State-business relations in post-1998 Indonesia: the role of Kadin

PhD ceremony: Mr. I. Hartono, 16.15 uur, Academiegebouw, Broerstraat 5, Groningen

Title: State-business relations in post-1998 Indonesia: the role of Kadin

Promotor(s): prof. C.L.M. Hermes, prof. B.S. Hadiwinata

Faculty: Economics and Business

The thesis discusses the changes in the relations between the government and the business sector in Indonesia during the period 1999-2003, i.e. the period after the fall of the Soeharto regime. The author analyzes these changes by looking at the role of Kadin – the Indonesian Chamber of Commerce and Industries, an organization representing business interests – in shaping economic policymaking after 1998. During the Soeharto regime, when a strong corporatist model prevailed and the government played a dominant role in policymaking, Kadin’s role in shaping economic policies was strongly marginalized. The economic and political reforms starting from 1997-1998 provided a new and challenging environment, allowing Kadin to – at least potentially – increase its influence on policymaking. We use three detailed case studies (on the establishment of the anti-monopoly law, on new rules regarding the procurement of government projects, and on establishing a new manpower law) to illustrate whether and to what extent Kadin’s efforts to influence economic policymaking were successful in the post-Soeharto period. The discussions of the three case studies show that the efforts of Kadin to become a more important player in the policymaking process were only marginally successful. The main reason for this was that in the post-Soeharto era Kadin was not the only organization in Indonesian society that represented specific interests. The economic and political reforms had given room for many other representatives of societal interests to raise their voice. Moreover, compared to the Soeharto period, the government and parliament had become much more open to demands from society.