country’s changing economy. Many scholars
examine on the development of capital by
emphasizing different questions, such as: why and
how is the role of the government in facilitating the
process of accumulation, how is the characteristics
of busiess and politics relations, how economic and
political change affects the relation of business and
government, why the development of capital is so
vulnarable to corruption for the country in
promoting democracy. They also develop differnt
approaches in analyzing the changing of polics and
economy in Indonesia. There are two different
approaches: the modernization-functional approach
and structural-Marxism approach. Modernization-
functional approach assumes that development of
economy is a pivotal instrument in promoting
democracy. Conversely, structural-Marxism
approach is pessimistic that integration of
Indonesia’s economy into the global economy
(development of economy) would bring to
democracy.
Most important issue of those studies examine
the important role of the government (state) in the
development of capital. The state played significant
role to the emerge of big companies in Indonesia
(Robinson, 2008; MacIntyre, 1994). Another
interesting issue of these studies also highligt that
rent-seeking activities is important aspect to the
development of capital. Rent seeking is not only the
characteristics of the development of capital in
Indonesia. Rent seeking is also important aspect of
the development capital in most industrializing
economy of East Asia. Rent seeking is adopted to
promoting and protecting infant industries. Rent
seeking, therefore, should be temporary along with
the advanced of the economy. Jomo and Sundaram
(2000) explained that rent seeking can be legal and
illegal prectices.
Why state played dominant role in the
development of economy and capital? According to
modernization-functional approach, developing
countries are ‘under-develop society’ in social,
economy and politics. The under-development of
developing countries roots as internal problems.
States in most developing countries should play as
an “agent of social change” or as an “agent of
development”. States in developing countries are
also responsible to devepment of nation-building.
The development of economy is a necessary
condition or prerequisite to development of
democracy. Conversely, structural-Marxism
approach has different asumption in understanding
the under-development of developing countries or
theThird World countres. Under-development roots
as external problems. What does it mean with
external problem? The external problem in this case
relates to globlal system that is conflictual and
exploitative. The under-development of developing
countries was caused by their historiacal experience,
colonialism. Colonialsm was responsible to the
under-development of developing countries. The
development of economy that promoting integration
of deveping economy in global would only bring the
Third World into “under-development”. Why state
plays dominant role in development of economy
according to structural-Marxism has different
argument with Modernization-functional one.
According to Structural-Marxism, state played a
significant role in the development of economy
because state is the only dominant social forces in
the society. Hamzah Alawi promotes the concept of
‘autonomous state’ in describing states of
developing countries in post colonialism. Robinson,
the proponent of Structural-Marxism, explaines the
dominant state of Indonesia by examining the
origine the New Order state. According to Robinson
(1985, p: 300-3006), state was the only dominant
social forces in the society because of (i) weakness
of social classes, most imprtantly the absent of a
powerfull national bourgeoisie, (ii) the failure of the
state in promoting import substitution
industrialization, and the failure of social revolusion.
All of those factors left the state the only social
dominant in Indonesian society. The role of state
become so important in the economy following the
increasing financail capacity, especially in 1970s
and 1980s.. But, the economic crisis, both in mid of
1980 and 1997, weakened the role of the state in the
economy.
The development of economy sponsored by state
has encourgaed the accumulation of capital and the
emerge of big businesss. As Robinson (in Robinson,
1985, p: 323) stated that “those business groups
which have florished in Indonesia have so far
benefited greatly from access to licenses, import
monopolies, construction and supply contracts,
credit, distributionships, and forestry concessions
allocated by power center within the state
apparaturs. In this case, the state plays important
role in distributing ‘rent’, by providing licenses,
monopolies and concessions. Rent seeking, thefore,
was strong characteristics in the development of
capital. Anoter important aspect on the development
of capital is how to get access of power to state
apparatus. In this case, political link is important
element in the relation of business and politics.
Therefore, patrimonialism is strong characteristics of
the development of capital in Indonesia.
How patrimonialism works in the development
of capital? Robinson (1985, p: 123) argued that “the
relationship between state and capital is, to a
signifiacnt degree, a relationship between specific
power groups and specifics companies where in the
success or failure of individual companies is heavily