The Case of Indonesia's New Order

Why has the process of democratization in Indonesia been so slow despite fast economic growth? What are some of the important factors that have accounted for this situation? This chapter attempts to answer these questions.

Indonesia under the New Order has had at least two periods of quasi-democracy. The first was during the early years of the New Order (1966-74), and the second commenced from 1988. In the period 1966-74, Indonesia experienced what a noted Indonesian journalist Mochtar Lubis called a blossoming of freedom (Kompas, 8 March 1992). Power was shared among various power centres, and freedom of the press and expression was allowed. However, this period ended when students from various universities in Jakarta started to protest against the goverment.

The first protest occurred in 1968 against the increase in the price of rice and resulted in the government regulating the price along with the establishment of logistics bodies (Bulog or Badan Urusan Logistik) to regulate the distribution of rice and some other basic commodities. The second protest involved student demonstrations in 1974 against visiting Japanese Prime Minister Tanaka on the role of Japanese investment in Indonesia and the rest of Asia. This protest was known as the Malari affair. All these protests were not handled by the government through participatory measures but by political engineering which tended to decrease public political participation (Mas'oed 1989; Muhaimin 1980; Sumitro1991; Budiman 1991).

 Learning from the above incidents, the government tightened its grip during the period 1975-88. Critics were no longer tolerated, and the press were forced not to publish any news considered by the government as dangerous and which would threaten political stability. This policy of reducing political participation was supported by some leading economists who viewed stability as crucial to economic development. During the regime of Soekarno, the economy was in dire straits and by 1965 inflation was spiralling to over 600 per cent. Some argue that such a situation occurred because of government policies that gave too much attention to politics.

The 1980s can be viewed as a period in the development of Indonesian politics under the New Order government. During this decade and beyond there were hopes for an acceleration of the democratic process since the government began to introduce what it called keterbukaan politik (political openness). However although political liberalization has been affected, some remain sceptical about how far it will go and whether democratization can be felt by the people in their daily lives? There are some who believe that the position of the state remains much stronger vis-a-vis society, although there have been much progress in social and economic conditions. If this is the case what factors are behind this situation? Or, why is the present state of Indonesia still categorized as semi-authoritarian in the midst of social and economic progress? To answer these questions, it will be necessary to describe the present economic and political situation.

(Continued on title : "The Growth of the Economy")