Capital development in Indonesia: Its impact on the political system

This study attempts to identify and characterize capital development in Indonesia. Specifically, why, after three decades of capital expansion and infusion of massive financial resources into the economy, has the emergence of an open political system and a democratic regime remained elusive in Indonesia?;Extensive documentary research conducted in 1996 and 1997, followed by a historical analysis, revealed the changing nature of the state. It was transformed from a political structure where power is shared between the executive and legislative branches and resources are lacking, toward a set of institutions where power is concentrated in the hands of Suharto, the military, and bureaucracy, and resources are ample. Additionally, the analysis showed that efforts to demand regularization of the state as well as political reforms by a variety of actors and groups from within civil society were futile due largely to the strength of the state.;Although the state-led capital development has brought significant changes to society, the bourgeoisie and middle class have remained weak and largely state dependent, while other subordinate classes, particularly the working class, incapable of organizing and mobilizing themselves. A comparison with South Korea's economic development, which eventually led to democratization, highlighted the relevance and importance of these structural configurations for initiating a democratization process.;The hypotheses offered to answer this question is that a strong state, characterized by a powerful patrimonial system and pervasive corporatist institutions which were constantly nurtured with capital resources, has prevailed upon the processes of capital accumulation and class formation in a post-colonial society. These political forces and resources, particularly the windfall from the oil-boom of 1974--82, have allowed Suharto and other state managers to form, manipulate, and control various weak and state dependent groups in society from within the New Order state.