DOCSLIB.ORG

Widjojo's "Invisible Hand"

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Widjojo's Economics and Finance in Indonesia Vol. 59 (3), Page 233 - 241 Widjojo's "Invisible Hand" Emil Salim Widjojo Nitisastro revealed for the first time his political economic view, when he unnoticeably reached his 28th birthday in September 23, 1955. He delivered a strong criticism to Wilopo's presentation on "the Interpretation of Article 33 of the Indonesian Constitution" in a debate between former Prime Minister (1952-1953) Wilopo and graduate student Widjojo Nitisastro that took place in a Symposium of University of Indonesia to celebrate the First Lustrum of the Economic Faculty of University of Indonesia, and was focused on the topic of Article 33 of the 1945 Constitution, stipulating that "the economy is arranged as a joint endeavor based on the principles of family-like mutual cooperation." • 1. UNDERSTANDING WIDJOJO Wilopo has been an influential leader in the Indonesian Nationalist Party (PNI), who has won the 1955 general election. As one of the outstanding leaders of his party, he has been Minister of Labor (1949-1950), Minister of Economic Affairs (1950-1952) and Prime Minister (1952-1953). As a graduate from the Faculty of Law and Social Science during the Dutch colonial period, Wilopo was considered an "intellectual politician", who was open for rational criticism. Widjojo on the other hand has joint the Indonesian 1945 revolution as member of the "Indonesian Student Army" in the battle of Surabaya (1946). When the physical revolution was over (1949), Widjojo became one of the first students of the newly established Economic Faculty at the University of Indonesia (1950) in Jakarta. He was already recognized as a brilliant student and as young graduate student was chosen by the Dean of the Economic Faculty, Professor Sumitro Djojohadikusumo, to become not only his teaching assistant but also his trusted "deputy" to assist him in "running" the Economic Faculty when he was occupied by his duty as Minister of Trade and Industry (1950- 1951), Minister of Finance (1952-1953 and 1955-1956). The seeds of Widjojo's intellectual thinking were sown during encounter. Wilopo was interpreting "article 33 of the 1945 Constitution" as anti-liberalism, not emphasizing individualism but collectivism. © 2011 LPFM 233 Emil Salim Economic activities should not be based on the motive of obtaining individual private gain, but on the motive of serving the community for the betterment of all. "Joint endeavor" as stipulated in the constitution is different from "private endeavor". The goal is "to strive for the enhancement of cooperative joint endeavors" for the enhancement of the whole society and not for "private individual profits". The government must promote these kinds of economic activities, in particular those traditional practices that can be adjusted to these principles of joint endeavors. It is in this context that cooperatives must be promoted to live up to the spirit of article 33 of the 1945 Constitution. Widjojo brought in his rebuttal the macro-economic perspective. The issue is not pro versus anti liberalism or state versus private enterprise per se. The main idea is to get the process of the economy moving to raise national income. All productive forces must be engaged and not limited to economic institutions and cooperatives. Furthermore, how does cooperatives organized by farmers, small producers, small traders and credit institutions lose their private features if "private enterprise" is rejected? Or are they being subordinated to states enterprises or state institutions? Widjojo detected confusion and mixing up of anti-liberalism with anti-private but pro cooperatives. Ernerging in this debate was Widjojo's concept to develop a coherent macro-economic structure that serves to raise GDP but by the same token device rational economic policies to interfere in the market to enable equitable distribution of income and to eradicate poverty. Whether through public or private enterprise becomes irrelevant, since the basic notion of article 33 is to strive for a growing economy with social justice, poverty eradication, and welfare for the people at large. The development policy concept of Widjojo was not clear yet in 1955, but it started to grow together with his maturing intellectual ability affected by the economic and political challenges that he had to endure during the turbulent years of President Soekamo's guided democracy. The first half of the fifties was full with political and economic turbulences. Indonesia was implementing parliamentary democracy with political parties forming the coalition cabinet and parliamentarians were chosen through free election. For a young nation like Indonesia however, the period of parliamentary democracy was combined with frequent changes of cabinets. Many cabinets lasted only 1 to 2 years. This squabbling between political parties makes economic development very difficult. It was only during the Burhanuddin Harahap's Cabinet (August 1955 - March 1956) that effective rational economic policies were implemented, such as reducing budget deficits, dismantling the system of import certification and.stopping discrimination against businesses 234 Widjojo's "Invisible Hand" from Chinese Indonesian. Rational economic policies were drawn with the aim to get the price mechanism working right. The driving force behind all this was Professor Sumitro Djojohadikusumo, who was in charge as Minister of Finance. And as Sumitro's assistant at the Economic Faculty, Widjojo got his first encounter with the "reality of economics in action." However, this experience gives him also the feel of the grim reality behind economics. Widjojo was confronted not only with theories of economics as written in textbooks and taught in classes, but also with economics as it is guided and influenced by real social and political forces operating in real society. In such an environment, economic policy must be based on a clear notion of "what do you want to achieve not only IN economics, but also WITH economics." ' | Widjojo was convinced that most import is to understand fully the theories of economics, to understand the inner logic in economics guided by the "invisible hand" in the market. This is why Widjojo urges all his young colleagues to reach for the Ph.D. degree. It is not the degree as such that is important, but the ability to develop the inner logic of economics, to obtain the methodology of deductive and inductive rational thinking. In brief the ability to use at its maximum our ability of critical and creative scientific thinking. But these features are also what Widjojo imposed upon himself. He obtained his graduate degree with top honors. And he completed his study and obtained his Ph.D. in economics from University of California (1961), Berkeley Campus, also with high distinction. Widjojo has proven to be a top graded scholar and intellectual. Meanwhile Widjojo was also aspiring for an ideal type of intellectual. Not the type of "intellectual worker that offers his intellectual ability to the highest bidder." But for a quality of intellectual with social conscious to perform the task of social critics, when means of criticism have been silenced, and to fight for the interests of the weak, the poor and the vulnerable group. This explains why Widjojo devoted his energy to lead the "Indonesian Institute for Economic and Social Research" or popularity known as LPFM. In his capacity as director of LPFM, several research projects were launched involving undergraduates and graduates students on subjects of transmigration in Lampung, urbanization into Jakarta with impacts on the informal sector in "becak-transport", informal trading in Pasar Benin, village commimity development nationally (that became the embryo for the creation of "Community Development Ministry or Kementerian Pembangunan Masyarakat Desa), family plarming and survey on 59 villages throughout Indonesia. * 235 Emil Salim Widjojo's has steered research into digging real data and facts in the fields where practically no reliable statistical data are available, not only in finance, banking, trade, production, but also in social statistics. Widjojo insisted that any responsible policies must be based on reliable data from the field. In due course of Widjojo's intellectual development, he became fully aware that social factors affected by population become a crucial determinant in Indonesian development. And the only most reliable statistical data available at that time was the Population Census. This was than intensively analyzed in Widjojo's Ph.D. dissertation on "Population Trends in Indonesia (1961) published by Cornell University Press, Ithaca in 1970. In his thesis, Widjojo also draws an analysis of Indonesian Population trend 1961-1991. 2. WIDJOJO'S DEVELOPMENT POLICY PRINCIPLES By then Widjojo's has a realistic view on the Indonesian economic and social conditions, supported by statistical data. Through his role as Dean of Economic Faculty and his wide connections with intellectuals of all walks of life, Widjojo soon became the major brain-power of the National Plarming Bureau, which is attached to the Office of Prime Minister Juanda. Together with Secretary Ceneral of the National Planning Bureau, All Boediardjo, the office was assisted by graduate students and graduates from Economic Faculty under the leadership of Widjojo. A rational 5 year National Development Plan (1965-1961) was drawn and agreed by the government. Unfortunately, the political development was not conducive and the Plan was not made operational. But the ability to draw a comprehensive Five Year Development Plan was the beginning of Widjojo's major say in Indonesian Five Year Plans when President Soekamo was replaced by President Soeharto in 1966. In economic planning, Widjojo recognizes the crucial role of price as the invisible hand in the market. But this invisible hand needs to be working for "development with equity", taking care of the poor, the weak and the vulnerable group. It is in this context that Widjojo believes that the "invisible hand" must be actively steered by the government through development policies into the direction of serving social justice, striving for equity within and between nations.
Load more

Recommended publications
  • A Review of Thee Kian Wie's Major
    Economics and Finance in Indonesia Vol. 61 No. 1, 2015 : 41-52 p-ISSN 0126-155X; e-ISSN 2442-9260 41 The Indonesian Economy from the Colonial Extraction Period until the Post-New Order Period: A Review of Thee Kian Wie’s Major Works Maria Monica Wihardjaa,∗, Siwage Dharma Negarab,∗∗ aWorld Bank Office Jakarta bIndonesian Institute of Sciences (LIPI) Abstract This paper reviews some major works of Thee Kian Wie, one of Indonesia’s most distinguished economic historians, that spans from the Colonial period until the post-New Order period. His works emphasize that economic history can guide future economic policy. Current problems in Indonesia were resulted from past policy failures. Indonesia needs to consistently embark on open economic policies, free itself from "colonial period mentality". Investment should be made in rebuilding crumbling infrastructure, improving the quality of health and education services, and addressing poor law enforcement. If current corruption persists, Indone- sia could not hope to become a dynamic and prosperous country. Keywords: Economic History; Colonial Period; Industrialization; Thee Kian Wie Abstrak Tulisan ini menelaah beberapakarya besar Thee Kian Wie, salah satu sejarawan ekonomi paling terhormat di Indonesia, mulai dari periode penjajahan hingga periode pasca-Orde Baru. Karya Beliau menekankan bahwa sejarah ekonomi dapat memberikan arahan dalam perumusan kebijakan ekonomi mendatang. Permasalahan yang dihadapi Indonesia dewasa ini merupakan akibat kegagalan kebijakan masa lalu. In- donesia perlu secara konsisten menerapkan kebijakan ekonomi terbuka, membebaskan diri dari "mentalitas periode penjajahan". Investasi perlu ditingkatkan untuk pembangunan kembali infrastruktur, peningkatan kualitas layanan kesehatan dan pendidikan, serta pembenahan penegakan hukum. Jika korupsi saat ini berlanjut, Indonesia tidak dapat berharap untuk menjadi negara yang dinamis dan sejahtera.
    [Show full text]
  • 00 Seasians ASEM.Indd 10 9/18/14 10:52:23 AM
    00 SEAsians_ASEM.indd 10 9/18/14 10:52:23 AM ecollections Reproduced from Recollections: The Indonesian Economy, 1950s-1990s, edited by Thee Kian Wie (Singapore: Institute of Southeast Asian Studies, 2003). This version was obtained electronically direct from the publisher on condition that copyright is not infringed. No part of this publication may be reproduced without the prior permission of the Institute of Southeast Asian Studies. Individual articles are available at < http://bookshop.iseas.edu.sg > The Indonesia Project is a major international centre of research and graduate training on the economy of Indonesia. Established in 1965 in the Division of Economics of the Australian National University’s Research School of Pacific and Asian Studies, the Project is well known and respected in Indonesia and in other places where Indonesia attracts serious scholarly and official interest. Funded by ANU and the Australian Agency for International Development (AusAID), it monitors and analyses recent economic developments in Indonesia; informs Australian governments, business, and the wider community about those developments, and about future prospects; stimulates research on the Indonesian economy; and publishes the respected Bulletin of Indonesian Economic Studies. The Institute of Southeast Asian Studies (ISEAS) in Singapore was established as an autonomous organization in 1968. It is a regional research centre for scholars and other specialists concerned with modern Southeast Asia, particularly the many-faceted problems of stability and security, economic development, and political and social change. ISEAS is a major publisher and has issued over 1,000 books and journals on Southeast Asia. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS).
    [Show full text]
  • Ali Wardhana
    VOLUME XIII / NO. 145 / OKTOBER 2019 ALI WARDHANA Usianya terbilang muda kala beban negara dipercayakan padanya. Warisan persoalan ekonomi menunggu dibereskan. Di tangan Ali dan timnya, hiperinflasi dicundangi, institusi keuangan dibenahi, penerimaan negara dikukuhkan, pun kualitas hidup masyarakat dieskalasi. Kecakapan dan kejujuran nurani jadi modal lima belas tahun mengampu Menteri Keuangan. EDISI KHUSUS VOL. XIII / NO. 133 / OKTOBER 2018 1 ISSN 1907-6320 Daftar Isi Diterbitkan oleh: Sekretariat Jenderal Kementerian Keuangan. Pelindung: Menteri Keuangan LAPORAN UTAMA Sri Mulyani Indrawati. Pengarah: Wakil Menteri Keuangan Mardiasmo. Penanggung Jawab: 17 Ali Wardhana, 1928 - 2015 Sekretaris Jenderal Kementerian Keuangan Hadiyanto. Pemimpin Umum: Kepala Biro Komunikasi dan Layanan Informasi Nufransa Wira Sakti. Pemimpin Redaksi: 20 Infografis Kabag Manajemen Publikasi, Rahmat Widiana. Redaktur Pelaksana: Yani Kurnia A. Dewan 22 Tuan Pelopor Pembaruan Birokrasi Redaksi: Ferry Gunawan, Dianita Suliastuti, Titi Susanti, Budi Sulistyo, Pilar Wiratoma, 25 Sang Penegak Reformasi Pajak Purwo Widiarto, Muchamad Maltazam, Sri Moeji S, Alit Ayu Meinarsari, Teguh Warsito, Hadi 27 Tegas Tuntas Membenahi Surono, Ali Ridho, Budi Prayitno, Budi Sulistiyo. Tim Redaksi: Farida Rosadi, Reni Saptati D.I, Danik Setyowati, Abdul Aziz, Rostamaji, Adik Tejo Waskito, Arif Nur Rokhman, Ferdian 29 Agar Berkah Minyak Tak Jadi Musibah Jati Permana, Andi Abdurrochim, Muhammad Fabhi Riendi, Leila Rizki Niwanda, Kurnia Fitri 30 Berimbang dahulu, Bertumbuh Anidya, Buana Budianto Putri, Muhammad Irfan, Arimbi Putri, Nur Iman, Berliana, Hega Susilo, Kemudian Ika Luthfi Alzuhri, Agus Tri Hananto, Irfan Bayu Redaktur Foto: Anas Nur Huda, Resha Aditya 34 Penakluk Hiperinflasi Pratama, Fransiscus Edy Santoso, Andi Al Hakim, Muhammad Fath Kathin, Arief Kuswanadji, Intan Nur 37 Vokal di Forum Global Shabrina, Ichsan Atmaja, Megan Nandia, Sugeng Wistriono, Rezky Ramadhani, Arif Taufiq Nugroho.
    [Show full text]
  • Downloaded 4.0From License
    chapter 3 Expertise and National Planning Abstract This chapter looks into the development of Indonesia’s postcolonial higher education system and the international technical assistance protocol in developing Indonesia’s new managerial class. It looks into the rapid expansion of higher education and the effort of the Indonesian society to decolonize its education system away from the Dutch model. Because of the swiftness of this process, Indonesianization looked a lot like Americanization. International aid through technical assistance was the primary means through which Western ideas on development planning and expert production through international higher education became cemented. Aid money helped create personal and institutional relationships between Indonesian and American govern- ment institutions and universities. In particular, the relationship between experts like the economist Sumitro Djojohadikusumo, Indonesia’s state planning institution, the faculty of economics of the University of Indonesia and UN and usaid technical experts and Western social scientists from American within mit’s Indonesia Project and others. These forms of transnational relationships legitimized the position of In- donesian planning experts within planning institutions that had strong institution- al relationship with the West. This pattern would continue throughout much of the twentieth century. Keywords Indonesianization of higher education – Americanization – international technical aid – modernization theory – Indonesia project This chapter discusses two developments concerning the post- colonial crea- tion of expertise during the 1950s. The first was the development of higher edu- cation in both quantitative and qualitative terms: this included the expansion of domestic tertiary education and the Americanization of the curriculum and study methods, as well as the introduction of the Guided Study method.
    [Show full text]
  • The Origins and Contested Legacy of Indonesia’S Berkeley Mafia
    The Origins and Contested Legacy of Indonesia’s Berkeley Mafia, 1955 – 1969 By Barry Thrasher Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of Bachelor of Arts In the Department of History at Brown University Thesis Advisor: Professor Kerry Smith April 6th, 2018 Thrasher ii Acknowledgements I would like to take the time to single out several people whose help made this project possiBle. The order of these acknowledgements does not reflect the degree of importance each person had on the final product - in fact, each one was equally vital to the completion of this thesis. To my advisor, Professor Smith; thank you for the invaluaBle wisdom and insight you Brought to Bear on my writing. I don’t douBt that there were moments you were pulling your hair out, But the care and patience you demonstrated for the Best part of 12 months reflects on your dedication to the craft of history. To my writing group; Grace, Greer, and Katy, thank you for pushing me every week to write, read, and reflect. The quality of your work and the sincerity of your comments motivated me to continually improve my own writing, and I hope I was aBle to help you do the same. Special thanks go to the Brown University History Department and the Southeast Asian Studies Initiative - two organizations on campus that encouraged me to pursue a topic in Indonesian history. Within these organizations I would like to express my gratitude to Professor Pollock, Professor ShiBusawa, Professor Evelyn Hu-DeHart, and Charles Carroll for their constant support and excitement over my topic.
    [Show full text]
  • Proquest Dissertations
    INFORMATION TO USERS This manuscript has been reproduced from the microfilm master. UMI films the text directly from the original or copy submitted. Thus, some thesis and dissertation copies are in typewriter face, while others may be from any type of computer printer. The quality of this reproduction Is dependent upon the quality of the copy submitted. Broken or indistinct print, colored or poor quality illustrations and photographs, print bleedthrough, substandard margins, and improper alignment can adversely affect reproduction. In the unlikely event that the author did not send UMI a complete manuscript and there are missing pages, these will be noted. Also, if unauthorized copyright material had to be removed, a note will indicate the deletion. Oversize materials (e.g., maps, drawings, charts) are reproduced by sectioning the original, beginning at the upper left-hand comer and continuing from left to right in equal sections with small overlaps. Photographs included in the original manuscript have been reproduced xerographically in this copy. Higher quality 6” x 9* black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. Bell & Howell Information and Learning 300 North Zeeb Road, Ann Arbor, Ml 48106-1346 USA 800-521-0600 UMI LIBERALIZING NEW ORDER INDONESIA: IDEAS, EPISTEMIC CCMMÜNITY, AND ECONŒIC POLICY CHANGE, 1986-1992 DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By Rizal Mallarangeng, MA. ***** The Ohio State University 2000 Dissertation Committee: proved by Professor R.
    [Show full text]
  • Prof. Dr. Widjojo Nitisastro
    Testimonials of Friends about Widjojo Nitisastro Law No.19 of 2002 regarding Copyrights Article 2: 1. Copyrights constitute exclusively rights for Author or Copyrights Holder to publish or copy the Creation, which emerge automatically after a creation is published without abridge restrictions according the law which prevails here. Penalties Article 72: 2. Anyone intentionally and without any entitlement referred to Article 2 paragraph (1) or Article 49 paragraph (1) and paragraph (2) is subject to imprisonment of no shorter than 1 month and/or a fine minimal Rp 1.000.000,00 (one million rupiah), or imprisonment of no longer than 7 years and/or a fine of no more than Rp 5.000.000.000,00 (five billion rupiah). 3. Anyone intentionally disseminating, displaying, distributing, or selling to the public a creation or a product resulted by a violation of the copyrights referred to under paragraph (1) is subject to imprisonment of no longer than 5 years and/or a fine of no more than Rp 500.000.000,00 (five hundred million rupiah). Testimonials of Friends about Widjojo Nitisastro Editors: Moh. Arsjad Anwar Aris Ananta Ari Kuncoro Kompas Book Publishing Jakarta, Januari 2008 Testimonials of Friends about Widjojo Nitisastro Publishing by Kompas Book Pusblishing, Jakarta, Januari 2008 PT Kompas Media Nusantara Jalan Palmerah Selatan 26-28, Jakarta 10270 e-mail: [email protected] KMN 70008004 Translated: Harry Bhaskara Editors: Moh. Arsjad Anwar, Aris Ananta, and Ari Kuncoro Copy editors: Gangsar Sambodo and Bagus Dharmawan Cover design by: Gangsar Sambodo and A.N. Rahmawanta Cover foto by: family document All rights reserved.
    [Show full text]
  • AUSTRALIAN NATIONAL UNIVERSITY Academic
    AUSTRALIAN NATIONAL UNIVERSITY Budy Prasetyo Resosudarmo Arndt-Corden Department of Economics Crawford School of Public Policy College of Asia and the Pacific Email: [email protected] Phone : +61 (2) 6125 2244 Academic Qualifications 1996 PhD in Economics of Development Cornell University, USA Recipient of: - Award of Merit for an Outstanding PhD Thesis in the Graduate Field of Agricultural Economics, Cornell University - GF Warren Award for an Outstanding Publication or Manuscript by a Graduate Student in the Graduate Field of Agricultural Economics, Cornell University - Honorary membership of the Gamma Sigma Delta Honor Society - Cornell Teaching Assistantship (1996) - US-Indonesian Cultural Foundation Scholarship (1995) - Overseas Fellowship Program Scholarship, Department of Research and Technology of the Republic of Indonesia (1991-1994) 1991 MSc in Operations Research University of Delaware, USA Recipient of: - Science and Technology Manpower Development Program Scholarship, Department of Research and Technology of the Republic of Indonesia 1986 BSc in Electrical Engineering Bandung Institute of Technology, Indonesia Other Academic Awards and Distinctions 2015 Indonesia Research Scholarship, awarded by the Ash Center for Democratic Governance and Innovation, John F Kennedy School of Government, Harvard University 2002 HW Arndt Prize for the best article by Indonesian author(s) in the Bulletin of Indonesian Economic Studies, awarded by the Indonesia Project, Research School of Pacific and Asian Studies, Australian National
    [Show full text]
  • Reproduced from the Politics and Economics of Indonesia's Natural
    The Research School of Pacific and Asian Studies (RSPAS) at The Australian National University (ANU) is home to the Indonesia Project, a major international centre of research and graduate training on the economy of Indonesia. Established in 1965 in the Schoolʼs Division of Economics, the Project is well known and respected in Indonesia and in other places where Indonesia attracts serious scholarly and official interest. Funded by ANU and the Australian Agency for International Development (AusAID), the Project monitors and analyses recent economic developments in Indonesia; informs Australian governments, business and the wider community about those developments and about future prospects; stimulates research on the Indonesian economy; and publishes the respected Bulletin of Indonesian Economic Studies. The Schoolʼs Department of Political and Social Change (PSC) focuses on domestic politics, social processes and state–society relationships in Asia and the Pacific, and has a long-established interest in Indonesia. Together with PSC and RSPAS, the Project holds the annual Indonesia Update conference, whose proceedings are published in the Indonesia Update Series (previously known as the Indonesia Assessment Series). Each Update offers an overview of recent economic and political developments, and devotes attention to a significant theme in Indonesiaʼs development. The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. The Instituteʼs research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS).
    [Show full text]
  • The Indonesian Economy in the Drafter of the New Order 1968-1998
    1 THE INDONESIAN ECONOMY IN THE DRAFTER OF THE NEW ORDER 1968-1998 SeyusaViora Indah* Prof. Dr.Isjoni., M.Si **, Drs. Kamaruddin., M.Si*** email: [email protected], [email protected], [email protected] Cp: 082389281429 Social Science Departement History Education FKIP-University Of Riau Abstract: After Soeharto and his supporters succeeded in seizing power from President Soekarno, automatic legacy of bad economic conditions became a major challenge President Soeharto to immediately fix the situation. The start of President Soeharto's government in the economic field is the implementation of a western-style economy pioneered by Indonesian economists who had studied at the University of California Barkeley. The purpose of this study is to examine who and how the designers of the Indonesian economy in the New Order period of 1968-1998. The method used in this research is historical and descriptive method. Data obtained through literature techniques, documentation and comparative studies. The location of research is in the city of Pekanbaru Riau. The time of study from the start of the proposal seminar to the thesis examination. The result of this research is that when the Old Order government fell, the New Order government was led by President Soeharto, especially the economic field of President Soeharto handed over his management to a group of Barkeley economists such as Widjojo Nitisastro, the leader of the Barkeley group, and Emil Salim, Ali Wardhana, JB Sumarlin , DorodjatunKuntjoro-Jakti with a position as a group of Barkeley economists whose task is to manage the Indonesian economy with the Capitalist system and use foreign loans for development during the New Order.
    [Show full text]
  • Downloaded 4.0From License
    chapter 7 Economic Policymaking in the Guided Democracy (1962– 1965) Abstract This chapter explores the economic policy making during the Guided Democracy, especially during the late- Guided Democracy period as it neared its end by 1965, and the increasing polarization between expert economists and the communist party. It looks into communist economic ideas that goes in line with Sukarno’s participatory ideas in the economy and how expert economists tried to incorporate socialist mod- els in the economy through researching the economic institutions of East European countries and the Soviet Union. Efforts to integrate liberal economic theories with socialist institutions were discussed in the context of continuing economic deterio- ration of the first half of the 1960s. A series of economic reform programs designed by Indonesian economists, often working with expert from the US. While initially obtaining support from Sukarno, these economic reforms flounder as a result of communist criticism and Sukarno’s unwavering stance to support a more populist position when under pressure. The period saw the return home of many of New Or- der’s main economists after graduating from US universities and their positioning into important post in the economic planning and control of the country. It was a period which cemented the rise of American- educated economists as major holder of Indonesian policy making and the subsequent fall of the Indonesian communist model of the economy. Keywords Indonesian socialism – Deklarasi Ekonomi – communist production policy – rise of Indonesian technocracy Economic policymaking during the latter part of the Guided Democracy showed increasing polarization between the populist nationalist sentiments that Sukarno espoused and the ideas of the economic experts who began to be courted by the executive to help design strategies to cope with the deteriorating © Farabi Fakih, 2020 | DOI:10.1163/9789004437722_009 Farabi Fakih - 9789004437722 This is an open access chapter distributed under the terms of the CC-BY-NC-NDDownloaded 4.0from license.
    [Show full text]
  • Authoritarian Modernization in Indonesia's Early Independence Period: the Foundation of the New Order State (1950–​1965)
    chapter 1 The Indonesian Elite and Its Authority Abstract This chapter looks at the shifting ideology and elite production in Indonesia as a re- sult of decolonization. Changing elite identity markers from traditional feudal towards modern education and expertise represented changes in relations between elites and the new postcolonial state. The problem of endowing authority towards the new ed- ucated elites was perennial in the history of Indonesian state- society relations and the Guided Democracy period represented a transitional phase in the ideological un- derpinnings of this authority. The new educated elite had to wait for the creation of an ideological scaffolding that would protect them within a cocoon of authority. This authority had been challenged by the older Republican political elites headed by Pres- ident Sukarno because they saw the new upstart generation as undermining the elite position of the old political class. The formation of a foundational ideology for the Indonesian state had been a product of compromise and strategies of the old elite to ensconce the new educated managerial class within a state ideology that placed at the center the old political class. This structure would remain after the replacement of that political class with an army elite during the New Order. Keywords Indonesian elite – political class – managerial class – 1945 generation – elite authority Throughout the 1950s, efforts by both the government and the military to root out corruption put some of Indonesia’s most prominent financial and eco- nomic policymakers behind bars. In a large round- up of corruption suspects carried out by the military in 1957 many prominent policymakers, including Bank of Indonesia’s first governor, Jusuf Wibisono, and economists such as Sjafruddin Prawiranegara, Ong Eng Die, and Sumitro Djojohadikusumo, were implicated.1 Throughout the nation’s history, the position of policymakers has been precarious.
    [Show full text]