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Chinese Big Business in Indonesia Christian Chua

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View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by ScholarBank@NUS CHINESE BIG BUSINESS IN INDONESIA THE STATE OF CAPITAL CHRISTIAN CHUA NATIONAL UNIVERSITY OF SINGAPORE 2006 CHINESE BIG BUSINESS IN INDONESIA THE STATE OF CAPITAL CHRISTIAN CHUA (M.A., University of Göttingen/Germany) A THESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY DEPARTMENT OF SOCIOLOGY NATIONAL UNIVERSITY OF SINGAPORE 2006 i ACKNOWLEDGEMENTS Throughout the years working on this study, the list of those who ought to be mentioned here grew tremendously. Given the limited space, I apologise that these acknowledgements thus have to remain somewhat incomplete. I trust that those whose names should, but do not, ap- pear here know that I am aware of and grateful for the roles they played for me and for this thesis. However, a few persons cannot remain unstated. Most of all, I owe my deepest thanks to my supervisor Vedi Hadiz. Without him, I would not have begun work on this topic and in- deed, may have even given up along the way. His patience and knowledgeable guidance, as well as his sharp mind and motivation helped me through many crises and phases of despair. I am thankful, as well, for the advice and help of Mary Heidhues, Anthony Reid, Noorman Ab- dullah, and Kelvin Low, who provided invaluable feedback on early drafts. During my fieldwork in Indonesia, I was able to work as a Research Fellow at the Centre for Strategic and International Studies (CSIS) in Jakarta thanks to the kind support of its direc- tor, Hadi Soesastro. Not only did my colleagues and friends at CSIS help make my time so en- joyable, I am not sure if I could have survived the nine months in Jakarta without them. I am also grateful to all of my respondents – those listed in the Appendices and those who preferred to remain anonymous – for taking the time to talk and explain to me the often very opaque world of business and politics in Indonesia, as well as to Evy Heliana, Agung Wicaksono, and my mother Susantiana Ciptawijaya, who helped me in one way or the other. I am also heavily indebted to my department, the charming ladies of the general office, the former Head, Hing Ai Yun, for her motherly care to her students, and to NUS with all the fa- cilities it provided, the freedom I was given (despite some redundant regulations), and, of course, the non-material and material support I received as a research scholar. For the latter, I thank the Faculty of Arts and Social Sciences for the fieldwork grant and conference funding, as well as the Ev. Studienwerk (Germany) for its generous scholarship before I joined NUS ii and its encouragement, together with that of my former supervisor Ingrid Wessel, to switch from Humboldt University Berlin to Singapore. No academic work can be done if one does not have a life outside university. To all those who were part of it, to my parents in Germany, and to my friends, who struggled with me through endless library days, stimulating discussions, and joyful nights over a Beck’s Bier in Göttingen, Tiger Beer in Singapore, or Bir Bintang in Jakarta: You are the best! I am very happy to know you. Finally, not only my gratitude but also all my love goes out to my wife Friederike for bear- ing and sharing four years of separation, stress, desperation, and anxiety. This dissertation is the outcome of her patience and support. As words cannot express my appreciation, it is there- fore dedicated to her. iii TABLE OF CONTENTS Acknowledgements ...................................................................................................................................................... i Table of contents ........................................................................................................................................................iii List of tables and figures ............................................................................................................................................. v Summary .................................................................................................................................................................... vi 1 Introduction: Capital and the state ...................................................................................... 1 1.1 FOCUS AND DEFINITIONS .................................................................................................................. 3 The Chineseness of capital ......................................................................................................... 3 Chinese ‘big business’................................................................................................................ 6 States and regimes...................................................................................................................... 8 1.2 CENTRAL ARGUMENT : THE EMERGENCE OF PLUTOCRACY ............................................................. 11 1.3 METHODOLOGY ............................................................................................................................. 12 1.4 OUTLINE ........................................................................................................................................ 15 2 Theoretical framework: Power configurations of state and capital ................................ 17 2.1 APPROACHES TO CHINESE INDONESIAN CAPITALISTS .................................................................... 18 Culturalist perspectives............................................................................................................ 18 Structuralist perspectives ......................................................................................................... 23 An analysis of Chinese capital’s ethnic and material conditions............................................. 26 2.2 IDENTIFYING THE ‘RULING CLASS ’: CAPITAL AND THE STATE ........................................................ 29 Theories of the capitalist state.................................................................................................. 30 The New Order state................................................................................................................. 32 Forms of capitalism.................................................................................................................. 36 2.3 FROM BUREAUCRATIC TO PLUTOCRATIC CAPITALISM .................................................................... 39 3 Limited capitalists: Chinese big business and the state before 1998 ............................... 41 3.1 DETERMINANTS : CHINESE CAPITAL IN HISTORICAL PERSPECTIVE .................................................. 42 Pre-colonial times (From the ‘dawn of history’ to 1600)......................................................... 43 Colonial rule (1600–1949)....................................................................................................... 44 The post-colonial state (1949–65)............................................................................................ 49 3.2 THE NEW ORDER ACCOMMODATION ............................................................................................. 53 Conditions: The creation of a pariah business class................................................................ 54 Marginalisation: Extinguishing Chineseness .................................................................................. 55 Discrimination: Making the Chinese visible ................................................................................... 58 Stigmatisation: The Chinese as expropriators ................................................................................. 60 Implications for the Chinese capitalists........................................................................................... 63 The formation of the alliance (1966–74).................................................................................. 64 Raising Chinese cukongs ................................................................................................................ 64 The foundations of symbiosis ......................................................................................................... 68 The consolidation of bureaucratic power (1974–82) ............................................................... 70 The system of dominance: Authoritarianism, centralism, and protectionism.................................. 72 Indigenous capital ........................................................................................................................... 75 The expansion of oligarchic capitalism (1982–97) .................................................................. 78 The politico–business oligarchy...................................................................................................... 79 Contradictions................................................................................................................................. 82 3.3 THE LIMITED POWER OF CAPITAL ................................................................................................... 85 iv 4 Capital in crisis: The conglomerates and the end of the New Order .............................. 88 4.1 THE CRISIS IN CONTEXT ................................................................................................................. 90 Interpretations.........................................................................................................................
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