Recollections of My Career

Editorial Note:Professor Sumitro Djojohadilcusomo is one of the principal architects of Indonesia's post-independence economic policy. He has held key economic portfolios in both the immediate post-independence era and in the New Order. In addition, as Professor of Economics at the University of Indonesia, and as a tireless lecturer and writer on economic issues, he has been instrumental in shaping the education of several generations of economics students in Indonesia, many of whom are now in key government positions. At the end of August, Professor Sumitro generously agreed to be interviewed on his long career by two members of the BIES editorial board, Anne Booth and Thee Kian Wie. In preparing this interview for publication, the editors have tried to preserve Professor Sumilro's own words to the greatest extent possible; his lucid and entertaining remarks are thus reproduced with a minimum of editing. The interview began with a question to Professor Sumitro about his early training in economies.     

Recollections of My Careerlections of My Career

Suhadi Mangkusuwondo, Professor Emeritus of the Faculty of Economics at the University of Indonesia (FEUI), was born in Solo, Central Java, in December 1927. After participating in the war of independence, he resumed his secondary education in Malang, completing it in 1949. He then studied economics at the University of Indonesia (UI) and later became a teaching assistant there. Suhadi spent two years doing postgraduate study at the Massachusetts Institute of Technology and later obtained a PhD in economics at the University of California at Berkeley. Returning to Indonesia and his teaching post at FEUI, he became editor of the journal Economics and Finance in Indonesia (EKI). He was Head of the R&D Agency in the Department of Trade from 1973 to 1975 and again in 1983-88, and Director General of Foreign Trade from 1975 to 1983. Professor Suhadi served as the Representative of the Government of Indonesia in the Uruguay Round when it was launched in 1986, and since 1992 has been a member of the Eminent Persons Group of the APEC (Asia–Pacific Economic Cooperation) forum. His other activities include membership of Indonesia's National Research Council (DRN), and of organisations such as the Regional Advisory Board of the ASEAN Economic Bulletin, the journal of the ASEAN Economic Research Unit of the Institute of Southeast Asian Studies in Singapore. He is now also Vice Chairman of the Jakarta-based Trade and Development Institute. On 8 July 1994, Professor Suhadi talked with H.W. Arndt, Hal Hill and Thee Kian Wie about his views on Indonesia's economic development under the New Order, and particularly about trade policy. On 19 September 1995, in a second interview with H.W. Arndt, Mari Pangestu and Thee Kian Wie, he elaborated further on his work at the Ministry of Trade and his participation in the Uruguay Round and the APEC Eminent Persons Group (EPG).     

Reflections on Economic Policy Making: 1945–51

Editorial Note:Mohammad Saubari was Secretary-General of the Department of Finance in the early 1950s. After his suspension from the civil service during the Guided Democracy years, he worked for several United Nations agencies in Indonesia. The following note, is based on his comments on the Indonesian translation of the interview with Professor Sumitro (Sumitro 1986), which were published in Kompas earlier this year, on his contribution to a commemorative volume published to honour Sjafruddin Prawiranegara in 1986, and on an interview which he gave to Anne Booth and Thee Kian-Wie in Jakarta in May 1987.     

CLIFFORD GEERTZ, 1926–2006: MEANING,METHOD AND INDONESIAN ECONOMIC HISTORY

Clifford Geertz was best known for his pioneering excursions into symbolic or in terpretive anthropology, especially in relation to Indonesia. Less well recognised are his stimulating explorations of the modern economic history of Indonesia. His thinking on the interplay of economics and culture was most fully and vigorously expounded in Agricultural Involution. That book deployed a succinctly packaged past in order to solve a pressing contemporary puzzle, Java's enduring rural poverty and apparent social immobility. Initially greeted with acclaim, later and ironically the book stimulated the deep and multi-layered research that in fact led to the eventual rejection of Geertz's central contentions. But the veracity or otherwise of Geertz's inventive characterisation of Indonesian economic development now seems irrelevant; what is profoundly important is the extraordinary stimulus he gave to a generation of scholars to explore Indonesia's modern economic history with a depth and intensity previously unimaginable.     

Recollections of my Career

Subroto, Professor at the Faculty of Economics, University of Indonesia (FEUI), is one of the architects of the economic policies that brought growing prosperity to Indonesia over the New Order years Educated in Dutch colonial and Japanese occupation schools, he joined Indonesia's independence struggle, and later studied economics at FEUI, McGill University, MIT, and Stanford and Harvard Universities. He taught international economics and business cycles at FEUI and was Secretary of the Faculty. With Widjojo Nitisastro, Mohammad Sadh, Ali Wardhana and Emil Salim, Subroto was appointed a Personal Economic Adviser to General (later President) Soeharto's new government in 1966 In 1968 he joined the Department of Trade, and later was minister of departments responsible for transmigration, cooperatives, mining and energy. After a 17-year ministerial career serving in four consecutive cabinets, Subroto was Secretary General of OPEC for six years from 1988 He remains active in Indonesia's nongovernmental Indonesian Institute for Energy Economics (IIEE), writing on energy problems, and is also Rector of the private Pancasila University in South Jakarta As part of our occasional series of interviews with economists who have helped shape New Order Indonesia, Professor Subroto talked with Chris Manning and Thee Kian VVie of the Bulletin's Editorial Board about his experience as a cabinet minister and as Secretary General of OPEC, and about his views on Indonesia's economic development, particularly its energy problems.     

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.     

Globalisation and its discontents: an Indonesian perspective

It is indeed a great honour for me to give the 2011 Heinz Arndt Memorial Lecture. The first time I met the great Professor Heinz Arndt was as a nine‐year‐old back in 1966 when our family first came to Canberra and Heinz was my father's (Panglaykim) new boss. I recall that he picked us up at the airport and within the first week we had visited his house in Deakin, where he gave me and my two brothers games such as Chinese checkers and books that his own kids had outgrown. So my first thought was: what a kind and thoughtful man. Little did I know that I would end up being what he often termed his ‘academic grandchild’. I never took a class from Heinz or was fortunate enough to be supervised by him. However, I had many interactions with him when I was a student at the Australian National University (ANU) and, upon graduation, as an aspiring young academic. He had an important influence on the course of my life. First, he encouraged me to do my PhD in the USA. After I completed my masters at the ANU under Peter Drysdale, I toyed with the idea of continuing with a PhD at the Research School of Pacific Studies. However, Heinz convinced me to go to the USA because he thought it would widen my horizons. He was right. Second, there was the importance of being disciplined and thorough in undertaking country or regional research. One of the most important initiation exercises for an academic working on Indonesia was to do a ‘Survey of Recent Developments’ for the Bulletin of Indonesian Economic Studies. I recall being given a yellowed document that had been formulated by Heinz with precise guidelines on topics, structure, and people to see and interview. We found similar guidelines on regional surveys when we did economic surveys of all the provinces a few years later. I found that doing the research and interviews for the survey was the easy part. The hard part was the two weeks spent in Canberra writing up the survey and being subjected to peer review. The draft was presented to the ‘editorial team’ and others, including, of course, the venerable Professor Arndt. I am glad to say that I passed in terms of substance; but of course there were lots of edits to do following Heniz's traditional typed‐up comments, both general and specific! Third, despite being a formidable figure and someone with a reputation for strong opinions, Heinz was the same kind and thoughtful man I remembered as a nine‐year‐old. He always had the time of day for the young academics, especially those from Indonesia. I had many cups of tea with him as a student and later as an aspiring academic. I still recall his room in University House filled with his books and the filing cabinet near the bathroom, where he would inevitably pull out the right references and reading materials that one needed. I learned a lot about the importance of mentoring and encouraging the young—many of whom have succeeded and are in the room today. This lecture is to honour Professor Heinz Arndt. I believe Professor Arndt was a true internationalist and therefore he would tackle with gusto the rumblings of discontent on globalisation. He would be thorough in trying to understand the manifestations of globalisation and its sources of discontent. He would also be of the firm belief that the benefits of globalisation outweigh its costs and come up with strategic ideas on how to best manage globalisation to counter ‘globaphobia’. I hope I do justice to this topic in the Heinz Arndt tradition.     

Challenging the de‐industrialization thesis: gender and indigenous textile production in Java under Dutch colonial rule,c. 1830–1920

Many dependency theorists as well as economic historians have contended that nineteenth‐century imperial policies and economic globalization de‐industrialized the global ‘periphery’. European metropoles extracted raw materials and tropical commodities from their overseas territories, and in turn indigenous consumers bought their industrial products, textiles in particular. This article investigates three of the assumptions of Ricardian trade theory that are often behind the de‐industrialization narrative. In this article it is argued that, at least for colonial Java's textile industry, these assumptions should be reconsidered. Adverse trade policies imposed by the Dutch and a prolonged terms‐of‐trade boom in favour of primary commodities make colonial Java a unique case for exploring the merits of the de‐industrialization thesis. Here it is demonstrated that Javanese households resourcefully responded to changing market circumstances, in the first place by flexible allocation of female labour. Moreover, indigenous textile producers specialized in certain niches that catered for local demand. Because of these factors, local textile production in Java appears to have been much more resilient than most of the historical literature suggests. These findings not only shed new light on the social and economic history of colonial Indonesia, but also contribute to the recent literature on alternative, labour‐intensive paths of industrialization in the non‐western world.     

A finnish textbook in economic history

Abstract

There is, to my knowledge, no work exactly corresponding to Professor Jutikkala's in any of the major languages. Uudenajan taloushistoria is a comprehensive and very skilful exposition of the economic development of the modern world and certainly much more than simply a good textbook in which material from generally recognized standard works, partial surveys, and particular investigations is brought together and rearranged. However much Professor jutikkala may have drawn upon the available modern literature, upon the writings of Heckscher, Clapham, Cole, Ashton, Ashley, Sombart, and other authorities, his book is stamped first and foremost by his own great familiarity with the vast field of his subject, by his own research and experience-especially in the field of agrarian and social history—and by his great versatility as a scholar. The author is not simply a historian with an economic training; he is also very conscious of the fact that economic development never occurs in society in forms which allow of a purely economic exposition. His method is—to     

MARKET RESPONSES TO CLIMATE STRESS: RICE IN JAVA IN THE 1930S

Do markets in less-developed countries abate consequences of climate stress? Using changes in regional rice prices across the 19 regions in Java, Indonesia, during 1935–40, this paper will assess how rice markets responded to variations in rainfall, which is an important factor in rice production. It finds that rice markets were highly integrated across Java. The El Niño-induced episodes of lower than usual rainfall in 1935 and 1940 did not have a negative effect on levels and variations in regional rice prices, nor did they have adverse consequences for the supply of rice. Adaptive responses of firms specialising in the trade of rice are argued to have mitigated regional deficiencies in food production caused by climate stress.     

Recollections of My Career

The Bulletin's occasional series of interviews with the older generation of economists has so far focused upon those who have served as ministers or held high positions in the civil service. A rather different perspective on economic conditions and economic policy under the Old Order is offered here by one of Indonesia's veteran pribumi (indigenous) entrepreneurs, Soedarpo Sastrosatomo, best known for his involvement with Bank Niaga and the Samudera Indonesia shipping group. Notable as one of the few pribumi to have survived in the forefront of business since the early years of Independence, he aimed in his business ventures to be an agent of soaoeconomic progress, a goal for which he is still working. His experience covers the fields of importing, office machines and computers (Soedarpo Corporation, est. 1952), insurance (Asuransi Bintang, est. early 1955), banking (Bank Niaga, est. late 1955) and, in the transport industry, agencies, stevedoring, shipping and freight forwarding (Samudera Indonesia and associated firms, 1964 onwards).

In view of the priority given after Independence to fostering the emergence of an indigenous business elite and the generally disappointing results, an underlying theme is that elusive factor of production, entrepreneurship. The interview therefore devotes some attention to Soedarpo's atypical family and educational background, as a prelude to his acquisition of banking skills and foreign contacts during a posting to the United Nations in New York (1948–50). By 1952, when he embarked on a business career, he was still inexperienced but better prepared than most of his contemporaries. The middle sections of the interview focus on the problems of capital formation, import licensing and inflation under the Old Order. Finally, Samudera Indonesia's role in the development of Indonesia's deepsea liner shipping is traced from the mid 1960s into the 1980s, showing how, even for a mature enterprise, survival still depends upon a judicious combination of local knowkdge, foreign Connections, and scarce capital.     

Farm Household Responses to Government Policies: Evidence from West Java

Few micro level analyses have been undertaken in Indonesia of rural households' responses to government policies, and of household characteristics and endowments. Most studies of rural household behaviour in Indonesia have analysed the consumption, production and labour supply aspects separately, ignoring the complex interrelations among farm production, farm profit, household consumption and family labour supply. In this study, the complex nature of rural household production and consumption decisions is analysed by applying a farm household model to cross-sectional data from 241 households in six villages of West Java. The model incorporates multiple crops, different wage levels for males and females, and non-agricultural employment.     

Using climate models to improve Indonesian food security

El Niño Southern Oscillation (ENSO) events exert significant influence on Southeast Asian rice output and markets. This paper measures ENSO effects on Indonesia's national and regional rice production and on world rice prices, using the August Niño 3.4 sea surface temperature anomaly (SSTA) to gauge climate variability. It shows that each degree Celsius change in the August SSTA produces a 1,318,000 metric ton effect on output and a $21/metric ton change in the world price for lower quality rice. Of the inter-annual production changes due to SSTA variation, 90% occur within 12 provinces, notably Java and South Sulawesi. New data and models offer opportunities to understand the agricultural effects of ENSO events, to reach early consensus on coming ENSO effects, and to use forecasting to improve agencies' and individuals' capacity to mitigate climate effects on food security. We propose that Indonesia hold an ‘ENSO summit’ each September to analyse the food-security implications of upcoming climate events.     

The determinants of poverty dynamics in Indonesia: evidence from panel data

We use the ‘spell’ approach to identifying poverty and apply an ordered logit model to examine the determinants of poverty dynamics in Indonesia, categorising households as poor, transient poor (–), transient poor (+) or non-poor. Observing the National Socio-Economic Survey (Susenas) balanced-panel data sets of 2005 and 2007, we found that 28% of poor households are classified as chronically poor (that is, remaining poor in two periods) while 7% of non-poor households are vulnerable to being transient poor (–). Our estimations confirmed that the determinants of poverty dynamics in Indonesia are educational attainment, the number of household members, physical assets, employment status, health shocks, the microcredit program, access to electricity, and changes in employment sector, employment status and the number of household members. We also found that households in Java–Bali are more vulnerable to negative shocks than those outside Java–Bali.     

Inequality Trends in Indonesia, 1969–1981: A Re-Examination 1

This paper attempts to clarify the debate over trends in inequality in Indonesia from 1969 to 1981, by adjusting die standard inequality measures for the differential impact of inflation on different expenditure groups. It is shown that, once such adjustment is made, inequality increased in Indonesia between 1969/70 and 1976, but declined between 1976 and 1981. Adjustments are also made to the inequality indicators for urban and rural areas, and for Java and the Outer Islands.     

Accommodating a growing population in Javanese agriculture

An examination of how the island of Java, Indonesia, has accommodated population growth over the past 150 years by a process of agricultural development is presented. A brief review of the literature on the relationship between agricultural development and population growth is first provided. Next, the available data on land area, cultivated area, agricultural production, and employment in Java over the past century are reviewed. The relationship between agricultural development and population growth in Java is then analyzed in terms of the concepts and processes discussed in the theoretical literature.     

Information and Price Setting in a Rural Javanese Market∗

The paper examines the thesis established by Geertz and Dewey that Javanese rural trading practices, although well suited to the pasar marketing system, are maladaptive to larger scale trade. Focusing on a chilli marketing depot in Java the paper outlines the network of trading links which stretch from farmer to end-market, as well as the mechanisms of price setting and credit arrangements. The conclusions reached are that the volume and value of goods handled at this level are considerable and that both price setting and commercial relationships are largely stable. Constraints on entrepreneurial activity are attributed not to a Javanese peasant ethos of “shared poverty” but to lack of capital, dispersed markets, perishable goods and discontinuous information on supply of produce and current market prices.

     

对国际法地位的探讨——《无政府状态与世界秩序》书评

在主权国家范围内,人们通常把建立秩序与建立政府并通过政府去推行和维护法制关联在一起,但是在国际社会,在人类目前尚达不到建立世界政府的境地,秩序应当如何建立?熊玠在《无政府状态与世界秩序》一书中,提出了自己的思路:他首先对"沃尔兹现实主义理论对国际法在国际社会中作用的虚无主义态度"进行了批判,并且认为"体系价值"是作为与权力平等的要素在国际政治中发挥着作用。笔者与其所持观点的主要分歧在于,至少到目前为止,国际法仍是权力政治的派生物,而不具有与后者平等的地位。     

Wage Trends in Rice Production on Java: 1976–1988

Lack of consensus among researchers in Indonesia concerning real wage trends in rice production has generated disagreement over rural labour market conditions on Java. This paper identifies some empirical difficulties associated with measuring real wages, difficulties which have contributed to conflicting results in the literature. It is argued that the choice of deflator and the time period of analysis play a significant role in the calculation of real wages. In addition, the regional dimension of analysis is shown to be important, particularly during certain discrete time periods in recent history.