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Small-Scale Enterprise Livelihoods and Social Capital in Eastern Indonesia: Ethnic Embeddedness and Exclusion


  • *Many thanks to the small-scale entrepreneurs in Makassar who took the time to talk to me about their work. I am also grateful to Hasbi for his field work assistance, Pak Ahmad Syamsuddin Suryana (Pusat Pengembangan Usaha Kecil Kawasan Timur Indonesia) and Pak Nurman Said (State Institute of Islamic Studies) for their enthusiastic support in Makassar, and Stephanie Coen and Laura Schoenberger for their research assistance in Canada. Thanks also to Wendy Allen, Indonesia Social Equity Project, McGill University, and the three referees for their useful comments.


This article explores the importance of specific forms of social capital for small-scale enterprises while highlighting that such analyses must incorporate local sociocultural complexities. In Eastern Indonesia, small-scale entrepreneurs in Makassar city rely heavily on informal networks, linkages, and trust relationships for their livelihoods. This dependence reflects different social capital forms, embedded in local ethnic and social relations that are inclusionary for some, yet exclusionary for others. Findings show that although bonding social capital is prevalent, albeit with diverse implications, bridging social capital is less so, and linking social capital is virtually absent. A lack of the latter, combined with widespread corruption in the city, hinders livelihood progress for many local entrepreneurs.