Changing Patterns of Political Contestation in Democratic Indonesia: The Case of Oil and Gas Policy

Abstract

Indonesia’s executive branch of government has had great difficulty in initiating policies, as it has faced constant opposition even from the ruling coalition in the legislature since democratization in 1998. Institutional settings that shape the relationship between the executive and the legislative branch and between a party and its members provide incentives for legislators to oppose government policy. This paper aims to identify the patterns of political contestation in Indonesia’s democratic era. To this end, it examines liberalization reform in the oil and gas sector and its policy implementation to explain the reasons why legislators have opposed the government from 1998 to 2009 when the institutional setting surrounding the executive branch and legislators changed most significantly.

The government under President Wahid was the first to initiate liberalizing reform of the oil and gas sector and to submit a bill. This ended up in failure as the direct confrontation with the major parties led to Wahid’s impeachment under the 1999 and 2000 amendments of the 1945 Constitution, which restricted the president’s power. Subsequently, the Megawati government resolved the conflictual relationship with the major parties and succeeded in enacting the bill. Also, to prevent destabilizing the government as a result of legislators’ attempts to impeach presidents in the future, the constitution was amended again in 2001 to involve the constitutional court in verifying any wrongdoing of the president during the impeachment process.

Having completed all of the constitutional amendments, Yudhoyono became Indonesia’s first directly elected president in 2004. The government tried to secure stability in building a majority coalition under the separation of powers. However, as this paper shows, in the case study of Cepu block, an oil field on Jawa island, opponents from the opposition party and the ruling coalition consistently criticized the government’s promotion of liberal policies in the oil and gas sector. Institutional changes, such as drastic decreases in party subsidies, and the semi-open party list system certainly motivated the opponents to earn the electability by their own so that they can win seats in the next election.

Therefore, the institutional settings of the constitution and the party system, which had shifted from 1998 until Yudhoyono’s first-term presidency, had a significant effect on the patterns of political contestation in each government. These changes, prompting either intra-party or individual competition among legislators, accelerated the political contestation between the executive and legislative branches as well.