Ersatz Capitalism and Indonesian Football

*Guest post by Fajar Junaedi of Muhamadiyah University, Yogyakarta

**This article is a translation of Kapitalism Semu dan Kegagalan Swastanisasi Sepak Bola Indonesia.

There is a missing link in professional football in Indonesia. The combination of the Association clubs with those of the Galatama (professional) clubs was intended to create a holistic professional competition. But, in the end, the pseudo-capitalism that underlined this unification became a new problem; this has led to ongoing problems.

In the early 1990s, a Jakarta-based think tank, LP3ES released a book that started off from a study by Yoshihara Kunio, titled, Ersatz Capitalism in Southeast Asia. The Suharto-led New Order government was incensed by the book as it felt that the book compared the Suharto government with that of the Ferdinand Marcos government of the Philippines. The book, however, was not just about Indonesia’s economic development, but about four countries of southeast Asia. The book was subsequently banned by the Attorney General. The book, though, became available to students in the form of photocopies – i.e. the same way other banned books were able to be read.

Kapitalisme Semu

Dangerous book

Kunio’s book was a criticism of the way business was practiced in Southeast Asia, inclusive of Indonesia. According to Kunio, there wasn’t a pure capitalism, as is commonly found in developed countries. In western Europe, where capitalism originates from, business relies on innovation and competition. This could be found in Japan, where innovation and competition was the breath of capitalism that turned Japan into the most developed industrial country in Asia.

In contrast to western Europe and Japan, capitalism in Indonesia relied upon the major capitalists who operated with the support of the government. They relied on the government to function, and thus, there was very little innovation and competition. Many capitalists relied on rent seekers and connections through the government for protection, business licenses or a monopolisation on their business. Kunio regarded these practices as ‘ersatz capitalism’.

Four years after the book was published, football in Indonesia underwent a transformation when the PSSI (Indonesian Football Federation) combined the two competitions together, forming the Indonesian League. This was made up of the Association (amateur) and Galatama (professional) clubs. Kunio didn’t discuss football in his book, but his thesis on ersatz capitalism can be used as a means to analyse football in Indonesia, in the period since its unification.

Originally, the Association and the Galatama leagues followed their own schedule. The Association league was an amateur competition in which football clubs from various cities participated. These clubs had their own members, which is where the clubs sourced their players from. Many of the players in these clubs were employees of their local government, as they served to strengthen the identity of their city and region. The clubs rise or fall of the clubs could not be separated from the attitude taken towards the fostering of amateur sport in the particular region. The Association clubs generally used facilities that were owned by the local government. On the other hand, the Galatama clubs were semi-professional and were formed by companies with funds coming from their founders and owners.

Sepakbola kita juara asia

The very olden days: “Our football is the best in Asia”

The final of the first season of the Indonesian league saw a game between Persib Bandung (a team with an Association background) and Petrokimia Putra (coming from the Galatama). Persib became the champions and have gone on to become one of the leading teams in Indonesia, while, Petrokimia Putra is nothing but memories, having merged with Persegres Gresik. This was despite the former-Galatama club having its own stadium – the Petrokimia Gresik Stadium. This could be compared with the poor condition of the facilities of the clubs coming from Association backgrounds.

After the merging of the Association and Galatama leagues, many former-Galatama clubs weren’t able to compete with the former-Association clubs. Those that were able to, include Barito Putera (of South Kalimantan), Arema (of Malang), Semen Padang (of Padang, West Sumatra) and Pelita (of Bandung). These clubs rely on connections with local governments or with elite clubs that are supported by politicians and bureaucrats.

Barito logo

Barito Putera, logo

Former-Association clubs were able to do better as they could use money from the Regional Budget. Many of the clubs had strong connections with the political elite at many levels of government. The clubs were usually given a certain amount of money that had to be used up within one year. Former-Galatama clubs such as Petrokimia Putra collapsed in the face of much better financed clubs.

Following Kunio’s thesis, it is clear that the effort to unite the Association and Galatama leagues, in the manner of European leagues, has not been beneficial. The desire to modernise Indonesian football has lead to a competition with teams that rely on connections to the government and protection from those within the government. Many clubs still use facilities that are owned by the government – such as stadiums, training grounds and accommodation for players.

Petrokimia 1996-97 jersey

Petrokimia jersey, 1996-97

In 2011, as the fight against corruption gained momentum, the Minister for Domestic Affairs banned the use of Regional Budget for professional football. Regional governments quickly switched off the free-flowing funds for professional football clubs. Regional governments also started charging a fee for the use of their facilities in order to raise their revenue. This didn’t lead to the immediate disappearance of ersatz capitalism. Many government officials within regional clubs are also local and national politicians.

Indonesian football is founded on ersatz capitalism. The PSSI (Indonesian Football Federation) positions itself as supporters of ‘private football’, but history has shown up until now, the government has played a strong role. The implications of the mistaken decision to unite the Association and Galatama leagues in 1994 are still being felt.


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