“THE RE-EMERGENCE OF GLOBAL GOVERNANCE IN INDONESIA AND THE OIL CRISIS IN THE 1970s”
Farabi Fakih
Lecturer/Assistant Professor of Asian History
Department of History, Faculty of Cultural Science
Universitas Gadjah Mada
This research looks into competing global governance structures emerging in Indonesia in the late-1960s up to the late 1970s. In 1975, the Indonesian national oil company, Pertamina, which at the time was the largest company in Asia outside of Japan, went bankrupt. The crisis brought forth competing flows of finance, norms and governance that are global in nature. Since the late 1960s, western, i.e. American aid through the World Bank (IBRD), the IMF and State Department and the Inter-Governmental Group on Indonesia, developed strong relations with the Indonesian technocracy. They coordinated with the technocracy in determining policies and planning. At the same time, significant oil and gas investments occurred through the Pertamina oil company, which under its head General Ibnu Sutowo, developed their own relationship with global bankers, businessmen and criminals. The expanding flows of aid and oil money became increasingly intertwined with norms and ideas on governance, economic development, corruption, mismanagement and state versus market-led models. These competing normative structures occur within the backdrop of the gradual shift towards financialization, the OPEC embargo and oil crisis and the general emergence of neoliberalism. This research looks into this global shift from the periphery of a minor-oil producing nation and how competition between oil money and aid money played out. It also looks at the history of neoliberalism by placing Indonesia as a central player and field in this shift.