Jan P. WengerFollow

Date of Award

2023

Document Type

Honors Thesis (Open Access)

Department

Colby College. Global Studies Program

Advisor(s)

Arnout van der Meer

Second Advisor

Patrice Franko

Abstract

This study examines Indonesia’s reliance and independence on foreign direct investment (FDI) and multinational corporations (MNCs) in the oil and gas sector. Analyzing historical, economic, and political primary and secondary sources and conducting qualitative interviews, the research explores the friction between economic development aspirations and nationalist sentiments. The study reveals that the current ambiguity surrounding FDI and MNC policies in Indonesia’s oil and gas sector can be traced back to the country’s economic decolonization and demonstrates that Indonesia’s economic policies towards these factors shifted in the aftermath of political change. Since gaining independence, Indonesia has strived to balance the pursuit of economic sovereignty and the potential benefits of FDI and MNCs in driving growth and social welfare. This investigation pays particular attention to the interplay between the socialist Indonesian Constitution, specifically Article 33, and the more liberal regulations governing investments that led to the establishment of production-sharing regimes for resource extraction. The experiences of the oil and gas industry serve as a case study for broader discussions on natural resources.

Keywords

Foreign Investment, Economic Decolonization, Article 33, PERTAMINA, Resource Nationalism

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