Managing resource nationalism: Political interests and technocratic authority in Indonesia

This paper examines how developmental states pursue nationalist objectives in strategic foreign asset takeovers while managing the operational demands of global markets. It advances a theory of strategic technocratic intervention, arguing that technocrats mediate between political mandates for national control and the technical and financial requirements needed to sustain production and investment. The argument is tested through a structured comparison of three foreign firms in Indonesia, Chevron, Freeport-McMoRan, and British Petroleum, whose contract renegotiations produced divergent outcomes under the same nationalist narrative. Chevron's Rokan block was transferred to a state-owned enterprise under domestic operational control; Freeport ceded majority ownership while retaining operatorship at Grasberg; and British Petroleum retained both ownership and operational control at Tangguh LNG through a long-term extension. Process tracing shows technocrats shaping these outcomes by translating nationalist goals into viable policy options, mediating among political leaders, state-owned enterprises, and foreign investors, and institutionalizing compromise through contracts and regulation. The findings demonstrate how technocrats can moderate the form and limits of resource nationalism while preserving its political symbolism. In this role, technocrats function as two-level game players, managing domestic nationalist pressures from political leaders and state-owned enterprises while simultaneously signaling institutional credibility to foreign investors and international capital markets.