This dissertation examines the inter-relationship between labour law, the state and economic development in Indonesia, particularly under the so-called "New Order" era of President Soeharto (1965-1998).
Throughout its history the Indonesian labour law regime has been a reflection of the economic interests of the state rather than the interests of Indonesian workers and people. The authoritarian New Order state, seeking to provide an appropriate framework within which policies of industrialisation and economic growth can be pursued, has used the concept and structures of corporatism to control labour in the name of "development". Labour legal framework has been specifically designed to assure managerial ascendancy and the restraint of labour costs with or without state repressions.
Initially, labour repression was important for the survival of the regime, later, it was a consequence of the shift in economic strategies from import-substituting industrialisation to export-oriented industrialisation, relied heavily on foreign investment and low-cost labour. Compounding this is the continuing international pressures, associated with the so-called "globalisation" of economy, which buttress competition in both domestic and international level and further weaken the already weakened labour through flexibilisation or labour markets and individualisation of labour relations. The current "labour law reform" under the Reformasi regime shall reflect this. |