Agus Suharsono 

Public Administration Department, Faculty of Social and Political Sciences, University of Jember, Jember, East Java, Indonesia 

Sukron Makmun 

Public Administration Department, Faculty of Social and Political Sciences, University of Jember, Jember, East Java, Indonesia 

Hasyisy Ahmad 

Public Administration Department, Faculty of Social and Political Sciences, University of Jember, Jember, East Java, Indonesia 

DOI: 

ABSTRACT 

As a state blessed with overflowing natural resources, Indonesia is often targeted by major power, who seek to infiltrate the nation with certain movements or ideologies, with the ultimate purpose of exploiting its natural resources. The shift from Soekarno’s socialistoriented economy to a capitalist model under Soeharto’s regime can be seen as an example in which foreign governments intervened the Indonesia’s governance. This research used literature study as a method and is analyzed using Marxist political economy framework. It discovered that the political events of 1965 gave significant impacts to Indonesia’s economic policies; enforcing the country under global capitalism domainance with the enactment of the Foreign Investment Law in 1967 (UU Penanaman Modal Asing) and the entries of multinational corporations, namely Freeport. These findings reinforce the role of the state as the guardian of the capitalist interest that exist by oppressing certain group in order to maintain power. This shift had led Indonesia to depend upon foreign investments. Thus, Indonesia’s long struggle to find the correct formula for economic development has yet to find its end, whether thorough domestic strategies or opeing doors to foreign invesment, neither has addressed that state’s economic challanges                               

Keywords: Political Economi, Marxis, Indonesia’s Economy, The Tragedy of G30S