Recollections of My Career

Mohammad Sadli, Professor Emeritus in the University of Indonesia's Faculty of Economics and Chairman of the Institute for Research and Development (LP3E) of the Indonesian Chamber of Commerce and Industry (Kadin), is one of the group of economists who fashioned Indonesian economic policy under the New Order government after it took power in 1965. He was Chairman of the Technical Committee for Capital Investment (1967–73), Minister of Manpower (1971–73), Minister of Mining (1973–78), Secretary-General of Kadin, and later LP3E-Kadin's first director. Despite retiring from the University in 1987, Professor Sadli continues to write and give seminars in Indonesia and abroad. In 1992 he granted an interview to Thee Kian Wie and Chris Manning of the BIES Editorial Board, and discussed his career, economic policy formulation in the early years of the New Order, and issues such as foreign investment, manpower and labour relations, the 1975 Pertamina crisis and government-private sector interaction.     

Recollections of My Career

Teuku Mohamad Daud, a pioneer Indonesian entrepreneur, was born in Perlak, Aceh, in 1920. Educated in Aceh and Jakarta, he joined the fledgling Indonesian National Army (TNI) at the proclamation of independence in 1945. Charged with procuring military equipment for the TNI Sumatra Command based at Bukittinggi, West Sumatra, Mr Daud was forced to finance the procurement by smuggling agricultural commodities, with the help of his uncle, Teuku Abdul Hamid Azwar. In 1947, at the suggestion of Vice President Hatta, Mr Daud and his uncle established Indonesia's first state-owned general trading company, the Central Trading Corporation (CTC, renamed PN Tri Bhakti in 1961, and later PN Panca Niaga), based in Bukittinggi. Mr Daud became a director of CTC while remaining on the TNI staff, and was later President Director until his resignation in 1966. He and several colleagues then established a group of private companies, engaged mainly in construction work.

On 1 October 1996 and again in June 1997, Mr Daud talked with Howard Dick and Thee Kian Wie of the BIES Editorial Board about his experiences in running CTC, both during Indonesia's revolutionary struggle and in the early period of independence, and about his views on the role of government in commerce. References to current government policy relate to the Soeharto administration.     

Widjojo Nitisastro and Indonesian development

Widjojo Nitisastro (2010) Pengalaman Pembangunan Indonesia: Kumpulan Tulisan dan Uraian Widjojo Nitisastro [The Experience of Development in Indonesia: A Collection of the Writings of Widjojo Nitisastro], Penerbit Buku Kompas [Kompas Book Publishing], Jakarta.

Widjojo Nitisastro is one of Indonesia's best-known economic policy makers. Much has been written by others about his role as a top adviser over more than three decades. This collection of his own essays helps fill out the picture. Seven main policy themes may be identified: the role of economic growth in helping overcome mass poverty; the need for economic policy makers to pay close attention to risk management and be constantly ready to respond to economic shocks; the importance of strong leadership and discipline in government; the need to scrutinise investment programs closely; the high priority to be given to borrowing programs and debt management; the role of the price mechanism; and the management of Indonesia's relations with the international community. Strong messages about growth, leadership and stability permeate the essays. The collection is a valuable contribution to the literature on economic policy making in developing countries.     

Publication

Masalah Usahatani-Tebu dan Industri Gula di Djawa [Problems of Sugar-cane Farming and the Sugar Industry in Java]. Report of the Agro-Economic Survey. Faculty of Economics, Gadjah Mada University, Jogjakarta, 1968. Pp. ix + 105. (In Indonesian.)

J. Panglaykim and K.D. Thomas, Indonesia's New Era - Development Administration: Supplementary Papers . Committee for Economic Development of Australia, Melbourne, 1968. Pp. xxix 86. Price $A2.00.

T. K. Tan (editor), Sukarno's Guided Indonesia, Brisbane, Jacaranda Press, 1967. Pp. xi + 196. $A5.50.

Angkatan Kerdia Penduduk Indonesia [The Indonesian Labour Force] . Report No. 2A, December 1967. Pp. 309. Angkatan Kerdia Penduduk Diawa-Madura [The Labour Force of Java and Madura]. Report No. 2B, March 1968. Pp. 282. Angkatan Kerdja Penduduk Luar Diawa [The Labour Force Outside Java]. Report No. 2C, March 1968. Pp. 282. Reports of the National Social-Economic Survey, Phase II (November 1964-February 1965). Research and Development Section, Central Statistical Bureau, Djakarta. (Text in Indonesian; tables with English subtitles.)

Buku Pedoman untuk Pentjatjah dan Pemeriksa [Instruction Manual for Interviewers and Supervisors]. Cost of Living Survey 1968-69. Research and Development Section, Central Statistical Bureau, Djakarta, June 1968. Pp. 48, mimeographed. (In Indonesian.)

Investment. The New Policies and Procedures of Foreign Capital Investment in Indonesia. Prepared by the Technical Team on Foreign Private Investment of the Government of Indonesia. Departmcnt of Iniorniation; Djakarta, 1968. Pp. 152.

G. L. Hicks and G. McNicoll, The Indonesian Economy, 1950-1967: Bibliographic Supplement. Bibliography Series No. 10, Southeast Asia Studies, Yale University, 1967. Pp. 211.     

Book Reviews

Richard Higgott and Richard Robison (eds), Southeast Asia: Essays in the Political Economy of Structural Change, London: Routledge & Kegan Paul, 1985. £18.00 (cloth)

John Wong, The Political Economy of China's Changing Relations with Southeast Asia, London: Macmillan Press, 1984, pp. xvi + 246.

Sumitro Djojohadikusumo, Perdagangan dan Industri dalam Pembangunan [Trade and Industry in Development], Jakarta: LP3ES, 1985, pp. 133.Thee Kian Wie

Masyarakat Indonesia, 12(3), Jakarta: LIPI, December, 1985. Special issue edited by Thee Kian Wie, entitled 'Kaitan-Kaitan Vertikal Antar-perusahaan dan Pengembangan Sistem Subkontraktor di Indonesia: Beberapa Studi Kasus' [Vertical Linkages between Firms and the Development of the Subcontracting System in Indonesia: Several Case Studies].

D. B. G. Denoon, Devaluation under Pressure: India, Indonesia and Ghana, Cambridge, Mass: MIT Press, 1986, pp. xi + 260. US$28.75

John W. Mellor and Gunvant M. Desai (eds). Agricultural Change and Rural Poverty, Baltimore: The Johns Hopkins University Press, 1985, pp. xix + 233. US$27.45.

'Indonesia's Transmigration Programme: A Special Report', The Ecologist, Vol. 16, No. 2/3, 1986. £4.00     

Book Reviews

David Glover and Timothy Jessup (eds) (1999), Indonesia's Fires and Haze: The Cost of Catastrophe, Institute of Southeast Asian Studies, Singapore, and International Development Research Centre, Ottawa, pp. xviii + 149. Cloth: S$59.90; US$36.00; Paper: S$28.90; US$17.00.

Jeffrey A. Winters (1996), Power in Motion: Capital Mobility and the Indonesian State, Cornell University Press, Ithaca NY, pp. xvi + 241. Cloth: US$36.90; A$54.25.

Donald K. Emmerson (ed.) (1999), Indonesia Beyond Suharto: Polity, Economy, Society, Transition, M.E. Sharpe, Armonk NY and London, published in cooperation with The Asia Society, pp. xxviii + 395. Cloth: US$69.95; Paper: US$26.95. Not available in Australia and Southeast Asia.

Tulus Tahi Hamonangan Tambunan (2000), Development of Small-scale Industries during the New Order Government in Indonesia, Ashgate, Aldershot, pp. 218. Cloth: £37.50.

C.H. Kwan, Donna Vandenbrink and Chia Slow Yue (eds) (1998), Coping with Capital Flows in East Asia, Nomura Research Institute, Tokyo, and Institute of Southeast Asian Studies, Singapore, pp. xiii + 319. Cloth: S$78.90; US$49.90; Paper: S$49.90; US$32.90.

International Labour Organisation (1999), Indonesia: Strategies for Employment-Led Recovery and Reconstruction, Jakarta, pp. 404.     

Book Reviews

Andrew MacIntyre (ed.), Business and Government in Industrialising Asia, Allen & Unwin, Sydney, 1994, pp. xii + 312. Paper: A$29.95.

John Bresnan, From Dominoes to Dynamos: The Transformation of Southeast Asia, Council on Foreign Relations, New York, 1994, pp. x + 115. $17.95.

Anthony Reid, Southeast Asia in the Age of Commerce 1450–1680: Volume Two, Expansion and Crisis, Yale University Press, New Haven and London, 1993, pp. xv + 390.

Binhadi, Financial Sector Deregulation, Banking Development and Monetary Policy: The Indonesian Experience (1983–1993), Indonesian Bankers' Institute, Jakarta, 1995.

Anwar Shah and Zia Qureshi, with Amaresh Bagchi, Brian Binder, and Heng-fu Zou, Intergovernmental Fiscal Relations in Indonesia: Issues and Reform Options, World Bank Discussion Papers 239, Washington DC, pp. xxxii + 279. $17.95; A$425.00; NZ$30.25.

Jacqueline Vel, The Uma-economy: Indigenous Economics and Development Work in Lawonda, Sumba (Eastern-Indonesia), Wageningen, pp. xiv + 283. $20.00 + $8 postage & handling.

Joao Mariano de Sousa Saldanha, The Political Economy of East Timor Development, translated by Theresia Slamet and P.G. Kattopo, Pustaka Sinar Harapan, Jakarta, 1994, pp. 414.

Jan-Paul Dirkse, Frans H$uUsken and Mario Rutten (eds), Development and Social Welfare: Indonesia's Experiences under the New Order, KITLV Press, Leiden, 1993, pp. 267.

W.G. Huff, The Economic Growth of Singapore: Trade and Development in the Twentieth Century, Cambridge University Press, Cambridge, 1994, pp. xxi + 472. A$60.

Saha Dhevan Meyanathan (ed.), Industrial Structures and the Development of Small and Medium Enterprise Linkages: Examples from East Asia, The World Bank (Economic Development Institute of the World Bank Seminar Series), Washington DC, 1994, pp. v + 158. Paper: $9.95.

Thee Kian Wie, Industrialisasi di Indonesia: Beberapa Kajian, LP3ES, Jakarta, pp. xxvi + 278 (including Introduction by Mari Pangestu).     

Survey of recent developments

The president reconstituted his cabinet in early December, focusing primarily on the economic team. The highly experienced Boediono was appointed as Coordinating Minister for Economic Affairs, while Sri Mulyani Indrawati was promoted from chair of the planning agency to become Minister of Finance. The former economics coordinating minister, Aburizal Bakrie, was made Coordinating Minister for Social Affairs—out of the economic limelight, but still with considerable influence. These changes overall have been well received by the markets, as indicated by a considerable strengthening of the rupiah.

The challenges facing the new cabinet remain immense, however. On a range of macroeconomic variables, performance has fallen well short of the government's targets. Output growth declined to just 4.9% p.a. in the December quarter from 6.5% a year earlier. Investment growth has fallen to a very low level, giving rise to concern about the creation of job opportunities. In a booming global economy, exports grew by only 7.4% in the four quarters to December, despite Indonesia's wealth of natural resources. The inflation rate doubled from September to October to almost 18% p.a., although subsequent price increases have been much slower.

The president's anti-corruption campaign continues to generate much attention. The number of corruption cases involving government officials and state enterprise managers brought to the courts continues to increase. Some high-profile cases have resulted in convictions, but others have not. The campaign seems likely also to be extended to judicial reforms, which are clearly crucial, but one urgent issue yet to be tackled directly is the widespread suspicion that funding of major political parties derives largely from abuse of power by government officials.

Numerous floods and landslides early in 2006 resulted in deaths, injuries and considerable physical damage. The frequency of such natural disasters has risen significantly over time, suggesting that governments at all levels need to develop mechanisms to manage them and implement policies to mitigate or prevent them.

Reconstruction progress in Aceh and Nias during 2005 was disappointingly slow. The reconstruction authority predicts dramatic improvement in 2006, but there appears to be a need to clarify the relationships among its three components, and to make some adjustments to its master plan, particularly in relation to land use planning. A reallocation of available funds among major activities, better coordination of implementing organisations, and a rethinking of conflicts between the authority's roles as implementation agency and coordinating agency may all be needed if the ambitious and urgent targets are to be met.     

Book Reviews

W.T. Woo, B. Glassburner and Anwar Nasution, Macroeconomic Policies, Crises, and Long-term Growth in Indonesia, 1965–90, Comparative Economic Studies, The World Bank, Washington DC, 1994, pp. xiii + 216. Paper: $13.95.

Hal Hill (ed.), Indonesia's New Order; The Dynamics of Socio-Economic Transformation, Allen and Unwin, Sydney, 1994, pp. xxxv + 364. Paper: A$29.95.

J. Thomas Lindblad (ed.), New Challenges in the Modern Economic History of Indonesia: Proceedings of the First Conference on Indonesia 's Modern Economic History, Jakarta, October 1–4, 1991, Programme of Indonesian Studies, Leiden University, Leiden, 1993, pp. viii + 306.

Thee Kian Wie, Explorations in Indonesia's Economic History, Lembaga Penerbit Fakultas Ekonomi Universitas Indonesia, Jakarta, 1994, pp. xv + 187.

Nancy Lee Peluso, Rich Forests, Poor People: Resource Control and Resistance in Java, University of California Press, Berkeley, 1992, pp. xv + 321.

Effendi Pasandaran, Agus Pakpahan, Edwin B. Oyer and Norman Uphoff (eds), Poverty Alleviation with Sustainable Agricultural and Rural Development in Indonesia, Published jointly by the Center for Agro-Socioeconomic Research (CASER) (Bogor), and the Cornell International Institute for Food, Agriculture and Development (CIIFAD) (Ithaca), Bogor 1992, pp. vi + 233.

Eric Thorbecke and Theodore van der Pluijm, Rural Indonesia: Socio-Economic Development in a Changing Environment, IFAD (International Fund for Agricultural Development) Studies in Rural Development no. 3, New York University Press, New York, 1993, pp. xxix + 360.

Niels Mulder, Inside Southeast Asia: Thai, Javanese and Filipino Interpretations of Everyday Life, Duang Kamol, Bangkok, 1992, pp. xiii + 178.

M.C. Ricklefs, War, Culture and Economy in Java, 1677–1726: Asian and European Imperialism in the Early Kartasura Period, ASAA Southeast Asia Publications Series no. 24, Allen & Unwin, Sydney, 1993, pp. xi + 425. A$29.95.

Ken Young, Islamic Peasants and the State: The 1908 Anti-Tax Rebellion in West Sumatra, Yale Southeast Asia Studies Monograph 40, Yale Center for International and Area Studies, New Haven, pp. xviii + 361.

Saya Shiraishi and Takashi Shiraishi (eds), The Japanese in Colonial Southeast Asia, Translation Series, Translation of Contemporary Japanese Scholarship on Southeast Asia, vol. 3, Southeast Asia Program, Cornell University, Ithaca, 1993, pp. 172.     

Book Reviews

M. Arsjad Anwar, Thee Kian Wie, Iwan Jaya Azis, Pemikiran, Pdaksanaan, dan Perintisan Pembangunan Ekonomi[Concepts, Implementation, and Pioneering in Economic Development], Fakultas Ekonomi Universitas Indonesia and PT Gramedia Pustaka Utama, Jakarta, 1992, pp. xx + 700.

Adam Schwarz, A Nation in Waiting: Indonesia in the 1990s, Allen and Unwin, Sydney, and Westview, Boulder, 1994, pp. 370. Paper: A$24.95.

East Asia Analytical Unit, Expanding Horizons: Australia and Indonesia into the 22st Century,Department of Foreign Affairs and Trade, Canberra, 1994, pp. xviii + 346. A$34.95.

Sjahrir, Pikiran Politik[Political Ideas], LP3ES, Jakarta, 1994, pp. xiv + 191.

Sjahrir, Persoalan Ekonomi Indonesia: Moneter, Perkreditan dan Nenca Pembayaran[Problems of the Indonesian Economy: Money, Credit and the Balance of Payments], Pustaka Sinar Harapan, Jakarta, 1995, pp. xv + 205.

Sjahrir, Analisis Bursa Efek[Analysis of the Stock Exchange], PT Gramedia Pustaka Utama, Jakarta, 1995, pp. xiv + 169.

Sjahrir, Ekonomi Indonesia dalam Perspektif Bisnis[The Indonesian Economy in a Business Perspective], PT Jurnalindo Aksara Grafika, Jakarta, 1994, pp. xvi + 239.

Sjahrir, Kebijakan Negara Mengantisipasi Masa Depan[National Policy: Anticipating the Future], Yayasan Obor Indonesia, Jakarta, 1994, pp. xv + 251.

Sjahrir, Formasi Mikro-Makro Ekonomi Indonesia[Indonesia's Macro and Micro Economy], Penerbit Universitas Indonesia, Jakarta, 1995, pp. xii + 313

F.B.A. Bouman and Otto Hospes, Financial Landscapes Reconstructed: The Fine Art of Mapping Development,Westview, Boulder, 1994, pp. xi + 416. US$45.00

Robert Cribb (ed.), The Late Colonial State in Indonesia: Political and Economic foundations of the Netherlands Indies 1880–1942,Verhandelmgen van het Koninklijk Instituut voor Taal-, Land- en Volkenkunde 163, KITLV Press, Leiden, 1994, pp. xiii + 295.

Shinya Sugiyama and Milagros C. Guerrero (eds), International Commercial Rivalry in Southeast Asia in the Inierwar Period,Yale Southeast Asia Studies Monograph 39, Yale Center for International and Area Studies, New Haven, 1994, pp. ix + 222.

W.L. Korthals Altes, Changing Economy in Indonesia. Volume 15: Prices (Non-Rice) 1814–1940,Royal Tropical Institute, Amsterdam, 1994, pp. 175. Paper: Dfl. 48.00.     

Book Reviews

Radius Prawiro (1998), Indonesia's Struggle for Economic Development: Pragmatism in Action, Oxford University Press, Kuala Lumpur, pp. xxvi + 374.

Yujiro Hayami (1997), Development Economics: From the Poverty to the Wealth of nations, Clarendon Press, Oxford, pp. xx + 316. A$160.00.     

Publications

The Kian-wie, Plantation Agriculture and Economic Growth: An Economic History of East Sumatra, 1863–1942, Jakarta, National Institute of Economic and Social Research (LEKNAS-LIPI(, 1977. Pp 142 + xii. Price not given.

Rodolphe De Koninck, D.S. Gibbons, and Ibrahim Hasan, “The Green Revolution, Methods and Techniques of Assessment: A Handbook of a Study in Regions of Malaysia and Indonesia', Notes et Documents de Recherche, No. 7, December 1977, Department of Geography, Universite Laval, Quebec, pp 409 + xiii.

Graeme J.Hugo,Population Mobility in west Java, Gadjah Mada university Press Yogyakarta, 1978,pp.

John Ingleson, Road to Exile: The Indonesian Nationalist Movement 1927–1934, Singapore: Heinemann for the Asian Studies association of Australia, 1979, pp. 254.

The Population of North Sulawesi by G.W. Jones, Gadjah Mada C. E. Beeby,Assessment of Indonesian Education, a Guide in Planning, Wellington, New Zealand Council for Educational Research in association with Oxford University Press, 1979, pp. 349. (Educational Research Series no. 59; appendices, tables and index; no price given).

Haryati Soebadio and Carine A. du Marchie Sarvaas (eds.),Dynamics of Indonesian History,Amsterdam, North-Holland, 1978, pp. 395 + xvi, $53.25.     

Book Reviews

Stephan Haggard (2000), The Political Economy of the Asian Financial Crisis, Institute for International Economics, Washington DC, pp. xvii + 272.

Colin Barlow (ed.) (1999), Institutions and Economic Change in Southeast Asia: The Context of Development from the 1960s to the 1990s, Edward Elgar, Cheltenham, pp. xi + 204.

Asian Policy Forum, Asian Development Bank Institute (Forum Secretariat) (2000), Policy Recommendations for Preventing Another Capital Account Crisis, Asian Development Bank Institute, Tokyo, pp. ii + 16.

Masaru Yoshitomi and Sayuri Shirai (2000), Technical Background Paper for Policy Recommendations for Preventing Another Capital Account Crisis, Asian Development Bank Institute, Tokyo, pp. ii + 85.     

Book Reviews

Jonathan R. Pincus (1996), Class, Power and Agrarian Change: Land and Labour in Rural West Java, Studies on the Economics of East and Southeast Asia, Macmillan, Hampshire, pp. xii + 248.

Pierre van der Eng (1996), Agricultural Growth in Indonesia' Productivity Change and Policy Impact since 1880, Macmillan and St Martin's Press, London and New York, pp. xii + 375. £50.00

Mari E. Pangestu and Yuri Sato (eds) (1997), Waves of Change in Indonesia's Manufacturing Industry, Institute of Developing Economies, Tokyo, pp xiv + 225.

Peter van Diermen (1997), Small Business in Indonesia, Ashgate, Aldershot, pp. xvn + 234. Cloth: £37.50

Jonathan Rigg (1997), Southeast Asia: The Human Landscape of Modernization and Development, Routledge, London, pp. xxv + 326.

HaI Hill, Indonesia's Industrial Transformation, Institute of Southeast Asian Studies, Singapore, and Allen & Unwin, Sydney, pp xix + 403.     

Book Reviews

Huib Foot, Arie Kuyvenhoven and Jaap Jansen, Industrialisation and Trade in Indonesia, Yogyakarta: Gadjah Mada University Press, 1990, pp. vii + 552.

W.L. Korthals Altes, General Trade Statistics, 1822–1940, Changing Economy in Indonesia, Volume 12a, Amsterdam: Royal Tropical Institute, 1991, pp. 200.

Adrian Clemens, J. Thomas Lindblad and Jeroen Touwen, Regional Patterns in Foreign Trade, 1911–1940, Changing Economy in Indonesia, Volume 12B, Amsterdam: Royal Tropical Institute, 1992, pp. 104.

BRIEFLY NOTED: Australian International Development Assistance Bureau, Introduction to Government Administration, Planning and Budgeting in Indonesia, Canberra: Aidab, 1991, pp. xxii + 60.

Helen Hughes (ed.), The Dangers of Export Pessimism: Developing Countries and Industrial Markets, San Francisco: International Center for Economic Growth, 1992, pp. xxvii + 446.

M.G. Asher el al., Fiscal Incentives and Economic Management in Indonesia, Malaysia and Singapore, Singapore: Asian-Pacific Tax and Investment Research Centre, 1992, pp. viii + 133.

Hal Hill, Indonesia's Textile and Garment Industries: Developments in an Asian Perspective, Occasional paper no. 87, Singapore: Institute of Southeast Asian Studies, 1992, pp. vi + 83.     

Publications

Fritjof Tichelman, The Social Evolution of Indonesia: The Asiatic Mode of Production and Its Legacy, International Institute of Social History, Amsterdam Studies in Social History No. 5, Martinus Nijhoff, The Hague, 1980, pp. xv + 301. Recommended price A$34.00.

Michael T. Skully (editor), A Multinational Look at the Transnational Corporation, Sydney, Dryden Press, 1978 pp. iv + 278.

Julfita Rahardjo, Pauline Hendrata, T. Omas Ihromi, Mely G. Tan, Ann Way, and Hanna Papanek, Wanita Kota Jakarta: Kehidupan Keluarga dan Keluarga Berencana, Jakarta, 1980.

ASEAN in a Changing Pacific and World Economy, Ross Garnaut (ed.), Canberra: Australian National University Press, 1980, pp. xxiii + 557.     

Book Reviews

Michael T. Skully, Merchant Banking in ASEAN: A Regional Examination of its Development and Operations. Kuala Lumpur: Oxford University Press, 1983, pp. x + 200.

Anwar Nasution, Financial Institutions and Policies in Indonesia, Singapore: Institute of Southeast Asian Studies, 1983, pp. xvi + 182.

R. M. Bautista and S. Naya (eds), Energy and Structural Change in the Asia-Pacific Region. Manila: Philippine Institute for Development Studies and Asian Development Bank, 1984, pp. xxii + 532.

Charles A. Coppel, Indonesian Chinese in Crisis, Asian Studies of Australia, Southeast Asian Publications Series No. 8, Kuala Lumpur: Oxford University Press, 1983. pp. xvii + 236. $24.95 (cloth). $13.95 (paper).

Avé, J., V. King and J. de Wit, West Kalimantan: a bibliography, Leiden: Koninklijke Instituut voor Taal-, Land- en Volkenkunde, 1983. Dfl. 30.     

Book Reviews

Anne Booth (1998), The Indonesian Economy in the Nineteenth and Twentieth Centuries: A History of Missed Opportunities, Macmillan, London, and St Martin's Press, New York, pp. xvi + 377. Paper: US$ 19.95; cloth: US$ 79.95.

J. Thomas Lindblad (1998), Foreign Investment in Southeast Asia in the Twentieth Century, Macmillan, London, and St Martin's Press, New York, pp. xiii + 240. Paper: £49.95.

Adam Schwarz and Jonathan Paris (eds) (1999), The Politics of Post-Suharto Indonesia, Council on Foreign Relations Press, New York, pp. 150. Paper: US$17.95.

Arief Budiman, Barbara Hatley and Darnien Kingsbury (eds) (1999), Reformasi: Crisis and Change in Indonesia, Monash Asia Institute, Melbourne, pp. 402. A$24.95.

Hal Hill (1999), The Indonesian Economy in Crisis: Causes, Consequences and Lessons, Institute of South East Asian Studies, Singapore, pp. 150. S$22.50; US$14.90.

Terry Dwyer (ed.) and Barry Reece and Craig Emerson (contributors) (1999), Resource Tax Policy in Countries of the Asia Pacific Region, Asia Pacific Press, The Australian National University, Canberra. A$20.00; US$20.00.

Januar Achmad (1999), Hollow Development: The Politics of Health in Soeharto's Indonesia, Coombs Academic Publishing, Research School of Pacific and Asian Studies, The Australian National University, Canberra, pp. viii + 220. A$15.00 plus postage.

Terence H. Hull, Endang Sulistyaningsih and Gavin W. Jones (1999), Prostitution in Indonesia: Its History and Evolution, Pustaka Sinar Harapan, Jakarta, pp. 161. A$10.00.     

SURVEY OF RECENT DEVELOPMENTS

Summary Apart from the peaceful December elections in Aceh, many major recent news stories from Indonesia have been about disasters of some kind: the sinking of an interisland ferry, the crash of a commercial plane, the continuing misery caused by a seemingly unstoppable mud flow in East Java, and severe flooding in and around Jakarta. The largely symbolic dissolution of the Consultative Group on Indonesia in January has helped neutralise economic nationalist criticism of the president.

The rate of output growth rose to 6.1% in the December quarter, driven by a sudden surge in investment spending. Inflation was modest, at 6.3% in the year to January 2007; the exchange rate has been steady; and the Jakarta Stock Exchange has been booming. The budget deficit is well under control, and public debt continues to decline relative to GDP. At the same time, it is a concern that exchange rate and monetary policies have increasingly come to resemble those in the months preceding the 1997–98 crisis.

Recent surveys confirm that Indonesia's investment climate remains poorer than those of its neighbours. The problem is exemplified by the uncertainty facing new investment in the oil and mining sectors: oil exploration has been sluggish, causing output to fall well below Indonesia's OPEC quota and, although mining operations have been highly profitable in recent years, spending on exploration and new mine development has declined steadily. Meanwhile, the government's hopes of improving infrastructure through public–private partnerships were met with a wait-and-see attitude by private sector participants attending a second infrastructure summit in November.

Non-oil manufacturing grew more slowly than GDP in 2006, reversing the outcome for 2005. Non-oil manufactured exports grew steadily over 2004–06, but there seems little prospect of a resumption of the double-digit growth of the late 1980s and early 1990s. Aside from the poor investment climate and infrastructure shortcomings, the constraints on manufactured export growth include strong competition from China and Vietnam and declining competitiveness resulting from big increases in regulation-driven labour costs.

In March 2006 the poverty rate stood at 17.8%, up from 16.0% in February 2005. A World Bank study has attributed this to the large increase in rice prices caused by the ban on rice imports. It argues that the Unconditional Cash Transfer program, which provided direct cash transfers to 19.2 million poor and near-poor households, more than offset the impact of the steep fuel price increases in 2005, although these findings have been the subject of vigorous debate.     

Book Reviews

Hendra Esmara (ed.), Teori Ekonomi Dan Kebijaksanaan Pembangunan: Kumpulan Esei Untuk Menghargai Sumitro Djojohadikusumo, Jakarta: P.T. Gramedia, 1987, pp. 645 + xxx, npg.

Khong Cho Oon, The Politics of Oil in Indonesia: Foreign Company-Host Government Relations, LSE Monographs in International Studies, Cambridge: Cambridge University Press, 1986, pp. 253 + x, $89,00.

Hal Hill, Foreign Investment and Industrialization in Indonesia, Singapore: Oxford University Press, 1988, pp. 179 + xxi, $34.50.