Indonesia Investments wishes all Muslims a happy & generous Ramadan
25 May 2018 (closed)
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Indonesia is a constitutional democracy. After the fall of president Suharto's prolonged authoritarian New Order regime in 1998 various constitutional amendments were made in order to reduce effective power of the country's executive branch, thus making a new dictatorship almost impossible.
Indonesia is now characterized by popular sovereignty manifested in parliamentary and presidential elections every five years. Starting from the fall of Suharto's New Order, which marked the beginning of the Reformation period, every election in Indonesia is regarded to be free and fair. However, the nation is not free from corruption, nepotism, collusion as well as money-politics through which power or political positions can be bought. For example, the poorer segments of Indonesian society are 'encouraged' to vote for a specific presidential candidate on election day by being handed some small money at the ballot box. Such strategies persist and are used by all involved sides (which - in some respects - makes it a fair battle and thus different from the New Order era).
We consider such issues to be part of Indonesia's growing process towards becoming a full democracy (currently - based on the Economist Intelligence Unit's Democracy Index - the nation is still regarded as a flawed democracy). It needs to be emphasized here that Indonesia constitutes a young democracy and therefore experiences growing pains.
Political conditions are important for those who seek to invest or engage in business relations with Indonesia. In this section we present an overview of Indonesia's current political composition as well as overviews of the key chapters in the country's political history.
General Political Outline of Indonesia
This section concerns Indonesia's current political system. It discusses the role that religion (in particular Islam) plays in political decision-making and provides a brief outline of Indonesia's separation of powers (trias politica), namely the executive, legislative and judicial branches. Currently, Joko Widodo's Working Cabinet (2014-present) is in office. It will govern up to 2019 when new parliamentary and presidential elections will be held.
Pre-Colonial Period of Indonesia
Sources indicate that the archipelago contained multiple political entities from early on in its history. These various entities slowly evolved from political centers around individuals whose leadership was legitimized by the possession of certain skills and charisma to leaders who legitimized their hold on power by claiming to be godlike figures equipped with supernatural powers, supported by paid armies and a population that paid tribute to the king.
Colonial Period of Indonesia
The arrival of the Europeans, attracted by the promising perspectives of the spice trade, is one of the major watersheds in the history of the archipelago. Having more advanced technology and weaponry at hand, the Portuguese and - in particular - the Dutch succeeded in becoming influential economic and political powers that would ultimately dominate the archipelago and laid down new political frameworks and boundaries.
Soekarno's Old Order
Soekarno, Indonesia's first president, is rightfully seen as the icon of the nationalist struggle against the colonizers. But after independence had finally been achieved, he faced the difficult task of guiding a new nation, plagued by traumas from the past and conflicts of political and social forces in the present. It proved to be a too daunting task for the young and inexperienced generation of Indonesian politicians, resulting in the chaotic middle years of the 1960s.
Suharto's New Order
Suharto, Indonesia's second president, managed to rise to power during the turbulent 1960s. His New Order government, that was characterized by both economic development (resulting in an admirable poverty reduction) and suppression as well as corruption, would rule Indonesia for more than thirty years. However, when the booming domestic economy - the main pillar of his legitimacy - collapsed in the late 1990s, Suharto quickly lost control of power.
Reformation Period of Indonesia
After decades of authoritarian rule, Indonesian politics were to be reformed in order to give the Indonesian people more power in the process of political and economic decision making. This new period is known as the period of Reformation and is marked by structural changes (such as the decentralization of power to the regions and limits to the power of the presidency), but also marked by continuities (such as the continuation of corruption, poverty and clustering of capital at society's elite).
Current Cabinet of Indonesia
This section displays an up-to-date list of members in President Joko Widodo's current cabinet - called the Working Cabinet - which was inaugurated on 27 October 2014 and is expected to govern until 2019 when new elections will be held. Widodo is allowed to participate in the presidential elections of 2019 as the constitution allows two terms (each covering a five-year period) to the Indonesian presidency. Since the inauguration there have been made several changes to the composition of the Working Cabinet.