Globalization, labour and the state: the case of Indonesia

Globalization has allowed internationally mobile capital to successfully ‘demand’ favourable investment climates, thereby increasing pressure on states to restrict the activities of organized labour. In the advanced industrial countries, the enhanced bargaining position of capital has helped to undermine the welfare state, the great compromise between state, capital and labour. But newly emerging labour movements in late industrializing countries like Indonesia are especially disadvantaged because of the global context characterized by the weakened bargaining position of labour. Nevertheless, labour strife has been on the rise in Indonesia in spite of long-established state mechanisms of labour control, usually legitimized in official discourse by reference to supposedly authentic Indonesian values that eschew conflict. This has to do with the gradual development of an urban-based industrial working class as the product of sustained industrialization until the economic debacle of 1997.