Abstract
To understand the political and economic nature of Indonesia under the New Order we must comprehend the enormous significance of oil earnings and revenues. The consolidation of the power of the state and its officials, the process of industrialisation and the emergence of major domestic corporate groups have all been built around oil. Consequently the collapse of oil prices in 1981-82 and the more disastrous falls in early 1986 have posed fundamental threats to the fabric of power and policy in Indonesia.