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Indonesia's Economy Since Independence

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INDEX A ASEAN (Association of Southeast Abdurrachman Wahid, 35, 122, 187 Asian Nations), 72–73, 103, 175, ADB (Asian Development Bank), 271, 286–87, 291–92 162–63 ASEAN-4, 159, 286 “administrators”, 44–45 ASEAN-5, 273 affirmative policy, see Benteng ASEAN-China Free Trade Agreement, programme 134 Agency for Technology Assessment ASEAN Free Trade Agreement and Application, see BPPT (AFTA), 263, 291 Agency for the Revitalization of the Asian Development Bank, see ADB Forest Industry, see BRIK Asian economic crisis, 3, 24, 69, Agreement on Textile and Clothing, 103–04, 122, 126–27, 129, see MFA 132, 156, 163, 169, 175, 179, “Ali-Baba” enterprise, 16, 32 187–88, 192, 194–98, 208, 212, Ali Sastroamidjojo, 33, 43 214–15, 248, 257, 273, 282–84, Ali Wardhana, 78 287, 289, 291 “anti-export bias”, 72–73, 102, 151, aftermath, and, 74–77, 260–63 155–56, 168–69, 177, 187, 252, auto-parts industry, impact on, 255 280–81 APEC (Asia-Pacific Economic developments after, 84–87 Cooperation), 103 industrial development overview, Arab-Israeli War, 91 176–83 Army Staff and Command School, see manufacturing sector after, 163–67 SESKOAD “Asian Tigers”, 159, 176 Army Strategic Reserve Command, see Assaat Movement (Gerakan Assaat), Kostrad 19, 21 A.R. Soehoed, 100, 149, 152–54, 276 Australia and Argentina: on Parallel Asahan aluminium smelter, 100 Paths, book, 134 15 Indonesia_Economy.indd 297 4/12/12 3:41:23 PM 298 Index authoritarianism, 83 BIN (Bank Industri Negara), 12, 42 automotive industry, 282–83 B.J. Habibie, 35, 81–82, 100, 122, auto-parts firms, number of, 277–78, 158, 180, 187–88 289–90 BLBI (Bantuan Likuiditas Bank auto-parts industry, 271 Indonesia), 119 Asian economic crisis, impact on, BMW, 287 280–81 BNI (Bank Negara Indonesia), 12, 15, development of, 273–80 29, 32, 42 dynamics factors, 285–90 Boediono, 187 exports and imports, 283–85 Boeke, J.H., 61 historical overview 272–73 Borsumij, 142 industrial organization, 282–83 BPPT (Agency for Technology world production, 275 Assessment and Application), see also car assembly industry 196, 198 BPS (Central Agency for Statistics), B 75, 284 baht, devaluation of, 118–19 Brazil, India, Indonesia, China, see Bali, attacks on, 257 BIIC bank consumer credit, 194 BRIC (Brazil, Russia, India, China), Bank Indonesia, 10, 13, 26, 46, 137–38 74–75, 94, 102, 112, 114, 119, “brief case importers”, 16, 33 133, 143, 150, 156, 169, 187, BRIK (Badan Revitalisasi Industri 191, 198, 255 Kehutanan), 240 Bank Indonesia Liquidity Support, see British-American Tobacco (BAT), 144 BLBI British Commonwealth, 5 Bank of Thailand, 118 “broad spectrum” strategy, 158 BAPPENAS (National Planning Bulog, 80 Board), 95, 162, 259 Burhanuddin Harahap, 6 Basic Law on Forestry, 231 Business Competition Supervisory Bata, 142, 144 Commission, 188 Baudet, Henri, 6, 40 Benteng (fortress) programme, 11–12, C 15–17, 24 Cakung Export Processing Zone, 253 implementing the, 31–35 Caltex, 92, 114 promoting indigenous capital goods, 208 entrepreneurs, 27–31 imports of, 211–12, 224, 226 Benteng goods, 15 capitalism, 27 Benteng group, 31 “capitalist developmental state”, 77 “Berkeley Mafia”, 43, 69, 87 car assembly industry, 272–73, 281 “Big Five”, Dutch trading companies, see also auto-parts industry 11, 15, 27, 31 “cash program”, 147 BIIC (Brazil, India, Indonesia, China), Castells, Manuel, 77 138 central bank, see Bank Indonesia 15 Indonesia_Economy.indd 298 4/12/12 3:41:24 PM Index 299 Central Agency for Statistics, see BPS D Central Bureau of Statistics, 115 Daewoo, 288 Central Office of Imports, 34 Daimler, 287 Central Trading Company, see CTC Dasaad Musin, 31 chaebols (Korean conglomerates), 80 decentralization laws, 85 Cherry cars, 288 deforestation, 131, 232–33, 235, Chevrolet cars, 288 240–41, 245 China “deletion programme”, 154, 272, second largest economy, 137 275–78, 286, 288–89 Chinese assessment of, 279–80 ban on retail trade, 18–20 Democrat Party (Partai Demokrat), 84 moneylenders, 14 “demographic dividend”, 133 pro-Taiwan, 18, 28, 36 deregulation package, 252–53 racial discrimination, 30 “dereservation” policy, 262 rice mills, ownership of, 17–18 Djohan Djohar, 31 weaving industry, and, 17 Djuanda Kartawidjaja, 8, 15, 29–30, see also Sino-Indonesian minority 43 “Chinese problem”, dealing with, Domestic Investment Law, 79, 149 14–15 “double colonialism”, 14, 28 Cochran, Merle, 5, 40 “dual track” industrialization strategy, colonial debt, 5–6 158, 180 Commission of Four, 80 Duncan, Tim, 134 Committee of Industrialization “Dutch Disease”, 82, 95–96, 130, 150 (Panitya Industrialisasi), 143 Dutch economic dominance, 6–7, 14, communist coup, 77 25–26, 28 Conefo (Conference of the Newly measures to reduce, 8–13 Emerging Forces), 113, 122 Dutch enterprise Conference on Climate Change, 131 nationalization of, 13–14, 18, 20, Confrontation, 113 25–27, 35, 49 Constant Market Shares Analysis, 262 Dutch-Indonesian relations, 4, 7, 14 corruption, 80, 130, 134, 138, 192, Dutch repatriation, 13 266–67 “duty exemption and drawback see also KKN scheme”, 177 cottage industries, 56 CoWs (contracts of work), 92 E CPO (crude palm oil) industries, East Asian Economic Miracle 165 — Economic Growth and Public Credit Foundation (Yayasan Kredit), Policy, The, report, 73–74, 161, 12, 42 177 “Crush Malaysia” campaign, 78, 112, “East Asian Tigers”, 155, 185 114–15 econometric studies, findings from, CTC (Central Trading Company), 216–17 11, 26 “economic decolonization”, 4 15 Indonesia_Economy.indd 299 4/12/12 3:41:24 PM 300 Index economic nationalism, 20, 24 Foreign Investment Law, 79, 149 defined, 3 forest fires, 131 early years of independence, in, forestry sector, development of, 25–27 231–34, 245 Economic Urgency Plan (Rencana Basic Law on Forestry, 231 Urgensi Perekonomian), 33, See also wood products industry 141–43, 168 Formosa Plastics, 262 objectives, 144–45 “free enterprise”, 59 Eight Year Overall Development Plan, 146 G electronics industry G-7, 137 study of, 220–21 G-8, 138 Emil Salim, 78 G-20, 133–34, 138 etatist policy, 110 garment industry, 166–67, 169, 193, Eurasians, 8 213–14, 248 European Community (EC), 249, Asian crisis, after the, 260–63 253, 258 capacity of, 265 Eveready and National Carbon, 142 characteristics of, 250 “export-led technology development”, exports, 254, 258–59, 264 213 period of rapid growth, 249–58 “export-platforms”, 253 post-MFA developments, 263–66 export-promoting industrialization, sluggish growth, 258–60 100, 154–55, 207, 226, 241, study of, 219–20 252, 261 Garuda Indonesian Airways, 10 “export-substitution” 230–31, 239 General Motors, 272, 288 “external economies”, 58 Gestapu coup, 117 GFC (global financial crisis), 127–30, F 133–34, 137–38, 273, 291 “family principle” economy, 29 GIAMM (Indonesia Automotive Feith, Herbert, 44 Parts & Components Industries Financial Daily (Het Financieel Association), 288–89, 292 Dagblad), 9 Glassburner, Bruce, 45 Financial-Economic Agreement, see Goldman Sachs, 137 Finec Golkar, 84, 87 Finec (Financieel-Economische Good Year, tyres, 142, 144 Overeenkomst), 6, 8, 12, 25, 26, Great Depression, 29, 142 40–41, 43 greenhouse gas, 131 Five Year Development Plan, 145–46, “Green Revolution”, 83 152 “Guided Democracy and Guided Flexible Manufacturing System, 267 Economy”, 19, 28, 34, 116, 145 Fogarty, John, 134 Food Logistics Board, 80 H Foreign Exchange Control Board, 8 Hadinoto, 14 15 Indonesia_Economy.indd 300 4/12/12 3:41:24 PM Index 301 Hadi Surjadipradja, 289 economic policy in 1950s, 42–45, Harahap, 46 115–17 Harmonized System, 275, 279 economy, 38–42, 70–72, 90, 96– Hawkins, Everett, 14, 28 97, 100, 103, 111, 115–17, Heineken Beer, 144 120, 137–38, 146, 150, 156, Higgins, Benjamin, 7, 43–44 158–59, 163, 169, 176, 260, HIID (Harvard Institute of 273 International Development), 163, education expenditure, 184, 189 178–80, 258 FDI (foreign direct investment), Houwink, A., 10 49–50, 60, 79, 86, 128, 132– HPAEs (High-Performing Asian 33, 165, 169, 170, 175, 182, Economies), 73, 159, 176 186, 190–92, 197, 208–12, hyperinflation, 78–79, 110–12, 121, 215, 222–25, 251, 287–90 148, 186 food crop production, 39 Hyundai, 287 foreign debt, 113–14, 117–18 foreign exchange, 46–47, 53–54, I 95, 112, 114, 118, 126 IBRA (Indonesian Banking GDP (gross domestic product), Restructuring Agency), 75 7, 39, 72, 75, 85, 97–98, IDD (International Direct Dialing) 110, 113–15, 127–28, 130, Facility, 99 137–38, 159, 160–61, 164, IGGI (Inter-Governmental Group on 176, 180–81 Indonesia), 79 GNP (gross national product), 70 IMF (International Monetary Fund), health expenditure, 189–90 3, 24, 74–75, 104, 119–20, 137, independence, 4, 26 182, 188 industrial competitiveness, 185–96 import bans, 151 industrial development, 103, import-substituting industrialization, 146–49, 158–63 99–100, 132, 134, 142, 146, industrial policy, 143–46, 149–58 150–54, 168, 177–79, 241, inflation, 46–47, 52–54, 85, 92, 252 102, 111, 120, 126, 165, 169, income gap, 81, 117 181, 186–87 infant mortality rate, 71 inherited colonial debt, 5–6 Incentive Programme, 275, 278–79 investment projects in, 157 assessment of, 279–80 manufacturing sector, 130, 146, Indian economy, 137 159–60, 164, 169, 176–78, Indonesia 181, 185, 251, 260–61, 267 budget deficit, 41, 46–47, 52–54, net exports, 128 85, 112–13 poverty in, 70–71, 75–76, 79, 86, deflation, 52–54 121 developmental state, as, 77–79 primary exports, 234 economic crises, 109, 110, 111–17, purchasing power, 47, 52, 97 122–23 technological competence, 183–85 15 Indonesia_Economy.indd 301 4/12/12 3:41:24 PM 302 Index technology importer, 207–11 Inpres (Instruksi Presiden), 99 trade
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    INTRODUCTION EMERGING MOVEMENTS Darwis Khudori, Bandung Conference and its Constellation — Seema Mehra Parihar, Scripting the Change: Bandung+60 pp. vii-xxv engaging with the Gender Question and Gendered Spaces — pp. 175-193 HISTORY Trikurnianti Kusumanto, More than food alone: Food Security in the South and Global Environmental Change — Darwis Khudori, Bandung Conference: the Fundamental pp. Books — pp. 3-33 194-206 Naoko Shimazu, Women Performing “Diplomacy” at the Bandung Conference of 1955 — pp. 34-49 EMERGING COUNTRIES Beatriz Bissio, Bandung-Non Alignment-BRICS: A Journey of the Bandung Spirit — GLOBAL CHALLENGES pp. 209-215 Two Big Economic Manoranjan Mohanty, Bandung, Panchsheel and Global Tulus T.H. Tambunan and Ida Busnetty, Crises: The Indonesian Experience and Lessons Learned Swaraj — pp. 53-74 for Other Asian-African Developing Countries — pp. Noha Khalaf, Thinking Global: Challenge FOR Palestine — 216-233 pp. 75-97 Sit Tsui, Erebus Wong, Wen Tiejun, Lau Kin Chi, Comparative Study on Seven Emerging Developing INTERNATIONAL RELATIONS Countries: Brazil, China, India, Indonesia, South Africa, Adams Bodomo, Africa-Asia relations: How Bandung Turkey, Venezuela — pp. 234-257 redefined area and international studies — pp. 101-119 Lazare Ki-zerbo, The International experience South Group EMERGING CONCERNS Network (ISGN): lessons and perspectives post-2015 — Lin Chun, Toward a new moral economy: rethinking land pp. 120-138 reform in China and India — pp. 261-286 István Tarrósy, Bandung in an Interpolar Context: What Lau Kin Chi, Taking Subaltern and Ecological Perspectives on ‘Common Denominators’ Can the New Asian-African Sustainability in China — pp. 287-304 Strategic Partnership Offer? — pp. 139-148 Mérick Freedy Alagbe, In search of international order: From CLOSING REMARK Bandung to Beijing, the contribution of Afro-Asian nations — pp.
  • Indonesian Universities: Rapid Growth, Major Challenges

    Indonesian Universities: Rapid Growth, Major Challenges

    Indonesian Universities: Rapid Growth, Major Challenges Hal Hill, Australian National University Thee Kian Wie, Indonesian Institute of Sciences (LIPI) Presentation to the ANU Indonesia Update Conference, September 21, 2012. 1. Introduction 2. Indonesian Universities: The Context An Overview International Lessons and Regional Experiences The Current Situation Performance Indicators Inside Universities: governance and incentives 3. Major Contemporary Policy Issues University Autonomy and the BHP Case Incentives for Academic Quality Accreditation and Quality Control The Challenge of Equity 1. Introduction A very large system undergoing rapid change and transformation. HEI’s: from 2,000 students (1945) to 5.2 million at present. Essentially a creation of the second half of the 20th century; much of the growth since the 1970s. Historical legacy: a laggard compared to much of Asia. Very rapid growth, driven by: • Supply-side: large cohorts, graduating from primary and secondary schools. • Demand-side: rapidly rising incomes, crossing a threshold. • A more ‘credentialed’ labour market, eg, for teachers, pegawai negeri. • Some deregulation of the private sector. 1. Introduction (cont) Very large quality variations: from 5-7 ‘elite’ universities, to rudimentary ‘colleges’. Private sector and funding the main source of growth. Contested philosophies: • Markets v/s regulation • Egalitarian ideals v/s unequal outcomes • A hesitant embrace of globalization. Main focus of this presentation: the university sector. Much of Indonesia’s higher education
  • The Issue of Changing Identity

    The Issue of Changing Identity

    PERSONAL RECOLLECTIONS OF INDONESIA’S FIRST TWO DECADES OF INDEPENDENCE: THE ISSUE OF CHANGING IDENTITY THEE Kian Wie Economic Research Centre Indonesian Institute of Sciences (P2E-LIPI), Jakarta Early youth in the Netherlands Indies • Family background: typical Chinese Peranakan family, i.e. ethnic Chinese born in Indonesia for generations, and generally not speaking Chinese anymore • Father’s education at Hollands-Chinese Kweekschool (HCK) to become a teacher at a Dutch-Chinese primary school (HCS); Mother’s initial education at a Chinese school: Her father was co-founder of a Chinese primary and secondary school for girls (Tiong Hoa Li Hak Hau); my mother later switched to a Dutch high school (Drie-jarige HBS), and later went to the Netherlands to study as a teacher • Pre-school at a Catholic Froebel school at Jalan Batutulis (1940-41) • First year at European Primary School (Europese Lagere School, ELS, basically only open to European students)) of the Carpentier Alting Stichting (CAS), 1941-February 1942 because my father was a principal (schoolhoofd) at a HCS (Dutch –Chinese primary school) in Jakarta • Awareness of looming Japanese threat at school among the pupils of our first class at the above ELS and at home (overhearing father’s talks with Mr. Parijs, an Eurasian (in the Netherlands referred to as ‘Indische Nederlander’) married to a German woman • Construction of ‘phony’ houses which fascinated me on Waterlooplein (Lapangan Banteng) to lure Japanese bomb attacks? Was it a kind of Potemkin village? • Establishment of Luchtbeschermingsdienst (LBD, Air Defense Service) which my father had to join • After Japanese attack temporary flight with my mother, younger sister and younger brother to Bintang estate, owned by relatives near Cibadak, West Java.