This is an observer's attempt to shed some light on the impact of glo¬balisation on Indonesian companies, and on their responses to shifts in trends. I will start by describing the trends in globalisation during the formative years of the Sukarno era (1945–66), then in the development-focused Suharto period (1966–98) and finally during the current period of reformasi (1998–). The Indonesian economy was closed to the world during the Sukarno era but gradually and often reluctantly opened up during the subsequent two periods. Indonesia's globalisation journey has not been a smooth one, with more than its share of fits and starts. The overall direc¬tion, however, has been an unavoidable opening trend.

In the first section of this chapter I will discuss the impact of globalisa¬tion on the corporate landscape, especially the financial sector. During the Sukarno era, the relatively open shutters of the colonial economy began to close with the nationalisation of large Dutch companies. The economy gradually began to reopen during Suharto's New Order era, with the impact varying depending on the sector, the state of development and preparedness to compete of individual companies, and the nature of the government's regulatory oversight. In both the Suharto and reformasi peri¬ods, the most common response of sectors and companies to globalisation was to call for protection, and then to prolong that protection for as long as possible in order to capture domestic market share. This was easier than innovating and improving efficiency to better compete globally.

Even with the country's protectionist bias, however, the disruptive impact of globalisation could not be avoided. Industry players and regula¬tory authorities struggled to adapt to heightened competition and to the rapid changes in technology and business models. Globalisation helped bring about deforestation, pollution and the devastating 1997–98 Asian financial crisis. Local companies have had to cope with rising working, environmental and product quality standards, whether they liked it or not. Government regulatory oversight has become tighter and more com¬plex, raising the cost of corporate compliance. On the other hand, the Indonesian consumer has benefited from having more options and better-quality products.

Over the last decade or so, as Indonesia has recovered from the blows of the 1997–98 Asian financial crisis, resumed economic growth and sta¬bilised as a successful democracy, a mood of assertive nationalism has entered the country's public discourse and domestic politics. Politicians, intellectuals, journalists, leaders of religious and social organisations, and many ordinary citizens frequently state publicly that foreign countries habitually insult, exploit and mistreat Indonesia, and do not accord it the respect it deserves as a great nation. From time to time, there are angry eruptions of public protest and media condemnation in response to alleged insults that other countries—usually neighbours such as Malaysia or Australia—have directed in Indonesia's direction. Candidates for politi¬cal office increasingly draw upon nationalist themes, and political leaders are increasingly moulding public policy to match the nationalist mood, with a host of measures to protect sectors of the Indonesian economy and restrict activities by foreigners. Though nationalist discourse and policy-making have featured in all post-Suharto governments, they are becoming even more prominent under President Joko Widodo, sworn into office in October 2014.

This chapter sketches core features of this new nationalism, analy¬ses its historical roots and identifies the factors driving its contemporary manifestation. The first section introduces the new nationalism, noting three key arenas of nationalist mobilisation: territorial, economic and cultural. The second section explains the historical sweep of Indonesian nationalism, in order to identify both the roots of the contemporary phe-nomenon and its novel characteristics. The next two sections focus on two features that define the contemporary nationalism: first, a sense of suspicion, sometimes bordering on paranoia, about the allegedly hostile intentions harboured by foreign countries; and second, an obsession with insults allegedly directed at Indonesia, and an overwhelming concern to defend Indonesia's ‘national dignity’.

The final section of the chapter considers factors driving the new nationalism. Indonesia's post-1998 democratisation, and the absence of strong policy or ideological differences between its major parties, provides a domestic political context strongly conducive to nationalist outbidding. The new nationalism is also moulded by insecurity about Indonesia's place in the world. The emphasis on national dignity, for example, derives largely from the anxieties attending Indonesia's transformation from a relatively poor and underdeveloped nation into a more successful eco¬nomic player, but one that still lags behind neighbouring countries.

In the current digital era of rapid technological change, globalisation of labour markets deals with a much broader range of issues than simply the effects of international trade and investment on jobs. Historically a major concern of governments, international trade and investment played a major role in job creation across the globe until the global financial crisis of 2007–08. Since then, the links between computerisation and industrial development—or between cyber and physical systems—have intensified, leading to revolutionary changes in modes of service delivery (Baldwin 2016). These developments have changed the nature of the debate on the labour market consequences of globalisation in Indonesia.

The shift in focus away from the labour market effects of trade in goods is partly a result of the slowdown in world trade since the global finan¬cial crisis. This is likely to be exacerbated by the Trump administration's threat to turn its back on the multilateral and regional trading system that has evolved over the past half-century. In addition to the effects of trade, many countries are concerned about the impact of foreign investment on employment, the benefits and costs of international migration and, more generally, the effect of globalisation on inequality (IMF 2007; Helpman 2016). Analysts are increasingly debating the indirect effects of foreign trade and capital movements for the labour market, as well as the direct effects through migration to and from developing countries.

Indonesia became more wary of trade, capital and labour interactions with the world economy after the Asian financial crisis of 1997–98. Restrictions that slowed the growth in trade and investment accelerated during the second term of the Yudhoyono administration (2009–14), as the boom in resource industries peaked and then came to an end (Hill 2015). At the same time, online shopping and other internet-based services spread rapidly in Indonesia, as in the rest of the world. In the Indonesian case, local start-ups such as app-based transport provider Go-Jek have expanded quickly, usually by gaining an initial foothold in Jakarta before moving quickly to other major cities. In the process they have created new job opportunities, while also threatening old ones (Ford and Honan 2017; Pangestu and Dewi 2017).

The global mining boom, occurring roughly between 2003 and 2013, caused a frenzy of mineral extraction across Indonesia's resource-rich regions, such as Kalimantan, Sulawesi and Sumatra. During the boom years, Indonesia's central and regional governments enjoyed a huge boost in revenues as demand from China sent commodity prices soaring. But many policy-makers, activists and politicians became concerned that Indonesia's finite resources were being shipped overseas too quickly and too cheaply, and that not enough Indonesians were feeling the economic benefits of the minerals boom.

In response, President Susilo Bambang Yudhoyono's administration (2004–14) introduced Law No. 4/2009 on Mineral and Coal Mining (the 2009 Mining Law), which stated that mining companies must begin adding value to their mineral ores within five years of the law's enactment. The government's goal was to kick-start a downstream mineral-processing industry by forcing companies to smelt or refine their ores domestically. Then, in January 2014, the government went ahead and banned the export of unprocessed minerals (Minister of Energy and Mineral Resources Regu¬lation No. 1/2014). According to the regulation, value-adding activities in the mining sector would help to ‘increase the benefits of minerals for the people and for regional development’. Indonesia could then transition away from extracting and exporting cheap primary commodities, and instead produce and export higher-value mineral products.

The policy was primarily justified in nationalist terms. Without policies like the export ban, so the argument went, Indonesia would just continue selling cheap primary commodities to richer, more industrialised nations, and never move up the global value chain. The policy contributed to Indonesia's reputation as a country marked by ‘resource nationalism’, a term that describes the various ways in which state and non-state actors attempt to extract more value from, and exert more ownership over, their natural resource endowments. Conventional market-cycle theories sug¬gest that resource nationalism emerges in response to commodity booms, and then fades as commodity prices cool and resource-rich governments come under financial pressure (Wilson 2015).

A growing body of literature has assessed the distributional effects of glo¬balisation, focusing mainly on inequality by skill level or socio-economic characteristics. Much less is known about the differential effects for men and women, although theory suggests several channels through which trade may affect the employment of men versus women. Globally, gender gaps in labour market outcomes remain large, notwithstanding the fact that differences between men and women in labour force participation and earnings are declining in many countries. Indonesia is one of the countries with relatively low female labour force participation, and a persistently large gender gap in participation. To understand whether and how trade policy and trade performance have played a role in this gender gap, this chapter focuses on the gender-specific effects of trade liberalisation in the 1990s and the relationships between trade and female employment in the period 2000–10.

In the next section, we first consider trade theory, and the mechanisms through which trade reform can induce gendered labour market effects. These channels include labour market discrimination, skill-biased techno¬logical change, sectoral segregation and the sectoral structure of employ¬ment. We then discuss the international empirical evidence for gendered trade effects. In the second section, we discuss the effects of Indonesia's trade reforms in the 1990s. The evidence suggests that import tariff reduc¬tions improved the competitiveness of Indonesian firms by reducing the costs of intermediate inputs. This, in turn, induced job creation and increased female—but not male—work participation. In the third section, we describe the more recent trends in female labour force participation, and in the fourth we relate those trends to Indonesia's trade performance in the period 2000–10. While the 1990s were a period of stagnation in aggregate female labour force participation, in the post-decentralisation period Indonesia experienced an increase in female participation, mainly in the service and trade sectors. But at the same time, the role of international trade in improving employment opportunities for women seems to have declined between 2000 and 2010.