Tensions between state, society and business
Jim Schiller
Jepara is a small town of about 100,000 and a district of slightly under a million on the north coast of Java, two hours by car from the provincial capital Semarang. Unlike Medan it has only recently become urban and is not an ethnic or religious mixing pot. Nearly 98% of Jeparans are from one ethnic group, the Javanese, and more than 95% are Muslim.
Jepara was an important port kingdom in the mid-sixteenth century, once ruled by Queen Kalinyamat. The colonial Dutch burned it to the ground twice in one year for breaking their trade monopoly. It was also the home of Kartini the Javanese aristocrat whose life and letters advanced educational opportunities for Indonesian women in the early twentieth century.
Jepara exports more than 500 million Australian dollars of its famous handcrafted furniture each year. It makes antique reproduction, garden and other furniture in any design the customer wants. There is also a substantial domestic furniture industry. Together they employ more than 80,000 Jeparans. Many more are employed in allied industries. Most work in more than 2000 overwhelmingly Javanese-owned small and medium enterprises in Jepara's villages. Even most of the largest firms are indigenous or European. Elsewhere in Indonesia, Chinese Indonesian firms dominate manufacturing.
Jepara's economy has boomed. For several kilometres the road into town is full of furniture factories, showrooms and warehouses. There has been a related growth in public transport, in packing and shipping services, in upholstering, banks, and public buildings. Internet and telephone kiosks, good hotels and 'modern' restaurants cater mainly to foreigners and the new commercial elite.
In 1971 Jepara was one of the poorest districts in Central Java. Now it is near the top in regional per capita income. It has more registered motor vehicles than any other locality in Central Java except the provincial capital. Another sign of local prosperity is the pilgrimage to Mecca, which costs more than AU$5000. This year nearly 2500 Jeparans went, up from about 900 the year before. In both years Jepara sent more pilgrims than any other locality in Indonesia. Local government revenue is so strong that in the midst of Indonesia's 1998 economic crisis Jepara's local government could build a large two-storey office building without borrowing.
Jepara's recent wealth is also visible in new retail shops, department stores, motor vehicle dealers and even a super-market. While inequality seems to have grown, there is anecdotal evidence that the growth in employment in the furniture industry has helped to push up other rural wages.
Responsive
For decades local politics has been competitive and local society has been able to challenge the local state to be more effective and responsive. My argument about how Jepara got by New Order standards a relatively demanding society and a responsive developmental state can be found in my book Developing Jepara (1996).
Jepara has long had a strong Islamic institution, Nahdlatul Ulama (NU), with deep roots and high status in Jepara's villages, small business community and Islamic schools. NU won nearly 60% of the vote in the democratic elections of 1955, and it expected to dominate local government after the destruction of the Indonesian Communist Party in 1965. It soon became clear that less-overtly Islamic bureaucrats from southern Central Java would fill local government positions. However, these 'outsider' bureaucrats soon found that they needed the support of local NU leaders to succeed with their development programs. Even in the 'controlled' New Order elections, Jepara's Muslim community resisted efforts to deliver the government party Golkar victories. They regularly elected PPP candidates to 40% of the elected seats, narrowly won one election, and found ways to make the assembly question government practices.
Encouraged by delegations to the assembly criticising poor government services, the Jepara assembly actively investigated corruption. They used the NU informal network to reveal the secrets of bureaucrats who showed signs of conspicuous consumption. On more than one occasion an assembly representative asked the district head (bupati) how it was that an official built a new house or deposited ten million rupiah into his bank account. The questions were well informed and embarrassing.
Jepara began to get a reputation as a difficult place for state officials to govern, because the people dared to complain loudly unless government was attentive and careful. As the furniture industry grew, entrepreneurs acquired cars, televisions, and stereos that gave them a new prestige in the materialist New Order.
Entrepreneurs gained further status when, after the oil boom, the state admitted it needed the private sector to play a leading role in making development succeed. In the 1980s and 1990s there was also a marked cultural turn to Islam in Indonesia. Jepara's officials began to see Jepara's Islamic and business communities as deserving their respect. Jepara's business leaders came to expect public services. Jepara's local government financed trade promotions, fought for better roads, for the right to use container trucks, for improved telecommunications.
All this does not mean that there was no conflict between state and society. It did mean that the risks of corruptors or tyrants being found out and humiliated were greater. The arrogance of power was constrained, not eliminated. That arrogance was most obvious when national or provincial interests wanted local land. Examples include the now-abandoned nuclear reactors, the huge, still-unfinished, Suharto family-owned Tanjung Jati power plant in Bangsri, and tourist development in the Karimunjawa islands. In these national projects the local state and local society had little voice.
One ongoing tension between state and society and between large furniture enterprises and small ones is over the role of (overwhelmingly European) foreigners. There have been pro- and anti-foreigner demonstrations, occasional mysterious fires in furniture factories, media attacks on the local state for condoning the presence of 'illegal' foreigners, and public threats to the safety of foreigners. Many indigenous firm-owners think that foreigners are trying to make a quick profit or establish a monopoly. However, many small business owners support the foreigners because they provide an alternative market which drives up prices.
Reform era
Jepara went through the New Order relatively well, with a strengthened economy and a society able to place limits on the state and a local state made more responsive. So how is Jepara managing in the Reform Era?
The local economy has remained strong with the rupiah value of furniture exports soaring. Many Jeparans now believe that they can do well at business even in adverse conditions. The worrying cloud on the horizon is the question of sustainability. Can the forests of Indonesia (and now Brazil) provide quality timber in ever increasing amounts?
Politics has been more problematic. The problem is not state-society relations but clashes within society. NU had established its own party, PKB, and thus came into competition with the other Islamic-based party, PPP, to which most Jeparan NU members had hitherto given their loyalty. One of the most widely reported clashes of the 1999 election campaign was in Dongos, near Jepara, in which four PKB supporters were killed when they tried to establish a local branch in a PPP-dominated village. Tensions remained high during the election.
PPP captured more than 40% of the votes, more than double the second party. Some election monitors saw PPP's victory as a sign that intimidation continued to play a big role. PPP, they said, did what Golkar had always done. Another view might be that voters remained loyal to the party that had battled the New Order in difficult times.
On the other hand, the PKB and NU leadership has been gracious in defeat. They did not challenge for the chair of the local assembly even though an everybody-but-PPP coalition might have succeeded. The PKB candidate withdrew and announced that it was better that the party with the most seats won the chairmanship. Such flexibility, inclusiveness and tolerance among the NU and PKB leadership provides the greatest hope that Jepara will do well in the reform era. Through the authoritarian years of the New Order it sustained resistance, but gave ground when it needed to. Eventually, it tamed the local state.
NU headquarters is now a place where Muslim and even non-Muslim activists feel they can meet and talk. The difficult task ahead for NU will be to accommodate and somehow soften their proud, exclusivist, PPP wing. Jepara has a flourishing civil society and a responsive local state. The question is how that society can learn to govern itself and constrain society-based power-holders.
Jim Schiller (asjs@sigma.sss.flinders.edu.au) teaches at Flinders University in Adelaide, South Australia. He is the author of 'Developing Jepara: State and society in New Order Indonesia' (Monash Asia Institute, 1996).