Indonesia's Economy: Socio-Political Challenges in the New Order

Socio-political challenges post- New Order

Suharto’s New Order regime was blatantly corrupt and filled with nepotism, this mixed with the aftermath of the Asian Financial Crisis left a legacy of socio-political challenges for subsequent reformasi governments. These challenges include the legacy of authoritarianism, corruption, depoliticised civil society, a powerful military and an inefficient judiciary and government. (Pohlman) The different reformasi governments failed to comprehensively resolve these challenges, leaving Indonesia riddled in uncertainty, and thus leading to its economic sluggishness.

ALL NEW RESEIMES ARE HARD TO IMPLIMENT SO MAY OF CONTRIBUTED TO THE ECONOMIC CLIMATE -

Government & Business

The post- New Order regimes have had to try and manage the aftermath of the Asian Financial Crisis (AFC), while simultaneously dealing with the repercussions of the Suharto regime. An area that this greatly impacted was the Indonesian business sector, which was struggling between the flight of the capital during the AFC, the IMF regulations and changes, and its corrupt business culture. Ultimately the new governments failed to properly address these issues creating an uncertain business and economic environment. The New Order regime left a lasting legacy of cronyism and nepotism, this opaque culture managed to survive the transition to democracy as it served both the political and business elite. The private sectors gains have often come at the expense of public welfare and the elite have used their political influence to block threatening reforms and to protect their interests. (Hamilton- Hart)

The Indonesian government has consistently failed to address certain concerns of international businesses and as a result has...

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... was unprecedented. Never in the nation’s history had anyone seen a full scale conflict based on religious lines and ethnic warfare. The catalyst of it all did lead to violence, but the context and developments over the years made it ripe for carnage on an unparalleled scale. Government is one of the major causes why Indonesia’s economy, while not in the doldrums, is far from its true potential. The freedom in democracy created many civil society groups and in the Maluku conflict, the jihadist groups raised volunteers that again prolonged the violence and chaos in the region.

Business requires certainty, rule of law and respect for contracts and property rights. Under Suharto’s Indonesia, all were respected and the military were upheld this peace at a bloody price. Society was shackled, rights were limited, but the economy grew and life was more or less, stable.