Local Politics and Chinese Indonesian Business in Post-Suharto Era

Abstract

This article examines the relationships between the changes and continuities of Indonesian local politics and Chinese Indonesian business practices in the post-Suharto era, focusing on Chinese Indonesian businesses in two of the largest Indonesian cities, Medan and Surabaya. The fall of Suharto in May 1998 led to the opening up of a democratic and liberal space as well as the removal of many discriminatory measures against the Chinese minority. However, due to the absence of an effective, genuinely reformist party or political coalition, predatory political business interests nurtured under Suharto's New Order managed to capture the new political and economic regimes. As a result, corruption and internal mismanagement continue to plague the bureaucracy in the country and devolve from the central to the local governments. This article argues that this is due partially to the role some Chinese businesspeople have played in perpetuating corrupt business practices. As targets of extortion and corruption by bureaucratic officials and youth/crime organizations, Chinese businesspeople are not merely passive and powerless victims of corrupt practices. This article argues, through a combination of Anthony Giddens's structure-agency theory as well as Pierre Bourdieu's notion of habitus and field, that although Chinese businesspeople are constrained by the muddy and corrupt business environment, they have also played an active role in shaping such a business environment. They have thus played an active role in shaping local politics, which is infused with corruption and institutionalized gangsterism, as well as perpetuating their increasingly ambivalent position.