Indonesian New Order period saw the
country witnessing phenomenal economic growth at 7.8% in 1996, which was
slightly more than the annual average since Suharto took power some thirty years
ago. In addition, exports had reached US$50 billion, double the volume in 1966.
It was no surprise therefore, that the surge in economic growth was attributed
to the rise of Indonesia’s rapidly growing middle class, as a strong middle
class serves as the engine for a growing economy. However, despite the rapid
growth of the middle class at about 15-18% per year,
it remained an agent of political change more in theory than in practice.
This paper analyses the main reasons for the lack of political power among the
middle classes, arguing that tight state control, a state-dependent middle class
and the lack of coherence within the middle class, accounted for this lack of
the tight state control of the New Order regime can be seen from both the
political and economic dimensions. Economically, the state exerted tight control
over the banking system until the late 1980s and maintained a grip on the
economy through corporate enterprises like Pertamina for oil and Krakatan for
Moreover, the heads of these state enterprises had little control over the
determination of Indonesia’s overall strategies and policies, and exerted
influence only in terms of their personal connections.
addition to the tight state control over economic policies, there was also tight
political control of the country, as can be seen from the entrenchment and
centralisation of authoritarian rule by the military, as well as the
appropriation of the state by its officials, and the exclusion of political
parties from effective participation in the decision-making process.
These political restraints resulted in a climate of fear and concerns over free
speech and the rule of law.
This was especially because of the “culture of corruption” which permeated
the state’s judicial institutions, and subjected these institutions to the
control of the political elite.
state control over political autonomy and economic policies was cemented by the
New Order ideology of “state above politics”, with ideology serving as the
justification for the legitimacy of state policies, argued to be in the
“national interests” of the country.
Hence, the “national interest” was conceived to be something over and above
individual private interests, not the sum total of these individual interests.
As can be seen, the authoritarian ideology of the New Order government played an
important role towards influencing the economic policies and political autonomy
of Indonesia, which were enforced by tight state control over the country.
second reason for the lack of autonomy among the middle classes can be explained
through their strong dependence on the state. Although the mid-1980s’ fall in
oil prices and the corresponding increase in private sector reliance resulted in
some erosion of state power, the middle classes remained dependent on the state
largely due to the economic resources and opportunities made available by the
state, as well as the need for social order to be preserved.
terms of economic opportunities, the New Order state protected domestic capital
interests by requiring foreigners to take indigenous joint-venture partners and
secured contracts for domestic private capitalists to the limit of their
It also allowed domestic groups the prospect of forming monopolies and securing
concessions, licenses and credit in the midst of a highly regulated economic
As for economic resources, these were controlled by the state through the
accumulation of investment capital derived largely from oil taxes and foreign
loans channelled via the state.
Consequently, the state provided the political conditions for capitalist
development, the fiscal framework and also the investment capital. This resulted
in the development of a strong patron-client relationship between the state and
corporate groups, which were integrated into the state’s broad industrial
strategies and became what many would term “another arm of the state”.
Hence, this system of patronage developed a high comfort level for many in the
middle class, who would be hesitant to sacrifice their comfort for political
middle classes were also dependent on the state for the preservation of social
order. This can be seen in the traditional role of authoritarian regimes to
protect the middle class from the peasant-based reformist and revolutionary
As Samuel Huntington argues, the military, and by extension the state, serves as
the “guardian” of the existing middle class as it opens the door to the
middle class and closes it on the lower class.
Indeed Indonesia’s historical background provides an insight into the weakness
of the middle class as can be seen from the traditional strong state dominance
in the pre-colonial and colonial eras. In addition, the strength of the
revolutionary left and the potential rise of Islamic fundamentalism drove the
middle class into the arms of the authoritarian Sukarno regime.
can be seen, the power of the capital-owning middle classes was not in the
formal sense, but only through their significance as keys to investment,
production and economic growth, thereby ensuring the economic survival of the
state. This resulted in the state being forced to intervene towards the
resolution of political and economic crises that threatened the health of the
system, and therefore creating a “pact of domination” between the middle
class and the state in order to preserve social order.
Consequently, the lack of autonomy among the middle class can be explained by
its dependence on the coercive powers of the state to maintain the prevailing
societal balance of power and to preserve social order.
third reason for the lack of middle class political autonomy can be seen in the
makeup of the middle class itself. This is because there was no one coherent
middle class in Indonesia, but in actuality a group of individual subclasses
seeking to obtain their own political and economic interests. In order to
understand the divergent interests of these individual subclasses, it is
important to understand the political and economic interests of each of the
three subdivisions, as classified as the “indigenous petty bourgeoisie”, the
“big bourgeoisie” and the “indigenous bourgeoisie”.
The “indigenous petty bourgeoisie”, comprising medium and small local
businesses, exhibited generally nationalist, populist and xenophobic
characteristics because it considered itself to be the primary victim of the
Chinese and international capitalists. They were also closely associated with
Islam and politically active only as an appeal for government protection.
The “big bourgeoisie”, or Chinese conglomerates, were generally not able to
challenge the state because they were not accorded a legitimate role in
This made them vulnerable in Indonesian society, resulting in them keeping a low
profile and developing their political influence through personal links with
officials and political figures.
The “indigenous bourgeoisie”, or large local capitalists, were not as
politically constrained as the Chinese due to the presence of business
associations like the Indonesian Chamber of Commerce (KADIN), which served as
vehicles for political and ideological debate. However, these groups were
dependent on the state economically due to the state’s assistance in their
development. Moreover, the most
important of these “indigenous bourgeoisie” were associated with the Suharto
family, and relied heavily on bestowed monopolies and state credit.
it can be argued that these three subdivisions possessed a common interest in
establishing a regulatory framework against those in power, the political role
of its composite elements differed according to the relationships formed with
other social forces. For instance, the “indigenous petty bourgeoisie” sought
an alliance with the rural middle classes while the “big bourgeoisie” allied
with the urban corporate managers, both groups seeking a different political
role within the Indonesian system.
addition to the complex relationships and alliances, there were also reformist
upper middle class groups like Forum Demokrasi and Petisi 50, which attempted to
change the prevailing societal order. However, these groups attained limited
political effectiveness because of internal divisions and a popular fear of
social and economic chaos. In addition, these reformist organisations failed
because of the efficient process of institution-building, which forced all
political and ideological activity into structures defined and controlled by the
Hence, in examining the political and economic interests of these different
middle class constituents, it can be argued that the lack of political autonomy
stemmed from their internal division as a “class”, which cast doubts on
their political coherence, and prevented them from pursuing a more
confrontational role with the state.
conclusion, the phenomenal growth of the Indonesian New Order economy had
resulted in a simultaneous expansion of the country’s middle classes. However,
unlike many countries whose middle classes enlarged their political roles in the
wake of a growing economy, Indonesia’s middle classes continued to function as
political extensions of the state. This lack of political autonomy can be
attributed to the desires of both the state and the middle classes to co-exist
under a “pact of domination”, with the middle classes exchanging their
political independence for the economic and political power of the state.
Consequently, the Indonesian middle classes gave up their political power in
order to attain economic success and political stability under an authoritarian
regime with its strict ideological domination.
above essay was written by Mark Lim Shan-Loong on 13 March 2001.
Anne, The Indonesian Economy in the Nineteenth and Twentieth Centuries:
A History of Missed Opportunities,
Macmillan: London, 1998.
fast-growing big-spending middle class”, East Asian Executive Reports,
Vol. 17, No. 9, 15 September 1995, Online, ProQuest Information Service, 2 Mar
J. A. C., “Property and Power in Indonesia”, The
Politics of Middle Class Indonesia, Eds.,
Richard Tanter and Kenneth Young, Centre of Southeast Asian Studies: Victoria,
Richard, “Authoritarian States, Capital-Owning Classes, and the Politics of
Newly Industrialising Countries: The
Case of Indonesia”, World
Politics, Vol. 41, No. 1, Oct 1988, 52-74.
The Rise of Capital, Asian Studies
Association of Australia: Sydney, 1986.
Richard and David S. G. Goodman, The
New Rich in Asia: Mobile Phones,
McDonalds and Middle-Class Revolution,
Routledge: London and New York, 1996.
Adam, “Indonesia after Suharto”, Foreign
Affairs, Vol. 86, No. 4, Jul/Aug 1997,
119-34, Online, ProQuest Information
Service, 2 Mar 2001.
Michael, “Caught in the middle”, Far Eastern Economic Review,
Vol. 161, No. 15, 9 April 1998, 14-5, Online, ProQuest Information Service, 2
Comments? Email firstname.lastname@example.org to share your thoughts.
The Writing Page
 Adam Schwarz, “Indonesia after Suharto”, Foreign Affairs, Vol. 86, No. 4, Jul/Aug 1997, 119-34, Online, ProQuest Information Service, 2 Mar 2001. In addition, Schwartz also commented that given prevailing rates of growth, Indonesia could become the sixth-largest economy by the year 2010.
 “Indonesia's fast-growing big-spending middle class”, East Asian Executive Reports, Vol. 17, No. 9, 15 September 1995, Online, ProQuest Information Service, 2 Mar 2001.
 Michael Vatikiotis, “Caught in the middle”, Far Eastern Economic Review, Vol. 161, No. 15, 9 April 1998, 14-5, Online, ProQuest Information Service, 2 Mar 2001.
Robison, Richard and David S. G.
Goodman, The New Rich in Asia:
Mobile Phones, McDonalds and Middle-Class Revolution,
Routledge: London and New York, 1996, p. 82.
 J. A. C. Mackie, “Property and Power in Indonesia”, The Politics of Middle Class Indonesia, Eds., Richard Tanter and Kenneth Young, Centre of Southeast Asian Studies: Victoria, 1990, p. 78.
 Richard Robison, Indonesia: The Rise of Capital, Asian Studies Association of Australia: Sydney, 1986, p. 105.
 Michael Vatikiotis, “Caught in the middle”. Vatikiotos describes how people hesitate to speak loudly for fear of who could be listening.
 Richard Robison, Indonesia: The Rise of Capital, p. 108.
 J. A. C. Mackie, “Property and Power in Indonesia”, p. 87.
Richard Robison and David S. G.
Goodman, The New Rich in Asia,
pp. 83-4. Robison and Goodman vividly describe the effects of decreasing
state power, including the deregulation of the finance sector and ending of
state monopolies, demands for greater economic accountability and the rise
of NGOs to deal with politically unpalatable but important policy issues.
 Richard Robison, “Authoritarian States, Capital-Owning Classes, and the Politics of Newly Industrialising Countries: The Case of Indonesia”, World Politics, Vol. 41, No. 1, Oct 1988, pp. 63-4.
 Ibid. p. 65.
 Richard Robison and David S. G. Goodman, The New Rich in Asia, p. 82.
 Richard Robison, “Authoritarian States, Capital-Owning Classes”, p. 72.
 Michael Vatikiotis, “Caught in the middle”.
 Richard Robison, “Authoritarian States, Capital-Owning Classes”, p. 53.
 Ibid. p. 54.
 Richard Robison and David S. G. Goodman, The New Rich in Asia, pp. 81-2.
 Richard Robison, “Authoritarian States, Capital-Owning Classes”, pp. 55-6. Robison forecasts a disruption of this “pact of domination” only if there was decreased dependence on the government’s economic resources, if the middle classes posed a direct challenge to the regime, and if there was fragmentation and increased internal conflict, leading to social instability and a loss of regime legitimacy.
 Richard Robison and David S. G. Goodman, The New Rich in Asia, pp. 90-3.
 Ibid. p. 90.
 Richard Robison, “Authoritarian States, Capital-Owning Classes”, p. 65.
 Richard Robison and David S. G. Goodman, The New Rich in Asia, pp. 91-2.
 KADIN was eventually co-opted into the orbit of the state through its association and linkage with Golkar, the state-sponsored political party.
 Ibid. pp. 96-7.
 Ibid. p. 89.
 Ibid. p. 87.