The State, Democratic Transition and Employment Relations in Indonesia

Abstract

Indonesia’s transition since 1998 from authoritarian developmentalism to democracy has had a fundamental effect on employment relations. Although the basic structure of the economy has not changed, the twin processes of democratisation and decentralisation have seen the return of a degree of political space not available in Indonesia since the 1950s. This transformation was underpinned by a shift in the balance between the primary logics of the state that has seen an enhanced emphasis on legitimation. It has reshaped expectations of workplace-level employment relations practice in the country’s small formal sector and of trade unions’ engagement with policy-making and electoral politics. This article traces the processes through which this transformation occurred and analyses both its successes and the ongoing challenges to more robust implementation of the country’s industrial relations framework.