Author: Brown, Rajeswary Ampalavanar

Source: South East Asia Research, Volume 12, Number 3, November 2004 , pp. 378-407(30)

Publisher: IP Publishing Ltd

Abstract:

This paper seeks to analyse the patterns of industrial power and competitiveness in contemporary Indonesia through a detailed examination of three large conglomerates, dominant in different industrial sectors: the Salim group in cement and food manufacturing; Sinar Mas in pulp and paper; and Texmaco in textiles. The paper traces the changes in ownership and concentration that occurred from the late 1980s, and the restructuring that took place after the crisis of 1997. The focus is on the governance structure of these family-dominated conglomerates; and how banks and capital markets were exploited by the large family shareholders, who also occupied the top management positions. The role of external capital inflows is also analysed. It is argued that the family-dominated ownership structure, the preference for debtdriven growth, and weak corporate governance were implicated in the crisis of 1997 and these have since rendered restructuring extremely difficult. The final section suggests that restructuring has often involved little more than the rescheduling of debt, although it has certainly increased foreign equity and ownership.

Keywords: CONGLOMERATES; INDUSTRIAL POWER; COMPETITIVENESS; RESTRUCTURING; INDONESIA

Document Type: Research article

DOI: http://dx.doi.org/10.5367/0000000042690135

Publication date: 2004-11-01

More about this publication?

• South East Asia Research publishes articles based on original research or fieldwork on all aspects of South East Asia within the disciplines of archaeology, art history, economics, geography, history, language and literature, law, music, political science, social anthropology and religious studies. This peer-reviewed journal is published four times per year by IP Publishing in cooperation with the School of Oriental and African Studies (SOAS). SOAS is the leading centre in this field in Europe and one of the most prestigious centres of South East Asian Studies in the world.

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