Jeffrey Winters on Oligarchs, Wealth Inequality and Indonesia

Professor Winters specializes on oligarchs and elites spanning a range of historical and contemporary cases, including ancient Athens and Rome, medieval Europe, the United States, as well as Indonesia, Singapore, and the Philippines. His book, Oligarchy (Cambridge 2011), won APSA’s 2012 Gregory M. Luebbert Award for the Best Book in Comparative Politics. It has been translated into Indonesian and will also be published in Chinese and Spanish. His research, publications, and teaching focus on the areas of comparative and political economy. In addition to oligarchy, important themes in his work include state-capital relations, capital mobility and the structural power of investors, the World Bank, human rights, authoritarianism, and democratic transitions in post-colonial states. He has conducted extensive research in the region of Southeast Asia. Professor Winters is the founder and Director of the Equality Development and Globalization Studies (EDGS) program at Northwestern. He is also the founder and Chairman of the Board of Trustees of the Indonesian Scholarship and Research Support Foundation (ISRSF), and the Director of the Social Sciences Program at the Center for Public Policy Transformation (Transformasi), both in Jakarta.
Nadine Zahiruddin '24 interviewed Dr. Jeffrey Winters on on February 16, 2023.
Photograph and biography courtesy of Dr. Jeffrey Winters.

As Jokowi’s time in office comes to a close, the prospective candidates in the 2024 elections have caused many to question the future of democracy in Indonesia. Why do these elections arouse concerns that Indonesia is at risk of democratic backsliding?

By most political science standards, Indonesia had a transition to democracy which involved overthrowing a dictatorship followed by the rise of democratic institutions and practices. There is always a danger of quick reversal to authoritarianism, as we saw in Egypt or Myanmar. But Indonesia passed through that dangerous phase of democratic reversal and in fact, has now entered into two decades at least, if not more, of democratic consolidation. The military has not intervened and voting has occurred on time and in a competitive way. The media have remained free and critical. While all of those things are positive, there are also reasons for concern. 

These start with the desires we hear expressed by elites to no longer have direct elections of the President. We also recently heard criticisms of direct elections of governors, such that several parties are calling for having indirect ways of selecting governors, either appointing the governors by the president or having regional the People's Representative Council (DPRD) select governors. People need to be aware that there is a constant desire on the part of elites to streamline their ability to dominate and control the system. 

A second factor is that Indonesia's progress toward the rule of law has stalled and even been reversed. One of the most important institutions backing up the rule of law was the Corruption Eradication Commission (KPK). Remarkably, under the current government, it has been weakened. Increasingly there are signs that its powers are being abused. Insofar as political elites can intimidate members of society or members of other parties through using a powerful institution like the KPK, democracy is being undermined.

The final factor is that Indonesia's parties and party elites are demonstrating a disconnect from the masses. There is a gap between the chess game being played by elites at the top and what the people down below want. For example, it appears a game of alliances is currently being played to try to come up with coalitions of parties that are sufficient to nominate a presidential candidate. That process shows no connection whatsoever to the views or even the policy interests of the people down below. On the one hand, there are signs that Indonesia is doing a very good job, procedurally, in terms of maintaining the forms and procedures of democracy. On the other hand, there are questions about the quality of democracy and how representative it is. 

You have previously talked about the convergence of oligarchy and democracy, and we have seen this convergence in Indonesia over different periods since Orde Baru until today. Given the country’s concentration of wealth, do you ever see Indonesia moving away from this challenge? What is necessary for Indonesia to break from its tendency toward oligarchy and deepen its democracy?

The problem of oligarchic power, which is to say wealth power, is not just a problem that Indonesia faces; it's a global problem. We have to understand that there is a direct connection between wealth concentration and political power concentration—partly because money is the lifeblood of politics. Politics as a popular contest. The idea of contesting and campaigning for votes starts with things like name recognition, visibility, successful messaging, and reaching voters with that message. All of this is expensive. It costs money to do politics. How are they going to get money? Either money is drawn from society to support candidates and campaigns, or candidates have their own money and they just pay themselves. In that process of how to fund democracy, we have a fundamental structural problem. One of the key questions then is how to neutralize wealth power in the political process. 

There are a number of ways to do it. One is to say there is a limit on how much money any single individual can contribute to the political process. One of the problems with that is that there are open contributions and there is dark money. Dark money is how campaigns in many countries are funded. There's the open audited Election Commission, reporting on campaign financing. People inside the system say that dark money makes up the vast majority of money that is used in campaigns. Clearly, this is a challenge, but that's one way to try to limit how much money oligarchs can deploy.

Another way that the people can have influence is by crowdsourcing, that is small donations by many people. This can add up to enough money for candidates and parties to be able to operate. In Indonesia, there is almost no micro-financing of the democratic process. It is disturbing that the actual flow of money is to the voters rather than from the voters. That is something that can be reversed through political awareness and political campaigning. People need to be aware that concentrated wealth is not just an economic issue, it's a political issue. Concentrated wealth means concentrated power, and that creates a cycle. That is, those with tremendous wealth can use their money to prevent greater equality in society. Certainly, these issues are big, but they're not limited to Indonesia.

According to a 2022 Forbes article, the collective wealth of the 50 richest people in Indonesia has reached a record $180 billion. Due to wealth inequality many Indonesians are dissatisfied with the country’s political system that rewards connections and money instead of merit. Can you speak about the broader implications of Indonesia’s wealth concentration? What does it mean for Indonesia's development?

One of the biggest problems Indonesia faces is not just wealth concentration, but also how wealth is concentrated in the country because this has even greater implications for the country's future. Indonesia is predominantly an extractive economy. It extracts predominantly from natural resources. When we call it an extractive economy, it means that it is not a serious manufacturing industrial economy. Indonesia's wealthiest stratum has positioned itself to benefit from that extraction, rather than from manufacturing.

If the way elites and oligarchs are enriched is through extraction, which is more about dividing up the pie rather than growing the pie, then it becomes a game of what I have in other contexts called bagi bagi (“dividing the spoils”) politics. If the national game is one of who's getting what from a finite pie, then the game is how much are you getting? Imagine the difference if the economy is more industrial and manufacture-driven. Then the market for your goods is not just the Indonesian population, but the world. Then that pie can grow to an enormous level and enrich your population. Indonesia has felt neither a desire to restore, nor a desire to create, a new kind of power capacity through being a manufacturing giant.

The really pressing question is, why doesn't the Indonesia's leadership have a sense of great urgency to transform the country into one of the most impressive manufacturing industrial platforms in the world? The sad answer is because the oligarchs and elites are far too happy with the way things are right now. In other words, why should they bother with a very difficult process of transforming the economy and society? 

Why do you think this is happening? 

There are a couple of reasons for this. One is that Indonesia essentially unleashed one of the greatest traumas of the 20th century in the mid-1960s. Its most critical political wing was massacred and destroyed. That was then followed by three decades of authoritarian depoliticization. Even today, the fear that exists in society to be labeled progressive, critical, and so on means that people can be very quickly labeled as Leftist and that immediately shuts everyone down. The ghost of the 1960s still haunts Indonesian society even today. That means that it is very difficult to mobilize critical politics from below that isn't easily subverted and labeled dangerous by elites.

In addition, there's no external threat. An external threat can be a big focus for elites. For example, why did South Korea go from being behind Indonesia in the 1950s in terms of GDP per capita to being very rich today? The key answer is its fear of North Korea. The fear factor pushed the elites of South Korea to mobilize, manufacture, get rich, be able to buy advanced fighter jets, and produce tanks, bombs, and boats to make sure North Korea wouldn't threaten them. Why did Taiwan transform itself? Taiwan had to make sure that China could not easily take them over as a province. Why did Singapore transform itself? Because it was a Chinese enclave with a Malay minority. Singapore, if it wanted to exist, had to make sure that it was economically strong and globally connected. So, there are many cases in the world of economic transformation through fear. Indonesia's elites have no fear internal or external. 

Indonesia is currently at the crossroads between the U.S. and China, and has the potential to play an influential role, given the size of the population, its geographic location, and resources. Jokowi has also been maintaining relations with both countries relatively well. What does Indonesia need to do to become a bigger player geopolitically?

Indonesia is somewhat more visible, but not in a major way like Indonesia under Sukarno was. That said, we are seeing hints of it, like G-20 or being a major figure in ASEAN. But Indonesia is not really positioning itself as a major player at the global table. I would argue that Indonesia punches below its weight class to use a boxing metaphor. Indonesia has a lot more potential power and leverage, especially in its positioning between the US and China, than it uses. 

Years and years ago, I would ask two simple questions to young Indonesians, “what is the thing that makes you most proud to be an Indonesian?” What amazed me was how long the pause was, as they thought about it. Eventually, they would say things like, our delicious food, or our musical culture, or our Batik. But they didn't say things like we are a leading manufacturer of the world. We are the most dynamic, transformative economy of the world. Those aren't the answers they gave. And the second question I would ask is, “who is the Indonesian you most admire?” And there would again be a fairly long pause and then they would ask “can it be someone who's dead?” This means there weren't many Indonesians alive that they really held up as a figure of inspiration.

To have pauses like that is problematic. This means that young Indonesians today aren't seeing the leadership or finding a narrative about their own country about who they are, where they come from, and where they are heading. To be able to answer that, in an inspiring way, is what political and social leadership is all about. Where will that narrative for Indonesia come from? Who or what offers that kind of inspiration? It's a combination of voices. It can be an artistic figure. Sometimes it's a musician, whose music and lyrics inspire. Sometimes it's a religious figure. It can come from many different sources. Until you tap into ideas and values and imaginings, you can't unlock the energy of a population to bring great change. Chinese leaders were able to unlock a dynamic energy across China. The Vietnamese leadership is doing the same thing now. The South Korean leadership was able to focus the energy of the South Koreans. Indonesia needs to tap into its latent energy and capacity and do the same. 

Nadine Zahiruddin '24Student Journalist

State Secretariat of Indonesia, Public domain, via Wikimedia Commons

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