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1 * Water Privatization in the Capital City of Indonesia and Struggles over Policy: Changes and Continuities in Post-Suharto Indonesia KAYANE Yuka* Abstract This paper analyzes the water privatization process in Jakarta, Indonesia, focusing on the changes in policy after the fall of Suharto in 1998, to show the strategic adaptation of domestic business elites to survive after the drastic transition period. During the Suharto era, business elites were able to accumulate capital by drawing patronage from former President Suharto. However, the democratization of the country led to Suharto s ouster and disordered the former interest structure, which was deeply entrenched in the Indonesian political economy. Today concessions in water privatization are no longer sustained by merely relying on the political authority. In Jakarta, the center of Indonesia s politics and economy,agreements with Suharto guaranteed private corporate interests with lucrative business relating to city development. Recently, however, private businesses, especially those managing public infrastructure, have become increasingly vulnerable to aggres sive public backlash and supervision by the regulatory bodies of the provincial government. Despite this increasing vulnerability, domestic business elites have succeeded in regaining their lucrative concessions by seizing opportunities and cooperating with the capitals of foreign countries. These business elites have successfully adapted to the changing democratic environment with sophisticated strategies and shrewd risk management. Keywords: urban water issue, privatization, political economy, public business, democratization, oligarchy * ; Graduate School of Asian and African Area Studies, Kyoto University, 46 Shimoadachi-cho, Yoshida Sakyo-ku, Kyoto , Japan kayane.yuka.22z@st.kyoto-u.ac.jp 139
2 Emmons IMF 10 Bakker 2010: 2 NGO ) United Nations General Assembly
3 I I 1 19 Bakker 2010: Thames Water Hall 2005: 286 IMF : : Hall et al. 2010: International Consortium of Investigative Journalists 2) : ) Hall et al. 2010: 6 141
4 51 1 IMF Jubilee South; Hall et al. 2010; Amrta Institute Perusahaan Daerah Air Minum Jakarta Raya PAM Jaya 9, Jakarta Water Supply Regulatory Body (JWSRB) 2009: 117 Shofiani 2003: 41 53; Kurniasih 2008: 7; Hall 2005; Hall et al Karen Bakker Bakker
5 JWSRB 2009: I Robison and Hadiz 2004: 3 18, 41 43; Winters 2011: Robison and Hadiz 2004: 40 68,
6 ) Forbes Forbes 2010/8 144
7 II Suez 2 II JWSRB 2009: II JWSRB 2009: 45; Harsono ) JWSRB ) 1 9,000 9, Harsono
8 51 1 McLeod 2002: 4; Dick and Mulholland 2010: Sigit Harjojudanto PT Kekar Pola Airindo 20 Harsono 2003a: 19 Soedono Salim PT Garuda Dipta Semesta 40 Bernard Lafrogne ibid JWSRB 2009: 46; 2003: 243; Dick and Mulholland 2010: 70 Radinal Mochtar : JWSRB 2009: 44, 46 47, ibid.: ) BAPPENAS /1/ /1/21 8) 25 BOT Built, Operation and Transfer:
9 70 757,129 7, , , Harsono 2003a ibid.; JWSRB 2009: Soerjadi Soedirdja Harsono 2005; JWSRB 2009: 48, 51 9 Sutiyoso ) Human Rights Watch Andreas Harsono 2012/7/15 147
10 51 1 III III Korpusi, Koneksi, Nepotisme: KKN JWSRB 2009: 46; Harsono IMF 2004: Rama Boedi Harsono 2003a 10) Haber 2002: 7 11) ) Harsono
11 JWSRB 2009: 58 PT Thames PAM Jaya: TPJ PT Palyja: 13 2 KKN IMF NGO Amrta Institute Koalisi Rakyat untuk Hak atas Air: KRuHA NGO Amrta Institute 2008; KRuHA 2011 Jakarta Post, Jakarta Globe Hall 2005; Hall et al. 2010; 2008: 58 98, 159; Jubilee South III Renegotiated Contract Agreement 13) TPJ 5 PT Terra Metta Phora PT Bangun Cipta Sarana JWSRB 2009: 64 14) Hall Replacing Failed Private Water Contracts
12 Jakarta Water Supply Regulatory Body: JWSRB Automatic tariff adjustment mechanism JWSRB 2009: 68, NGO III ) 1 5, Hadipuro and Ardhianie 2006: 22 16) Keputusan Gubernur Provinsi DKI Jakarta No Tahun 2004 tentang Penyesuaian Tarif Otomatis 17) Water Law NGO Al Afgani 2006: 3 18) JWSRB 2009: 9, 59,
13 Hall et al. 2004: JWSRB 2009: 67 TPJ TPJ Tempo.co 2006/9/29; Hall et al. 2010: 2 IV IV 1 TPJ 19) Pemerintahan Provinsi Daerah Khusus Ibukota Negara Republik Indonesia Jakarta Pemerintah Provinsi Daerah Khusus Ibukota Jakarta Sebagai Ibukota Negara Kesatuan Republik Indonesia 20) 2008 Jakarta Globe 2011/12/27 151
14 51 1 TPJ PT Astratel Nusantara 30 Citigroup Antara News 2006/7/ TPJ 2007 Acuatico Pte. Ltd 95 PT Alberta Utilities 5 TPJ PT Aetra Air Sandiaga Uno Edwin Soeryadjaya PT Recapital Advisors Saratoga Group 2 152
15 IV 2 PT Aetra Air TPJ TPJ TPJ JWSRB 2009: TPJ BPKSPAM Amrta Institute 2008: 2 TPJ Jakarta Post 2006/12/16 Suara Karya 2006/12/26; 2007/1/ Amrta Institute 2008: 8 21) 3 Jakarta Post 2006/12/14,
16 51 1 TPJ , : 2 6 IV PT Gaya Motor : ; 2004: 167; Robison and Hadiz 2004: 56, ) 1998 IBRA Indonesian Bank Restructuring Agency Jardin Matheson Group; Robison and Hadiz 2004: ) 1997 Rosan Perkasa Roeslani PT Recapital Advisors Himpunan pengusaha Muda Indonesia: HIPMI ICMI Recapital Advisors HP 154
17 PT Saratoga Investama Sedaya 2011 Tokoh Indonesia 2011/11/4 Aburizal Bakrie PT Bakrieland 24 Edgardo Bautista Kompas 2012/1/ Garuda Merpati Robison and Hadiz 2004: 79; Chua 2008: 133 Korpri McLeod 2010: Bumi Resource 15 Berau Coal Financial Times 2011/7/5 24) Bakrie Infrastructure Alberta 75 Bakrieland Annual Report ) Fauzi Bowo: Fadel Muhammad: Jakarta Post 2005/3/31 Edward Soeryadjaya Suara Karya :
18 51 1 IV 4 PT PAM Lyonnaise Jaya: Palyja Tempo.co 2006/7/27 51 TPJ 8 NGO 2011/2/4 JWSRB Palyja 2011 ADB CSR Corporate Social Responsibility 156
19 CSR Global Partnership Output Based Aid ADB 4,550 5,000 6,650 ibid.: 10, 13, ,160 ibid.: Jakarta Globe 2011/12/ Tempo.co 2012/11/11 26 V 26) Bloomberg 2012/10/18 Sayogo Hendrosubroto Jakarta Post 2012/12/13 PT Pembangunan Jaya Tempo.co 2012/11/11 157
20 51 1 NGO
21 Antara News. 2006/7/27. DPRD DKI Sesalkan Penjualan 49 Persen Saham Palyja. Asian Times. 2002/3/29. Jakarta Turns Deaf Ear to Privatization Nay-sayers. Bloomberg. 2012/10/18. Manila Water Acquires Suez s 51 Stake in PAM Lyonnaise. Financial Times. 2011/7/5. Adaro Executive Enjoy Rise in Coal Demand. Forbes. 2010/8. Indonesia Billionaires. Jakarta Globe. 2011/12/27. In Jakarta a Fight over Money and Water. Jakarta Post. 2005/3/31. Golkar Gives Suara Karya Makeover /12/14. Regulatory Body Casts Doubt on Takeover Bid /12/16. Acuatico s Takeover Bid Rejected by Committee /12/13. Council Asks Governor to Put Sale of Palyja Stake on Hold. Kompas. 2010/9/24. Privatization in Indonesia Remains Uncertain /1/24. KORUPSI AIR: Tembok Besar Membersihkan Bisnis Air Jakarta. Majalah Tempo. 2013/3/ Perusahaan Cucu Mengincar Air Jakarta, pp Suara Karya. 2006/12/26. Warga DKI Rindu Pelayanan Air Bersih Tidak Cret-Cret Lagi /1/3. Sutiyoso Setujui Acuatico Beli 100 Persen Saham PT TPJ. Tempo.co. 2006/7/27. DPRD Minta Penjualan Saham Palyja Dibatalkan /9/29. Thames Water Jual Saham ke Acuatico /11/11. Menelikung Di Tengah Negosiasi. Tokoh Indonesia. 2011/11/4. Taipan Tangguh yang Dihormati. Bakrieland Annual Report /5/1 Blue Gold /12/12 Flow /12/12 Jardin Matheson Group /9/12 Jubilee South /12/15 Recapital Advisors /5/1 Aetra Air Annual Report Jakarta: Aetra Air. Al Afgani, Mohamad Mova Constitutional Court s Review and the Future of Water Law in Indonesia. Law, Environment and Development Journal (LEAD) 2(1): Amrta Institute The Controversial Sell Out off PT Thames Pam Jaya (TPJ). Jakarta. Unpublished paper Tidak Ada Agenda Pro-Miskin Dalam Konsensi Layanan Air Jakarta. Jakarta. Unpublished paper. Bakker, Karen Privatizing Water: Governance Failure and the World s Urban Water Crisis. New York: Cornell University Press Barlow, Maude Blue Covenant: The Global Water Crisis and the Coming Battle for the Rights to Water. New York: New Press. Brown, Rajeswary Ampalavanar Indonesian Corporations, Cronyism and Corruption. Modern Asian Studies 40(4): Chua, Christian Chinese Big Business in Indonesia: The State of Capital. New York: Routledge. 159
22 51 1 Dick, Howerd; and Mulholland, Jerremy The State as Market Place: Slush Funds and Intra Elite Rivalry. In State and Illegality in Indonesia, edited by Edward Aspinall and Gerry Van Klinken, pp Leiden: KITLV Press. Emmons, Garry Turning on the Tap: Is Water the Next Oil? Harvard Business School Alumni Bulletin 81(3) /12/ Goldman, Michael Imperial Nature: The World Bank and Struggles for Social Justice in the Age of Globalization. New Haven, CT and London: Yale University Press.) Haber, Stephen Crony Capitalism and Economic Growth in Latin America: Theory and Evidence. Stanford: Hoover Institution Press. Hadipuro, Wijanto; and Ardhianie, Nila Critical Review of Jakarta Water Concession Contract. Semarang: Amrta Institute. Hall, David Public Resistance to Privatization in Water and Electricity Development in Practice. Unpublished paper /12/13 Hall, David; Lobina, Emanuele; and Corral, Violeta Replacing Failed Private Water Contracts. Unpublished paper /12/13 Hall, David; Lobina, Emanuele; De la Motte, Robin; and Violeta, Corral Water Privatisation and Restructuring in Asia-Pacific. Unpublished paper /12/14 Harsono, Andreas. 2003a. Water and Politics in Fall of Suharto. International Consortium of Investigative Journalists. Unpublished paper /11/ b. From the Thames to the Ciliwung, RWE: Thames Water in Jakarta. Online-Materialien aus dem Asienhaus /11/ When Water and Political Power Intersect. Nieman Reports. reports/article/101044/when-water-and-political-power-intersect.aspx 2011/12/25 Jakarta Water Supply Regulatory Body (JWSRB) The First Ten Years of Implementation of the Jakarta Water Supply 25-Year Concession Agreement ( ). Jakarta: Badan Regulator DKI Jakarta. Koalisi Rakyat untuk Hak atas Air (KRuHA) Current Situation of Jakarta Water Privatization. Unpublished paper. Privatization.html 2012/4/14 Kurniasih, Heni Water Not for All: The Consequence of Water Privatization in Jakarta, Indonesia. The 17 th Biennial Conference of the Asian Studies Association of Australia Educational, Scientific and Cultural Organization, p. 7. McLeod, Ross Privatization Failures in Indonesia. The Austraria National University. Unpublished paper /12/ Inadequate Budgets and Salaries as Instruments for Institutionalizing Public Sector Corruption in Indonesia. South East Asia Research 16(2): Institutionalized Public Sector Corruption: A Legacy of the Suharto Franchise. In State and Illegality in Indonesia, edited by Edward Aspinall and Gerry Van Klinken, pp Leiden: KITLV Press. Mietzner, Marcus Funding Pilkada: Illegal Campaign Financing in Indonesia s Local Elections. In State and Illegality in Indonesia, edited by Edward Aspinall and Gerry Van Klinken, pp Leiden: KITLV Press Palyja Annual Report 2011, pp Jakarta: Palyja. Robison, Richard; and Hadiz, Vedi Reorganizing Power in Indonesia: The Politics of Oligarchy in an Age of Markets. London and New York: Routledge Curzon
23 1992 Shofiani, Nur Endah Reconstruction of Indonesia s Drinking Water Utilities: Assessment and Stakeholders, Perspectives of Private Sector Participation in the Capital Province of Jakarta. Thesis of Department of Land and Water Resources Engineering Royal Institute of Technology, Stockholm Tomsa, Dirk Party Politics and Democratization in Indonesia-Golkar in Post-Suharto Era. London and New York: Routledge. United Nations General Assembly The Human Right to Water and Sanitation. view_doc.asp?symbol=a/64/l.63/rev.1&lang=e 2012/1/25 Winters, Jeffrey Oligarchy. New York: Cambridge Press Pathways to a People s Indonesia. Inside Indonesia. pathways-to-a-people-s-president /11/
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