Prelude
The Indonesian government’s effort to craft a new official history is not merely an academic initiative—it is an ideological intervention into the nation’s collective memory.
This project signals a conscious attempt to construct a history devoid of structure and, therefore, does not cover the state’s responsibility for past failures. These include Minister of Culture Fadli Zon’s denial of the mass sexual violence during the May 1998 riots to the apparent removal of political-economic contexts from the manuscript’s early drafts.
1998
The tragedy in May 1998 was never just about violence or political unrest on the street; it was the explosive end of a crisis that had been ongoing for a long time. The crisis destroyed the New Order regime’s false sense of economic stability that spanned over 32 years.
In its official report, the Joint Fact-Finding Team (TGPF) recorded at least 152 cases of sexual violence during the riots, mostly targeting women of Chinese descent. These were not isolated or spontaneous acts; they were racialised, gendered forms of violence—born from economic frustration, scapegoating and systemic exclusion.
For the ethnic Chinese community – many with ancestral ties to China – the trauma of 1998 is not a closed chapter. It remains a raw cut, left unacknowledged by the state. The attempt to fully erase it from the public memory is akin to rubbing salt into the wound.
These women were not only victims of sexual violence but of a broader structural collapse. Denying their experience means getting rid of the moral debt owed by the state to an already marginalised community.
Crucially, their suffering was not isolated—it was deeply intertwined with the collapse of Indonesia’s economic system, which unravelled under the weight of long-standing structural vulnerabilities.
The Story of the State Making
The official narrative under construction offers little recognition of the intertwined realities that set the stage for the crisis.
In the government’s retelling of 1998, the economic breakdown that exacerbated racialised violence is conspicuously absent. There is no meaningful reflection on the Bank Indonesia Liquidity Assistance (BLBI) programme, which created a long-term fiscal burden. No critical discussion of Indonesia’s skewed liberalisation or the class-driven nature of its reforms. No serious engagement with the implications of the November 1997 Letter of Intent (LoI) with the International Monetary Fund (IMF), which marked the turning point at wh
The choice to rewrite history is not just a neutral act of academic revision but a strategic effort to shape the national memory in ways that reinforce state legitimacy. It is a process that whitewashes the events of 1998 and takes away the economic and structural contexts that enabled the crisis.
By doing so, the government is seen to be erecting a barrier that separates the ruling elite from past errors. This is because giving a full acknowledgement to the political econo
This is why a history rewrite is necessary for the government. Rather than highlighting the enduring presence of these elites, the new historical narrative offers a selective amnesia: one that presents rupture without accountability and reform without structural reckoning.
In this way, the historical revision appears to prioritise stability and the status quo over scrutiny, reconciliation and reparation.
Economics as Power and Ideology
For decades, economic history in Indonesia has been pushed to the margins—treated merely as data on inflation, imports or exchange rates.
But economics is never just about numbers. It is about human decisions, beliefs, social norms and power. It is the field where governments make moral choices: who is subsidised, who is excluded, who is protected and who is expendable. When econo
This is why economic history must be understood not as a technical appendix to politics, but as a concrete exercise of power. It is enacted through fiscal laws, legal frameworks and patronage networks.
For example, the 1967 Foreign Investment Law (UU PMA), enacted early in Suharto’s rule, did more than invite foreign capital. It signalled the consolidation of a post-1965 authoritarian regime whose legitimacy depended on military-business alliances. That law was not neutral; it was shaped by geopolitical interests and domestic power plays that legitimised authoritarian capitalism.
In this light, economics must be read as ideology—not as neutral accounting, but as a system that defines who is deemed productive, who is excluded and who is sacrificed in times of crisis. The LoI signed with IMF in 1997 was far more than a technical agreement; it constituted a strategic blueprint for neoliberal restructuring that reshaped Indonesia’s public institutions and diminished state capacity in favour of market-oriented governance. These ideological consequences, however, are nowhere to be found in the existing historical draft.
Economic Collapse and Enduring Scars
The effort to silence certain sensitive aspects
In Indonesia, economic history has rarely been used as a lens to examine the links between the state, foreign capital and domestic elites.
From Sukarno’s nationalisation programmes to the sweeping liberalisation after 1966, Indonesia’s economic policies have always been entangled in geopolitical contestation and elite negotiation. But these dynamics are often deemed “too technical” for public understanding—or too politically dangerous for official historiography.
Such perception risks obscuring causal links, potentially favouring simplified narratives – such as attributing collapse to a lack of moral character – over a thorough analysis of underlying economic vulnerabilities.
In Indonesia: The Rise of Capital, Richard Robison shows that the New Order was never about public welfare. It was a project of crony capitalism, maintained through strategic alliances bet
The 1997–1998 crisis was not a natural disaster. It was a structural implosion. When the rupiah collapsed and capital flight surged, the entire edifice of Suharto’s New Order – built on centralised power, military alliances and oligarchic patronage – came crashing down. IMF’s intervention, while offering a path to recovery, also introduced conditionalities that impacted national economic autonomy. Sixteen private banks were closed. Subsidies were cut. Social protections were gutted. These moves triggered mass layoffs, economic instability and widespread suffering.
The crisis did not end with the riots. Years after the crisis, Indonesia’s GDP had not fully recovered to the same level as it was before 1997. Even though the riots targeted Chinese Indonesians, the economic pain scarred the entire nation.
Rewriting History
The riots were essentially a surge of social rage. But that anger was not merely political—it was economic. It was borne of desperation, one that triggered violence, especially against those perceived to represent “privilege”, including the ethnic Chinese.
Presenting this violence solely as an isolated anomaly, without acknowledging the systemic factors that enabled it, risks an incomplete and potentially misleading historical account.
To forget these women – their pain, their names, their stories – is to allow the same structures and failures to persist. To write them out of the narrative is not only an act of neglect but a betrayal of truth itself.
What we are witnessing today is a structured politics of forgetting. By decoupling violence from economics and economics from policy, the state effectively absolves itself—not through denial of facts, but through erasure of context.
In Reorganising Power in Indonesia: The Politics of Oligarchy in an Age of Markets, Robison and his co-author Vedi R Hadiz make it clear that Indonesia’s oligarchy did not fall with Suharto. It adapted, reinvented itself and survived through democratic institutions. These oligarchs have retained power by taking control of reform narratives, manipulating market reforms and reshaping institutions in their own interest.
Robison and Hadiz called this process part of oligarchic consolidation. The elites survived transitions not by resisting change, but by capturing its narrative. Official history that ignores BLBI, IMF or the racialised violence of 1998 is not just incomplete—it is complicit. It sets the terms for what the next generation is allowed to, and should, remember. And because economics is the domain where power is most deeply entrenched, it is often the first to be censored.
Conc
A historical narrative that omits the political economy of the 1998 crisis not only blinds the public to the true nature of Reformasi—it severs the link between suffering and cause. This makes justice impossible, without which history only serves as a tool of power, not a means of reflection.
Suharto’s regime may have fallen 27 years ago, but Indonesia has yet to fully reckon with the political and economic legacies of his regime. The official history surrounding his fall remains fragmented, separating structures from events, systems from individuals and policies from pain. If this continues, history will not teach accountability, allowing the same failures to recur. History should not protect the comfort of those in power. It should expose the ways power evades accountability. If political economy continues to be excluded from the story of who we are, what we inherit is not memory but structural blindness. It is a blindness that risks reproducing the same tragedy, with new actors, but with the same enduring logic of domination.
