00074918.2013.809844

(1)

Full Terms & Conditions of access and use can be found at

http://www.tandfonline.com/action/journalInformation?journalCode=cbie20

Download by: [Universitas Maritim Raja Ali Haji] Date: 17 January 2016, At: 23:25

Bulletin of Indonesian Economic Studies

ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20

State-Business Relations in Post-1998 Indonesia:

The Role of Kadin

Irawan Hartono

To cite this article: Irawan Hartono (2014) State-Business Relations in Post-1998

Indonesia: The Role of Kadin, Bulletin of Indonesian Economic Studies, 50:1, 132-133, DOI: 10.1080/00074918.2013.809844

To link to this article: http://dx.doi.org/10.1080/00074918.2013.809844

Published online: 24 Mar 2014.

Submit your article to this journal

Article views: 362

View related articles

(2)

132 Abstracts of Doctoral Theses on the Indonesian Economy

State–Business Relations in Post-1998 Indonesia: The Role of Kadin

Irawan Hartono ([email protected])

Accepted 2011, University of Groningen

This thesis discusses the changes in relations between the state and the business sector in Indonesia during 1998–2003, after the fall of the Soeharto regime. In doing so, it examines the role of Kadin (the Indonesian Chamber of Commerce and Industry, an organisation representing the interests of the business sector) in shaping economic policymaking. It also focuses on Indonesian politics, especially on the country’s move towards greater levels of democracy.

During the Soeharto regime, the government’s inluence on policy was predom -inant, so Kadin had only a subsidiary role. However, the economic and political reforms that started in 1997–98 have offered a new and challenging environment for Indonesian businesses, which have allowed Kadin, at least potentially, to

amplify its inluence. To demonstrate whether and to what extent Kadin’s efforts

to shape economic policymaking were successful in the post-Soeharto period up to 2003, this thesis uses the theory of corporatism to examine state–business inter-actions, and applies the concepts of legitimacy, business institutionalisation, and credibility to three detailed case studies: the establishment of the anti-monopoly law, the new rules regarding the procurement of government projects, and the new manpower law.

The analysis of these case studies demonstrates that Kadin’s initial efforts to become a larger player in the policymaking process were only partially

success-ful, particularly its attempts to inluence the state’s economic policies that it asso -ciated with the business sector. In the immediate post-Soeharto era, Kadin was not the only organisation in Indonesian society that represented and promoted the interests of the sector; the economic and political reforms had made room for many other representatives to express their demands, and the government and the parliament had become much more receptive than they had been under Soeharto.

This thesis argues that the reformation that started in 1997–98 has placed Kadin in a very different politico-economic environment from that of Indonesia during the Soeharto regime. If in the New Order era Kadin’s independence was lenged by a directing state, then in the reformation era its decisions can be be chal-lenged by forces in Indonesian society, as well as from within its own structure. Unlike in the former era, in which its society was weak, in the reformation era as well as a bidirectional relationship between industrial concentration and price– cost margin.

This research suggests that policymakers in Indonesia should limit the size of

irms by, for example, rejecting proposed mergers of big irms and supporting

new entrants to the industry. Policymakers should also seek to prevent anti-com-petitive practices, which could reduce industrial concentration in the long run. Moreover, the government should revise the competition law, to enable better interpretation and stricter law enforcement.

(3)

Abstracts of Doctoral Theses on the Indonesian Economy 133

Indonesia has become a very dynamic yet sometimes fragmented nation. This has posed a new challenge for Kadin, which can itself be fragmented in its responses to different issues.