Indonesian Legal Dynamics in Global Capitalism Reality: Analysis of the Formation of Indonesia’s Regulations

: Consumer protection in muamalah transactions is a critical aspect that emphasizes the principles of justice and balance in Islamic law. This article examines the mechanisms of consumer protection in muamalah transactions, focusing on both the rights of consumers and the responsibilities of producers or sellers. The study employs a qualitative approach through literature review, referring to Islamic legal sources such as the Quran, Hadith


Introduction
Capitalism does not only apply in the world of economy and free trade as it has been understood so far.The theory of Karl Marx's. 1 Capitalist interests can shape economic policies through regulatory changes, as seen in Indonesia during the 1997/1998 crisis when IMF intervention led to capitalist-driven legislation. 2IMF aid frequently leads to a "debt trap," with countries like Argentina and Brazil experiencing ongoing economic problems such as inflation and currency devaluation. 3urkey's IMF Stand-By Arrangement (SBA) in December 1999 initially stabilized the economy with falling inflation and interest rates.However, real exchange rate appreciation led to higher domestic demand and a larger current account deficit, while delayed fiscal and structural reforms raised market concerns. 4In Thailan, the value of bath dropped ergifrenthy 40%.While and Brazil, a senous social crisis was eidentitas 12,9 million became jobles. 51 Agus Trisa, Cara Kapitalisme Menguasai Dunia (Ways Capitalism Conquers the World), https://www.kompasiana.com., 2015, : Karl Marx's work has had an everlasting impact on the arena of sociology in that his views opened the door to the study of how one's social class has a direct influence on one's life experiences and life chances.His work also opened the door for many differing perspectives on the issue of the wealthy and the poor in society.( In Indonesia, IMF recommendations led to privatization and deregulation, which allowed foreign entities to control previously government-owned companies.This increased Indonesia's debt and exacerbated the economic crisis. 6n Indonesia, law formation aims to serve the nation's interests as outlined in the 1945 Constitution, focusing on improving public welfare and global peace.Pragmatic law development seeks to create laws reflecting national values, emphasizing justice, mutual cooperation, and alignment with both divine principles and democracy.As Achmad Irwan Hamzani 7 rgues that Indonesian national law should focus on public welfare, justice, and order, reflecting the values of its people.Development law should facilitate community growth, security, and education.Soepomo adds that Indonesian law must represent national identity and customary law while incorporating international principles in line with Pancasila and the 1945 Constitution. 8onomic Papaer Europen Affair, 2009: Hasan Cömert, A Tale of Three Crises in Turkey: 1994, 2001 and  2008- to enforce new laws and replace outdated ones to meet national objectives. 12egal politics in Indonesia seeks to address public needs and future goals by: 1) Integrating customary law and Pancasila into national law, 2) Creating new rules for emerging issues, and 3) Establishing laws that ensure fairness and prosperity. 13his paper explores Indonesian legal politics, focusing on how law formation deviates from established principles.It examines: 1) deviations in legal product creation, 2) application of laws, 3) causes of disharmony, and 4) the impact of foreign influences.The study argues that legal formation is swayed by political and legal interests, with executive and legislative power shifts often favoring specific groups over public welfare, perpetuating global capitalism. 14

Literature Review
Indonesian law evolution is linked to political shifts.Initially, the founders aimed to base the legal system on Pancasila's noble values, which are rooted in Indonesian culture and reflect existing values rather than new concepts. 15 and da Gama, introduced early capitalism and aggressive colonization.This competition among European powers significantly reshaped Indonesian society and economy. 16 crucial question is why Indonesia's legal system should be uniquely Indonesian.B. Arief Sidharta notes that despite independence, Indonesian law remains heavily influenced by Western legal positivism. 17This is evident in the law-making process, where laws are crafted to advance legal development and the national system, starting with rational planning or structured programs. 18he rapid evolution of capitalism in Indonesia often outpaces legal regulation, causing the legal framework to struggle in keeping up with its fast-paced changes. 19hen the government system in Indonesia from time to time underwent several changes. 20.Historically, the application of capitalism and neoliberalism in Indonesia was driven by the New Order's goal to restore the nation's dignity and economy following the 1965 uprising. 21Max Weber argued that capitalism centers on maximizing profits for capital owners, often ignoring social welfare and shared interests. 22he state protects the most influential capitalists and the destructive effects of reform. 23Politics today often favors specific groups and individuals, sidelining the broader public interest and prioritizing the goals of a few over the needs of the community. 24apitalists, guided by technocrats from industrialized countries, have mainly benefited industrialized nations while exploiting developing countries.To counter this dependency, developing countries should focus on local wisdom and robust governance. 25.

Method
This study uses descriptive terminology and qualitative analysis, meaning it does not require large amounts of data, making it To create effective laws and regulations, including those at the regional and local levels, several conditions must be met.Firstly, philosophical requirements necessitate that laws align with the nation's core values and principles, such as Pancasila in Indonesia, which reflects the moral framework of the society.Secondly, juridical requirements must be fulfilled.This includes formal aspects, where the regulation must be based on a legal foundation that legitimizes the authority of the issuing body.

The Legislative Relationship Products of Global Capitalism in Indonesia
During the Old Order era, legal formation often deviated from Pancasila, especially after Presidential Decree No. 2 of 1959, which bypassed general elections, and MPRS Decree No. 3 of 1963, which appointed the President for life.These New Order legal products were seen as orthodox, elitist, and conservative. 37During the New Order era, laws frequently deviated from reflecting Pancasila.Mahfud MD described Indonesia's political configuration during this period as "undemocratic." 38nder Suharto's New Order era, the legal system was used to maintain power and serve the regime's interests.Laws facilitated government impunity, with the president's extended tenure leading to increased corruption and favoritism.The military's dominant role also hindered democratic progress, stalling the country's democratic development. 39he reformation movement aimed to address legal issues from the New Order era, driven by: (1) laws being used to justify government policies and actions, (2) manipulation of justice for influential individuals and their associates, and (3) a judiciary that was influenced by executive power. 40n example of a law diverging from legal Under Act No. 3 of 1985, political parties were required to adopt Pancasila as their only principle, limiting their ideological diversity and voter base.This law also weakened the DPR's effectiveness, as it was dominated by Golkar.DPR members faced risks for opposing the government, leading to reduced legislative activity and challenges in forming effective coalitions. 42n the economic sector, deviations have worsened as capitalist groups, bureaucratic capitalists, and political elites dominate.They seek protection from foreign competition, along with concessions, licenses, monopoly rights, and government subsidies, leading to widespread abuse and corruption. 43The RPJPN 2005-2025 focused on legal development reforms to create a competitive nation and foster a regulationbased democratic society. 44 Forming Religious-Based Regional Regulations, Jurnal MADANIA Vol. 23, No. 1, Juni 2019. 41 Law formation in Indonesia faces significant issues, particularly in state administration.Politicians in Senayan are seen as rent-seeking entities influenced by foreign sponsors with business interests.Satya Arinanto, citing Daniel S. Lev, describes the current period as an "era of opportunity" for exploitation rather than true reform. 45.The main problem faced is that it is easy to overlap or even contradictions among regulations. 46rom various investigations, there are several Acts of reform era products that are suspected of potential irregularities, as expressed by state constitutional law expert Zainal Arifin Mochtar as well as Director of the Anti-Corruption Study Center at Gajah Mada University. 47One indication of the change in mindset of drafting laws due to foreign aid is the privatization of the public sector which should be the responsibility of the state. 48The Indonesian Constitution, guided by Pancasila, mandates that natural resources be state-controlled and used equitably for societal benefit.However, pragmatic politicians seeking immediate gains have led to a state of "Political Nihilism," similar to America.This shift undermines democratic principles and prioritizes profit over public welfary 49  Indonesia worse off after the inclusion of capitalization in the world of education. 50The opening of higher education to the free market Higher education was finally released from government control.The issuance of laws related to investment, mining, and plantations has granted extensive concessions to the private sector, particularly regarding land tenure.These concessions have adversely affected local communities, leading to their impoverishment.Entrepreneurs, backed by the government under the guise of promoting investment and regional development, have acted unethically, undermining the principles of Pancasila.This situation highlights that morality in law is deeply intertwined with social and power relations. 51Therefore it should always be remembered by law makers Eugen Ehrlich and Roscoe Pound "the center of gravity of legal development lies not in legislation, nor in juristics, nor in judicial decisions, but in society" 52 Despite the presence of large plantations, which are expected to benefit local communities, Bengkulu Province remains the second poorest area on the island of Sumatra and struggles with high levels of corruption.The region, with a population of less than 2 million, is often described by the term "a small gulf with crocodiles," reflecting its challenging socio-economic conditions and governance issues. 53n the research on the tenure and management rights of customary land in the Pekal tribe region of North Bengkulu and Mukomuko Regency, Bengkulu Province, it leads to such matters. 54Khanif (2015) said the precepts in the Pancasila and the Preamble of the 1945 Constitution contained values that mandated the state to realize social welfare for all Indonesian. 55Therefore, the legal substance that deserves to be built in the future is the law that is in favor of human dignity and is democratic, therefore the legal substance must not have the potential to benefit a particular group, whoever it is.It must also be prevented from forming a corrupt legal substance.This is the joint task that accompanies us. 56Many people recently do not trust the institutions and law enforcement because legal issues are not yet effective in their handling.Distrust of the legal system in Indonesia increasingly becomes the cause for concern.This tendency does not only occur in justice institutions but also in all social level. 57A lot of judicial review material on the Constitutional Court, proves that the Act was allegedly contrary to the 1945 Constitution of the Republic of Indonesia.The data shows, since the Constitutional Court was established in 2003 to 2017, there have been 574 norms amended both article and paragraph revoked from 234 Laws requested. 58Legislative institutions must uphold Indonesian legal principles and prioritize public interests over those of groups or individuals.Legislators should heed the voices of the majority who lack influence, ensuring that democratic mechanisms and political infrastructure safeguard the needs of the general populace.This approach will help create responsive and effective legal products that align with societal norms and values. 59he DPR appears to have lacked seriousness in lawmaking, as evidenced by conflicting norms within laws that regulate similar matters.For example, Law No. 32 of 2004 on Regional Government Law No. 25 of 2004 on Development Planning Systems contain contradictory provisions.Law No. 25/2004 (Article 19, paragraph 3) mandates that the Regional RPJM (Regional Medium-Term Development Plan) be established by Regional Head Regulation within three months of appointment.In contrast, Law No. 32/2004 (Article 150, paragraph 3, letter e) requires that the Regional RPJP (Regional Long-Term Development Plan) and Regional RPJM be set by Regional Regulation based on Government Regulation.The differing legal frameworks for regional development planning complicate implementation.The discrepancy between Regional Regulation (Perda) and Regional Head Regulation creates legal issues regarding the validity of development documents.According to Zudan, the national legal development process, often driven by "Jakarta logic," results in legal products that are challenging to apply across Indonesia's diverse communities compared to the narrower perspective of "Jakarta actors. 61

Disscusion
The study aims to examine how law and regulation formation in Indonesia, from independence to the reform era, has been influenced by global capitalism, conflicting with Indonesian legal principles.Findings reveal that foreign capitalist interests have significantly impacted Indonesian legislation, particularly in natural resource laws.This influence is evident in the post-reform era, where legal processes are often managed or funded by foreign entities, resulting in laws that lack national identity. 62