Endnotes

¹ Since overly racist references to the ethnic Chinese were, just like during the Sukarno era, frowned upon, the government and the public, specifically the mass media, used the euphemistic term ‘economically strong groups in society’ to refer to the ethnic Chinese, even though many ethnic Chinese were small businessmen rather than tycoons.

² These adverse factors include complicated licensing procedures; overlapping policies of the central and regional governments on investment; lack of legal certainty and weak law enforcement, labour market problems, security disturbances in some regions; an inefficient and corrupt tax system; and increased competition from other East Asian countries, particularly PRC and Vietnam, to attract foreign investment (Bappenas, 2003: I-13 – I.14).

³ These impediments include socio-economic unpredictability; a weak legal and judicial framework and implementation; business-unfriendly labour regulations, deteriorating physical infrastructure; rampant corruption in getting necessary licenses and taxation and customs clearance; and confusion by the unclear demarcation of authority between the central and regional governments after regional autonomy was introduced in early 2001 (Kinoshita, 2004: 9).

⁴ The term ‘small enterprises’ should be treated with some caution, as sometimes micro or cottage enterprises are sometimes also included in the category of small enterprises.

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Comment(s)

There are [2] comment(s) for this entry. Post a comment.

1. Thee Kian Wee
   (posted 09 May 2006 / 01:39:20 PM)
   
   Dear Mr. Cabalza,
   
   You are absolutely right that the ethnic Chinese, both totoks and peranakans have played and are still playing an important rule in the Indonesian economy. I did not mention this in my paper, as my focus was on how the perception on the part of several Indonesian policy-makers of Chinese economic dominance have shaped various policies to curtail Chinese economic activities in order to promote indigenous Indonesian entrepreneurship. Most of these policies have not succeeded in substantially reducing the economic role of the Chinese, although over time a growing class of indigenous Indonesian entrepreneurs emerged during the New Order era without, however, substantially reducing the economic role of the Chinese.
   
   While during the late Soeharto era much resentment arose in response to the growth of Chinese-owned and -controlled conglomerates, it is often forgotten that the large majority of Chinese business consists of the large number of small- and medium-scale enterprises (SMEs) operating in manufacturing, trade, transportation, restaurants, and other services, such as the many shops all over Indonesia selling auto parts, electronic products, auto repair shops, and various other economic activities which keep the Indonesian economy running. The surge of manufactured exports after the deregulation measures and trade reforms after the end of the oil boom was to a large extent due to foreign-invested, export-oriented plants from Korea and Taiwan and to the Chinese run garment firms and other firms producing labor-intensive products.
   
   Thank you for your good comment.
   
   THEE Kian Wie
   Senior Economist
   Economic Research Centre
   Indonesian Institute of Sciences
   (P2E-LIPI), Jakarta
2. Chester Cabalza
   (posted 27 March 2006 / 08:14:46 AM)
   
   It would have been ok if you also highlighted the significant roles of the totoks and peranakans (of Chinese descent) in the economic progress of Indonesia. Despite, some persecutions experienced by this minority group, they have at least contributed a lot to the escalation of the largest economy in Southeast Asia.