artists is not bound to the conventional idea of an artist producing an image to deliver a political message. Even then, creativity in dissent has become part of social-engagement projects that have seen eruptions of expression, not least in the streets and over cyberspace.

Khoo Boo Teik (Chapter 9) explores connections between social divides, which stimulate or provoke dissent, and dissident interventions that change the contours of social divides. He focuses on dissident convergence and oppositional transformation that have altered the terrain and terms of politics within the past 20 years. He argues for a dynamic view of waves of dissent that emerged, receded, or resurged to challenge the regime. Separately viewed or organized as Reformasi, BERSIH, and HINDRAF, post-September 1998 dissent mobilized alongside an opposition project that had poor results before making a historic electoral breakthrough in 2008. Another spurt gave the opposition, now institutionalized as Pakatan Rakyat (PR, People’s Pact), its best electoral result in 2013; but this second coalition was still unable to unseat the ruling coalition. Thereafter, external repression, internal disunity, and fortuitous events combined to unravel the PR. But ironically, just when the opposition was headed for another nadir, new scandals and fresh crises struck at the regime and once again divided UMNO’s leadership. As a result, new sociopolitical divides have sprung up, the regime is hobbled, and a restructured opposition coalition struggles to coordinate dissent. What social transformation has produced this uncharted political terrain? What has been the impact of broad, deep, and sustained dissent on contemporary politics? What are the implications for political contestation when neither the opposition nor the regime can claim a convincing hold over the popular imagination? Addressing these and related questions, Khoo’s analysis brings the situation up to the moment of writing (March 2017).

This volume does not offer a collective conclusion on an overall situation that remained fluid. Up to the eve of the 60th anniversary of Merdeka, perhaps only this much could be said with some certainty about current political struggles in Malaysia: the divides and dissent in society and politics endured, not as ossified fixtures but in contingent forms that were dynamically reconfigured as historical conditions and the composition of protagonists changed.

Accepted: June 29, 2018


Between the end of 2017 and the beginning of 2018, when the manuscript of this Special Issue was accepted for publication, the opposing sides in the political system made their preparations to contest in the 14th General Election (GE14). There was intensive campaigning even before Parliament was dissolved or the date of GE14 was announced. In the event GE14, that covered the elections for Parliament and the Legislative Assembly in all states except Sarawak, was held on May 9, 2018. There was considerable excitement in GE14 as a new unified opposition coalition, Pakatan Harapan (Harapan, or Pact of Hope) led by Dr. Mahathir Mohamad mobilized to challenge the incumbent Barisan Nasional (BN, or National Front) headed by Prime Minister Najib Razak. The latter expected to win comfortably. Its advantages were obvious: the powers of incumbency, newly passed electoral re-delineation that heavily favored BN’s dominant partner, the United Malays National Organisation (UMNO), and the refusal of the opposition party, Parti Islam SeMalaysia (PAS, or Pan-Malaysian Islamic Party), to cooperate with Harapan. The outcome of GE14, known late in the evening of May 9, registered tremendous shock around the world: the two-year old Harapan had won and its 92-year old leader, Mahathir, became the “7th Prime Minister,” having been the “4th Prime Minister” from 1981 to 2003.

One must resist passing off hindsight as prescience. Even so one might say with reference to the theme of this volume of essays that Malaysia’s “divides and dissent” had culminated via GE14 in “regime change” for the first time in 61 years after Merdeka. How might the analyses in this volume guide an understanding of post-GE14 society and politics? Some pointers may be considered here.

First, a superficial review of the post-GE14 distribution of representation and power suggests that the divides of ethnicity and class persist but in modified forms. In Peninsular Malaysia, Harapan’s staunchest support at the national level lay in the urban non-Malay-majority and ethnically-mixed constituencies. While it won a number of rural Malay seats once steadfastly loyal to UMNO Harapan could not match the influence of UMNO and PAS in constituencies with very large Malay majorities. At the state level, Harapan swept the ethnically mixed, highly urbanized, and economically developed west coast from Kedah in the north to Johor in the south. But four predominantly rural Malay states were split between PAS and UMNO. The former retained Kelantan and won Terengganu on the east coast. The latter held onto Perlis, the smallest and northernmost state, and Pahang, the largest and central-eastern state. The post-GE14 balance of power bears a resemblance to the situation after the first Malayan general election of 1959 when the Alliance (BN’s predecessor) won all states except Kelantan and Terengganu which were taken by PAS. To some extent, GE14 has reproduced an old rural-urban divide that overlapped with demographic divisions between Malays and non-Malays, and economic differences between less developed and more prosperous communities. But GE14 brought peaceful regime change with no trace of the interethnic tensions that led to violence after the general election of May 1969. Ethnicity and class remain salient but altered sites of social divides (see Abdul Rahman Embong in this volume). Whether and how they serve as sources of dissent towards the new regime will depend, among others, on how all political parties in power or opposition grapple with the ethnic-class implications of GE14 not for their political strategies alone but also policies.

Second, another version of a regional divide—between the peninsula, and Sabah and Sarawak—remains but again it has been modified by GE14. Sabah re-enacted the theme of a “strongman-led” state government seeking balance with a peninsula-dominated federal government (see Faisal Hazis in this volume). This time Shafie Apdal led a new regionalist Parti Warisan Sabah (Warisan, or Sabah Heritage Party) (see Khoo Boo Teik, Chapter 9, in this volume) to form a coalition government with smaller parties. For GE14 Warisan and Harapan were allies. Harapan won some parliamentary seats against BN but stayed away from state contests. Thus, Harapan accepted the old regionalist refrain of “Sabah for Sabahans” that was revived by Warisan’s mobilization. For its part, Warisan committed its parliamentarians to the Harapan-headed federal government. In Sarawak, BN’s constellation of state-based parties held a majority of the parliamentary seats against several Harapan gains. But when national defeat cast them as the opposition, Sarawak’s BN parties abandoned the BN framework. They now form a loose “Sarawak only” coalition that rules Sarawak since there was no state election in 2018. After an eventual state election, probably to be held within two years, a formal coalition will emerge to re-negotiate Sarawak’s relationship with the peninsula. Meanwhile Harapan has indicated its willingness to review key provisions that governed the original merger of Sabah and Sarawak with Malaya to form Malaysia in 1963.

Third, much of Harapan’s electoral mobilization had drawn on converging streams of popular dissent over quotidian hardships, high-level corruption, institutional degradation, diminished civil liberties, and so on (see Khoo Boo Teik, Chapter 9, in this volume). Mahathir’s Cabinet, mostly constituted of experienced dissidents, responded to mass expectations of reform. It would take longer to overcome economic hardship but the extremely unpopular Goods and Services Tax was abolished. Within days of GE14, a full royal pardon was secured that released Anwar Ibrahim from prison with all charges against him officially erased. Then came an anti-authoritarian turn true to Harapan’s promise of a democratic environment with free media and respect for civil liberties. Reform was swiftly conducted in law and the judiciary that had previously been abused for repression (see Azmi Sharom in this volume): politically motivated suits against dissidents were withdrawn; unjust verdicts against oppositionists were overturned; reputable untainted figures were appointed to the offices of Attorney-General, Chief Justice of the Federal Court, and Speaker of the Parliament. The work of repealing notoriously repressive laws was begun. Where the previous regime was suspected of covering up corruption, the new regime legally attacked impunity for high corruption, above all by resuming the official investigation of the 1 Malaysia Development Berhad (1MDB) financial scandal (see Khoo Boo Teik, Chapter 9, in this volume) with the cooperation of foreign jurisdictions. At the time of writing, Najib Razak has been charged with 32 counts of criminal breach, corrupt abuse of power, and money laundering, many traceable to 1MDB. His wife, Rosmah Mansor, faces 17 counts of money laundering and tax evasion. The Malaysian Anti-Corruption Commission (MACC) has frozen 408 individual and/or corporate bank accounts (some belonging to UMNO and BN parties) suspected of receiving money originating in 1MDB. Mahathir acted to reform the civil service. Many high-ranking public officials resigned or were effectively dismissed. The most prominent of them were the Attorney-General, the Chief Justice, the President of the Court of Appeal, the Director of MACC, the Governor of Bank Negara (the central bank), the Secretary-General of the Treasury, and an assortment of senior officials of government-linked corporations. Moreover, the regime terminated 17,000 “political appointments” and closed some agencies as part of conducting institutional cleansing and rationalization on a scale not seen before.

Fourth, it is not only pre-GE14 dissent that matters. Post-GE14 dissent is obviously present. For the time being its principal expressions come from a defeated UMNO and an unvanquished PAS. The principal leaders of the two parties try to erect an ideological “Malay first and Islamist” defense of “race, religion and (Malay) rulers.” This politicization of ethno-religious tenets and anxieties (see Ahmad Fauzi Abdul Hamid in this volume) occasionally creates controversies over such matters as sexuality, child marriage, appointments (of non-Malays or non-Muslims) to senior public office, the use of non-Malay languages in public communications, and so on. The ethno-religious attacks on Harapan have not made much headway. The regime’s leaders are mostly Malay-Muslim, and Prime Minister Mahathir is iconic of the Malay-led multi-ethnic leadership and “progressive Islam” of his time. In two recent post-GE14 bye-elections (occasioned by the death through illness of the incumbents), UMNO and PAS, which took turns to contest while publicly espousing their alliance, were both defeated by Harapan candidates.

Finally, political economy will surely have an influence over the transition to “New Malaysia,” Harapan and its supporters characterize the post-GE14 situation. The defeat of UMNO and the anti-corruption campaign that targets its leaders and their allies have severely diminished the material resources that they once took for granted. As a political party, UMNO is financially strapped as it had never been before. An example is the virtually bankrupt position of Utusan Malaysia, UMNO’s Malay-language daily newspaper; its financial losses cannot be offset by fresh infusions of money from either UMNO or the government. Yet one must assume that the ranks of UMNO-associated businesses used to many forms of rent-seeking before (see Jeff Tan in this volume) must harbor grievances that can be readily expressed as political dissent if the economy falters or if they are unable to re-negotiate their way in a milieu where business is largely separated from politics, that being the goal of a good portion of the Harapan leadership that wants to see “good governance, transparency, and accountability.”

It is infeasible to cover divides and dissent in many other areas. It is hoped that the Introduction and the Postscript can server as a guide to how the theme may be explored beyond this Special Issue.

1) See the essay on Sabah and Sarawak (Chapter 4); its title refers to 54 years of being in Malaysia.

2) Those include major schemes of rural development and projects of urbanization.

3) Singapore’s separation from Malaysia just two years after the latter’s formation was a shocking development.

4) The hopes vested in the New Economic Policy’s twin objectives of poverty eradication and restructuring were realized to a considerable degree.

5) The impact of the East Asian financial crisis of 1997 dashed predictions of continued rapid economic growth.

6) Begun in the early 1970s, export-oriented industrialization retains its economic importance to the present.

7) A policy to change from teaching science and mathematics in the Malay language to English was barely implemented when controversy reversed the switch.

8) Written on October 6, 2018.


Vol. 3, No. 1, Ramon Guillermo

Contents>> Vol. 3, No. 1

Themes of Invention, Help, and Will: Joachim Campe’s Robinson der Jüngere in Tagalog and Bahasa Melayu Translations

Ramon Guillermo*

* Department of Filipino and Philippine Literature, College of Arts and Letters, University of the Philippines, Diliman, Quezon City 1101 Metro Manila, Philippines

e-mail: bomen.guillermo[at]

Joachim Heinrich Campe’s pedagogical work Robinson der Jüngere (1779/1780) represents one of the most important and popular educational works of the European Enlightenment. It is not widely known that this work was translated into Malay as Hikayat Robinson Crusoë (1875) and into Tagalog as Ang Bagong Robinson (1879) in the late nineteenth century. This paper attempts a preliminary comparative analysis of these translations with a particular focus on the problem of translating concepts from political economy into Tagalog and Malay.

Keywords: political economy, Joachim Heinrich Campe, Adam Smith, Malay translations, Tagalog translations, Robinson Crusoe, Daniel Defoe, translation studies


This paper presents a preliminary comparative analysis of the translations of Joachim Heinrich Campe’s pedagogical work Robinson der Jüngere (RDJ) into Malay—Hikayat Robinson Crusoë (HRC)—and Tagalog—Ang Bagong Robinson (ABR). Given the strong economic themes present in these works, and in Robinsonades in general, the analysis shall be done from the point of view of the translation of political-economic concepts. Doris Jedamski explains why these types of translation analyses have not until recently been given the attention they deserve, despite their obvious advantages:

. . . indigenous translations and adaptations of Western novels and their impact in colonial societies have so far found little scholarly attention. A possible explanation for this negligence is the general misapprehension that translations and adaptations are no more than the reproduction of European cultural products in indigenous languages, without the insights into cultural transformation that are present in “original” novels by colonial subjects. (Jedamski 2002, 45)

Since this study is partly intended to provide “insights into cultural transformations” by means of translation analysis, it does not aim to assess or measure fidelity or translational accuracy. Rather, it seeks to compare the conceptual systems and discursive elements informing the three texts in question. Its aim is to make use of the contrastive resources that the techniques of translation analysis bring in order to probe into the specificity of discursive elements and conceptual histories in the respective texts being analyzed. Given this objective, the fact that HRC and ABR are “relay translations” of the original German text, from Dutch and Spanish respectively, can be considered a secondary problem in the context of the overall study. The translations will be read on their own terms with respect to their distinctive discursive characteristics. It is undeniable that as far as the receptor cultures and reading publics who are without access to the original language of the source text are concerned, these translations are, for all intents and purposes, stand-alone works. However, as much as possible some of the mediating translations will be consulted in order to refine the analysis and establish the origin of some major textual differences. It should be emphasized in advance that this paper is not a study in linguistics but rather an exercise in attempting to combine what has been called “discourse analysis” and “conceptual history.”

Text 1: Robinson der Jüngere

Daniel Defoe’s (1660–1731) novel with the full title The Life and Strange Surprizing Adventures of Robinson Crusoe of York, Mariner: Who lived Eight and Twenty Years, all alone in an uninhabited Island on the coast of America, near the Mouth of the Great River of Oroonoque; Having been cast on Shore by Shipwreck, wherein all the Men perished but himself. With An Account how he was at last as strangely deliver’d by Pirates. Written by Himself, otherwise more briefly known as The Life and Strange Surprizing Adventures of Robinson Crusoe or even just Robinson Crusoe, was first published in 1719 and is considered to be the first English novel. Due to its great success among the reading publics of Europe, it also became one of the most well-known and widely translated works in world literature.

The mythos of Crusoe attained such a degree of popularity in eighteenth-century Germany that the term “Robinsonade,” referring to a distinct literary genre, was coined by the writer Johann Gottfried Schnabel (1692–1758) as early as 1731 to refer to works sharing similar themes and premises (Schnabel 1994). An enormous amount of critical and scholarly material on German literary Robinsonades accumulated up to the end of the twentieth century (Wegehaupt 1991; Stach 1996). Among the eighteenth-century German Robinsonades, the most popular and most successful on a Europe-wide scale was a two-volume educational work by the Enlightenment pedagogue Joachim Heinrich Campe (1746–1818) titled Robinson der Jüngere: Zur angenehmen und nützlichen Unterhaltung für Kinder (The new Robinson: Agreeable and useful entertainment for children, 1779–80) (see Fig. 1). The title alone indicates a new attitude to the pedagogical practice of the time, which considered “useful” and “entertaining” as irreconcilable opposites.


Fig. 1 Title Page of Campe’s Robinson der Jüngere (28th Edition, 1837)

Campe was one of the most prominent figures in the German Enlightenment and was well known throughout Europe in the nineteenth century for his innovative edu­cational and linguistic theories. He began his career as the tutor of the future naturalist and explorer Alexander von Humboldt (1769–1859) and his brother, Wilhelm von ­Humboldt (1767–1835), who would become an important founder of historical linguistics, a philosopher, and a politician. (Interestingly enough for the present study, the latter would end up writing some of the most important and pioneering early European studies on Malay and Tagalog.) Campe was part of an eminent group of educators that included Johann Bernhard Basedow (1724–90) and Christian Gotthilf Salzmann (1744–1811) and was heavily influenced by Jean-Jacques Rousseau’s educational novel Émile, ou De l’éducation (1762). The group were known as the “Philanthropen” (those who love humanity), and their educational approach was called “Philanthropismus.” They frowned upon rote learning and corporal punishment, criticized the authoritarianism of adults in the learning process, and rejected the treatment of children as “small grown-ups.” Campe was also a well-known and effective advocate of what is today disparagingly called ­“linguistic purism” (Sprachreinigung). His reasons for advocating the above position on language use were consistent with his Enlightenment beliefs in human emancipation, democratization, and pedagogical effectivity. One of the representative philosophical works defining Campe’s educational outlook in the context of his time was the short study Von der nöthigen Sorge für die Erhaltung des Gleichgewichts unter den menschlichen Kräften (On the necessary concern for the preservation of balance among the human powers, 1785). It was during the 1770s, when he ran a school in Hamburg along “philan­thropist” lines, that he produced his free “Rousseauist” version of Robinson Crusoe, titled ­Robinson der Jüngere, considered the first work of German literature intended for ­children. Rousseau had famously written that the first book the student Émile would read would be Robinson Crusoe, a book that according to him was the best treatise on “natural education” (Rousseau 1882, 131–132). Campe’s adaptation of Defoe’s plot is supplied with a frame story of a father telling the story to his children, his wife, and some of their friends. As a literary work for children, Campe’s rendition emphasizes a more explicitly didactic and moral function. Looked at from the practical side, the story is divided into 45 parts, each of which is short enough for evening reading sessions with children.

Campe’s 17-year-old hero from the German city of Hamburg, named “Krusoe” (rather than Robinson), is the last surviving son of his parents after one brother died in a war and another of disease. Against the wishes of his parents, who spoil him due to their fondness for him, he decides to set out to sea in order to seek his fortune. Various untoward incidents intervene, purportedly to teach him a lesson for disobeying his ­parents, until he finds himself the lone survivor of a shipwreck on a remote island in the Caribbean. David Blamires, who finds that Campe succeeded in crafting a “miniature history of human development,” divides Campe’s novel into three periods as follows:

In the first, he is alone and has to make shift with just his head and his hands. In the second he gains a companion, Friday, and learns to value human society. Finally, in the third the wreck of a European ship provides him with tools and other things that make for a more civilized life and eventually permit him to return first to England and then to Hamburg, where he is reconciled with his father and finds that his mother has died. (Blamires 2009, 30)

The central, and in Campe’s view quite crucial, distinction between his and Defoe’s works is that where Defoe’s Robinson has at least a gun, some tools, food, and drink to get him started, Campe’s has nothing but the clothes on his back and some songs he has learned by heart. Indeed, some readers better acquainted with this type of environment would find it quite strange how easily Campe’s Robinson is able to satisfy his ravenous hunger after washing up on the island without any tools to help him open oyster shells. He also seems to have plucked and eaten coconuts just like apples from a tree.

Though Robinson der Jüngere was soon eclipsed in the English-speaking world by Johann David Wyss’s (1743–1818) phenomenally successful Der Schweizerische Robinson (1812–13), more famously known under the title Swiss Family Robinson (ibid., 79ff), Campe’s novel would be read and translated into innumerable languages, including Malay and Tagalog, throughout the nineteenth century. Data gathered from Hermann Ullrich’s (1898) bibliography of Robinson Crusoe and various other Robinsonades spanning the period 1770–1870 (not including the Tagalog and Malay translations) shows that RDJ was translated into at least 12 languages during that period, most often into French (with 14 translations), Danish (7), and English (5). Relevant to the present study are the two translations into Dutch and one translation into Spanish. Ullrich estimates that 117 German editions of RDJ were printed until 1894, but he unfortunately does not include data on the many abridgments of Campe’s Robinsonade upon which the Malay translation may have been based (see Figs. 2 and 3). Although this is beyond the scope of this study, it might be interesting to note that for the period 1900–90, Reinhard Stach (1996) was able to identify at least 111 editions, adaptations, and abridgments of Campe’s work (with available years of publication). Of this total, 93 appeared between the end of the first decade of the twentieth century and the 1940s, after which there was a sharp decline.


Fig. 2 Number of Translations of Robinson der Jüngere and Number of Languages Translated into per Decade from 1770 to 1870


Fig. 3 Number of Translations of Robinson der Jüngere per Language from 1770 to 1870

Source: Ullrich (1898)

Text 2: Hikayat Robinson Crusoë

In 1875, Joachim Heinrich Campe’s Robinson der Jüngere was translated from Dutch into Bahasa Melayu as Hikayat Robinson Crusoë by the “Indo” (Eurasian) Adolf Friedrich von Dewall (or Von de Wall). He was born in Cirebon on April 28, 1834, and died in Jakarta (formerly Batavia) on July 6, 1909. His father, Hermann, was a German (which explains the “von” in his name instead of the Dutch “van”) employed as a government official in West Borneo, where the young Adolf grew up, it is said, “almost like a native” among the locals. When Adolf entered government service, his mastery of Melayu and sufficient grasp of both Sundanese and Javanese led him to be assigned to work as an official translator of adventure stories and popular scientific works intended for educational purposes (Molhuysen and Blok 1930, 386).

Being a translation probably intended to be used for teaching “proper” or “high” Malay, HRC was most likely used as a school textbook and would be reprinted by the Government Printing Office (Pertjetakan Goewernemen) eight times by 1910 (Jedamski 2002) (see Fig. 4). Previous studies by Jedamski (ibid.; 2009) and Waruno Mahdi (n.d.) have been helpful in situating HRC within the field of Malay language and literature. Jedamski’s pioneering research on HRC was probably the first to stress its importance for Malay and Indonesian literary historiography. Although Jedamski considered this translation to be the first literary work to successfully introduce the novel form to a Malay audience, she justifiably entertained doubts regarding the efficacy of HRC with respect to its Malay readership due to the great difficulties that she observed regarding the transmission of “alien” European concepts such as that of “individualism” to a very different religious and sociocultural context. She also observed the difficulties in actually measuring the impact of this work on the development of Indonesian literature as a whole:

Von de Wall’s Crusoë was printed with government support and, as in the case of all succeeding Indonesian versions of Robinson Crusoe, it was used for educational purposes (that is, within the Dutch-controlled education system). As such, it seems safe to assume that the dissemination of the Crusoe story was primarily undertaken as an educational measure. Statistics on distribution figures or records on readers’ reactions to the book are, of course, almost non-existent. It is therefore almost impossible to make reliable statements with regard to the reception of this novel in colonial Indonesia. (Jedamski 2002, 29)


Fig. 4 Cover of Von Dewall’s Hikayat Robinson Crusoë (8th printing, 1910)

The language of HRC appears to follow closely the linguistic conventions of “hikayats” or Malay sagas of the same period. One indicator of its closeness to conventional literary patterns is the fact that out of approximately 1,047 sentences, 58 percent start with the word maka (hence), 4.5 percent with sjahdan (so it happened/and then), and 4 percent with hatta (then/thereupon). This means that around 70 percent of the sentences begin in a formulaic way, akin to oral performance. Waruno Mahdi makes the following observation:

The language is a remarkably good example of classical “High” Malay, and the only points of criticism regard the vocalization that is inevitable when mastery of the language tradition is based exclusively on acquaintance with Jawi script written sources. (Waruno Mahdi n.d., 25)

Second, it turns out that one of the most pressing problems in analyzing HRC as a relay translation is in establishing its immediate Dutch language source text. The title page of HRC only indicates the source language to be Dutch but does not specify the title of the Dutch edition that served as the main source text. This is a more pressing issue with respect to HRC than ABR because the Malay version represents a significant abridgment of RDJ along with several, not insignificant, textual revisions. HRC has no chapters and is one long text. The framing story of RDJ has been removed, chapters and other divisions have been eliminated, the long subplot about Friday’s father has been deleted, and almost every aspect of the text has been simplified or made more compact. Chapters 20, 25, 27, and 28 are completely omitted from HRC. The Malay text perhaps adds up to only one-fourth or even less than the original length of RDJ. A sentence-by-sentence comparison shows that only an average of 38.45 percent of content per chapter has been retained from each of the 30 chapters of RDJ (see Fig. 5).


Fig. 5 Approximate Sentence-by-Sentence Matching of Robinson der Jüngere and Hikayat Robinson Crusoë by Chapter (1–30) in Percentages

Jedamski (2009, 199) has proposed the source text as being Gerard Keller’s trans­lation titled Geschiedenis van Robinson Crusoe verkort (The abridged story of Robinson Crusoe, 1869). An interesting sidelight to the history of HRC is that Von de Wall’s translation was considered attractive enough to be published twice without proper attribution by other people claiming to be its author in the daily Bintang Sorabaia (Star of Surabaya)—the first time in 1888–89 and the second, under the false title Hikayat Anoewari, anaknja saorang miskin (Story of Anoewari, son of a poor man), in 1901–2. Jedamski gives details on the reactions of some readers to these attempts at plagiarism (ibid., 177–179).

Text 3: Ang Bagong Robinson

Joaquin Tuason, the Tagalog translator of Campe’s Robinson der Jüngere (1879), was born on August 19, 1843, and died on September 27, 1908. Despite his being one of the most prolific and well-known Tagalog writers of the nineteenth century, relatively little is known about him. Modern literary prejudices against “mere” translators and authors of religious works have ensured his slide into obscurity. He was the son of a landowner-merchant in Pateros and received schooling at the Ateneo Municipal de Manila (Mojares 2006, 430). He worked as a translator of Spanish religious and moral treatises and also wrote poetry in his own right from the mid-nineteenth to the early twentieth century. Among his works, Matuid na Landas Patungo sa Langit (Straight path to Heaven) was the most popular and was printed in 10 editions after its initial publication in 1869 (Quirino 1995). For a relatively complete bibliography of Tuason’s works, see Manuel (1955).

His translation of RDJ was titled Ang Bagong Robinson, historiang nagtuturo nang mabubuting caugalian, na guinauang tanungan nang icatuto at icalibang nang manga batang babayi,t lalaqui (The new Robinson, a story that teaches good conduct, that has been made into a question and answer form so that girls and boys can learn and be entertained) (see Fig. 6). Like the Malay version, Tuason’s translation was not translated directly from German but was a relay translation from Tomás de Iriarte’s (1750–91) El Nuevo Robinson, which was first published in 1789 and reprinted in 1804 and 1811 (Ullrich 1898). Iriarte’s translation is said to have been a popular textbook in Spanish schools long before Defoe’s original was finally translated into Spanish in 1835 (Pym 2010). In his “Translator’s Prologue,” Iriarte heartily recommends Campe’s version while praising the “justified banning” of Defoe’s Robinson by the Tribunal de la Fé in 1756 and inclusion in the Index librorum prohibitorum due to its abundance of “dangerous maxims” (peligrosos máximas) (Campe 1820, IX). He also informs the reader that he took the liberty of suppressing, adding to, or changing Campe’s text in not just a few places to correct some factual errors, clarify some ideas that seemed too difficult for children to grasp, and reduce the number of bothersome digressions and repetitions (ibid., XII). One of his interventions is to correct Campe’s description of llamas having “humps” (corcoba). He also adds a long, “more scientific” discussion about lightning (ibid., 125–127), to which Tuason in turn adds a footnote about lightning in the Philippines. Iriarte’s prologue (also partially translated by Tuason) ends with long quotations from Inca Garcilaso de la Vega’s (1539–1616) account of the life of Pedro Serrano, a Spaniard shipwrecked on a desert island, which is considered one of the many literary precursors of Robinson Crusoe. The differences between its presumed French source (by an anonymous translator) and ­Iriarte’s translation have been closely scrutinized by Marizzi (2008). He discovered that the originally informal modes of address used by the children to address their parents had become formal in Iriarte, and that the letters written by the children no longer used childish language as in the French and German versions but had become filled with “horrible formalisms.” Their speech had also departed from Campe’s deliberately simple language and were now replete with complex grammatical constructions. Contrary to Campe’s effort to use German terms that could be understood by ordinary people, ­Iriarte’s text is peppered throughout with “learned words” (cultismos). Marizzi’s opinion is that these changes reveal differences between the Spanish and German reception of Enlightenment ideals. Tuason’s Ang Bagong Robinson was the second work in novel form, after the Tagalog translation of Enrique Perez Escrich’s El Martir de Golgota in 1872, to be introduced to a Tagalog reading public. Significantly, the Tagalog translation was commissioned and published by the Dominican Colegio de Santo Tomas.


Fig. 6 Title Page of Tuason’s Ang Bagong Robinson (1st printing, 1879)

Though there were Spanish editions in several formats, including single-volume, two-volume, and three-volume ones, the edition upon which the Tagalog translation is based is probably the 1846 edition, because its first volume is made up of the first 13 chapters, unlike the original German version, where the first volume consists of only the first 11 chapters. The second volume of this Spanish edition contains chapters numbered 14 to 31.

The second volume of the German edition contains chapters 12 to 30. The reason there is one additional chapter in the Spanish edition is that the 17th chapter corresponding to the German edition has been broken into two chapters. Each chapter in the Spanish edition is titled “Tarde” (afternoon), which explains why the Tagalog translation has chapters titled “Afternoon” (hapon) rather than “Evening” (Abend) as in the German original. The Tagalog translation follows the 1846 Spanish edition closely with respect to the division of volumes and chapter numbering (as Elmer Nocheseda observed in an email dated June 23, 2010).

Tuason, like Iriarte, admitted to having made changes to the text: “In translating this work, I have removed what I deemed of no use to Tagalogs; in the same way, I added prayers to the benevolent Virgin whenever Robinson faces misfortune” (Sa pagtagalog nito,y, aquing linisan ang inaacalà cong uari hindi paquiquinabangan nang manga tagalog; gayon din naman aquing dinagdagan nang pagmamacaauà sa mapagpalang Virgen sa touînang daratnan si Robinson nang anomang casacunaan) (Campe 1879, 12).1) One example of such a change is the fate of Campe’s heavily modified version of the song “Morgengesang” (morning song) dating from 1757, written by Christian Fürchtegott Gellert (1715–69) and with music by Carl Philipp Emanuel Bach. Instead of being a straightforward Spanish version, the verses included in Iriarte’s translation constitute a totally different work from Gellert’s original. For his part, Tuason explains in a footnote that aside from his translation of the relevant verses from Iriarte, he has appended eight additional strophes in his translation. In these strophes he mentions “Virgen Maria,” “Ester,” “Joséng Esposo ni Maria” (Jose, the husband of Maria), and the “daquilang Arcángel Rafael” (great Archangel Rafael). Tuason’s additional explanatory footnotes are also worth mentioning in this context. For example, he adds a note in the sixth chapter commenting on the rarity of anyone being struck by lightning in Europe as compared to the “archipelago” (sancapuluan), where there is news of at least one person being struck dead by lightning every year (ibid., 157). In the 10th chapter, he explains that during the winter season (panahon nang taglamig) leaves fall from the trees, and the plants, seemingly dead, do not bear fruit (ibid., 240). A note in the 14th chapter on the mention of the “abedul” (birch) tree says, “these trees cannot be found here in the Philip­pines” (Ang mana cahoy na ito,y, uala rito sa Filipinas) (Campe 1880, 5). There are even such slippages as when the father/narrator in the story compares a fruit on Robinson’s island to a “guava fruit as we have here in the Philippines” (bayabas natin dito sa Filipinas) (Campe 1879, 117) and says that a llama is for the island “what a deer would be here in the Philippines” (na siyang pinacausá cung baga dito sa Filipinas) (ibid., 141).

Iriarte uses the term “indio” to translate the German words “der Wilde” (the savage) seven times, “Freitag” (Friday) nine times, and “Indianer” (Indian) and “Amerikaner” (American) once each. Given the heavily loaded connotations of “indio” in the Philippine colonial context, where it referred to “pure natives,” it should be interesting to see how Tuason, who was himself a Chinese mestizo, reacted to it as a translator (this problem was posed by Elmer Nocheseda in an email dated August 4, 2010). He translates Iriarte’s usages of “indio” 11 times as “Domingo” (“Sunday,” Iriarte’s translation of the name “Friday”); 5 times as “tauong bundoc” (mountain people); and once each as “mabangis na tauo” (wild people), “manga caauauang tauo” (wretched people), and “indio.” (“Indio” appears in the Spanish text without a corresponding equivalent in the German original seven times, while it is left untranslated in the Tagalog text six times.) There is one instance where the text differentiates between Peruvian Indians, who are “civilized,” and the other “indios,” who are savages. Tuason is thus able to use the word in the sense of “civilized indios” in the sentence: “Isn’t it so that the Peruvians are not really savages like other indios?” (¿Cung sa bagay, ay ang manga perulero ay hindi totoong manga ­tauong damó na para nang ibang manga indio?) (ibid., 120). The Peruvians were indeed “indios,” but despite this they were not savages like “all the other” indios and instead were “truly civilized” (totoong mana sivilisado) (ibid., 121). In all other cases where “indio” refers unambiguously to savages, Tuason avoids translating the word or replaces it with “tauong bundoc” (mountain people) in five instances. The appellation “los indios bravos,” which was adopted by Jose Rizal and his friends, occurs once in Iriarte’s translation and is rendered as “mabangis na tauo” (savage people), which has the same meaning as the original term “die Wilde” (savages), which appeared in RDJ. “Salvage” (alternative spelling: “salvaje”) is translated into Tagalog as “tauong bundoc” 68 times, as “tauong damo” (grass people) 3 times, and as “tauong tampalasan” (vile people) in one instance. Quite puzzlingly, “tauong bundoc” and “tauong damo” do not actually fit into the island context but are rather pejorative terms for “uncivilized” people who have escaped from the Spanish colonizers by living in the mountains. Finally, Iriarte’s usage of “barbaro” (barbarian) is translated as “tauong bundoc” four times and as “tauong mababangis” (savage people), “manga tampalasan” (vile people), and “mga tauong tacsil” (traitorous people) once each (Fig. 7).


Fig. 7 Iriarte’s Use of “Indio” and Tuason’s Equivalents

Many interesting aspects of Tuason’s translation still have to be looked into, particularly in relation to Iriarte’s Spanish translation. Similar to Jedamski’s assessment of HRC, the literary historian Resil Mojares notes that the “bourgeois individualism” in Defoe’s original Robinson Crusoe appears to have been supplanted by religious virtues in Tuason’s rendition (Mojares 1998, 89).

Translation Analysis

Without a doubt, Defoe’s original novel has far outlasted Campe’s version, despite the latter’s countless editions, translations, and abridgments, both as a far more complex work of art and in terms of popularity. The temporary advantages that the banning by Catholic censors of Defoe’s “dangerous” novel offered over the other “safer” Robinsonades sanctioned by Church and state authorities have long since disappeared. UNESCO’s Index Translationum (accessed November 4, 2013) lists 224 new editions and translations of Defoe’s novel into various languages from 2000 to 2012. There were only two translations of Campe’s version in the same period, one in Japanese (2006) and the other in Danish (2005). For its time, Campe’s extraordinarily successful Robinsonade was perhaps just as much an effort at rendering a version of Robinson Crusoe that could be more safely digested by German-style Protestantism, as it was an attempt to produce something more in line with the Rousseauist pedagogical aims of the Philanthropists. Iriarte’s very “Catholic” translation of Campe’s work, despite the controversy surrounding ­Rousseau’s Émile, must be considered as part of the early Spanish reception, generally mediated through French translations, of the pedagogical ideas he inspired in the ­German-speaking world among thinkers such as Campe himself and Johann Heinrich Pestalozzi (1746–1827). On the other hand, the reasons behind the translation of what appears to be a Christian treatise in a predominantly Islamic Dutch colony are perhaps murkier. (“Allah” is used consistently throughout the text to refer to “God”; “Tuhan” [Lord], on the other hand, is never used.) Doubtless, however, is the fact that both Von de Wall’s and Tuason’s translations must be understood, even with all their ideological distortions, deliberate omissions, and dubious additions, as further extensions overseas of the dissemination of German pedagogical Rousseauism, mainly through French translations.

Any finite translation analysis cannot deal with all aspects of the texts in question but has to discover a conceptual point of entry or fulcrum. Finding and selecting a central point upon which to anchor the translation analysis requires a period of reflection on the textual materials. The preliminary analysis indicates that a useful point of entry in the analysis would be the comparison of the respective languages of “political economy” in RDJ, HRC, and ABR. This may seem somewhat odd given that Campe’s text is ostensibly a moral-pedagogical treatise. However, one of the major preoccupations of RDJ is the problem of the pressing needs that Robinson has as he is stranded on the island and the means by which he succeeds in satisfying these needs. Melani Budianta’s (2002) excellent study of the concept of “money” in Aman Datoek Madjoindo’s novel Tjerita Boedjang Bingoeng (The story of Bujang Bingung, 1935) has already shown the potential of this kind of “political-economic” approach to literary material. RDJ may, in fact, be one of the first texts translated into Malay and Tagalog with significant discussions on modern European economic themes.

In his famous reference to Robinson Crusoe, Karl Marx writes:

Because political economy is fond of Robinsonades, Robinson appears at first on his island. Humble as he may be, he has nevertheless various needs (Bedürfnisse) to satisfy and must therefore perform different kinds of useful labor, make tools, fabricate furniture, tame llamas (Lama zähmen), fish, hunt etc. (Marx 1956, 90)2)

It can be noticed here that Marx mentions Robinson taming “llamas” rather than the “goats” that are more properly found in Defoe’s novel. This may lead one to suspect that Marx actually read Campe’s version, with its “humped llamas,” rather than Defoe’s version, with its hairy goats. It would, however, be rash to conclude this since Campe’s Robinson was a German from the city of Hamburg while Marx specifically refers to Robinson in the continuation of the passage above as being a “good Englishman” (güter Engländer). Robinson’s habit of keeping a journal, a fact that is central to Marx’s point, is also more pronounced in Defoe’s version. It may therefore be the case that Marx was familiar with both versions and his portrait of Robinson in Das Kapital is a kind of composite from Campe and Defoe. Ian Watt (1996, 178) even asserts that Marx poured his scorn on the economists who used Campe’s RDJ as an illustrative text and imagined it was the original version. Moore and Aveling’s (Marx 1961) English translation of Das Kapital supervised by Friedrich Engels replaced Marx’s reference to Campe’s llamas with Defoe’s goats. In Ben Fowkes’s (Marx 1976) translation, on the other hand, the goats are restored to llamas (see Fig. 8).


Fig. 8 Robinson Crusoe’s Llama (Frontispiece, Robinson der Jüngere)

Many readers of the above passage have found it difficult to accept Marx’s assertion that the relation between Robinson and the products of his labor on the island, in spite of the simplicity of Robinson’s situation, “contained all the essential determinants of value” (Und dennoch sind alle wesentlichen Bestimmungen des Werts enthalten). Michael Berger in his guidebook to Das Kapital dismisses this statement as being incoherent, since, according to him, “Robinson does not produce for exchange, his work is only concrete work, and therefore his products do not possess value. It is hardly evident that all essential determinations of value are contained in this example. . . . The text only says therefore that in precapitalist modes of productions, no social relations are hidden” (2003, 59). Michael Heinrich, on the contrary, emphasizes that Marx is referring to the existence of the “essential determinations of value” and not “value” per se as being present in the example: “Marx does not write that value relations would exist on Robinson’s island. Given the lack of exchange, this would be empty nonsense. What he writes is that the ‘essential determinants of value’ would exist” (2009, 194). Heinrich understands “essential determinants” in this passage to refer to “the proportional allo­cation of the total amount of labor” (die proportionelle Verteilung der Gesamtarbeit). Jacques Bidet (2007, 286), for his part, argues that the interpretation of “value” in this passage is not to be confused with that specific to capitalist social relations but is rather a general or transhistorical notion that the “time of labor” always remains the “measure of the cost of production.”3)

Marx offers a way of reading Robinson Crusoe as an economic parable that could profitably be taken up in this study. However, using his concepts to analyze Campe’s specifically economic discourse would probably lead to unwanted anachronisms. In light of the 100-year gap between RDJ and Das Kapital, it would be quite unlikely that they would be speaking the same economic idiom. Fortunately, the first foreign language into which Adam Smith’s The Wealth of Nations (WN) was translated was German. It was translated in 1776, the same year its first edition was also published in English and three years before the first printing of RDJ (see Fig. 9). This translation was made by Johann Friedrich Schiller (1737–1814), a cousin of the famous poet and dramatist. Despite the fame of Smith’s earlier Theory of Moral Sentiments, which met with an immediate enthusiastic reception upon its translation into German in 1770, this translation of WN failed to find a substantial readership and did not apparently exert any influence at all on economic thinking in Germany at the time of its publication. Norbert Waszek (1993, 166), like many other historians, attributes this partly to the allegedly poor quality of Schiller’s translation, although Keith Tribe (2000, 128), who finds nothing substantially inferior about this translation, disagrees with the verdict. Tribe instead attributes the poor reception to the inability of German economists at that time to fully understand the novelty of Smith’s ideas beyond mercantilism and physiocracy. The next translation, by Christian Garve, the first volume of which came out in 1794, turned out to be much more successful. Waszek offers the following explanation:

While J. F. Schiller was simply a translator with no literary reputation, Garve was one of the most highly respected and influential German philosophers in the 1770s and 1780s. . . . The fact that a man of his standing undertook the new translation ensured a wider and more sympathetic audience for Adam Smith. (Waszek 1993, 167)


Fig. 9 Time Line of Relevant Works

Nevertheless, it would take a few more decades until Smithian economic ideas began to be genuinely understood and adopted in Germany, where cameralism still dominated the field of public administration, economic theory, and policy (Tribe 1995).

Given that the first German translations of WN and RDJ are almost contemporaneous, it might be possible to take up Marx’s insight on the economic content of the ­Robinsonade as a literary genre in general so that this can be applied to RDJ, while carefully avoiding anachronism by using WN and its early German translations as the main discursive reference points. Although there are indications that Campe had some awareness of the prevailing economic doctrines of his time, it is not actually necessary to assume that he had read WN either in English or in German translation in order to compare the implicit economic ideas in RDJ to their nineteenth-century translations in Malay and Tagalog. It is sufficient that he was evidently dealing in some economic terms and notions in RDJ that were in general usage in the late eighteenth century.

Table 1 shows selected lexical elements from RDJ related to the thematics of political economy. (The old spellings from the eighteenth-century German text and nineteenth-century Tagalog and Malay texts will be maintained when quoting from these in the course of the analysis.) Fig. 10 shows the “economic” terms selected from RDJ, HRC, and ABR in relation to some central concepts from WN and Das Kapital. The foregoing translation analysis will look into some salient economic notions as these were translated from RDJ to HRC and ABR. The most central of these notions (not all of them explicitly formulated in WN) are “exchange value,” “use value,” “division of labor,” “abstract labor,” “socially necessary labor time,” and “needs.”

Table 1 Selected “Economic” Terms from RDJ with Frequency of Appearance



Fig. 10 Selected “Economic” Terms from WN, RDJ, HRC, ABR, and Das Kapital

“Value in Exchange” and “Value in Use”

Smith defines “value” as follows:

The word value, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called “value in use”; the other, “value in exchange.” The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it. (Smith 1904, 30)

Smith’s distinction between “value in exchange” and “value in use” (see also Marx 1956, 50) is elaborated thematically in RDJ when Robinson discovers a clump of gold in his cave dwelling. Robinson estimates that it is large enough to mint 100,000 “Thaler” (a Swiss or German coin). In ABR, on the other hand, it is stated that “if it was made into money” (Tag: cung gagau-ing salapi) it would add up to the huge sum of “one hundred thousand pesos” (Tag: sandaang libong piso). RDJ notes that Robinson is now rich in gold, the universal medium of exchange, and capable of buying anything he wants. Unfortunately, “there was no one [on the island] that had anything to sell” (Ger: da war ja keiner, der was zu verkaufen hatte / Tag: ualà isa mang tauong magbili sa caniya nang anomang bagay). Robinson therefore has the occasion to reflect on the unexpected “uselessness” of the clump of gold. He asks aloud, “of what use are you to me?” (Ger: Was nüzest du mir? / Mal: apakah goenanja emas ini bagikoe / Tag: Anong mahihita co sa iyo?). He then kicks it aside while remarking that he would exchange it without hesitation for a handful of “nails” (Ger: Nägel / Mal: pakoe / Tag: paco) or any other “useful tool” (Ger: nüzliches Werkzeug / Mal: barang jang bergoena / Tag: casangcapang paquiquinabangan). Since the use-value of money is its ability to function as a universal equivalent for other commodities that can function as use-values for the buyer, money that cannot fulfill this function is divested of all value except that which is appropriate to its physical characteristics as a metal. In Robinson’s condition, where the exchange of commodities is impossible, only the use-value of objects finally matters and not their value in exchange. (This may be seen as the exact reverse of Marx’s discussion of the “metamorphosis” of money into capital in which use-value is abstracted out to leave pure exchange-value as the goal of an economic transaction.)

In another, earlier, scene RDJ dramatizes the notion of “exchange value” by discussing an example of commodity exchange. The term for “commodity” in German is “Ware,” and this is translated into the standard Malay and Tagalog terms in HRC (Mal: barang, barang dagangan) and ABR (Tag: bagay, calacal). According to the advice of the ship’s captain who agreed to take him on a voyage to Africa, Robinson should buy (Ger: einkaufen / Mal: beli / Tag: bili) useless and cheap objects that “give pleasure” (Ger: Vergnügen / Mal: disoekai / Tag: totoong naiibigan) to the Africans and exchange these with them for “gold” (Ger: Gold / Mal: ema s/ Tag: guinto), “ivory” (Ger: Elfenbein / Mal: gading / Tag: garing), and any other valuable items that they may possess. The captain convinces Robinson that these cheap wares can be sold at a price “one hundred times more . . . than they are worth” (Ger: hundertmal mehr . . . als sie werth sind / Mal: seratoes kali ganda harganya). Unlike RDJ and HRC, ABR says only that Robinson should buy “cheap” things for which he will “be paid at a really high price” (Tag: babayaran sa iyo nang totoong mahal) and explicitly mentions “profit” (Tag: tubo) in the phrase “make a great profit” (Tag: pagtutubuan nang malaqui). By “buying cheap and selling dear,” Robinson will become a “rich man” (Ger: ein reicher Man), “go home rich” (Mal: poelang-poelang kaya), or “make a great profit” (Tag: pagtutubuan nang malaqui) from the venture. The wealth of the merchant, as it is represented in RDJ, therefore comes from selling goods above their “real value” (Ger: Werth / Mal: harga). The category of “real value” in the exchange of commodities is explicit in RDJ (Ger: Werth) and HRC (Mal: harga) but only implicit in ABR, which speaks rather of “commodities” (Tag: calacal) as being “cheap” (Tag: mura) or “expensive (Tag: mahal). It is evident in RDJ that the “real value” of commodities is not simply identical with the rate at which they exchange with other goods; it may be lower (or higher) than the rate at which they are sold. But Campe does not give any further clue in RDJ as to how this “real” or maybe even “objective” value is determined.

Smith, on the other hand, speaks of the “real price” of commodities as follows: “Labour alone, therefore, never varying in its own value, is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. It is their real price; money is their nominal price only” (1904, 35). In his translation, Garve renders “real price” as “the true price” (der wahre Preis) and Schiller as “the real price” (der reelle Preis) (Erämetsä 1961, 45). According to Smith, the reason more attention is paid to the “money price” of goods than to their real price is that actual profits can be made from such means as “buying cheap” and “selling dear.”4)

Although terms such as “use value” and “exchange value” do not directly appear in RDJ, the above examples clearly demonstrate the presence of these notions with reference to the “uselessness of gold” and the sense of the dubious origin of merchant profit, both of which are judged negatively by Campe from the religious and moral point of view of his time (Conze 1972, 166).

Abstract Labour and Division of Labor

Henryk Grossman, in his classic study titled “Die gesellschaftlichen Grundlagen der mechanistischen Philosophie und die Manufaktur” (The social basis of mechanistic philosophy and manufacture), posits the rise of the notion of “abstract homogeneous labor” (Grossman 1935, 190) in the eighteenth century during the development and spread of “organic manufacture” in Europe, which was characterized by the fact that the “work process is divided into the simplest, continually repeated and highly accomplished hand movements, where the result of the work of one worker is the starting point for the next one” (ibid., 184).5) Grossman’s opinion was that the most developed degree of division of labor represented by organic manufacture was the technological and social basis for the appearance of “abstract labour” as a concept in political economy (Marx 1956, 362ff).

It is well known that WN’s central concept is the “division of labor.” It famously begins as follows: “The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, or applied, seem to have been the effects of the division of labour” (Smith 1904, 1). Smith seems to have found it much easier to make the old concept (Sun 2004) of “division of labor” understood, even in the fundamentally reconceptualized form it took within his system, than the newer one of abstract labor. Commenting on the difficulty of explaining such a novel concept as labor in the abstract, Smith writes, “The greater part of people . . . understand better what is meant by a quantity of a particular commodity than by a quantity of labour. The one is a plain palpable object; the other an abstract notion, which, though it can be made sufficiently intelligible, is not altogether so natural and obvious” (1904, 34). Smith’s German translators apparently faced a similar problem interpreting this concept. Richard Biernacki notes:

[The first German translations of WN] showed some reluctance to conceive of labor as an abstract category. Where Smith referred to “the demand for labor,” his interpreters rendered it as “demand for laboring hands” or “demand for workers.” Smith endowed the category itself with life, whereas German expositors resisted the detachment of the category from concrete persons. These early exegetes, unaccustomed to the reified form of labor as a commodity, thought of labor only as visible work. (Biernacki 1995, 265)

However, the translational problem is apparently not as straightforward as Biernacki portrays it.

This matter can be investigated more closely by looking at all the translations into German of the phrase “demand for labour” in Chapter 8 of WN (titled “Of the Wages of Labour”). The earlier translation by Schiller uses “Verlangen nach Arbeit” (desire/demand for labor) consistently throughout to translate “demand for labour.” Schiller’s is quite a literal translation, but it did not enter into general usage. Garve’s translation, on the other hand, uses the phrase “Nachfrage nach Arbeit” (demand for labor; a phrase that would be absorbed into modern usage up to the present day) as well as “Nachfrage nach Arbeitern” (demand for workers) and “Nachfrage nach arbeitenden Händen” (demand for laboring hands). Furthermore, Schiller translates “division of labour” consistently as “Vertheilung der Arbeit” (division/distribution of labour), which emphasizes the abstract nature of the “labor” being divided up and is, according to Erik Erämetsä (1961, 39), the earliest translation of this concept in German. For his part, Garve translates it as “Theilung der Arbeiten” (division of employments) and “Vertheilung der ­Arbeiten” (distribution/division of employments), which fail to render the abstract nature of labor. (Marx uses the modern word “Arbeitsteilung” aside from “Teilung der Arbeit” in his own economic writings.) These examples demonstrate that Garve’s more popular translation is in fact worse afflicted with the problem of interpreting “abstract labor” than Schiller’s.

The most relevant and extended passage on the social division of labor in RDJ unfortunately does not appear in HRC, because it is part of the framing story that has been deleted in the Malay translation (and presumably in the intervening Dutch trans­lation). In this passage, RDJ and ABR expound on the “benefits” (Ger: Vortheile / Tag: capaquinabangan) of “social life” (Ger: das gesellige Leben / Tag: paquiquisama) and the “great difficulty” (Ger: unendlich schwer / Tag: laquing cahirapan) that “a single individual” (Ger: jeden einzelnen Menschen / Tag: isang tauo) would face if he “lived alone” (Ger: allein leben / Tag: mabuhay nang nagiisa) and had to “provide for all his needs on his own” (Ger: für alle seine Bedürfnisse selbst zu sorgen / Tag: matacpang magisa ang lahat nang cailangan) without the “help of other people” (Ger: Hülfe seiner Nebenmenschen / Tag: tulong na maaasahan sa ibang capoua tauo). It goes on to assert that “a thousand hands” (Ger: Tausend Hände / Tag: sanglibong camay) would not be enough to prepare what “each of us needs every day” (Ger: was ein Einziger unter uns an jedem Tage braucht / Tag: nang quinacailangan nang baua,t isa sa arao arao). (According to Erämetsä [ibid., 92], “Hände” [hands] acquired an additional meaning as “worker” due to the influence of the German translation of WN.) Campe uses the example of a “mattress” (Ger: Madrazen), the production of which requires stuffing, linen covering, glue, cloth, yarn, thread, flax, etc., in order to illustrate the point that an almost endless number of “hands” working in various specialized occupations are needed for the production of a simple object for a single child to sleep on. In addition to these, the “various kinds of labor” (Ger: vielerlei Arbeit / Tag: ang sarisaring paggaua) required in the production of the tools of the various occupations involved in making the mattress must also be taken into account. The benefits of a “social existence” are contrasted with the difficulties of Robinson, who must provide for his own needs “without any other hand except his own” (Ger: keine einzige andere Hand, ausser den Seinigen / Tag: ualang ibang camay na macatulong sa caniya) and with “not a single tool” (Ger: kein einziges von allen den Werkzeugen) to aid him.

RDJ’s discourse on the “division of labor” is evidently a transitional one and has a lot in common with Garve’s translation of WN. The references to “a thousand hands” and to “various kinds of labor” (vielerlei Arbeit) similarly grapple with the problem of expressing the abstract notion of labor. Campe’s example seems to be a direct reference to Smith’s elaborations of the benefits of the “division” of labor in WN. The illustration used by Campe, “Madrazen,” actually seems to take its cue from Smith’s example regarding “the bed which [the workman] lies on, and all the different parts which compose it” and the tools used to make it. Smith writes about “the different hands employed” to provide the workman with food and ends the relevant passage in the same way Campe ends his:

If we examine, I say, all these things, and consider what a variety of labour is employed about each of them, we shall be sensible that, without the assistance and co-operation of many thousands, the very meanest person in a civilised country could not be provided, even according to what we very falsely imagine the easy and simple manner in which he is commonly accommodated. (Smith 1904, 13–14)

Two other passages refer more to the benefits of “cooperation” rather than division of labor per se, but it would not be completely out of place to discuss them here. In the first one, when Robinson cannot start a fire without the help of another person, he begins to feel “the helplessness of a lonely life and the great advantages provided by the companionship of other people” (Ger: die Hülflosigkeit des einsamen Lebens und die grossen Vortheile, die uns die Geselschaft anderer Menschen gewährt), “the difficulties of a person without a friend/companion” (Mal: kesoesahan orang jang tiada berkawan), “the real lack of a person who is alone and what benefits are derived from our companionship with other people” (Tag: totoong casalatan nang tauong nacaisa isa, at cung gaanong cagalingan ang quinacamtan natin sa paquiquisama sa ibang manga tauo). Another short passage on the benefits of cooperation is left out in HRC. It deals with the arrival of Friday and the fact that through their “common industry” (Ger: gemeinschaftlichen Fleiß / Tag: pagtutulungan) Friday and Robinson are now together capable of accomplishing tasks that “would have been impossible had [Robinson] been alone” (Ger: wenn er sich ganz allein befunden hätte, würde unmöglich gewesen sein / Tag: nacagaua sila nang maraming bagay na di sucat magaua cung nagiisa ang sinoman sa canila). By working together, Robinson and Friday realize how good it is that people stay together through “sociability” (Ger: Geselligkeit / Tag: paquiquisama sa canilang capoua) and “friendship” (Ger: Freundschaft / Tag: pagibig), “unlike animals who roam the earth alone” (Ger: nicht, wie die wilden Thiere, einzeln auf dem Erdboden herumschwärmen / Tag: magisa na para nang manga hayop). Campe therefore gives greater importance to somewhat idealized notions of conviviality, friendship, and altruistic behavior in these passages than does Smith, who, for his part, emphasizes the virtues of self-interested behavior. It seems that nothing could be further from Campe’s worldview than Smith’s famous words:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. (ibid., 16)

Necessary Labor Time

One of the well-known theses of WN is the notion that the division of labor is constrained by the extent of the market. Smith explains this as follows:

As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, for want of the power to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he has occasion for. (Smith 1904, 19)

In a one-person economy in which exchange, and therefore a market, cannot exist, a division of labor among individuals is likewise ipso facto impossible. Robinson has to depend on himself alone to produce all the goods necessary for the satisfaction of his needs. Given this fact, the amount of time necessary for any additional work has to be carefully allocated with reference to all the necessary occupations within the “working day.” So when Robinson estimates that the “work” (Ger: Arbeit / Mal: pekerdjaan / Tag: paggaua) necessary for carving out a boat from a tree trunk with his primitive tools would take many years, he decides to consciously partition his time so that he has a particular task allotted for every hour of each day. In RDJ he devises “an orderly partitioning of the daily work hours” (Ger: eine ordentliche Eintheilung seiner Tageszeit) because he has learned by experience that “nothing advances and lightens our industry more than order and the regular partitioning of the hours of the day” (Ger: nichts mehr unsern Fleiß befördert und erleichtert, als Ordnung und regelmäßige Eintheilung der Tagesstunden). This is more or less reflected in ABR with the phrases “an orderly partitioning of his tasks” (Tag: maayos na pagcacabahabahagui nang caniyang manga gagau-in), because “nothing makes tasks easier . . . than a correct allotment of time” (Tag: ualang totoong nacadadali sa pagganap nang manga catungculan . . . para nang uastong pagbabahagui nang panahon). HRC makes this point implicit by stating only that Robinson decides to work “not more than two or three hours a day” on carving the trunk (Mal: ditentoekanlah dalam sehari tiada lebih dari pada doea atau tiga djam mengapak batang kajoe itoe) so that his “other tasks would not go to waste” (Mal: maka soepaja pekerdjaannja jang lain djangan tersia-sia).

Marx (1956, 90) writes about Robinson keeping a record of “the amount of time each of these various products costs him on the average to produce” ([die] Arbeitszeit, die ihm bestimmte Quanta dieser verschiednen Produkte im Durchschnitt kosten). ­Robinson therefore has a notion of the necessary labor time required for him as an individual to produce each particular object useful to him. In effect, Robinson attempts to map the social division of labor onto the limited hours of the working day available to him as a single individual. (“Necessity itself forced him to divide his time precisely between different occupations” [ibid., 91].) The proportion allotted to each task is pegged on Robinson’s estimates regarding the techniques and tools available to him and his level of skill. Thus, more difficult tasks that require more time to accomplish than easier ones are probably allotted more time in the working day.6) Naturally, the notion of a regulative “socially necessary labor time” (gesellschaftlich notwendige Arbeitszeit) (ibid., 53) cannot exist as such for Robinson’s production for each of his personal needs since his labor is, disregarding his memories of social life and production, completely that of an isolated individual. With the arrival of Friday, Robinson’s productive labor loses its purely individual character and a notion approaching “socially necessary labor time” enters into the picture. When Robinson tells Friday how much time it took him to carve out a small part of the trunk to fashion a small boat, Friday shakes his head and smiles and says “that he didn’t need to have done all that work” (Ger: daß es all’ der Arbeit nicht bedurft hätte) and that it could be “better and more quickly accomplished using fire to hollow out the log” (Ger: man könte einen solchen Blok viel besser und zwar in kurzer Zeit durch Feuer aushöhlen). In ABR, Friday remarks that Robinson “had wasted a lot of time and effort” (Tag: totoong maraming panahon at pagod ang caniyang sinayang) and that the job could have been done “in only a few days” (Tag: manga ilang arao lamang). In HRC, Friday observes that Robinson “spent too much time working on it” (Mal: terlaloe amat lama bekerdja) and persevered with “an unnecessary degree of difficulty” (Mal: dengan soesah jang boekan-boekan patoet) because a boat could have been “made by himself and his countrymen” (Mal: diboeat oleh Djoem’at dan bangsanja) with much better quality in just a few days (Mal: sedikit hari dan lebih baik). This passage from HRC, by bringing in Friday’s notion of the average amount of time and effort needed for himself and his countrymen (Mal: bangsanja) to make such a boat (as expressed in his smile), seems to make the notion of socially necessary labor time clearer than does either RDJ or ABR, where it remains implicit in Robinson’s and Friday’s differing estimates of the time necessary to produce a boat of a particular quality. From the point of view of Friday’s society, Robinson is a very unskilled boatbuilder; but alone on his island and without Friday, Robinson has no measure to gauge his own productivity or skill and in fact has no need to do so.7)


The German concept of “Bedürfnis” (need) in the quote from RDJ is said to have undergone a fundamental transformation in the eighteenth century. According to Johann ­Müller:

Up to the last decade of the eighteenth century, the word “Bedürfnis” was used quite rarely; the frequency of usage increased from around 1740–60, and from around 1770 onward it entered into general usage. The spectrum of meanings which it shows in the last decades of the eighteenth century is no longer substantially different from that of today. (Müller 1973, 442)8)

It was formerly used as a synonym for “Nothdurft” (call of nature) or “Armut” (poverty), and “Bedarf” originally referred to basic necessities. However, during the European Enlightenment “Bedürfnis” began to be used more frequently in its plural form—“Bedürfnisse”—to refer more and more to “needs” corresponding, on the one hand, to changing cultural and economic living standards and, on the other hand, to particular individualized needs or preferences. An “escalation of needs” (Bedürfnissteigerung) accompanied by the “dissolution of its limits” (Bedürfnisentgrenzung) came to the fore. But this could have become possible only with the simultaneous transformation of the notion of “labor” (Arbeit) itself:

The highest value was the striving for happiness in the material and moral sense. This could however only be attained by means of satisfying “needs.” These needs in turn called for labor and awakened the drive to reasonable industriousness, meaning the continuous increase of productivity through better technology, organization, and morale. (Conze 1972, 176)9)

According to Werner Conze, John Locke’s writings heralded a new era for the understanding of “labor” as a concept:

With [Locke] begins the history of the modern concept of labor, liberated from the lowest level in the scale of human activities no longer in the old Christian sense, its lifting to a specifically human potency and finally, its separation from human beings and its elevation to an abstract active Subject (labour makes . . .). Everything in the world, according to D. Hume, is purchased by labour, and our passions are the only causes of labour. Inasmuch as bourgeois society no longer portrays itself as before in the representative actions of the ruling estates, rather, labor receives a valuable social function as the confrontation of human beings with nature, the process began in which the concept became self-evident: it separated itself from its entanglement with poverty . . .; it began to free itself from the connections with “effort” and “burden.” Technology (artes) should lead to the alleviation of labor. (ibid., 168; italics in the original)10)

The analysis of the translation of “Bedürfnis” can usefully begin with a selected quote from RDJ and its translation in HRC (see Table 2). The quote from RDJ may be read as a capsule narrative of the development of the concept of Bedürfnis. Starting with the concept of “Noth” (hardship/necessity), which may be read as pertaining to the most basic needs, it moves to the concept of “Bedürfnisse” (needs), which possesses the broader and more modern definition. The quote from RDJ shows how the effort of human beings to satisfy their needs through “labor” (Arbeit) gives rise to the process of develop­ment of human knowledge about “nature” or the “Earth” (Erde) and the “invention” (Erfindung) of various tools (Werkzeuge) and machines that would facilitate the satis­faction of these needs. According to John Bellamy Foster (2000), Marx used a term borrowed from the German chemist Justus von Liebig’s (1803–73) usage, “metabolic interaction” (Stoffwechsel), to characterize the human labor process in general. Marx writes:

Labour is, first of all, a process between man and nature, a process by which man, through his own actions, mediates, regulates and controls the metabolism between himself and nature. He confronts the materials of nature as a force of nature. He sets in motion the natural forces which belong to his own body, his arms, legs, head and hands, in order to appropriate the materials of nature in a form adapted to his own needs [Bedürfnisse]. Through this movement he acts upon external nature and changes it, and in this way he simultaneously changes his own nature. . . . It [the labor process] is the universal condition for the metabolic interaction [Stoffwechsel] between man and nature, the everlasting nature-imposed condition of human existence. (cited in Foster 2000, 157)

Table 2HRC and RDJ


Granted that such an account of the human labor process may reasonably claim a trans­historical interpretation, Marx’s representation of it in these particular terms certainly could not have been conceived outside of the context of industrial society and the corresponding terminologies that grew out of it. If the relevant passage from RDJ is understood as an illustration of human “metabolic interaction” (Stoffwechsel) with “nature” or the “Earth” (Erde), then it could be seen as concentrating all the earlier economic themes into the structure of needs and productive labor as these developed in the late eighteenth and throughout the nineteenth century in Germany and other parts of Europe. Labor as an abstract potentiality is here understood as the confrontation of human beings with nature in order to satisfy their mounting and increasingly complex needs, thus necessitating the development of technology, complex organization (such as the division of labor), the reduction of socially necessary labor time, and so on and so forth. It could therefore be argued that “Bedürfnis” can serve as a point of concentration that draws together all the threads of Campe’s economic discourse in RDJ.

The version presented in HRC of this passage is obviously quite different. “Hadjat” (desire/need) and “kesoesahan” appear in the corresponding translation as the equivalents for “Bedürfnis” and “kesoesahan” (difficulty/adversity) for “Noth.” Similar to the idea present in RDJ, “human beings” (Mal: manoesia) are said to be confronted with “kesoesahan” and imbued with various “hadjat,” which sharpens “thinking” (Mal: pikiran) and deepens “knowledge” (Mal: ilmoe). However, the HRC version does not translate “Erde” (“Earth,” or in this case “nature”) and “Erfindung” (invention). Because of these omissions, the macro-narrative of “mastery of nature” through human technology and “invention” does not seem to arise in HRC. The capacity for thought and intellection (Mal: pikiran), however, is developed to overcome all “difficulties” (Mal: kesoesahan), “reject” (Mal: menolak) all “danger,” (Mal: bahaja) and “to satisfy” (Mal: memenuhi) the various “needs” (Mal: hadjat). It seems that HRC refers to the sharpening of a skill rather than to the development of a technology in overcoming these difficulties and satisfying these desires. “Kesoesahan” and “bahaja” in HRC clearly refer to situations that, even though they may occur often enough, do not constitute the normal condition of things. “Hadjat,” on the other hand, may be interpreted to refer to a “longing” or “desire” beyond the more basic necessities of life (Wilkinson 1919). HRC therefore includes a qualifier of “hadjat” as having to be “decent/proper” (Mal: patoet). Although “hadjat” does also appear in such contexts as “to urinate” (Mal: membuang hajat kecil) or “to defecate” (Mal: membuat hajat besar), the use of this word in the language of the Malay hikayats in general seems to accord more with an elevated kind of “desire.” (Terms such as “longing” or “desire” can indeed be translated as “Bedürfnis” in German, but some other words such as “Begierde,” “Lust,” “Verlangen,” or “Begehren” have much closer connotations.) (The first translation of the first chapter of Marx’s Das Kapital in Indonesian [1933a; 1933b; 1933c], serialized in the newspaper Daulat Ra’jat, consistently uses “lack” [Mal: kekoerangan] as the equivalent of need; but toward the end of the first section, it suddenly becomes unsure and uses “lack/need” [Mal: kekoerangan (keboetoehan)]. The newest translation of the same work [Marx 2004; Guillermo 2013] uses “kebutuhan” throughout.) The quote from HRC therefore seems to refer to zones “below” (kesoesahan/bahaja) and “above” (hadjat jang patoet) the norms of everyday need; and being extraordinary experiences, these necessitate the development/advancement of thinking and of knowledge. On the other hand, the concept of Bedürfnisse in RDJ, whatever its subjectivization, refers neutrally to needs that presumably can be satisfied by the confident advance of human mastery over nature.

Further analysis of HRC would also show that beyond the development of skills for evading hardship, the most obvious “solution” to “kesoesahan” in HRC is “pertolongan” (“help,” whether from God or from other human beings). According to W. J. S. ­Poerwadarminta (1976), “pertolongan” means “perbuatan atau sesuatu yg dipakai untuk menolong” (an act or something used to help). An example is “mendapat pertolongan dari dr penduduk kampung” (to receive help from the doctor of the inhabitants of the village). Out of 21 usages of the word “kesoesahan,” eight collocate with “pertolongan” (see Tables 3.1, 3.2, and 3.3). There is apparently no surface collocational structure corre­sponding to this in RDJ. Though the social and religious themes of “help” are not completely excluded in RDJ, the tendency in HRC contrasts strongly with RDJ in its focus on ethical competence rather than the almost completely excluded notion of techno­logical competence in overcoming hardships, resolving the problem of lack of resources, or mastering nature. If the life situation is below the norm, then HRC points to “pertolongan” (help/aid) as the always-dependable solution for human beings.

Table 3.1 “Kesoesahan” and “Pertolongan” Collocations in HRC


Table 3.2 “Kesoesahan” (Adversity) HRC Concordance List


Table 3.3 “Pertolongan” (Help) HRC Concordance List


In contrast to HRC, it can be remarked that the translation in ABR closely mirrors the conceptual arrangement of RDJ in the text presented in Table 2. Unlike HRC, which does not translate “Erde” (Earth/nature) and “Erfindung” (invention), ABR does translate these words, albeit rather ambiguously, as “earth/land” (Tag: lupa) and “effective means” (Tag: mabubuting paraan). It should be noted that the latter translation of “various inventions” (Ger: allerlei Erfindungen) as “effective means/good way” (Tag: mabubuting paraan) is not sufficient in itself to generate the technological themes present in RDJ. The two ideas of Noth and Bedürfnisse are conflated in ABR (as they are in Iriarte’s translation of the term “necesidad”) as “need” (Tag: pagcacailangan). The key to discovering the discursive specificity of ABR therefore has to be sought elsewhere. The second example (see Table 4) may serve as a preliminary illustration. In RDJ, Robinson prays that he will be blessed with “Stärke zur Ertragung” (strength to withstand hardship) in going through or experiencing “Leiden” (suffering). (This passage demonstrates incidentally how closely RDJ reflects the strong connection between “Arbeit” [labor] and “Mühe” [effort]/“Last” [burden] derived originally from the Judeo-Christian worldview [Conze 1972, 165].)

Table 4 HRC, RDJ, and ABR


It can be noticed that the same sentence as translated in HRC once again contains a collocation of “kesoesahan” and “pertolongan.” Here, Robinson pleads for the “pertolongan” of God so that he can “suffer” (Mal: menderita) the extreme difficulties he faces (Mal: kesoesahan jang terlampau berat) “patiently” (Mal: sabar). On the other hand, the version in ABR uses two words to describe the attitude toward “suffering”/“hardship” (Tag: cahirapan), namely, “to bear” (Tag: pagtiis) and “to endure” (Tag: pagbata). However, “pagtiis” and “pagbata” do not exhaust this theme in ABR. In addition, a person needs “strength of the will” (Tag: catibayan nang loob) in order to be able to bear and endure for an extended period. “Catibayan nang loob” here does not necessarily pertain to an “active will” but leans more to a kind of “passive will” to “endure” everything for as long as necessary. It has been observed that HRC is unique in relation to ABR and RDJ in its emphasis on “pertolongan”; for its part, ABR seems to dwell on the notion of enduring suffering more than either RDJ or HRC. Given the wealth of its lexicalizations on this theme, ABR can be said to have an “elaborated code” on “suffering” as opposed to the relatively “restricted codes” of HRC and RDJ.

It is therefore not surprising that in his “Translator’s Preface” (Paounaua nang Tumagalog) Tuason writes the following:11)

I also added that in bearing [pagtiis] any suffering [cahirapan], or in the attainment of any comfort one should not only desire a good fate in this life, rather to become a means for serving God and the attainment of eternal bliss . . . like Robinson, who, despite being only an example or metaphor, can become an example for anyone in dire straits or danger, so that one’s will shall not weaken [humina, malupaypay ang loob] or reproach the Creator of the world, and instead shall bow to his will, have endless faith in his mercy, worship his unattainable knowledge that what we think to be a misfortune and hardship comes from his love that will be followed by eternal bliss. In other words, we should bear [matiis] and accept with tranquility [malumanay sa loob] and give thanks for whatever he bestows upon us, may it be comfort or hardship [cahirapan]. (Campe 1879, 13–14)12)

The previous observation can be made even more evident by studying the collocations of “difficulty” (Tag: hirap, cahirapan) in ABR (see Table 5.1). In contrast to the collocational structure formed in HRC by the pair “kesoesahan-pertolongan,” the ABR reveals a significant collocational structure formed by “difficulty”/“adversity”/“poverty” (Tag: hirap, cahirapan) and several phrases corresponding to the “strength” or “weakness” of the “will” (Tag: loob). These phrases pertaining to the state of the “will” are as follows: “catibayan nang loob” (strength of the will), “malulupaypay ang loob” (weakening of the will), “pahihinain ang loob” (the will shall be weakened), “humina ang loob” (to lose resolve), “di macapaghina nang loob” (shall not weaken the will). It can be seen that in ABR, the subject confronted by “cahirapan” vacillates between a strong and weak will. However, only a “strong will” or “catibayan nang loob” (steadfastness) can allow the subject to “bear” and “endure” suffering. A concordance listing of the polarity of “weak will” (Tag: mahinang loob) and “strong will” (Tag: malacas na loob) would show how powerfully this theme works within the total ideational structure of ABR. The phrases referring to a “strong loob” are the following: “catibayan nang loob” (resilience of the loob), “lacas nang loob” (strength of the loob), “capanatagan nang loob” (confidence of the loob), “di nasira ang loob” (unweakened loob), “hinapang nang loob” (strengthening of the loob). The phrases referring to a “weak loob” are the following: “mahina ang loob” (weak loob), “nasira ang loob” (crushed loob), “caligaligan nang loob” (restlessness of the loob), “malupaypay ang loob” (weak loob), “pagsaulan nang loob” (to console), ­“catacutan sa loob” (fear in the loob). (For the sake of comparability, only the sections in which HRC overlaps with ABR have been scanned for relevant collocations, see Tables 5.2 and 5.3.)

Table 5.1 “Cahirapan” and “Catibayan nang loob” Collocations in ABR


Table 5.2 “Catibayan nang loob” (Strong Will) and Variants, ABR Concordance List


Table 5.3 “Cahinaan nang loob” (Weak Will) and Variants, ABR Concordance List


A third example (see Table 6) may lend further insights into the discursive specificity of ABR. This section has not been translated in HRC since it is part of the discarded framing story of RDJ. However, this particular quotation is particularly important because it represents a short exposition of the basic core of Campe’s educational philosophy as embodied in the term “Selbstüberwindung” (self-overcoming). According to Campe, the development of the capacity to postpone satisfaction or deprive oneself voluntarily of immediate desires in an “overcoming” of the self can strengthen one’s personality so that every difficulty in the future can be faced with “gelassener Standhaftigkeit” (calm resolve). The term “Selbstüberwindung” is not translated directly in ABR but rather substituted with an explanatory translation as the condition of being “accustomed to the lack of whatever comfort even that which you most desire.” The phrase in RDJ “stark am Geist und Herzen” (strong in spirit and heart) is translated in ABR as “catibayan nang loob” (strength of the loob), and “gelassener Standhaftigkeit” (calm resolve) is translated as “matitiis na mapayapa” (can be endured calmly). While RDJ does not specify what shall or must be “endured in calm resolve,” ABR collocates “catibayan nang loob” here with “cahirapan” (difficulty) and “caralitaan” (poverty). It could be asserted that the main semantic polarity in ABR is “cahirapan” (difficulty/poverty) versus “catibayan nang loob” (strength of the will).

Table 6RDJ and ABR



The notion of Bedürfnisse and its connection to science and human invention is apparently discursively specific to RDJ with respect to HRC and ABR. The tendency in RDJ is to develop a discourse around the fulfillment of unlimited needs by increasingly developed (though still bounded) technological means. This conceptualization of needs and their fulfillment in RDJ is neutral in relation to the situation in which the subject finds herself/himself. On the other hand, HRC seems to posit an unstated norm of satisfaction of basic needs or, more controversially, of “original affluence” (Sahlins 1974). It is only when human beings (Mal: manoesia) are confronted with an exceptional situation below (or above) the norm, referred to as a state of “kesoesahan” (difficulties), that poverty or deprivation looms as a possibility for the human subject. However, instead of appealing to technological invention as a solution to this “difficulty,” the predominant tendency in HRC is to look toward social and ethical solutions to the problem of deprivation or lack. Evidence for this is provided by the strong collocational pair “kesoesahan”–“pertolongan.” In his classic study of the concept of gotong royong, which elaborates on its various types, Koentjaraningrat observes:

The activity which is most spontaneous in character is evidently gotong rojong of the tulung lajat variety; by “spontaneous” is meant here the voluntary nature of help, which is given without any expectations and without keeping count of contributed services and goods. No further elaboration of this point is needed, as we all know that in cases of death or great calamities, people the world over offer spontaneous help to the afflicted family. There are probably few exceptions to this universal phenomenon. (Koentjaraningrat [1961] 2009, 52–53)

The other categories of political economy (“exchange value,” “use value,” “division of labor,” “abstract labor,” “socially necessary labor time”), which so tightly cohere in RDJ as various aspects of human-nature metabolism, therefore seem to fall away in HRC.

ABR, on the other hand, seems to emphasize the normativity of suffering and deprivation. Indeed, Mojares’ pioneering commentary on ABR (1998, 87–89) compares it with a medieval exemplum and stresses the influence upon it of the generic conventions of Catholic pastoral texts in Tagalog in which the translator Tuason was deeply immersed. If the situation of Robinson stranded on an island is considered in HRC as an exceptional state of “kesoesahan” (difficulty) and “bahaja” (danger) requiring “pertolongan” (help), it is, on the contrary, deemed exemplary of the human condition in ABR. ABR almost seems to posit a situation of “ontological scarcity” (or, as Iriarte puts it, “la miseria y necesidades del hombre en este mundo”) and inescapable suffering with a very strong Catholic flavor perhaps reminiscent of the lives of saints, which Tuason also translated into Tagalog, in which individual human beings have to learn to bear the difficulties inherent in life itself. This interpretation rests on the strong collocational pair “cahirapan”–“catibayan nang loob” (difficulty–strength of the will). Similar to HRC, the languages of political economy in RDJ seem to fall away in ABR as being insignificant in relation to the central problem of “bearing suffering.”

The differences between RDJ, HRC, and ABR are schematically represented in Figs. 11 and 12. It is evident that ABR and HRC do not share the interpretative grid upon which RDJ rests, namely, that provided by the material development of industrial societies in the Europe of the late eighteenth and nineteenth centuries. Notions central to RDJ such as that of “unlimited” human needs, human-nature metabolism (Stoffwechsel), and scientific-­technological innovation therefore do not figure prominently—if at all—in HRC and ABR. But one should take note that these societies were not static at all. Waruno Mahdi points to the crucial changes occurring in Indonesian society at the time of HRC’s publication:

It was not until around the middle of the 19th century that relevant portions of the population experienced sufficient changes in their economic and social life to bring them into direct contact with features of European industrial-age culture, and create a noticeable interest and demand for corresponding items of vocabulary and other means or modes of expression. (Waruno Mahdi n.d., 5)


Fig. 11 Robinson’s Situation in RDJ (Norm Neutral), HRC (below and above the Norm), and ABR (within the Norm)


Fig. 12 Interconnection of Concepts: “Bedürfnis”–“Kesoesahan”–“Cahirapan”

HRC represents a position that depends upon ethical and social solutions to exceptional situations of scarcity, adversity, and deprivation. In a hypothetical situation of limited needs, where sufficient means exist to supply these needs for a community, this is perhaps not an unusual outlook. The explanation for the particular discursive elements in ABR may most likely reflect the fact that the delicate balance between the limited needs and sufficient means has been interrupted by the deprivation of these previously adequate means, for example, by extractive colonialism. The aim of ABR in Tagalog as an even more emphatically moral-religious treatise was, as with many deeply ideological works in the colonial religious canon, the preaching of endurance and suffering within the context of colonial exploitation. The experiences of “kesoesahan” and “cahirapan” in HRC and ABR are qualitatively different from the “relative impoverishment” occurring in societies of developed industrial production since the revolution of “needs” had not yet taken place within their material and discursive worlds. That is to say, the “deprivation of means” by means of “primitive accumulation” had taken place before the notion of “unlimited needs” corresponding to notions of “relative impoverishment” could arise. Indeed, one can speculate whether RDJ, ABR, and HRC could be read more broadly as articulations of various kinds of responses to “capitalist modernity.” Another textual exploration would be necessary to work it out, but following the philosopher Bolívar Echeverría’s (2000) characterization of the four ethe of modernity, RDJ could be said to fluctuate between the romantic and realist types while ABR represents more distinctly a classical ethic; finally, HRC very roughly corresponds, only by analogy, with the baroque ethic.

The solution in RDJ to fulfilling human needs is the development of adequate technical means and the attainment of efficient productive organization. In other words, the means by which societal prosperity is to be achieved is not through social struggle but through the struggle to dominate nature. In contrast to this, the solution to “kesoesahan” and “cahirapan” in the colonial contexts of HRC and ABR seems to be the continual development of various discourses of critique in combination with various kinds of oppositional practice. What if “pertolongan” was inflected to mean the collective action of the “rakjat” (people) against the colonial oppressor? What if “catibayan nang loob,” instead of being conceived as a passive acceptance of one’s fate, becomes understood as the strength of the will to overcome the “hardships” (cahirapan) of the struggle in pursuit of the “himagsikan” (revolution)? Some evidence has been shown elsewhere, at least for the Tagalog case, that these types of critique would eventually articulate with and form connections with the discourses specific to the nationalist struggle (Guillermo 2009b) and eventually also with notions of labor and production within the discourse of the early radical labor movements (Guillermo 2009a). In these early receptions, the discourses of political economy presented in RDJ would therefore not simply be abrogated or rejected but rather be reimagined and reconfigured discursively in a new constellation in which conceptions of exploitation and liberation would displace the centrality of ideas of technical progress and mastery over nature. Unfortunately, although the history of European political and economic concepts and categories has been well studied, there are as yet no comprehensive and encyclopedic studies on this theme with respect to Philippine and Indonesian languages. This paper may be regarded as a small contribution to this field.

In 1951, around 75 years after the publication of Hikayat Robinson Crusoe, Pramoedya Ananta Toer would write some reflections in his novella Bukan Pasar Malam (Not an all night’s market) on the promises of technology and progress and the problem of the unfulfilled “needs” of the people after the attainment of Indonesian independence and democratic rule. It might be fitting, therefore, to end this study with Pramoedya’s words:

In between the darkness and the light fading in the red West, I passed the small road in front of the palace on my bicycle. This palace is flooded with the light of electric lamps. Who knows how many watts? I don’t know. I estimate that the electricity in this palace would not be lower than 5 kilowatts. And around it is felt the lack of electricity, but the person in the palace would only have to lift the telephone to order an increase. The President really is a practical man—not like the people trying to make a living at the roadside every day. When you are not a President and also not a minister and you want to receive 30 or 50 watts more, you would have to pay 200 or 300 rupiah. Indeed, this is not practical. And when the person inside this palace wants to travel to A or B, everything is ready—airplane, car, cigarettes, and money. As for me, in order to go to Blora, I have to scour Jakarta to find money to borrow. Indeed, this kind of life is impractical. And when you become President, and your mother is sick or you want to visit your father or any close relative—tomorrow or the day after you can go there to visit. But if you are a lowly employee who earns only enough to breathe, just asking for leave is difficult, because these small bosses know that they can forbid their employees anything. All of these things bothered me. Democracy is indeed a wonderful system. You can become President. You can choose the employment you desire. You have rights like other people. Because of democracy you no longer need to show reverence or bow your head to the President or minister, or any other high personage. True—this is one triumph of democracy. And you can do anything you want within the limits of the law. But if you have no money, you will be crippled and cannot move. In democratic states you can buy whatever you want. But if you have no money, you can only look at the object of your desire. This too is a triumph of democracy. (Pramoedya [1951] 2009, 9–10)13)

Accepted: March 8, 2013


Grants from the Asian Public Intellectual Program and the Deutsche Akademische Austauschdienst, along with the support of the Department of Filipino and Philippine Literature, University of the ­Philippines–Diliman, allowed me to undertake this research. For their intellectual generosity and helpfulness, I would like to thank Melani Budianta and Syahrial from the Fakultas Ilmu Budaya, Universitas Indonesia, and Caroline Hau and Shimizu Hiromu from the Center for Southeast Asian Studies, Kyoto University. For sharing with me important materials, I am grateful to Elmer Nocheseda, Waruno Mahdi, and Cheng-Chung Lai.


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1) An example of this is the following: “Asking forgiveness from the beautiful and merciful Virgin that she should watch over him in that remote place, that no one should hurt him, he renewed his hope in the Mother of Mercy, who is the most powerful intermediary to her Son: since this blessed Virgin is his beloved Mother and support in all of his suffering when He was alive in this world. He also called upon his beloved Saints Joseph and Archangel Rafael” (Nagmamacaauà naman sa maalindog at mapagcalarang Virgen na siya,y, calingain sa iláng na yaon, na ualang sucat macasamang sinoman; pinagtibay niya ang pag-asa sa Ina nang auà, na siyang lalong malacas na taga pamamaguitan sa caniyang Anac: yayamang ang mapalad na Virgeng ito ang pinacaibig niyang Ina at caramaydamay sa madlang cahirapan nang siya,y, nabubuhay dito sa lupà. Nanauagan naman sa maloualhating cay S. José at sa Arcangel S. Rafael na caniyang manga pintacasi) (Campe 1879, 91).

2) “Da die politische Ökonomie Robinsonaden liebt, erscheine zuerst Robinson auf seiner Insel. Bescheiden, wie er von Haus aus ist, hat er doch verschiedenartige Bedürfnisse zu befriedigen und muß daher nützliche Arbeiten verschiedner Art verrichten, Werkzeuge machen, Möbel fabrizieren, Lama zähmen, fischen, jagen usw.”

3) Bidet writes: “Marx ascribes [the law of value] to Robinson Crusoe as a generic figure of labouring society, and it is also that of the future communist society. Theories of Surplus-Value makes this particularly clear: ‘Time of labour, even if exchange-value is eliminated, always remains the creative substance of wealth and the measure of the cost of its production’. A ‘law’ of this kind is confined, as we shall see, to asserting the general relationship between the fact that labour is always ‘expended’, and the fact that as rational activity aiming at use-values it is important for it to be reduced to a minimum and divided in proportion to social needs. So this is in no way a ‘law’ in the sense that this term functions in ‘law of value’, that of a structure the existence of which is established by historical materialism for a determinate kind of society, and possesses, as a theoretical object, an explanatory value, because it denotes a particular system of compulsion to produce and interest in producing. It is, rather, a general matrix logically prior to the determinations specific to historical materialism as a theory of modes of production.”

4) “If a London merchant, however, can buy at Canton for half an ounce of silver, a commodity which he can afterwards sell at London for an ounce, he gains a hundred per cent by the bargain, just as much as if an ounce of silver was at London exactly of the same value as at Canton” (Smith 1904, 40).

5) “. . . welche den Arbeitsprozess in einfachste, sich stets wiederholende und mit Virtuosität vollzogene Griffe zerlegt, wobei das Arbeitsresultat des eines Teilarbeiters den Ausgangspunkt für die Arbeit des folgenden bildet.”

6) “Adversity forced him to precisely divide up his time among his different functions. The fact that one takes up a greater portion, and another less of his total work depends on the greater or lesser difficulty necessary to attain the desired effect” (Die Not selbst zwingt ihn, seine Zeit genau zwischen seinen verschiednen Funktionen zu verteilen. Ob die eine mehr, die andre weniger Raum in seiner Gesamttätigkeit einnimmt, hängt ab von der größeren oder geringeren Schwierigkeit, die zur Erzielung des bezweckten Nutzeffekts zu überwinden ist) (Marx 1956, 90–91).

7) Although Smith does not explicitly conceptualize “socially necessary labor,” it could be argued that he gives various inklings of it in WN.

8) “Bis in die ersten Jahrzente des 18. Jahrhunderts kommt ‘Bedürfnis’ selten vor, von etwa 1740–1760 nimmt es an Häufigkeit zu, von etwa 1770 an kann man es dem allgemeinen Sprachgebrauch zurechnen. Das Spektrum der Verwendungsmöglichkeiten, das es seit den letzten Jahrzehnten des 18. Jahrhunderts zeigt, ist vom heutigen nicht mehr wesentlich unterschieden.”

9) “Oberster Wert war das Streben nach Glück im materiellen und moralischen Sinne. Dies aber konnte nur durch Befriedigung der ‘Bedürfnisse’ erreicht werden. Die Bedürfnisse wiederum forderten Arbeit und weckten den Trieb zur vernünftigen Arbeitsamkeit, d.h. einer fortgesetzten Vervielfältigung der Arbeitsleistung durch verbesserte Technik, Organisation und Arbeitsmoral.”

10) “Damit beginnt die Geschichte des modernen Begriffs der Arbeit, ihre nicht mehr christlich begründete Emanzipation von der untersten Stufe der Rangordnung menschlicher Tätigkeiten, ihre Erhebung zu einer spezifisch menschlichen Potenz ja letzlich ihre Ablösung vom Menschen und ihre Erhöhung zum abstrakten wirkenden Subjekt (labour makes . . .). Everything in the world, hieß es bei D. HUME, is purchased by labour, and our passions are the only causes of labour. Indem die bürgerliche Gesellschaft sich nicht mehr, wie bisher, im repräsentativen Handeln der Herrschaftsstände darstellte, sondern Arbeit als Auseinandersetzung der Menschen mit der Natur einen gesellschaftlichen Funktionswert erhielt, setzte der Prozess der Verselbständigung des Begriffs ein: er löste sich aus der Verschränkung mit armut . . .; er begann sich auch von seiner Verbindung mit ‘Mühe’ und ‘Last’ zu lösen. Die Techniken (artes) sollten zur Arbeitserleichterung führen.”

11) This can be compared to Iriarte’s comment in his “Prologo”: “Nothing is more praiseworthy in this work than the healthy moral doctrine laid out in the whole of it. Inspire love, gratitude and respect to the supreme Creator and Father of human beings, enter with limitless faith into the adversities which he sends us, and an impervious humility which separates us from the temerity of wanting to understand and more or less judge, his inscrutable judgment: excellently portrays the misery and needs of human beings in this world . . .” (Nada hay tan loable en esta obra como la sana doctrina moral oportunamente sembrada en toda ella. Inspira amor, gratitud y respeto al supremo Criador y Padre de los hombres, suma confianza sin límite en las adversidades que nos envía, y una ciega humildad que nos aparte del temerario designio de querer penetrar y muchos ménos calificar, sus inscrutables juicios: pinta excelentemente la miseria y necesidades del hombre en este mundo . . .) (Campe 1820, VII).

12) “Idinagdag co rin naman dito na sa pagtitiis nang anomang cahirapan, ó pagcacamit nang anomang caguinhauahan ay hindi lamang ang dapat hangarin ay ang magandang capalaran sa buhay na ito, cundi lalonglalò na ang maguing daan nang ipaglilingcod sa Dios at ipagcacamit nang caloualhatiang ualang hangan . . . tulad cay Robinson, na baga ma,t, isang halimbauà ó talinhagà lamang, ay magagauang uliran nang sinomang na sa sa isang caguipitan at capanganiban, nang houag huminà, malupaypay at maghinampo ang loob sa Namamahalà nang sangdaigdigan, bagcus umayon sa caniyang calooban, manalig sa ualang hangan niyang caauaan, sambahin ang di malirip niyang carunungan, na ang inaacalà natin na isang casacunaan at cahirapan ay bunga nang caniyang pagibig na pagcacaraanan nang ualang hanga nating caloualhatian, cung baga,t, ating matiis, at tangapin nating malumanay sa loob at pasalamatan, maguing caguinhauahan at maguing cahirapan man, ang minamarapat niyang ipagcaloob sa atin.”

13) “Antara gelap dan lembayung sinar sekarat di barat yang merah, sepedaku meluncuri jalan kecil depan istana. Istana itu—mandi dalam cahaya lampu listrik. Entah beberapa puluh ratus watt. Aku tak tahu. Hanya perhitungan dalam persangkaanku mengatakan: listrik di istana itu paling sedikit lima kilowatt. Dan sekiranya ada dirasa kekurangan listrik, orang tinggal mengangkat tilpun dan istana mendapat tambahan. Presiden memang orang praktis—tidak seperti mereka yang memperjuangkan hidupnya di pinggir jalan berhari-harian. Kalau engkau bukan presiden, dan juga bukan menteri, dan engkau ingin mendapat tambahan listrik tigapuluh atau limapuluh watt, engkau harus berani menyogok dua atau tigaratus rupiah. Ini sungguh tidak praktis. Dan kalau isi istana itu mau berangkat ke A atau ke B, semua sudah sedia—pesawat udaranya, mobilnya, rokoknya, dan uangnya. Dan untuk ke Blora ini, aku harus pergi mengelilingi Jakarta dulu dan mendapatkan hutang. Sungguh tidak praktis kehidupan seperti itu. Dan kalau engkau jadi presiden, dan ibumu sakit atau ambillah bapakmu atau ambillah salah seorang dari keluargamu yang terdekat—besok atau lusa engkau sudah bisa datang menengok. Dan sekiranya engkau pegawai kecil yang bergaji cukup hanya untuk bernafas saja, minta perlop untuk pergi pun susah. Karena, sep-sep kecil itu merasa benar kalau dia bisa memberi larangan sesuatu pada pegawainya. Ini semua merupakan kekesalan hatiku semata. Demokrasi sungguh suatu sistem yang indah. Engkau boleh jadi presiden. Engkau boleh memilih pekerjaan yang engkau sukai. Engkau mempunyai hak sama dengan orang-orang lainnya. Dan demokrasi itu membuat aku tak perlu menyembah dan menundukkan kepala pada presiden atau menteri atau paduka-paduka lainnya. Sungguh—ini pun suatu kemenangan demokrasi. Dan engkau boleh berbuat sekehendak hatimu bila saja masih berada dalam lingkungan batas hukum. Tapi kalau engkau tak punya uang, engkau akan lumpuh tak bisa bergerak. Di negara demokrasi engkau boleh membeli barang yang engkau sukai. Tapi kalau engkau tak punya uang, engkau hanya boleh menonton barang yang engkau ingini itu. Ini juga semacam kemenangan demokrasi.”


Southeast Asian Studies, Vol. 3, No. 1, April 2014, pp. 3-47
©Center for Southeast Asian Studies, Kyoto University