Small-scale enterprise livelihoods and social capital in eastern Indonesia: Ethnic embeddedness and exclusion

This paper reflects on the importance of social capital for small-scale enterprise livelihoods. At the same time the article also recognizes that in order to fully understand its dynamics we need to be aware of the local sociocultural complexities. This qualitative study was conducted in Eastern Indonesia, and questionnaires were completed by nearly 400 small-scale entrepreneurs. Entrepreneurs depend on informal networks, linkages, and trust relationships for their livelihoods. These dependences show different social capital forms, where people rely on their networks for monetary transactions more than on institutions. Social capital is embedded in local ethnic and social relations more than gender and age. Networks and linkages have both positive and negative effects; what is inclusive for some is also exclusive to others based on ethnicity, migrant status, employment status etc. Findings show that even though bonding social capital is widespread, bridging social capital is less common, and linking social capital is virtually absent. The absence of linking social capital prevents entrepreneurs from even being aware of different types of assistance. This combined with widespread corruption in the city, hinders livelihood progress for many local entrepreneurs.