Indonesia in the New World: Globalisation, Nationalism and Sovereignty
Arianto A. Patunru, Mari Pangetsu and M. Chatib Basri (Eds)
Singapore: ISEAS Publishing: 2018
Since President Joko Widodo took office in 2014, Indonesia has wrested control of at least three major mining operations from the hands of foreign contractors, which have long run many of the country’s extractive industries. The Batu Hijau copper and gold mine, in West Nusa Tenggara, was transferred from US Newmont to local company Medco; the Mahakam oil-and-gas block, in Kalimantan, from French and Japanese interests to state-owned Pertamina. Control of the Rokan oil field, in Riau, which accounts for about a quarter of the country’s oil output, will shift to Pertamina, from Chevron, in 2021. Meanwhile, the government has been in a long tug-of-war in Papua with Freeport-McMoRan over one of the world’s largest gold reserves.
History may not be on Indonesia’s side. In 1955, the government nationalised all Dutch business interests in oil and gas and plantations, with disastrous consequences for the economy. That was then, when Indonesia had been an independent nation for only ten years. Things have changed, and there now seems to be no stopping the government when it comes to assuming more control of the country’s economic resources. Yet the rhetoric used in today’s boardroom battles is not so different from that used in 1955: nationalism and sovereignty, and the idea that Indonesia has to control its own resources and determine its own destiny.
This new developmentalism in the mining sector is “premised on the notion that the state should intervene in markets in order to protect and boost local companies, support state owned enterprises and develop domestic champions as agents of industrial development”, writes Eve Warburton, one of the contributors to Indonesia in the New World: Globalisation, Nationalism and Sovereignty. This edited collection provides glimpses of the struggles of the world’s fourth most populous country in coming to terms with its newfound power. The subtitle aptly defines the three key forces that Indonesia needs to address as it searches for its rightful place in the world, one commensurate with its size.