"Sritex, the Indonesian textile behemoth, has found itself in a spot of bother, belly-up and bankrupt as of late December 2024, after the Supreme Court gave its appeal the old heave-ho," Limbuk was reading a news. "It appears the judiciary confirmed the original verdict from the Semarang Commercial Court, which occurred in late October 2024, sealing Sritex's fate. The root of this misfortune? Sritex couldn't quite manage to pay its debts to PT Indo Bharat Rayon (IBR), a creditor, even after a previous agreement to sort things out in January 202213. This also dragged Sritex's subsidiaries, PT Sinar Pantja Djaja, PT Bitratex Industries, and PT Primayudha Mandirijaya, into the mix.
The root of this misfortune? Sritex couldn't quite manage to pay its debts to PT Indo Bharat Rayon (IBR), a creditor, even after a previous agreement to sort things out in January 2022. This also dragged Sritex's subsidiaries, PT Sinar Pantja Djaja, PT Bitratex Industries, and PT Primayudha Mandirijaya, into the mix.
What were the main reasons behind Sritex's bankruptcy? Sritex buckled under the weight of massive debts, including Rp14.42 trillion owed to 27 banks. By the first half of 2024, their total long-term debt reached USD 1.47 billion (IDR 22.8 trillion), with an additional USD 131.4 million (IDR 2 trillion) in short-term debt, resulting in a capital deficiency of USD 980.56 million (negative IDR 15.2 trillion).
The company was declared bankrupt after being negligent in fulfilling its payment obligations to PT Indo Bharat Rayon, a creditor, based on a Homologation Decision from January 25, 2022. Internal issues such as poor debt management, a liquidity crisis, and inefficient crisis management also played a significant role. The COVID-19 pandemic, the Russia- Ukraine war, and declining global demand negatively impacted textile and garment exports, exacerbating Sritex's financial condition. The Indonesian textile industry has been struggling since 2023 due to rising interest rates and high capital costs, compounded by a flood of cheap imported goods, particularly from China and Vietnam. Sritex's President Commissioner, Iwan Setiawan Lukminto, pointed to a Trade Ministry regulation that opened the floodgates to imports, crippling the domestic textile industry.
Adding insult to injury, Sritex had already given 2,500 workers the boot due to raw material shortages. The President Commissioner of Sritex, Iwan S. Lukminto, suggested even more layoffs could be on the horizon if they couldn't get their act together. Turns out their bank accounts were frozen, which rather put a damper on importing and exporting. As of September 2024, Sritex was in the hole for a staggering Rp14.64 trillion (US$899.6 million), including a hefty Rp14.42 trillion owed to 27 banks.
However, not all is as it seems, because the curators appointed for the bankruptcy have spotted some oddities. Despite the bankruptcy, some subsidiaries were carrying on as if nothing had happened, and there seemed to be plenty of raw materials, contrary to earlier claims. The curators are also having a devil of a time getting banks to freeze Sritex's accounts and meeting with the owners.
The Indonesian government is on the case, cooking up a rescue plan involving bailout funds and incentives. The goal is to protect the workforce and keep those export commitments on track. So, Sritex, once a shining example of Indonesian industry, serves as a cautionary tale of corporate governance and financial management."
Cangik continued, "Let's move on with our topic. Jeffrey A. Winters discusses the influence of oligarchs on government policy in Indonesia in his work Oligarchy (2011, Cambridge University Press). According to Winters, Indonesia exhibits a form of oligarchy characterised by wealth defense, where powerful economic elites use their vast resources to shape political and legal systems to protect their wealth. He highlights how Indonesian oligarchs influence government policy. Oligarchs finance political parties and candidates, ensuring elected officials serve their interests. They use their wealth to influence the judiciary, law enforcement, and regulatory bodies to avoid legal repercussions. By securing control over key sectors (such as natural resources, infrastructure, and banking), they dictate policies that favor their economic dominance. Indonesia’s democratic institutions struggle to counter oligarchic influence due to corruption and clientelism. Winters argues that despite democratization, oligarchs remain the dominant force in shaping Indonesia’s political and economic landscape.
Democracy in Indonesia: From Stagnation to Regression," edited by Thomas Power and Eve Warburton (2020, ISEAS–Yusof Ishak Institute) examines the challenges facing Indonesian democracy, including the entrenchment of oligarchic power. While specific details from this work are not available in the provided sources, other studies have documented resistance to oligarchy in Indonesia. For instance, a case study from Pati Regency, Central Java, highlights grassroots opposition to oligarchic forces. The anti-cement-factory movement protested against the expansion of Indocement Tunggal Prakarsa Ltd in the Kendeng Mountains. This movement extended its influence to the 2017 local elections, challenging and 'defeating' oligarchic interests in the region. This case demonstrates that oligarchic power can be contested through organized grassroots efforts.
Additionally, the Confederation of Indonesian People's Movements (KPRI), an alliance of various social movements and unions, represents another form of resistance. KPRI includes workers, peasants, fishermen, indigenous peoples, and women's groups. It aims to challenge oligarchic dominance by unifying fragmented social movements and formulating alternative policy frameworks with a clear anti-neoliberal, leftist orientation. KPRI's efforts exemplify attempts to counter oligarchic influence through collective action and political participation.
These examples illustrate that resistance to oligarchy in Indonesia manifests through grassroots movements and alliances seeking to challenge entrenched power structures.
Oligarchy exists across Southeast Asia, but it manifests differently based on historical context, economic structure, and governance models. Below is a comparative analysis of Indonesia, the Philippines, Thailand, Malaysia, and Vietnam, highlighting their unique oligarchic systems.
In Indonesia, who holds the power? Business tycoons, political dynasties, ex-military elites. Post-Suharto elite families dominate political parties. Business oligarchs fund politicians to secure favorable policies. Media is controlled by political and business elites.
In the Philippines, political dynasties, business magnates, and media moguls hold power (Dynastic & Business Oligarchy). Elite families have dominated politics for generations (e.g., Aquino, Marcos, Duterte, Roxas, Estrada). Big business groups (Ayala, SM Group, San Miguel, Gokongwei) control the economy and fund elections. Media is privately owned but politically aligned (ABS-CBN, GMA Network). Ferdinand Marcos (1965–1986) centralized oligarchic power, benefiting crony capitalists.
The Philippines oligarchy is more dynastic than Indonesia (political families directly dominate elections). It is similar to Thailand in elite control but without military coups.
The Philippines has long been characterized by a concentration of political and economic power in the hands of a few elite families. This system of oligarchy manifests in two primary forms: dynastic oligarchy, where political power is passed down through family generations, and business oligarchy, where a few influential business elites dominate key industries.
The Modern Principalia: The Historical Evolution of the Philippine Ruling Oligarchy (2007, University of the Philippines Press) by Dante C. Simbulan provides a historical analysis of how political dynasties emerged and persisted in the Philippines. Simbulan traces the origins of political dynasties back to the Spanish colonial period, where the principalia (local ruling class) were appointed as intermediaries between the Spanish government and indigenous Filipinos. These local elites, often composed of landed families, accumulated wealth and political influence by collecting taxes, managing land, and controlling trade.
Even after Spanish rule ended, these powerful families retained their influence under American colonial rule. The U.S. introduced democratic institutions, but political participation remained restricted to the elite due to property and literacy requirements. These ruling families adapted by dominating electoral politics, forming dynasties that passed power through generations.
Post-independence, these dynasties consolidated control over both political and economic spheres by monopolizing electoral positions (family members run for multiple government roles across generations); leveraging patronage and clientelism (providing economic benefits to ensure voter loyalty); and controlling business and land ownership (expanding wealth to sustain political dominance).
Simbulan argues that political dynasties have hindered true democratic development, as governance remains centered on elite interests rather than public welfare. His work highlights the need for reforms, such as anti-dynasty laws, to break the cycle of elite rule.
In The Conjugal Dictatorship of Ferdinand and Imelda Marcos (1976, Ateneo de Manila University Press), Primitivo Mijares exposes how the Marcos family and their close associates used political power to build business empires in the Philippines through crony capitalism, monopolization of industries, and misuse of state resources. Ferdinand Marcos established a system where business opportunities were reserved for his loyalists and close associates (cronies). He granted them control over key industries, such as banking, energy, and media, in exchange for their political and financial support. Key cronies included businessmen like Eduardo Cojuangco Jr. and Roberto Benedicto, who amassed wealth through government-backed monopolies. Government contracts and favorable policies were given to these cronies, allowing them to dominate the economy.
The Marcos regime ensured that only trusted allies controlled essential industries, reducing competition and increasing family wealth. Roberto Benedicto controlled sugar trading, earning billions in export revenues. Eduardo Cojuangco Jr. led a monopoly through the United Coconut Planters Bank, funded by forced levies on coconut farmers. The government seized major TV and newspaper companies to prevent dissent and promote their propaganda.
Marcos and his associates diverted billions of dollars from government funds for personal gain. Public infrastructure projects were overvalued, with a large portion of funds being funneled into personal accounts. Overseas Swiss bank accounts were secretly used to store ill-gotten wealth, later uncovered after the Marcos downfall. The Imelda Marcos-driven extravagant spending (e.g., luxury buildings, shopping sprees) was financed using government money.
Mijares’s work reveals that the Marcos dictatorship was not only about political repression but also about economic plunder. By using the government as a tool for wealth accumulation, the Marcos family and their allies entrenched themselves economically, leading to long-term effects on the Philippine economy. The fall of the regime in 1986 exposed the extent of their corruption, but their legacy of wealth and influence still persists today.
In Cacique Democracy in the Philippines: Origins and Dreams (1988, Cornell University Press), Benedict Anderson explains how economic and political power are deeply intertwined, enabling a small group of elites (the caciques, or political bosses) to dominate both sectors in the Philippines. Anderson argues that elite rule in the Philippines dates back to the Spanish colonial period, when landowning families (caciques) gained control over vast agricultural estates. These families maintained their power even after Spanish rule ended, transitioning from landlords to political leaders under the American colonial government. The U.S. introduced elections, but the system favored the wealthy elite, who controlled local politics and the economy. Political offices became family assets, passed down through generations.
The same elite families that dominated politics also controlled key industries, allowing them to use wealth to secure electoral victories. Business monopolies and land control ensured that the masses remained economically dependent on them. Election campaigns were funded by oligarchs, making it nearly impossible for outsiders to compete. Politicians rewarded their business allies with government contracts and favorable policies, reinforcing the cycle of elite control.
Political families distribute government resources, jobs, and aid to maintain voter loyalty. Voters, especially in rural areas, become dependent on these elites for survival, ensuring continued support. This system prevents real democratic competition, as power remains concentrated in a few hands.
Anderson describes the Philippines as a 'cacique democracy,' where elections exist but only serve to legitimize elite rule. Political dynasties and business oligarchs work together to ensure that wealth and power remain within their exclusive circle, limiting true democratic participation and economic mobility.
In Electoral Dynamics in the Philippines: Money Politics, Patronage and Clientelism at the Grassroots (2019, National University of Singapore Press), editors Allen Hicken, Edward Aspinall, and Meredith Weiss analyze how political dynasties maintain control over electoral politics through money politics, patronage, and clientelism.
Political dynasties use vast financial resources to secure electoral victories. Campaigns are expensive, and wealthy political families dominate by vote buying (offering direct cash payments or goods e.g., rice, medicine) to voters); Funding massive campaigns (spending on advertisements, rallies, and media influence); sustaining local alliances (providing financial incentives to local leaders who mobilize voters).
Patronage refers to the distribution of government resources to reward loyalty. Dynasties use their positions to appoint allies to key government positions (e.g., barangay leaders, police, bureaucrats); provide jobs and contracts to supporters in exchange for votes, and control public funds (e.g., pork barrel projects) to strengthen voter dependency.
Clientelism is a reciprocal system where politicians provide personal benefits to voters in return for electoral support. This includes offering direct assistance (e.g., covering medical expenses, school fees); prioritizing services for loyalists while neglecting opposition supporters; building a culture of dependency, where voters feel obligated to support certain families.
The work argues that money politics, patronage, and clientelism reinforce the dominance of political dynasties, making it difficult for new or independent candidates to compete. This system weakens democratic institutions, as elections are often decided by financial power rather than policy or merit. The authors suggest that electoral reforms, stricter campaign finance laws, and anti-dynasty legislation are necessary to break this cycle.
In Thailand, the monarchy, military elites and business elites hold the power (Military-Royalist Oligarchy). The Thai monarchy (King Rama X) holds ultimate power with military backing. Military coups (e.g., 2014, 2006) are used to reset the political system in favor of elites. Business oligarchs like the Chearavanont family (CP Group) benefit from close ties with the state. Media is tightly controlled, especially by the monarchy and military. Thailand is more centralized than Indonesia & the Philippines (military-monarchy control). It is closer to Vietnam in state control but with a capitalist economy.
B.J. Terwiel in 'Thailand's Political History: From the 13th Century to Recent Times' examines the evolution of Thailand's elite power structures, highlighting their oligarchic characteristics. In the Ayutthaya Period (1351–1767), the kingdom was governed by a centralized monarchy, with power concentrated among the king and a small group of nobles and officials. This elite class controlled land and resources, establishing a hierarchical society.
In the Bangkok Period and Chakri Dynasty (1782–present), following Ayutthaya's fall, the Chakri Dynasty rose to power, maintaining centralized authority. The monarchy continued to rely on a network of elites, including nobility and bureaucrats, to administer the kingdom.
In 19th Century Reforms, under King Chulalongkorn (Rama V), significant reforms modernized the administration and reduced noble power, but the elite class adapted, retaining influence within the new bureaucratic structures.
In the 1932 Revolution, a coup led by military and civilian elites transformed Thailand into a constitutional monarchy. Despite this shift, power remained with a select group, as military and bureaucratic elites dominated politics.
In Post-World War II Era, the military emerged as a dominant force, with figures like Field Marshal Sarit Thanarat consolidating power through coups. This period saw the intertwining of military and economic elites, reinforcing oligarchic tendencies.
In the late 20th to Early 21st Century, business elites gained political prominence, exemplified by Thaksin Shinawatra's rise. His tenure highlighted tensions between emerging business elites and traditional military-royalist factions, leading to political instability.
Terwiel's analysis underscores the adaptability of Thailand's elite power structures, which have evolved yet consistently maintained oligarchic characteristics throughout the nation's history.
'A History of Thailand' (2005, Cambridge University Press), Chris Baker and Pasuk Phongpaichit explore the evolution of Thailand's elite power structures, highlighting their oligarchic characteristics through various historical periods. In the late 19th century, Siam underwent significant transformations to establish itself as a nation-state. This process involved integrating diverse regions with distinct histories, languages, and cultures into a unified entity. The centralization of power during this period laid the groundwork for a consolidated elite.
Post-1976, the senior bureaucracy, along with the palace and military, continued to uphold a model of a passive rural society that accepted hierarchical social and political orders. They aimed to engineer social harmony and guide 'democracy' from above, reflecting the enduring influence of bureaucratic elites.
The intertwining of political and economic elites has persisted into modern times ( Contemporary Elite Dynamics). The resurgence of political family dynasties, such as the Shinawatra family, exemplifies the enduring nature of oligarchic structures in Thailand's political landscape.
Throughout these periods, Thailand's elite power structures have adapted to changing political and social landscapes, maintaining their influence and exhibiting oligarchic characteristics.
In Dynastic Democracy: Political Families of Thailand,' Yoshinori Nishizaki (2023, University of Wisconsin Press) explores the concept of 'dynastic democracy,' characterized by the transmission of political power within select ruling families.
Since the 1932 overthrow of absolute monarchy, Thailand's political landscape has been significantly influenced by elite political families. These families fall into two main categories: influential commoners who have held parliamentary seats since 1932, forming the core of Thailand’s dynastic democracy, and upper-class citizens related to the royal family either by kinship or ideological alignment, who have repeatedly challenged political transitions through coups and constitutional changes.
Nishizaki's analysis illustrates how democratic pluralism in Thailand has been consistently stifled by these dynastic structures, often to the detriment of ordinary citizens. This underscores the enduring significance of familial ties in Thai politics, where political authority and influence are frequently inherited across generations.
In Malaysia, the political-business elite and state-linked enterprises hold the power (Corporate-Political Oligarchy with Ethnic Influence). The ruling UMNO party (until 2018) controlled politics for decades, benefiting business elites. The 1MDB scandal (Najib Razak) showed deep corruption in elite networks. State-linked enterprises like Petronas and Khazanah Nasional dominate key industries. Ethnic-based business favoritism (Bumiputera policies support Malay elites). It is more state control than Indonesia and the Philippines, but less than Thailand or Vietnam. More racial-economic favoritism than other ASEAN nations.
In Malaysia's Political Economy: Politics, Patronage and Profits, authors Edmund Terence Gomez and Jomo K. S (2007, Cambridge University Press) analyze the intricate relationship between politics and business in Malaysia, illustrating how party politics and economic development have fostered a politico-corporate oligarchy. This work delves into the mechanisms through which political patronage has influenced wealth accumulation and concentration in the country.
The authors employ the concepts of rent and rent-seeking to explore how political patronage has been instrumental in wealth accumulation. They argue that the Malaysian political economy is characterized by the distribution of economic privileges to politically connected individuals and entities, leading to the emergence of a business class closely tied to the ruling political elite.
The intertwining of political power and business interests has resulted in a politico-corporate oligarchy, where economic resources are controlled by a select group with strong political affiliations. This nexus has perpetuated a system where political considerations heavily influence economic decisions, often at the expense of broader economic efficiency and equity.
The work discusses how this patronage system has shaped Malaysia's economic development, affecting policy-making and the distribution of economic opportunities. The alignment between political objectives and business interests has led to the prioritization of projects that serve the interests of the politico-corporate elite, potentially sidelining more inclusive or merit-based economic initiatives.
In Vietnam, Communist Party elites and state-owned enterprise (SOE) executives hold power (State-Controlled Oligarchy or Communist-Linked Elites). One-party rule ensures Communist Party dominance over business and politics. Wealthy businessmen must be closely tied to the party to succeed. State-owned enterprises (SOEs) control major sectors (PetroVietnam, VinGroup, Viettel).
The media is fully state-controlled (there is no independent press like in Indonesia or the Philippines) and more centralized than in Indonesia, the Philippines, and Thailand (which are party-controlled). It is closer to China’s model of oligarchy than other ASEAN countries.
Author Bill Hayton in 'Vietnam: Rising Dragon' (Yale University Press, 2010), examines the emergence of an oligarchic structure within Vietnam's political and economic systems. He highlights how the intertwining of political power and business interests has led to the rise of a new elite class, often connected through familial ties to the Communist Party leadership. He describes how members of the ruling Communist Party and their relatives have leveraged their positions to dominate both state-owned enterprises (SOEs) and private business sectors, creating a form of oligarchy.
The Communist Party of Vietnam (CPV) has maintained control over key economic sectors, ensuring that political connections are necessary for business success. State-owned enterprises (SOEs) receive privileged access to resources, capital, and government contracts, often benefiting Party-affiliated individuals.
Hayton introduces terms like 'COCC' (Con Ông Cháu Cha) and '5C' (Con Cháu Các Cụ Cả) to describe these networks. 'COCC', translating to 'son of father, grandson of grandfather', refers to the junior tier of the new Party-business elite, encompassing provincial bosses and lower-level national Party and government officials. '5C', meaning 'all children and grandchildren of the great grandfather', denotes the real elite, including direct descendants and extended family members of high-ranking officials. These individuals leverage their connections to secure business opportunities and protect their interests, often operating beyond the reach of legal accountability.
This fusion of political authority and economic privilege has fostered a system where state-owned enterprises (SOEs) and private companies are frequently controlled by Party members or their relatives. Such entities benefit from favorable policies, access to capital, and regulatory leniency, perpetuating a cycle of wealth and power concentration. Hayton argues that this oligarchic structure undermines equitable economic development and poses challenges to governance and social stability in Vietnam.
So, among those ASEAN countries, which has the highest level of oligarchs' influence?
Vietnam is an extremely high level of oligarchic influence where the Party controls all economic & political activity (state-controlled oligarchy).
Thailand has an extremely high level of oligarchic influence where the military and monarchy control state power (military-royalist oligarchy)
Indonesia has a very high level of oligarchic influence where Political dynasties and business groups shape policy (business and political oligarchy)
The Philippines has a very high level of oligarchic influence, where elections are dominated by family dynasties (dynastic and business oligarchy)
Malaysia is a moderate to high, strong but with recent political shifts (corporate-political oligarchy).
Indonesia and the Philippines are the most democratic but highly oligarchic (political-business elites dominate).
Thailand is the most military-controlled oligarchy (frequent coups). Malaysia is a state-linked oligarchy with ethnic favoritism (less power for private tycoons). Vietnam is a strictly state-controlled oligarchy (like China).
Indonesia’s oligarchy is more business-controlled, while Thailand’s is monarchy-military dominated. Philippines is the closest model to Indonesia, but it is more family-based in elections.
