Entrepreneurs are transforming political parties.

Bima Arya Sugiarto

Few people had heard of Soetrisno Bachir when he became Amien Rais’ successor in the National Mandate Party (PAN) congress in April 2005. Amien, who had been the chairperson of Muhammadiyah, Indonesia’s second largest Islamic organisation, was well known from Indonesia’s 1998 reformasi movement. In contrast - Bachir, a batik entrepreneur from Central Java, defeated another wealthy businessman and former Suharto minister, Fuad Bawazier, for the post. Another successful businessman, Zulkifli Hasan, became party secretary general.

The rise of business-people is not limited to PAN. A month earlier, Megawati retained leadership of the Indonesian Democratic Party of Struggle (PDI-P). However, the new secretary general, Pramono Anung, former CEO of Yudistira Group, a mining and energy enterprise, will likely dominate party affairs. Golkar’s chairperson is Vice President Jusuf Kalla, the major share holder and former chair of the huge Kalla group. The media tycoon Surya Paloh now chairs Golkar’s advisory board.

Similarly, in the national parliament, 39.8 per cent of members have business backgrounds. A comparison of the background of members from PAN, Golkar and PDI-P after the 1999 and 2004 elections illustrates a trend of growing business dominance. In Golkar, the number of MPs who are former military (TNI) officers and bureaucrats has fallen, while the number with business backgrounds has risen. In PDI-P, the nationalist political activists who once dominated the party are being sidelined by businesspeople. In PAN, the rise in business representation has come at the expense of people with backgrounds in Islamic mass organisations who played the key role when the party was formed in 1998.

A number of factors explain this trend. The post- Suharto banning of active military officers and civil servants from political party membership has had an obvious structural impact. So too has the costly nature of modern democratic election campaigns – requiring the funding support of entrepreneurs.

Political scientists suggest that political parties usually pass through distinct phases of development, each requiring different kinds of leaders. Immediately after the fall of Suharto the priority for new parties was to establish a strong identity that could attract public support. This created opportunities for well known ‘charismatic-populist’ type politicians. Amien Rais became the symbol for PAN identity, just as Megawati personified the PDI-P.

In regional branches, local popular figures used their mass appeal to attract public attention. Senior local Muhammadiyah leaders were important in forming PAN branches, while popular figures and long-time followers of Megawati became leaders of PDI-P branches.

Beginning after the 1999 election, the next phase – party consolidation – saw much energy was concentrated on internal organisational arrangements in addition to external political competition. It was then that entrepreneurs with business backgrounds began to gain prominence. It seemed that the skills now required included the ability to manage party internal organisation, lobby strategically, and negotiate coalitions with other parties. The growing importance of the media is also a factor. Being able to control the media is more important than grass roots political networking.

The good news is that Indonesian democracy is being transformed from within, and the chief political forces are no longer the military or bureaucracy. However, the obvious danger is that narrow and self-serving business interests might come to dominate party development, and hence government and public policy.

As yet there are no effective regulations to prevent politicians from using public office for private gain. Lawmakers must rectify this to prevent the democratic transition from being hijacked by money and business. ii

Bima Arya Sugiarto (bima.sugiarto@anu.edu.au) is a PhD student at the Australian National University.