professionalism, purgation, and presentability in order to continue operating in post-Soeharto Indonesia. In fact, Salim could claim to be one of the first big debtors who had settled his debt
completely and in a relatively short period. This will help the group to re-emerge as Indone- sia’s largest conglomerate and its boss to become the most powerful tycoon in the footsteps of
his father, with the difference that – in the long run – politicians will be going to him to tender themselves as patrons who, however, will increasingly lose their usefulness for the Salim
Group. While Liem Sioe Liong was dependent on ‘business as privilege’ Anthony Salim, in- terview 13 April 2005, his son was about to free himself from such constraints, making his
group sustainedly stronger than it had ever been before.
5.4 Capitalist consolidation, consolidated capital
As the case studies demonstrated, there were several ways for the conglomerates to survive in post-authoritarian Indonesia. Lippo, on the one hand, applied a more defensive strategy that
resembled the corrupt methods the conglomerates used before in the New Order. It was still very dependent on patronage and connections with the political decision makers, which even-
tually brought them through the crisis. In comparison to the Soeharto regime, democracy was considered to be a more difficult environment that immensely restricted the range of Lippo’s
activities. The Salim Group, on the other hand, embarked on different tactics. It progressively adjusted to the changes. While the group still reverted to KKN whenever it was deemed pos-
sible and profitable, it realised that there were indeed a lot of benefits to gain from democ- racy, decentralism, and deregulation. Salim was mature enough to survive without President
Soeharto as major protector. The resilience of these two groups – and the many more that are still alive and kicking –
revealed the nature of the new regime. Even though many new conditions emerged through reformasi
, which at first sight seemed to inhibit the continuation of the old elites, a fundamen- tal break with the past failed to take place. Democratisation merely modified the workings of
the predatory arrangements without fundamentally transforming them. The basic structures of power were not altered significantly because post-reformasi powerholders have merely tried
to capture rather than overcome the old system. The changes that have occurred, however, were adequate to please and appease international observers and creditors, as well as the few
credible internal voices of reformasi. Still, the restructuring of the new regime was by far too inconclusive to overturn the position of those that had been incubated within the New Order
oligarchy. In this chapter, I identified capital’s indispensability as the basic cause for structural con-
tinuance. As demonstrated, the crisis resulted in a mechanism that turned out to be very ad- vantageous for the conglomerates: The more money they pulled out of Indonesia, the more
the economy needed them. As long as the old system was in the process of revitalisation, the capitalists knew that they were the oxygen any post-Soeharto regime required to stay alive.
This gave them the opportunity to recover and recoup many losses – as the case studies showed – and further increased their importance. Moreover, they managed through these
processes to resist unpleasant reforms. Here, I analysed the reactions of the capitalists to reformasi. They were substantially re-
sponsible for many of the continuities between the New Order and the post-Soeharto regime. Beyond this, they could soften the consequences of the changes. Their capital was the basic
condition for this, without which politicians could not run for elections in the new parliamen- tary democracy. It also gave them the opportunity to make use of the many avenues of civil
society. The end of the centralised state offered grey areas, provided new possibilites, and simplified the access to regional decision makers, who were easier to bribe than the former
powerful gatekeepers in Jakarta. Through corruption, co-optation, or infiltration, the decen- tralisation of power as well as the emergence of new watchdogs posed few serious difficulties
for big business to pursue their strategies of survival in more deregulated markets. However, we cannot evaluate the conglomerates’ response to the demise of the New Order as strictly re-
actionary. The cases of Lippo and Salim elucidated that the new regime allowed the simulta-
neity of reactionism and professionalism in corporate behaviour. Moreover, they also indi- cated the potential future course of big business in Indonesia, making clear that the political
system was no longer the main variable that determined the options of the conglomerates. On the contrary, the capitalists were ready to determine politics. They realised that they indeed
could influence the outcome of democratisation, decentralisation, and deregulation and what was left of reformasi in accordance to their requirements. The post-Soeharto environment
provided conditions particularly beneficial for the Chinese conglomerates that did not only let them survive, but substantially decreased the authority of the state over business. The follow-
ing chapter will explore actual and possible scenarios of Chinese capital’s accommodation in an initially unfamiliar, post-authoritarian environment that they moulded in such a manner to
pave the way for the establishment of an increasingly plutocratic regime.
6 CAPITAL UNLIMITED:
TOWARDS A NEW ACCOMMODATION
The economic and political crisis in Indonesia ended the New Order regime, leaving one of its main pillars, the Chinese conglomerates, damaged but not destroyed. I have demonstrated
how and why Chinese business groups emerged and flourished Chapter 3 and how the end of the New Order disrupted the predatory arrangements and endangered the continuing exis-
tence of big business Chapter 4. However, I have also shown how the new regime turned out to be less inhibiting for the tycoons than widely expected Chapter 5. Indeed, they man-
aged to survive the crisis. But where did they go from there? In what ways did they cope with the dismantling of the old patronage networks? How did they attempt to thrive in a democra-
tised, decentralised, and deregulated post-1998 Indonesia? Most big businessmen were initially afraid of Indonesia’s democratisation, because, as
Pharos boss and chairman of the Indonesian Chinese Association INTI, Eddie Lembong in- terview 21 October 2004, remarked, ‘democracy is unfortunately related to numbers, and the
Chinese are very small in numbers’. Ufen 2002: 187 pointed out that the capitalists – as eth- nic Chinese – had to fear a loss of their good relations with state officials which would leave
them unprotected against anti-Chinese groups and sentiments. Amy Chua expected a similar outcome:
In the numerous countries around the world that have pervasive poverty and a market-dominant minority, democracy and markets […] can proceed only in deep tension with each other. In such
conditions, the combined pursuit of free markets and democratization has repeatedly catalyzed ethnic conflict in highly predictable ways, with catastrophic consequences, including genocidal
violence and the subversion of markets and democracy themselves. A. Chua 2003a: 16
She concluded that ‘market-dominant minorities do not really want democracy’ due to its po- tential to be inimical to their interests and to cause ethnic hatred A. Chua 2003a: 259, an
analysis and prediction shared by many Indonesian experts. Almost all my interviewees knew and mentioned her book in which she explicitly discussed the case of the Chinese in Indone-
sia, showing that the question of economically powerful minorities and democratisation is a very relevant and timely one in the post-Soeharto era.
43
However, I offer a different interpretation of reformasi. Here I suggest that the capitalists were well represented by the new regime. Indeed, the democratic transition strengthened their
stance in Indonesian society and resulted in a more beneficial political economy for the cor- porate world that would eventually lead to the emergence of a relatively autonomous capital-
ist class. I argue that the regime change removed the social limitations of the Chinese tycoons, empowered them politically in relation to the politico-bureaucrats, and secured their eco-
nomic revival. This set the stage for an increasingly plutocratic Indonesia, in which these capitalists dominate the state unambiguously and assume the characteristics of a ‘ruling class’
see Chapter 2.2. Therborn 1978: 203 proposed that ‘how far it [the bourgeoisie] is prepared to accept lib-
eralization will depend on the availability of modes of transition to other, equally good or bet- ter, formats of representation’. The aim of this chapter is thus to observe the ‘modes of transi-
tion’ through a micro-level analysis of old, revised, and new patterns of political business prevalent in contemporary Indonesia and disclose capital’s corresponding ‘formats of repre-
sentation’, thereby providing empirical evidence that the tycoons – while still in hibernation – were quietly forging a new form of state–business accommodation, in which their dominance
would be firmly established.
43
Financial analyst Lin 2004, for instance, based a Tempo article on the ‘Chinese role in Indonesia’ on A. Chua’s propositions. In the interviews I conducted, he as well as other respondents such as
Sjahrir, Faisal Basri, Anton Supit, Alvin Lie repeatedly referred to A. Chua’s hypothesis to substanti- ate their arguments.
6.1 Capital in post-Soeharto Indonesia: Un-limiting Chinese big business
