1.2 Central argument: The emergence of plutocracy
What are the consequences of the regime change in 1998 for Chinese big business? Why – and how – were the conglomerates able to survive in a dramatically changed environment? I
argue that the new democratised reformasi regime facilitated the emergence of plutocracy in Indonesia. It did not, as widely expected, terminate the rule of the power bloc consisting of
politico-bureaucrats and Chinese capitalists, but it prompted a change of power relations be- tween the two fractions in favour of capital. The oligarchy in which politico-bureaucrats and
their families tended to dominate has now given way to one that is composed in a more pluto- cratic fashion – where big business will tend to run the show more unabashedly.
In the New Order, the politico-bureaucrats held instrumental power over the state, success- fully maintaining their dominance through a sophisticated regime of authoritarianism, central-
ism, and collusion. One integral component of their largely unchallenged rule was the subju- gation of the capitalists, who were effectively limited by being labelled ‘Chinese’ – a stigma
that linked them with a socially marginalised ethnic minority and prevented their access to di- rect power. The Chinese tycoons were thus appropriate partners to be raised and co-opted as
compliant partners in a bureaucracy dominated oligarchy. This was, after all, a price they were willing to pay to maintain a stake in a predatory, extremely profitable symbiosis with the
state, whose managers allowed and supported them to establish enormous conglomerates that dominated the country’s private sector. The crisis, however, forced an end to this accommo-
dation. I further argue that the Chinese tycoons benefited most from the democratisation, decen-
tralisation, and deregulation efforts of the reformasi period. While the disintegration of the New Order seriously disrupted the oligarchy’s bases of authority – and with it the power con-
figurations thought to be essential for Chinese business success – the new regime could not do without the Chinese capitalists due to their economic indispensability to an Indonesian econ-
omy re-emerging from deep crisis. The resulting continuities allowed the major business groups to survive, recoup their losses, and even help determine the course of post-Soeharto
Indonesia, enabling them to steadily distance themselves from bureaucratic patrons, extend their autonomy, and perhaps to rise to a more overtly dominant position within the ruling alli-
ance. By showing how the conglomerates dealt with the unravelling of the New Order and its
centralised network of patronage, this thesis will demonstrate that the Chinese tycoons man- aged to reorganise in post-Soeharto Indonesia, and that their interests and actions have paved
the way for a more plutocratic regime. The study will thus highlight an important case in which big business adjusts to new political conditions, as has happened before in other post-
authoritarian environments.
1.3 Methodology
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