Extractive Regimes Toward A Better Under

Rural Sociology 75(1), 2010, pp.
28–57
Copyright © 2010, by the Rural Sociological Society
Extractive Regimes: Toward a Better Understanding of

Indonesian Development
Paul K. Gellert
Department of Sociology
University of Tennessee
Abstract This article proposes the concept of an extractive regime to

understand Indonesia’s developmental trajectory from 1966 to 1998. The
concept contributes to world-systems, globalization, and commodity-based
approaches to understanding peripheral development. An extractive regime is
defined by its reliance on extraction of multiple natural resources in the
formation of an economic and political order that is also supported by global
and regional forces. After elaborating the concept of an extractive regime, the
article illustrates it through examination of Indonesia’s developmental trajec-
tory from its formation in the post–World War II era to its firm establishment
during Suharto’s New Order. Although a comprehensive study would necessi-
tate attention to the full panoply of commodities, the study illustrates some of
the workings of the extractive regime in the timber and fisheries sectors, which
share spatial extensivity and other characteristics. The article concludes by
considering the future of the extractive regime in Indonesia amid democrati-
zation and continued class domination and by offering suggestions for further
application, specification, and extension of the extractive regime concept.
Indonesia as an Extractive Regime: Development and Crisis Revisited

A decade after the Asian financial crisis of 1997–98 and on the eve of the
2008–2009 global crisis, Indonesia was once again being touted for its
economic growth and developmental potential. The World Bank’s East
Asia and Pacific Office optimistically referred to the emerging Asian
economies and featured Indonesia as a prominent member (World
Bank 2007).1 After suffering the worst socioeconomic effects in South-
east Asia from the 1997–98 crisis in terms of currency devaluation (over
70 percent), budget cuts, negative growth rates, and declines in employ-
ment (Hill and Shiraishi 2007), Indonesia’s economy was projected to
resume its three-decade record of 6 percent growth and reach 6.3 and
6.5 percent in 2007 and 2008 (World Bank 2007:1, table 1). However,
the basis for the return to growth is not the same as the much-touted
1
Boosters continue to tout Indonesia’s potential. I recently subscribed to the World
Bank’s “East Asia and the Pacific on the Rise” blog. On February 25, 2009, a World Bank
staff person posted “Underrated Indonesia Poised to Enter Global Stage,” in which he
praised Indonesia’s recovery, debt reduction, and democratization as signs that Indonesia
would become a global player for the first time since hosting the nonaligned movement
in Bandung in 1955. See http://eapblog.worldbank.org/content/underrated-indonesia-
poised-to-enter-global-stage.
Extractive Regimes — Paul K. Gellert 29
manufacturing miracle of the 1980s (World Bank 1993). Growth is being

led by consumption with some growth in components exports to China
for downstream production. Export growth is concentrated on basic
commodities like rubber, palm oil, and coal, due to high international
prices (World Bank 2007:40). Attracting foreign and even domestic
investment remains challenging due to perceived corruption and lack of
political consolidation (Chia 2007).
At this historical juncture it is useful to reflect on the prior three
decades of developmental “success” and the political longevity of Suhar-
to’s New Order from 1966 to 1998. This article proposes to reframe
Indonesia’s experience in terms of the power of an extractive regime.
The extractive regime relied on a combination of developmental and
predatory practices in which states “extract at the expense of society”
(Evans 1995:12). The combination has, in turn, been supported by
exports of multiple extractive commodities, including oil, gas, timber,
and minerals. This reframing rejects the ideological see-sawing in policy
circles and academic writing—for example, from development miracle
to hotbed of crony capitalism and now back to (potential) miracle (Palat
1999; Wade 1998). Such oscillations are representative of false develop-
mentalist hopes and ignore persistent structural inequalities in the world
capitalist system (Arrighi 1990; Rist 1997; Wallerstein 2005). They also
reveal a bias in favor of neoliberal opening of markets and economy to
foreign capital and ownership.
Beneath the ideological debates lie important questions about the
foundations and limitations of uneven development in Indonesia. To
capture the essence of these issues, this article proposes the concept of
an extractive regime and illustrates the concept through the historical
case of Indonesia. This concept is based on the insights of a world-
systems approach to political economy (Arrighi 1994; Wallerstein 1974)
and a commodity-based approach to raw-material extraction and export
from the periphery (Barham, Bunker, and O’Hearn 1994; Bunker 1992,
1994; Bunker and Ciccantell 2005). An extractive regime is not a timeless
or abstract form of capitalist development but a historically produced
and concrete form. Its conceptualization emerges from less deductivist
and functionalist methodologies (McMichael 2000; Paige 1999) to con-
struct nuanced, historically produced understandings of the hierarchical
workings of global capitalism and hegemonic power (Arrighi 1994;
Arrighi and Silver 1999; O’Hearn 2001; Tomich 1997).
World-historical approaches take states to be produced relationally
within a global hierarchy of nation–states. Nation–states are, by defini-
tion, not independent units of analysis but situated within a global
system of commodities produced through linked chains of production
30 Rural Sociology, Vol. 75, No. 1, March 2010
and consumption (Gereffi and Korzeniewicz 1994; Robinson 1998). The

commodity-based approach of Bunker and his colleagues builds on this
world-historical analysis while taking seriously the irreducible impor-
tance of the biogeophysical characteristics of commodities and their
extraction, processing, and trade to the downward developmental tra-
jectories of peripheral regions of extraction (Bunker 1984) and the
ascent of global hegemonic powers (Bunker and Ciccantell 2005). More
broadly, their approach fits within a literature on the dynamics of econo-
mies more closely linked to “nature” than industrial economies (Boyd,
Prudham, and Schurman 2001). Combining the two approaches leads to
new insights into and questions about the developmental trajectories of
peripheral nation–states.
An extractive regime is defined by two basic characteristics. First,
extraction of natural resources forms a significant basis for the produc-
tion and accumulation of value. In an important departure from the
“resource curse” literature, however, more than one resource export is
important to the economy (Ross 1999). Second, an extractive regime is
a resilient economic and political regime of growth and accumulation
that can withstand crises and last for years if not decades. In addition to
economic stability, the regime relies on political domination and legiti-
mation to sustain itself over such long periods.
Two benefits derive from adding the concept of an extractive regime
to the literature on states, resources, and globalization. First, the concept
adds specificity to the categories of periphery, semiperiphery and, poten-
tially, even core. Peripheral and semiperipheral nation–states are fre-
quently lumped together in world-systems analysis, despite the diversity
of their economic size, export composition, class structure, political
regime, domestic inequality, and other dimensions. The analytical
power in the tripartite world-systems structure of nation–states is
strengthened by further differentiation within the broad categories.
Extractive regimes often form in the periphery but differ from other
peripheries in the relative importance of natural-resource-based exports
over labor-intensive ones. This difference has important implications for
patterns of social, political, and environmental relations and outcomes.2
Second, the concept of an extractive regime contributes to our under-
standing of how specific commodities affect the emergence, duration,
and dynamics of economic and political regimes. In recent years,
increased attention has been focused on understanding the role of
natural resource extraction in world-systemic processes. Bunker and
2
To be sure, extraction also occurs in the core (e.g., Dunaway 1996; Leitner 2004), so it
may be useful to extend this concept to such internal peripheries. However, the wider
effects of extraction on the national political economy may be weaker in the core.
Ciccantell (2005) offer an exemplar of how to “integrate systematically

both physical and political economic considerations” (Bunker 1994:449)
in a plausible argument about the rise of hegemonic powers. Their study
leaves open questions about the relationship between the biogeophysical
and the political-economic considerations in the numerous states that
remain in the periphery despite attempts to rise in the global hierarchy.
In these cases, studies of the resource curse (Ross 1999) argue that
resources cause undemocratic and “kleptocratic” states (Evans 1989;
Hutchcroft 1998).
The extractive regime approach is more historical than the other
approaches. It rejects universalistic assumptions (e.g., resources are
always “bad”), ideal-typical methodology (e.g., states can be categorized
on a continuum from developmental to predatory), and teleological
thinking (e.g., that such states will eventually move toward the develop-
mental end of the continuum). Predatory accumulation strategies,
relying less on direct labor repression, can be legitimated through prac-
tices that appear developmental, and they can endure for long periods.
Because the reproduction of their conditions of production (O’Connor
1998) relies on commodified (socio)nature (see Gellert 2005a; Swynge-
douw 1999), extractive regimes may face specific resource-based limits,
but such limits can be tempered by the multiple resources that support
them.
This article uses the case of Indonesia, particularly the New Order
period from 1965 to 1998, to develop and illustrate the concept of an
extractive regime. The World Bank and neoliberal scholars have touted
Indonesia’s appearance of manufacturing success (e.g., Hill 2000; World
Bank 1993), but this appearance is belied by continued reliance on
natural-resource-based exports. As Anne Booth (1998) recounts, Indone-
sia has relied on multiple commodities since the colonial period. Some
scholars have analyzed Indonesia’s more recent development through
the lens of oil booms and busts, the revenues available to Indonesian
leaders, and efforts to attract foreign capital (Smith 2007; Winters 1996).
However, they have paid insufficient attention to the extraction of mul-
tiple natural resources in oil, gas, minerals, fisheries, and tropical timber
that have been significant to Indonesia’s development. These resources
have affected domestic patterns of accumulation and bolstered President
Suharto’s rule for 30 years. These patterns may even endure in the
post-Suharto period of democratic reform, as the power of dominant
actors continues to prevail in what Hadiz and Robison dub an “illiberal”
polity (Hadiz and Robison 2005; Robison and Hadiz 2004).
The article first elaborates more fully the concept of an extractive
regime by describing how we can combine the world-historical and
commodity-based perspectives for enhanced understanding. Then it

examines the historical formation of Indonesia’s extractive regime from
the complex and multiple causal relations among international,
regional, and national processes and material and ideological factors
built on the foundation of multiple extractive commodities. In order to
illustrate the extractive regime, this section summarizes the enduring
importance of multiple resource commodity exports to Indonesia’s
economy. Next, it examines the timber and fisheries sectors because of
their significance among nonoil sectors. The aim here is to illuminate
the contradictory processes through which commodity characteristics
facilitate accumulation, affect sociological and political relations under-
girding the regime, and yet face socionatural limits and potential decline
(Gellert 2005a; Swyngedouw 1999). Finally, the article concludes with
suggestions for other areas, both geographic and conceptual, where the
concept of an extractive regime might be applied or extended.
Extractive Regimes: Combining World-Historical and

Commodity-Based Approaches
An extractive regime is a sociopolitical formation that relies for its power
and longevity on extraction of natural resource wealth as commodities
and on the importance of these commodities to the world-system’s core.3
Extraction of natural resources, the oft-forgotten material basis of capi-
talist production, is the direct foundation of the regime’s wealth. A
durable economic and political regime with longevity based on a degree
of legitimacy is historically produced on that material foundation. The
concept of an extractive regime offers a more complex and holistic
understanding of state formation than sociological analyses of the
impact of resource extraction on local communities (Freudenburg 1992;
Peluso, Humphrey, and Fortmann 1994) or political science approaches
to natural resources that separate the economic from the political (Ross
1999).
Extractive regimes feature four distinguishing characteristics. First,
they provide fiscal resources to the state without the burden of building
the large meritocratic and effective state capacity touted in the statist
literature. The characteristics of the multiple commodities extracted and
the industrialization of related sectors substantially shape the state, social
3
Even though extraction occurs at all locations in the world-system, the concept of an
extractive regime is not generally applied to core states because coreness has never been
correlated with the dominance of extractive commodities. Also, although consumption
occurs in the periphery and semiperiphery, these zones contribute less to global
accumulation.
relations (including labor relations), and development trajectories (e.g.,

Bergquist 1986; Shafer 1994). Although labor regimes may be as exploit-
ative as those in labor-intensive peripheries (Deyo 1989), the amount of
labor needed for extraction and accumulation is usually less. Second, the
state both accesses and uses the resources via a regime of domination
tempered by legitimation. The domination may not be as extreme as in
kleptocratic states such as Mobutu’s Zaire. Legitimation rests on claims
that extraction benefits the public good, despite the regime’s frequent
appropriation from areas of contested control by indigenous groups and
high levels of private accumulation. Legitimation is further bolstered by
social spending, albeit in limited amounts. Typically, extractive regimes
are not progressively redistributive, although recent Latin American cases
raise this possibility. Third, extractive regimes have a spatiality that is
specific to the resources in question—enclave for minerals and spatially
extensive for timber and fisheries—with only limited malleability by
human intervention. Fourth, extractive regimes emerged in a parti-
cular world-historical period in which domestic control of resources in the
service of “development” was both legitimate and legitimated by the
state(s) that took such control. Thus, their present trajectory is uncertain.
Delineation of these characteristics of an extractive regime builds on
world-systems and commodity-based approaches. World-systems analysis
provides structural expectations about the limited possibilities of periph-
eral nation–states to advance in the global hierarchy. Some analysts
assert that, due to the legacies of the colonial period, peripheral states
experience structural constraints resulting in a persistent lack of devel-
opment and high levels of inequality (Mahoney 2003). But such research
is vulnerable to criticism of its encompassing analyses and comparisons
that predetermine outcomes in different parts of the world (McMichael
2000; O’Hearn 2001). In more nuanced versions of world-historical
analysis, nation–state cases are analyzed in a comparative perspective
that neither assumes a priori the shape of the totality being investigated
(McMichael 2000; Tomich 1997) nor underestimates the importance of
investigating “geo-historical ‘individuals’ with a specific pre-colonial,
colonial and post-colonial heritage which endowed them with different
capabilities to cope with change” (Arrighi 2002:24). This article exam-
ines the case of Indonesia to pursue this world-historical understanding
of an extractive regime.
The extractive regime approach differs from the influential neo-
Weberian typology of states situated along a spectrum from develop-
mental states, such as South Korea, to predatory, kleptocratic ones,
such as Zaire (Evans 1989, 1995). The ideal-typical approach to states
lacks attention to world-historical position and to particular export
commodities in shaping state formation. Also, it neither directly

addresses resource exporters nor provides sufficient analysis of the his-
torical factors leading to the emergence of state types (Kohli 2004).
More than just a type of state, an extractive regime combines “domestic
socioeconomic conditions and international relations” (Pempel 1999:
138). Its formation within Indonesia is based in multiple commodities,
including metals, minerals, oil, and gas (Ascher 1998; Bresnan 1993;
Robison 1986; Smith 2007; Winters 1996).
Commodity-based approaches, by contrast, highlight the importance
of specific commodity characteristics, from global supply and demand at
particular historical periods to geographical, topographical, and physi-
cal characteristics of extracted matter. In his examination of the
Amazon, Bunker (1984) argued that extraction led to the social disor-
ganization and ecological disruptions of underdevelopment and that the
state failed to bring development. More recently, Bunker and Ciccantell
(2005) utilize but criticize Arrighi’s (1994) notion of systemic cycles of
accumulation in the world-system for the latter’s emphasis on financial-
ization of the world-economy. Their focus on the organization of extrac-
tion and transport into generative sectors by successive rising hegemonic
powers (Holland, Great Britain, and the United States) offers little
understanding of efforts of peripheral states to reshape accumulation
processes.
The spatial and temporal dimensions in a world-historical approach
meld fruitfully with the emphasis on natural, biogeophysical constraints
on social agency of a commodity-based approach. Extractive economies
are shaped by the intersection of the specific physical characteristics of
commodities with extant topographies, markets, and technologies
(Barham et al. 1994; Bunker 1994). Nature-based industries encounter
constraints, as well as surprises and opportunities, in extraction, trans-
port, and processing (Boyd et al. 2001). For core powers and aspiring
hegemons, manipulation of matter and space are crucial to ascent
(Bunker and Ciccantell 2005). For peripheral powers (Bunker 1984;
Talbot 2002) and extractive regions within core powers (Bridge 2000;
Dunaway 1996; Leitner 2004), the possibilities for ascent are more
daunting but the outcomes are still not predetermined. Attention to the
specificity of extraction leads one to question sociological and develop-
mental assumptions that privilege industrialization. Such assumptions
treat the rural/natural nexus as residual, backward, and destined to
disappear through industrialization of the rural and dematerialization of
the natural (Boyd et al. 2001; Coronil 1997).
The concept of an extractive regime is developed historically from the
case of Indonesia and its complex set of factors: (1) not a single domi-
nant resource export commodity but multiple resource commodities;

(2) a developmentalist trajectory and ideology; and (3) largely exclu-
sionary political and social practices. Extraction of naturally based com-
modities has been important for hundreds of years and, except for the
manufacturing boom years of the 1980s and ’90s, extraction seems des-
tined to continue. Critical analyses of Indonesia have adopted the word
rejim from Dutch to describe Suharto’s New Order and evoke the conti-
nuities from colonial to postcolonial systems of multilayered exploitation
and export to the center of the world-economy (Anderson 1983).4
To be sure, not only the extraction of natural resources but also the
exploitation of peripheral labor is important for capitalist transforma-
tion and accumulation.5 Indeed, both extractive industries and labor-
intensive manufacturing characterized the New Order. However, the
nation’s designation as a manufacturing miracle implied a substantial
developmentalist shift from the former to the latter (World Bank 1993).
The argument advanced here, by contrast, is that the continued signifi-
cance of natural resource exports produced a particular pattern of
political, economic, and ecological relations in Indonesia during this
period.
Important differences distinguish resource-based from labor-
intensive exports. Natural-resource extraction often requires a longer
investment time horizon than labor-intensive manufacturing and is
subject to locational specificity and sunkness of investments in transport
and other inflexible technologies (Barham et al. 1994; Boyd et al. 2001).
Unlike in so-called footloose manufacturing, in which capital is highly
mobile, location cannot be shaped by human organization within
socially useful time frames, especially for minerals including oil and gas
but also for timber and fisheries. The productive areas of resource
extraction tend to be spatially dispersed at local and regional levels.
Although large numbers of people are sometimes employed in mining
and logging operations, these activities are less labor intensive than is
light manufacturing. Finally, economies of scale are inverse to produc-
tive economies; as geographically, socially, and technically accessible
supplies are depleted, unit costs rise and create “diseconomies of scale”
(Bunker and Ciccantell 2005:49).
4
For examples of usage of rejim, long common in activist circles, see the newsletter of
London-based nongovernmental organization Down to Earth (see http://dte.gn.apc.org/
40ila.htm) and the blog of journalist Andreas Harsono (http://andreasharsono.blogspot.
com/2005/08/gordon-bishop-untuk-suardi-tasrif-award.html). Academics, such as Geof-
frey Robinson, have also deployed rejim, for example in Indonesian in Robinson 2000. See
http://www.history.ucla.edu/people/faculty?lid=859.
5
This point was raised by an astute reviewer of an earlier draft and prompted this
clarification.
The extractive regime’s emergence and durability in Indonesia, even

in the face of crises, can be explained through a combination of inter-
national, regional, and commodity factors. In terms of international
effects, the colonial legacy led Indonesia’s first president, Sukarno, to
attempt to tread a nonaligned position in the Cold War, despite U.S.
intervention (Kahin and Kahin 1995). The legacy continued in the
alleged communist coup of 1965 and anticommunist genocide and
arrests of 1965–66, which the United States supported (Roosa and
Nevins 2005). President (Lt. Gen.) Suharto subsequently embraced an
anticommunist, pro-U.S. stance politically, militarily, and economically
(Simpson 2008). The nation’s production and export prowesses were
facilitated by inclusion in regional production networks centered in a
Japanese core that had begun during the World War II occupation
(Bernard and Ravenhill 1995).
An extractive regime is also the product of the developmentalist era.
In addition to the lack of historical and spatial independence of cases, a
world-historical approach emphasizes the importance of situating our
analysis temporally, including the timing, sequence, pace, and intensity
of social interaction. In this regard, we can apply McMichael’s (1996)
distinction between the contours of the “development project,” emerg-
ing in the post–World War II order under Bretton Woods institutions
and emphasizing nationally integrated circuits of production and con-
sumption, and the “globalization project” forming since the 1970s
around the dominance of finance capital (Arrighi 1994) and participa-
tion in the world market based on freely traded exports and constructed
comparative advantage. Both projects are ideological, but differentially
impact the struggles among states, firms, and other social actors in and
across space. In the development era, states such as Indonesia focused
efforts on creating autonomous and self-directed national development.
In the globalization project phase that has deepened under neoliberal-
ism, states focus less on national development than on fitting into export
niches in the global markets. The latter strategy has opened the door to
“accumulation by dispossession” when that dispossession can be justified
as bringing about export success (Harvey 2003). However, the continued
capacity and legitimacy of the extractive regime is likely to be altered
under such circumstances and thereby affect who benefits and how from
the extractive processes.
On the surface, extractive regimes often appear homologous to preda-
tory states that extract resources from the lands, waters, and people within
their sovereign borders in order to enrich their leaders. They seem
destined for failure both as political projects, due to the declining legiti-
macy of the thieves who have “stolen” or captured the state government
(Evans 1989), and as economic projects, due to the lack of sustained

growth and transformation of the economy (Ross 2001). In the literature
on Indonesia, Ross (2001:3) highlights “efforts by state actors to gain the
right to allocate rents,” but his analysis of “rent seizing” in Southeast Asian
timber polities falters on pluralist assumptions about the interest of state
actors in creating public goods and rational policies, such as sustainable
logging rates. Smith’s (2007) useful reevaluation of oil booms argues that
not all oil booms lead to unstable predatory states. An oil boom that
follows the consolidation of political order, for example that by Suharto
after 1965, may explain the regime’s longevity (Smith 2007). However,
this perspective underemphasizes the importance of oil and, like Ross,
pays insufficient attention to international factors, such as the role of
international financial institutions and military support in bolstering the
regime of extraction in Indonesia (Simpson 2008).
The extractive regime not only preys but combines predatory and
developmental elements in what Feith (1981) once called a “repressive
developmentalist” regime.6 Without attention to both world-historical
and commodity-based factors, it is difficult to explain how unpopular or
“failed” states suffering from perennial institutional breakdown have
endured in various locations across the periphery. But the Indonesian
regime accumulated capital and endured for over 30 years. This accu-
mulation provided material support for the repressive state power and
widespread underlying “terror” in Indonesia (Heryanto 2006) that was
tempered by only limited material development. Arguably the post–New
Order governments of the last decade are continuing some of the same
patterns of extraction and rule, although perhaps without as much state
terror.
The Formation of Indonesia’s Extractive Regime

Throughout the 1980s and 1990s, Indonesia’s New Order was held up as
a model of successful national development based on prudent economic
policy making. To mainstream analysts, Suharto’s combination of pre-
dation and development was evidence that “a patrimonial political struc-
ture is not fatal to capitalist economic development, at least at the early
stages of industrialisation” (Schwarz 1994:59). In a world-historical
frame, such combinations are legitimate to more powerful states and
firms in the world-system to the extent that access to key raw materials is
established and maintained. In other words, a certain amount of domes-
6
Foran (2005:20) similarly observes that reproduction of a dependent development
social system “requires a repressive state” for order when so much of the population is
suffering.
tic corruption may not be detrimental to the international reputation of

the regime. In fact, such international relationships are as important as
domestic fear and legitimacy-promoting projects in forming an extrac-
tive regime based on multiple extractive commodities.
The formation of Indonesia’s extractive regime began in the colonial
period but solidified during the post–World War II “development
project” era. Historically, Indonesian exports were “less concentrated by
commodity than in many other tropical colonies” (Booth 1998:207). The
leading export changed from coffee in the nineteenth century to sugar
(late nineteenth–early twentieth century) to rubber (twentieth century)
to petroleum (late twentieth century). Concentration peaked at 82
percent for petroleum in 1981, but the five leading commodity exports
accounted for 68 percent in 1900 and a strikingly similar 65 percent in
1990.
The geopolitical and ideological importance of Indonesia to the West
and especially the United States during the Cold War cannot be overes-
timated (Simpson 2008; Tyner 2007). President Sukarno, a leader of
Indonesia’s independence struggle against Dutch colonialism, had
attempted to steer a nonaligned nationalist-socialist course for Indonesia
between the two Cold War powers (Barker 2008). To President Eisen-
hower, Indonesia’s oil and mineral resources were “the richest prize in
all Southeast Asia” (Nevins 2007:48), justifying direct U.S. support for
(unsuccessful) secessionist groups in the 1950s (Kahin and Kahin 1995).
After several years of Sukarno’s increasingly anti-Western stance, includ-
ing nationalization of oil, mineral, and agricultural industries, he was
toppled in an alleged communist coup attempt in 1965. In the ensuing
political violence, the United States indirectly assisted the Indonesian
Army in the killing of up to one million members of the Indonesian
Communist Party and other groups (Cribb 1990; Robinson 1995; Roosa
2006).
Amid the violence, Suharto officially took power in 1966 and under
his New Order, the extractive regime was rapidly established in oil,
timber, minerals, and other commodities. Foreign investors were
courted in 1967 through a foreign investment law and international
tours to promote the new business-friendly political environment
(Winters 1996).7 The liberalized regime received substantial foreign aid
7
Smith (2007) finds it significant that oil revenue flows took several years to establish
and argues that consolidation of political institutions, especially Suharto’s Golkar Party,
was more important. However, the expressed interest of foreign capital was more imme-
diate. In 1962, prior to Sukarno’s fall, U.S. Secretary of the Treasury George Humphrey
had assessed forest products and minerals as being of potential interest to U.S. corpora-
tions (Thomas and Panglaykim 1967:83–85).
from Western nations (Robison 1986; Winters 1996)8 and was the
leading recipient of Japanese aid and loans. The World Bank offered
decades of financial support and lavish praise for what it saw as the “jewel
in the crown” of the Bank (Kapur, Lewis, and Webb 1997:493), including
Indonesia in its famous East Asian miracle report as one of the eight
high-performing Asian economies (World Bank 1993). The bank
believed the fundamentals were sound and argued that Indonesia was
moving in the right direction on financial and market liberalization,
especially after bank liberalization began in 1985 (Winters 1996).9
The economic results were impressive, although most observers
ignored the dirigiste elements of state involvement in the economy
(Rock 1999). The end of President Sukarno’s rule had been marked by
crisis with negative growth, staggering inflation, and partial withdrawal
from the global economy. In the late 1950s and early 1960s developmen-
talist period, the government had pursued efforts to create indigenous
national economic capacity (Robison 1993). Sukarno nationalized key
industries, notably oil and agricultural plantations, owned by Dutch and
other Western firms. He also snubbed foreign aid, and in 1964 dramati-
cally withdrew Indonesia from the United Nations.
Under Suharto, Indonesia opened its economy, foreign investment
returned, inflation was stabilized, and growth recovered. As a member of
OPEC, Indonesia became an oil boom state in the 1970s (Smith 2007;
Winters 1996), but a team of economists and technocrats dubbed the
Berkeley mafia ably “managed” Indonesia (Bresnan 1993). After a brief
dip when oil prices fell in the early 1980s, Indonesia implemented
financial reforms, and the economy had 7 percent growth in the late 1980s
and early 1990s. In addition to high growth rates, averaging over 5 percent
for three decades and close to 7 percent in the 1980s, the economic
performance has been praised for export growth and industrialization
(Hill 2000), as well as utilizing the oil windfall (Gelb 1988). State revenues,
especially from oil and foreign assistance, were used to employ a consid-
erable number of civil servants (e.g., in the state-owned oil company
Pertamina and the Departments of Agriculture and Forestry), to support
rice and fertilizer production, and to fund Presidential Instruction
8
The donors group was the Inter Governmental Group on Indonesia until 1995, when
Suharto rejected Dutch criticisms and the group was reorganized without the Netherlands
as the Consultative Group on Indonesia.
9
Ironically, bank liberalization became a focal point for criticism of KKN (Korupsi, Kolusi
dan Kepotisme or, corruption, collusion and nepotism) during the 1997 crisis because of the
crony relationships among banks and the Suharto family or sister companies of conglom-
erates. The Indonesian Bank Restructuring Agency (IBRA) established during structural
adjustment recapitalized many indebted conglomerates without much success at garnering
accountability (Barr et al. 2002).
projects to build schools and health clinics throughout the archipelago.

This project budget doubled to $304 million in 1974 and in the early 1980s
was two-thirds of the allocation to outlying regions (Smith 2007:131).
Near-universal primary education was achieved but with only modest
improvement in health indicators (Hill 2000:210–16). The Gini coeffi-
cient of inequality rose from 0.35 to 0.38 during the 1970s and then
returned to 0.32–0.34 in the 1980s and 1990s (Hill 2000:197). President
Suharto frequently glorified his government’s developmental achieve-
ments, but many questioned the politicization—and the accuracy—of the
data behind the claims (Hill 2000:199; Winters 1995, 2002).
The cultivation of an appearance of developmental success and the
move toward increasingly liberal economic policy making over the
decades must be placed within the regional context of growth and then
specified to the commodity exports of the extractive regime (Bernard
1996; Bernard and Ravenhill 1995; Burkett and Hart-Landsberg 2000).
Manufacturing exports exploded with growth of 20 to 30 percent per
year from 1980 to 1992 (Hill 2000:164). Rather than such growth being
an internal transformation, however, Indonesia and Southeast Asia gen-
erally were held in Japan’s “embrace” as export platforms (Hatch and
Yamamura 1996). Revaluation of the yen by the 1985 Plaza Accord and
the flows of capital that ensued created domestic manufacturing growth.
However, the export platforms continued to depend on Japan techno-
logically (Glassman 2003). Moreover, export earnings and profitability
began to decline by the mid-1990s—even before the crisis of 1997–
98—due to overproduction, competition from China, and organized
workers’ struggles (Glassman 2003; United Nations Industrial Develop-
ment Organization [UNIDO] 2000).
Crucially important to understanding the extractive regime, natural-
resource commodity exports flourished. Oil has been critical to Indone-
sia’s economic trajectory. Oil revenue relieved the “fiscal breakdown of
the state” (Smith 2007:79–99; Winters 1996:50). In the 1970s boom
years, oil provided almost half of governmental revenue (Booth
1998:187). After 1986, when world oil prices dropped, Indonesian
export value from oil and gas fell gradually to one quarter of export
revenue from 1994 through 2003 (Athukorala 2006:179, table 1). Indo-
nesia is now a net oil importer, but significant liquid natural gas exports
offset the declining oil revenue.
From the beginning of the New Order, multiple commodities have
been extracted and exported. The first foreign investor in Suharto’s
Indonesia was Freeport McMoran, which signed its contract of work with
the Indonesian government in 1967 for the enormous gold and copper
mine in Irian Jaya (now Papua Province). Over the next two decades
(1967 to 1989), 42 percent of foreign investment in nonoil and gas

sectors was in basic metals (Hill 1992:236). Logging of Kalimantan
(Borneo) and Sumatra required much less capital and boomed quickly.
Log export earnings reached $170 million in 1971, $275 million in 1972
when it overtook rubber’s export value, and $720 million in 1973 (Gelb
1988:table 12–3). Fisheries exports became significant later, growing
from $163 million in 1977 to over $200 million in the 1980s and jumping
to $374 million in 1986 (Bailey 1988:table 3). In the late 1980s, palm oil
began to boom, contributing $1.4 billion of foreign exchange by 1997
(Casson 2002; Gellert 1998).
Various sequences and interactions within and across commodities
have been important. Within particular sectors, Indonesian exports have
moved to increasingly capitalized and ostensibly more “developed” com-
modities, such as from the mere extraction of logs to processing plywood
and later, pulp and paper, or from the extraction of fish to the establish-
ment of shrimp aquaculture. As certain commodities faced depletion, the
extractive regime has found other commodities to replenish its revenues.
After the 1986 global oil price decline, Indonesian leaders were espe-
cially concerned to achieve nonoil manufacturing. Despite considerable
growth in such manufacturing, resource-based commodities have contin-
ued to account for a significant 31 percent of nonoil and gas exports in
2003–2004 (Athukorala 2006:185). As Table 1 shows, in the early 1990s,
resource-based commodities accounted for over 40 percent of nonoil and
gas exports. A forest-based product, plywood, was the leading nonoil
export almost every year from the late 1980s to the mid-1990s. A decade
later, after the financial crisis and political transition, this percentage had
declined significantly in wood products but only slightly overall. Exports
of some extractive commodities such as coal and metals, as well as palm
oil, benefited from global price booms and grew significantly.
The extractive regime’s ability to extract and export natural resources
and simple resource-based commodities, as well as to suppress wages in
manufacturing, was held together through military domination and social
exclusion of dissenters who might stand in the way of “development”
(Anderson 2001). The military was a crucial element. Beginning in the
Sukarno period but expanding greatly during the Suharto period, the
military took on a “developmental” role in Indonesia that was justified as
part of its “dual functions” in development and security (Crouch 1988).
Ideologically, throughout the 30-year reign of Suharto and beyond,
Indonesia has been thoroughly anticommunist and stridently nationalist.
The universal guiding myth of developmentalism (Loriaux 1999) was
Indonesia’s collective project (Evans 1995) espoused by state elites.
Suharto fostered an image of himself as the Father of Development both
Table 1. Leading Nonoil Export Commodities from Indonesia, 1990–94

and 2000–2004
Share of Total Exports (%)
1990–94 2000–04
SITC code and commodity
63 Wood products 17.9 6.1
84 Clothing 12.2 9.2
65 Textiles 9.7 6.6
85 Footwear 5.7 2.9
03 Fish et al. 5.6 3.3
23 Rubber 4.6 2.7
07 Coffee, tea, cocoa 4.0 2.3
28 Metallic ore 3.9 4.6
76 Telecom equipmt. 3.0 6.8
42 Vegetable (palm) oils 2.9 5.3
82 Furniture 2.3 3.2
32 Coal 2.2 4.0
68 Nonferrous metals 1.7 2.5
64 Paper 1.6 4.4
Resource-based commodities 42.7 36.1
Source: Items taken from Athukorala 2006:appendix table A.
Notes: Italics indicate natural resource-based export categories. Commodities are listed in
order from highest export percentage in 1990–94 during the Suharto period. Original data
compiled by Athukorala from UN Comtrade database. Resource-based commodities sub-
total includes palm oil due to the forest conversion that palm oil expansion has involved.
through unceasing use of the state-owned media and by bringing material

benefits to particular groups—the burgeoning but small middle class,
Chinese-Indonesian capitalists, state bureaucrats, and the military
(Heryanto 1988; McCormack 1999).
Domestic critics periodically raised the issue of regime corruption and
patrimonial politics, notably in the 1970s and again in the 1990s when the
beneficiaries of patronage were increasingly seen to be Suharto’s chil-
dren. Suharto and his family together reportedly amassed $15 billion
through corruption, as well as various monopolies on commodity trade.10
Indonesia still has a reputation from Transparency International as one of
the most corrupt countries in the world (McLeod 2000). Others have
pointed to the violence and suppression of rights that were crucial to the
building of an extractive regime (International Crisis Group [ICG] 2002).
Yet, given the long-standing support for his leadership at previous
moments of crisis, Suharto had reason to believe in 1997 that “the mere
announcement of IMF [International Monetary Fund] assistance would
10
The charges were vigorously denied by Suharto, and in September 2007 he won
$106 million damages in a defamation suit against Time. See BBC News 2007.
restore confidence and avoid the need to undertake fundamental

change” (Robison and Rosser 2000:179; see also Gellert 2005b) in his
extractive regime.
Once established, the extractive regime in Indonesia proved to be
surprisingly durable (Smith 2007). The small but rising middle class
benefited the most (Robison and Goodman 1996) but even some of the
poor were also helped by rice and fuel subsidies, as well as direct assis-
tance to rural villages through Presidential Instruction (Instruksi Presiden
or Inpres) projects. As the developmental and predatory tentacles of the
state simultaneously reached the villages of Indonesia, a “hyperobedi-
ence” (Heryanto 2006) of the Indonesian populace was produced.
Heryanto (2006:22) jarringly observes, “More than a few outsiders either
failed or refused to understand the level of fear that Indonesians
endured during the New Order period, considering the word ‘teror’ an
exaggeration.” For many years the conditions to overturn this regime
were not in place, and even the protests that culminated in the resigna-
tion of Suharto in 1998 did not radically transform the society’s state and
class structures.11
Commodity Foundations and Dynamics of Indonesia’s

Extractive Regime
The extractive regime was built on oil, gas, mining, timber, and fisheries.
This section takes the rising and waning importance of oil rather for
granted as background in order to focus on the contribution of other
commodities. As Table 1 shows, multiple resource-based commodities
emerged in Indonesia. Timber and fisheries provided crucial contribu-
tions to the formation and durability of Indonesia’s extractive regime
during a particular world-historical period of peripheral state develop-
mentalism. Although a comprehensive study would necessitate attention
to the full panoply of commodities, some of the workings of the extrac-
tive regime are illustrated here through examples from timber and
fisheries, which share spatial extensivity and other characteristics.12
11
Thus, counterfactually, Indonesia did not have all the five elements Foran (2005)
identifies as combining to precipitate a successful revolution: dependent development,
repressive/exclusionary state, political culture of opposition, economic downturn, and
world-systemic opening.
12
I am grateful to a second-round reviewer for encouraging greater attention to multiple
commodities, especially fisheries. This article maintains a greater emphasis on timber
because of my expertise in this area. I also occasionally mention other commodities, but due
to length considerations, the article does not specifically address the increasingly important
minerals commodities, as well as plantations of palm oil and fast-growing trees for pulp and
paper. These extractive commodities also form part of the extractive regime but with
commodity-specific differences due to their spatial concentration and capital intensity.
Examination of these commodities reveals how the regime was built on

their extraction and export; how the legitimacy of the regime was bol-
stered by a developmentalist industrializaton and growth model; and
how the characteristics of the commodity affect the geography of extrac-
tion, including its present and future possibilities.
Timber exports from the Indonesian periphery were an early and
important contribution to the material wealth of the regime and its
foreign and domestic supporters. In his first acts as president in 1967,
Suharto opened the economy to foreign investment via Foreign Invest-
ment Law Number 1 and the forests to exploitation via Forestry Law
Number 1. Like in mining and oil, core U.S. interests were served, while
regional Japanese importers were the most eager for access to the
timber. Due to late recognition of the economic importance of fisheries,
by contrast, Indonesia promulgated a fisheries law only in 1985 (Patlis
2007:210).
The first step was the commodification of the resource. Timber had
long been extracted from the Philippines but stands there were deplet-
ing. Japan’s postwar growth led demand for tropical plywood for use in
concrete construction forms. Sukarno had nationalized the oil industry
and erected barriers to foreign capital’s entry into the forests, but
Suharto lifted these barriers and a logging boom ensued. Even before oil
and gas had boomed, timber exports were providing considerable
revenue to the New Order government and its supporters. By 1970,
logging totaled 10 million cubic meters; exports peaked in 1979 at 25.3
million cubic meters (Gillis 1988:54) and provided over $1.5 billion in
export revenue (Suarga, Komalasari, and Hidayat 2004:14, table 2.1).
Fisheries were slower to become as important an export commodity
sector in part due to the numerous small-scale fishing communities that
had long participated in the commodified seas (Bailey 1988).
Since extractive regimes are shaped by the geography of the com-
modities extracted, an important part of the regime’s foundation in
Indonesia was the assertion of the state’s right to regulate access to forest
lands and seas, especially on the islands of Sumatra and Kalimantan
(Borneo). The Suharto government relied on the 1945 Constitution to
assert national control of all land and sea resources (Barber 1989). It
allocated 20-year logging concessions to loyalist military officers and
military organizations and some foreign firms. The military allocations
facilitated off-budget financing of the armed forces (Ascher 1998) and
fostered legitimacy with this constituency. By 1995, the government
licensed 585 concessions, covering 62 million hectares of Indonesia’s
total land area of 133 million hectares of the (government-identified)
forest area (Brown 1999). Access to the seas of Indonesia’s archipelago
has proven more difficult to limit (Bailey 1988; Patlis 2007), but there
have been parallel government efforts to control logging through
annual allowable cut and fishing through total allowable catch. These
policy-based limits assume expert knowledge of the resource base that
does not exist. Also, they have perennially been overestimated, exceed-
ing sustainable yield levels, to support continued expansion of produc-
tion and export (Barr 2002; Patlis 2007:204).
Infringement on local rights and conflict with local peoples has been
common to the extraction of multiple commodities. The logging con-
cessions of the 1970s were overlaid on indigenous lands without prior
consultation or consent (Barber 1989; Wahana Lingkungan Hidup Indo-
nesia [WALHI] 1993). As logging led to conversion for plantations in the
late 1990s, Dayak rattan farmers engaged in multiple strategies to chal-
lenge the destruction of their livelihood and displacement from their
ancestral lands (Fried 2003). Fisheries, too, moved from the predomi-
nance of artisanal and subsistence practices to more capital-intensive
technologies, and this transformation infringed upon people’s rights
and livelihoods. Perhaps due to the larger population density and prox-
imity of fisherfolk to urban centers, they were more successful in chal-
lenging the expansion of large-scale fish exports based on trawlers. After
violent protests, in 1980, the government decreed (No. 39) a ban on
trawlers (Bailey 1988:35–36). Conflict is also characteristic of mineral
extraction, notably at the Freeport copper and gold mine in Indonesian
Papua and the Newmont gold mine in Sulawesi.
To build the development and legitimacy of the extractive regime, the
Suharto government promoted large-scale exports and resource-based
industrialization. Although the ban on trawlers appeared to support
poor fisherfolk and sustainability, two other steps moved fisheries in the
opposite direction. First, large-scale, capital-intensive fish exporters
turned to purse seiners with the government’s approval, and, second,
the government directly supported expansion of shrimp ponds in coastal
brackish waters (Bailey 1988:36–37; Hall 2004). Similarly, in the forestry
sector, the government redirected public criticism of the unsustainabil-
ity of logging to rationalize its 1980 decision to phase in a log export ban
from 1982 to 1985. The ban and supporting policies helped to build a
significant domestic plywood industry (Gellert 2003).
While extracting tremendous wealth from the forests and seas, the
regime worked equally hard to legitimate its efforts. The government
touted the development benefits from logging and fisheries, including
revenues, employment, and linkages. Export revenue from forest prod-
ucts climbed to $4 billion by 1991 and close to $7 billion by 1998 (Suarga
et al. 2004:14, table 2.1). In fisheries, export revenue in shrimp, tuna,
and total fisheries doubled from 1977 to 1986 (Bailey 1988:35).

However, in contrast to production-sharing agreements in oil that pro-
vided 85 percent of revenues (post–cost recovery) to the state, private
appropriation was the rule in timber and fisheries. The government
captured less than 20 percent of available timber rents in the 1980s
(Mubariq 1992; WALHI 1991), and although increases in the so-called
Reforestation Fund collections improved rent appropriation to 30 to 40
percent by 1995 (Ross 2001:186), the personal accumulation of long-
time Suharto protégé and timber baron Mohamad (Bob) Hasan and his
followers soared disproportionately (Barr 1998). In fisheries, open
access, export-orientation, and lack of downstream processing enabled
large and especially foreign fishing operations to garner most of the
revenue, although significant amounts of licit and illicit revenue from
licensing flowed into the Directorate General of Fisheries within the
Ministry of Agriculture (Alisjahbana 2005; Fox, Adhuri, and Resosu-
darmo 2005).
The creation of the domestic plywood industry out of the logging ban
was celebrated by the Suharto regime as one of its development success
stories. While providing the appearance of industrial transformation and
perhaps even world-systemic movement from the periphery, the move
into downstream processing was the result of a combination of factors:
the world-historical timing of its entrance into global markets when
sources were dwindling, the second largest resource base in the world,
and state support and collaboration with private firms (Gellert 2003).
This alliance of state and private timber firms, united under Hasan’s
leadership of the Indonesian Wood Panel Association, transformed the
sector from a peripheral raw log exporter to the dominant tropical
plywood exporter in the 1980s and 1990s (Barr 1998; Dauvergne 1997;
Gellert 2003). The plywood industry grew to 9 million cubic meters of
plywood per year in the 1990s, at its peak accounting for more than
three-quarters of the world’s tropical plywood trade (Dauvergne 1997).
Indonesian export prowess also was shaped by its relation to the
regional political economy (Hatch and Yamamura 1996). To a signifi-
cant degree, Indonesian production displaced Japanese, Korean, and
other sites of production (Dauvergne 1997; Gellert 2003). With domi-
nance over domestic supply secure, Hasan formed a transnational alli-
ance with a Japanese importing firm to monopolize distribution and
even gain a degree of market price control (Gellert 2003). In fisheries,
the regime did not achieve comparably tight domestic control, but it
accumulated wealth from exports to Japan (Hall 2003). Japan has been
the world’s leading importer, accounting for 22 percent of global
imports, although exports of Thailand and China have far exceeded
those of Indonesia (Kagawa and Bailey 2006). In both plywood and

shrimp, Japanese aid has encouraged producers to supply products
fitting Japanese quality standards.
Single-minded concentration on plywood production to gain regional
or global market dominance discouraged investments in product diver-
sification and technological upgrading. For example, diversion of wood
supplies to plywood handicapped the furniture and sawnwood indus-
tries. Until recent years, with increasing scarcity of large logs, mills did
not invest in small-spindle and other technology to improve wood recov-
ery rates.13 A comparably single-minded focus on growth has character-
ized the fisheries sector, leading to overharvesting and depletion as well
(Bailey 1988). Despite concerns about the environmental sustainability
of large shrimp operations (Vandergeest, Flaherty, and Miller 1999),
Indonesian corporations with state support have favored large-scale pro-
duction. These operations have addressed problems with effluents and
disease in small coastal Java ponds via new megaprojects on other islands
in which they control water and prevent recycling effluent water as
intake (Hall 2004:329).
Timber and fisheries are both potentially sustainable export sectors,
but years of high rates of extraction have effectively meant that these are
extractive commodities. For timber, minimal efforts at replanting exac-
erbate the problem, while for shrimp insufficient attention to effluent
and disease have undermined production (Hall 2004:325–31). The
extractive regime, therefore, had to adjust to a dynamic of depletion.
From the late 1980s, depletion of proximate sources led timber firms to
increasingly remote areas and, within these stands, to steeper sloped
stands of timber. The Dipterocarp species logs could still be floated down
the meandering rivers of Kalimantan and other islands, but the
increased distances to logging operations constrained the capacity of
the state to monitor implementation of its own regulations, such as the
Selective Logging and Replanting (Tebang Pilih Tanam Indonesia) system
(Barr 2002). Similarly, in aquaculture, large- and small-scale shrimp
farmers have engaged in “slash-and-burn aquaculture” (Skladany and
Harris 1995:184) by moving rather than more sustainably managing
existing ponds. Inadequate budgets for monitoring and, especially in
forestry, government dependence on the firms being monitored for
transport, lodging, and honoraria to their distant sites of production
undermined the state ability to ensure compliance with regulations.
With depletion threatening continued accumulation, the regime
turned to efforts to “reduce uncertainty and maintain order in the face
13
Based on field interviews in several mills in East Kalimantan in 2005.
of underlying contradictions which threaten to impede accumulation”

(Bridge 2000:249). The fisheries sector relied on an “agricultural model”
(Hall 2003:253) of intensive, brackish water shrimp ponds that were
much more capital intensive and also highly productive. The forestry
sector attempted to follow this path too via government credit subsidies
to plantation companies. In both sectors, there were integrated projects
with the government’s “transmigration” program to move poor people
from the densely populated central islands to more sparsely populated
Outer Islands, such as Sumatra and Kalimantan (Borneo). Shrimp and
tree plantation transmigration programs aimed to provide docile labor
for their production (Gellert 1998; Hall 2004) but have had limited
success and faced considerable opposition.
More importantly, the new tree plantations came with clear-cutting
permits, and the logging that ensued provided new supplies from
logged-over and so-called degraded areas to stave off depletion
(Nugroho 1994; WALHI 1995). The real investment in plantations was
slow to be realized. The Ministry of Forestry later admitted that less than
a quarter of the areas allocated had actually been planted (Forest Watch
Indonesia and Global Forest Watch [FWI/GFW] 2002:38).14 Assessments
at the end of the New Order predicted the commercial demise of
lowland forests in Sumatra by 2005 and Kalimantan by 2010 (FWI/GFW
2002; Holmes 2000). The last few years have witnessed numerous
plywood factory closings and layoffs as supplies dwindle. International
consultants now (again) highlight the urgency to establish forest plan-
tations to avoid a collapse of Indonesian forestry exports in the not-so-
distant future (Brown et al. 2005).
Extractive cycles of different commodities are increasingly overlap-
ping and intertwined, and the scale of degradation has increased. For-
ested areas that were logged for decades to supply plywood industries
have been largely depleted. They then have been rapidly cleared for
conversion to fast-growing pulp tree or palm oil plantations. Expansion
of shrimp ponds is responsible for conversion of coastal mangrove
forests. Mining activities, too, have overlapped with and at times had
jurisdictional conflicts with forested areas. In other cases, mining tailings
are potential pollutants of the nearby seas.
Finally, the extractive regime’s increasingly invasive practices were
bolstered by a combination of violent suppression of protest, fear, and
14
Moreover, the established plantations are in fast-growing tree species aimed at the
pulp and paper industry, rather than the slower growing Dipterocarp trees that supplied the
plywood industry. Pulp and paper, another pillar of the extractive regime, garnered huge
investments in the 1990s and continues to grow despite attempts at restructuring it through
the IBRA (Barr et al. 2002; Setiono 2007).
ideological undercutting of dissent. Criticisms of the New Order’s

extractive regime and its negative environmental and social conse-
quences in the extractive regions, as well as the unsustainability of the
strategy were significant and growing in the 1990s (Barber, Johnson, and
Hafild 1994; Sekretariat Kerjasama Pelestarian Hutan Indonesia
[SKEPHI] 1992, 1999; WALHI 1991). In general, however, the political
economic power of the timber industry meant that they were deflected,
muted, unable to gain access to the intimidated press, and unsuccessful
in the judicial system (Mayer 1996). Instead, the ideological myth of
“national” development (Loriaux 1999) and job creation (Hasan 1991)
was repeatedly conveyed. Inside the forestry bureaucracy and in the
press, criticism was met by reference to naughty companies (perusahaan
nakal), implying that their behaviors were exceptional (not systemic) in
their lawbreaking and lack of professionalism. The urban middle class
that bolstered the New Order and was its expression of legitimacy mostly
could not be bothered by the excesses of a political system that provided
them with increased prosperity (Robison and Goodman 1996).
Important in stabilizing the regime’s legitimacy and undermining
resistance, the extractive activities were spatially distant from the centers
of power in the capital, and the groups whose livelihoods were negatively
affected were socially and ethnically distinct. The important exception to
this is fisheries near urban centers and 1980s shrimp ponds, for both of
which groups expressed significant and visible resistance to corporate
dominance. Export processing zones for manufacturing are intention-
ally isolated, but the larger need for labor generally also requires that
such zones be located near urban centers. Those whose livelihoods were
directly threatened by the growth of extractive activities found them-
selves engaged in discursive struggles (Fried 2003) and where such
opposition was sufficiently challenging, Suharto relied on the military to
suppress opponents.
Conclusion: A New Phase of the Extractive Regime?

The end of the Suharto period was precipitated by the Asian financial
crisis of 1997–98 and widespread protests in the nation’s capital and
distant provinces. Amid student demonstrations and withdrawal of elite
support, Suharto experienced a lack of legitimacy and resigned from
office in May 1998. This ended a remarkably durable political regime of
32 years. However, the extractive regime appears merely to be entering
a new phase.
At the time of Suharto’s resignation, there was widespread hope that
the corruption, collusion, and nepotism against which protestors railed
would be dismantled in a post-Suharto Indonesia. In fact, many viewed

the crisis as an opportunity to reform “crony capitalism” in Asia more
generally in the direction of neoliberal economics and formal democ-
racy (Robison and Hewison 2005). To be sure, the crisis provided the
IMF and World Bank leverage to liberalize the Indonesian economy and
especially its extractive sectors (Gellert 2005b). Their target in forestry,
Bob Hasan, was jailed for six years on corruption charges and a number
of indebted timber conglomerates were slated for restructuring (Barr
et al. 2002). The ideological pendulum was again moving from viewing
Indonesia as a corrupt failure to a (potentially) modernizing, liberalizing
developmental success.
As critical analysts such as Hadiz and Robison (2005) have observed,
however, the social power of dominant and predatory class interests
continue despite the democratizing tenor of the period in Indonesia.
Perhaps we should not be surprised given the long history of extraction
and concentrated benefits. Anne Booth (1998:333) observes, “The eco-
nomic history of Indonesia over the past two centuries, and indeed for
much longer, can be seen as a continual struggle between the concepts
of the predatory and the developmental state, with the latter gradually
becoming the dominant vision but never totally subduing the former.”
Taking a slightly different tack, I argue that capitalist-driven extraction
of resources to the world-system’s core may facilitate peripheral accumu-
lation and the durability of political leaders.
Successive post-Suharto governments have sought to reestablish the
extractive regime that provided public revenue and private accumula-
tion for so long. In fact, Indonesia’s attractiveness to foreign investors as
an export platform for cheap-labor manufactured goods waned after the
crisis. Instead, there was amplified attention to natural-resource exports
(Lindblad and Thee 2007). The pattern of development under the
extractive regime—legal and legitimate for the national elite (and their
global supporters) but violent and illegitimate for groups whose liveli-
hood has suffered (and their supporters)—may continue in the period
of neoliberal globalization.
As democratic regimes strive to fit into global market niches, some
characteristics of Indonesia’s extractive regime may be changing. Spe-
cifically, the terror and lack of accountability of the Suharto period may
no longer be as possible in bolstering the legitimacy of the extractive
regime. Moreover, tensions between capitalist interests in the nation’s
center and the locally dominant classes in extractive regions have risen.
Yet these domestic tensions are potentially useful to global capitalist
interests in the extractive sectors if they lead to competitive pressures on
policymakers to offer favorable investment conditions. That the result
will be more sharing of local economic benefits or especially attention to

sustainability of local environments and formation of a larger domestic
capitalist class is unlikely.
Turning from the empirical case to broader concerns, this article’s
sociological aim has been to advocate the concept of an extractive regime
as a useful addition to the literatures on world-systems, globalization, and
commodity-based approaches. Both world-systems and globalization lit-
eratures pay insufficient attention to understanding peripheral develop-
ment as a differentiated or uneven set of processes, rather than either a
persistent but homogenized position within the world-system structure or
a location of an as-yet-incomplete homogenization process. The extrac-
tive regime, by contrast, demonstrates that there are important differ-
ences within the periphery and semiperiphery depending on the
networks of interaction with the rest of the world-economy. These differ-
ences are structurally persistent while maintaining identifiable dynamism
related to the resource extraction that supports them.
Indonesia’s trajectory as a peripheral nation–state in the world-
economy seeking both “development” and legitimacy has been based in
crucial aspects upon the geohistorical conjuncture of its resource wealth
and diversity during a world-historical period of Cold War struggle and
legitimate developmental state control. An extractive regime formed on
the material basis of resource exports, and the extraction, limited pro-
cessing, and export of these resource-based commodities bolstered a
regime of accumulation, domination, and legitimation. The importance
of having multiple commodities is that not all commodities are domi-
nated equally by international capital and high technological barriers at
all times. Some commodities at some times, such as oil in the early OPEC
years or timber and fisheries in the 1990s, offer better opportunities for
domestic actors in the periphery to benefit. On the other hand, the
extractive regime is shaped by specific geographical characteristics that
vary with the commodities extracted but generally are more spatially
extensive and always less flexible than labor-intensive manufacturing
strategies. The claims of benefits for the nation as a whole, supported by
various social spending or welfarist policies, confronts the reality of
highly uneven benefits and significant loss of control and livelihood for
people living in and around the extractive zones.
The extractive regime concept might usefully be extended in a variety
of ways. First is the historical question of how the extractive regime in
Indonesia or elsewhere will continue in a more neoliberal global
context. Domination under democratization may be changing from
repressive to legalistic modes, for example. Second, the industrialization
of rural areas is a crucial and understudied kind of development trajec-
tory and one that could be fruitfully examined through attention to

different sectors within the extractive regime. Third, comparative work
could shed further light on the question of the effects of extraction on
state formation in different locations in the world-system, including the
core. Fourth, the range of political exclusion/inclusion and legitimation
strategies might be fruitfully explored through comparative study, for
example, of Hugo Chavez’s use of oil wealth in Venezuela and Evo
Morales’s renegotiation of gas wealth in Bolivia. Examining these cases
will enhance our understanding of the limits of developmental policies
even in socially more democratic polities. They may even show whether
the extractive regime concept fits states that are attempting to challenge
the global political order more thoroughly than the earlier developmen-
tal states.
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Rural Sociology 75(1), 2010, pp.

Extractive Regimes: Toward a Better Understanding of

Abstract This article proposes the concept of an extractive regime to

Indonesia as an Extractive Regime: Development and Crisis Revisited

manufacturing miracle of the 1980s (World Bank 1993). Growth is being

and consumption (Gereffi and Korzeniewicz 1994; Robinson 1998). The

Ciccantell (2005) offer an exemplar of how to “integrate systematically

commodity-based perspectives for enhanced understanding. Then it

Extractive Regimes: Combining World-Historical and

relations (including labor relations), and development trajectories (e.g.,

commodities in shaping state formation. Also, it neither directly

nant resource export commodity but multiple resource commodities;

The extractive regime’s emergence and durability in Indonesia, even

(Evans 1989), and as economic projects, due to the lack of sustained

The Formation of Indonesia’s Extractive Regime

tic corruption may not be detrimental to the international reputation of

projects to build schools and health clinics throughout the archipelago.

(1967 to 1989), 42 percent of foreign investment in nonoil and gas

Table 1. Leading Nonoil Export Commodities from Indonesia, 1990–94

through unceasing use of the state-owned media and by bringing material

restore confidence and avoid the need to undertake fundamental

Commodity Foundations and Dynamics of Indonesia’s

Examination of these commodities reveals how the regime was built on

and total fisheries doubled from 1977 to 1986 (Bailey 1988:35).

those of Indonesia (Kagawa and Bailey 2006). In both plywood and

of underlying contradictions which threaten to impede accumulation”

ideological undercutting of dissent. Criticisms of the New Order’s

Conclusion: A New Phase of the Extractive Regime?

would be dismantled in a post-Suharto Indonesia. In fact, many viewed

will be more sharing of local economic benefits or especially attention to

tory and one that could be fruitfully examined through attention to

Paige, J.M. 1999. “Conjuncture, Comparison, and Conditional Theory in Macrosocial

in Melestarikan Hutan Tropika: Permasalahan, Manfaat, dan Kebijakannya (Sustaining the

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