The conglomerates in crisis: Indonesia, 1997–1998

The crisis in 1997/1998 unravelled Indonesia's successful business model of close state–business relations. Without the authoritarianism, centralism, and protectionism of the former regime, the conglomerates – predominantly owned by ethnic Chinese – had to deal with a new political environment that brought them to the brink of financial and political collapse. This paper analyses the impact of the Asian crisis and outlines the new challenges for the business groups in a more democratic, decentralized, and deregulated economy.