CHAPTER EIGHT THE GATEKEEPER (1950S–1970S) Cooperatives not based on people’s participation flourished but lacked a strong basis. Combined with cheating in some cooperatives both by man- agement and outsiders, these weaknesses were only exposed once the excessive facilities given to the cooperatives were no longer available. (NTT Governor El Tari official report 1972:II, 455) Idealistic teachers making common cause with rebellious peasants was one aspect of life in Kupang in the 1950s and ‘60s, but most people just wanted to make a living in these insecure times. This chapter describes a more limited form of power generation, among a rising group of senior bureaucrats and their dependents. They formed the core of a new provin- cial establishment. The exercise of power can only be sustained by mobi- lizing certain resources, and this chapter focuses on material ones. The key resource was not money as such but the capacity to control its flow across space. Once again, it was their highly political intermediate func- tions that gave provincial elites access to resources out of proportion to their position in pure market or state institutions. ‘Cheating,’ as the NTT governor put it so frankly in the 1972 report quoted at the head of this chapter, was the key to both the possibilities and the limitations of these resources. Two earlier chapters have already traced in a synthetic way the outlines of the argument developed here. A rather unconventional notion of class necessary to make sense of the story in this book was introduced in Chapter 1 with a discussion of two important papers. Aage Sørensen (2000) argued that exploitation can be explained by asking who controls any kind of asset. Bureaucratic resources such as targeted subsidies and the polic- ing of regulations form powerful assets. Michal Kalecki (1972) reasoned that the varieties of state socialism common in several newly independent countries in the 1950s and ‘60s had been more favourable to a politically savvy lower-middle class than to ‘pure’ capitalists in the upper- and upper- middle classes. Chapter 2 applies these ideas synthetically to a broad his- tory of Middle Indonesia. The beating heart of post-independence provincial urbanization was a new and largely bureaucratic indigenous © Gerry van Klinken, 2014. This is an open access chapter distributed under the terms of the Creative Commons Attribution‐Noncommercial 3.0 Unported (CC‐BY‐NC 3.0) License. Gerry van Klinken - 9789004265424 Downloaded from Brill.com09/26/2021 08:36:37PM via free access <UN> <UN> 184 chapter eight middle class. Their economic muscle was exercised in the rent-seeking politics associated with state intervention in the economy in the 1950s and ‘60s. The present chapter aims to put flesh on these assertions by recon- structing bureaucratic economic behaviour in a particular town. Indonesia wrote socialism into its constitution (articles 33 and 34), but it never adopted the creed in an integral way, restrained, as it was, by being within the US sphere of influence from 1945 and throughout the Cold War. But the US was subsequently more concerned to control foreign policy, and Indonesia did adopt socialist-sounding ideological motifs for domes- tic matters. Socialist language was de rigeur across the political spectrum. There were historical reasons for this. The nationalists had found their voice during the Depression of the 1930s. The colonial state itself had intervened to protect vulnerable populations from out-of-control market forces at that time. The Japanese occupation had seen a war economy run entirely along command lines. The promise of welfare for all, which gave the national revolution its popular energy, was premised on extensive redistribution of resources. A government floundering to assert its author- ity in the 1950s sought to buy political stability by appeasing the noisiest provincial groups. Unable to give them real money, it gave them the gift of the means of primitive accumulation. Four economic and political processes that help explain the rise of this provincial middle class are discussed below. The first was Indonesianisasi, a deliberate policy to create a new class of indigenous urban entrepre- neurs who could both compete and work together with more established Chinese operators. A steady trickle of government funding preferentially targeted this group in stricken provincial economies. Next, these entre- preneurial urban officials resorted to political action to increase their leverage over this funding. They pushed Jakarta for more government and greater autonomy in their home territory, at the price of sabotage if they didn’t get it. This section on localism adds a crucial territorial dimension to Kalecki’s intermediate class analysis. Third, ‘cheating’ increased as they discovered that scarcity could be a source of wealth for those in gatekeep- ing positions. And fourth, exploitative practices produced social tensions with disadvantaged groups. An undercurrent of violence led to militariza- tion. By the late 1960s the indigenous ruling class in town had established a strong gatekeeping position for itself in Middle Indonesia, even in the midst of economic crisis, lower class disaffection, and authoritarian poli- cies emanating from the centre. The next chapter examines the tragic consequences of pursuing this increasingly exploitative new local con- stellation of power. Gerry van Klinken - 9789004265424 Downloaded from Brill.com09/26/2021 08:36:37PM via free access <UN> <UN> the gatekeeper 185 Indonesianisasi A major part of the constitutional goal of popular welfare through expanded democratic control over the economy was to ‘Indonesianize’ it (Sutter 1959). Indonesianisasi developed a late colonial policy ideal of excluding the Chinese from those levels of the economy below big capital, which the Dutch thought indigenes should be able to handle. All the Indonesian political parties participating in the colonial proto- parliament called the Volksraad had supported significant state interven- tion in the economy. State banks out-competed Chinese moneylenders with their small credit schemes for indigenous small and medium entre- preneurs. State-sponsored cooperatives expanded rapidly after 1927, and state intervention generally grew in scope during the Depression. The Japanese occupation further stimulated the indigenization of the econ- omy in order to make up the shortfall caused by the loss of imports. State-sponsored trade organizations attempted to displace Chinese pri- vate enterprise. Chinese traders were driven from the villages and were excluded by means of a licensing system from many economic sectors, except where it concerned their own community needs (Wertheim 1955). In post-war revolutionary Indonesia, nationalizing everything from sugar and textile production to rice distribution and land title was the main policy promoted under Vice-President Mohd. Hatta, a Dutch-trained economist. The historian’s wasteland that is Kupang in the 1950s and ‘60s has left us only snippets of information about the economy, and practically nothing from the earlier parts of that period. Most of the termite-ravaged rem- nants of ‘grey’ government literature, still held in private collections, dates from the mid- to late 1960s, and so do most of the stories I heard from old people in Kupang about the economy. Precision and completeness is therefore no longer possible, and we shall have to range across the period to get an impression of the way Indonesianisasi created an indigenous provincial establishment. The private economy in town was tiny (Chapter 6). Above the itinerant Sabunese small traders, most of its practitioners were ethnic Chinese while a few were Arab. Chinese before the war had made up 13% of the urban population, though this decreased as the town grew. All but one of the ‘factories’ in town were Chinese-owned: three made ice, three lemon- ade, and one, owned by Ang Hauw Lang, produced clove cigarettes. The Arab entrepreneur Umar Baktir had a little weaving plant. None was very reliable – breakdowns were common (Anonymous 1956). Gerry van Klinken - 9789004265424 Downloaded from Brill.com09/26/2021 08:36:37PM via free access <UN> <UN> 186 chapter eight Live cattle were the island’s major export, but the value of imports greatly exceeded exports such as these. Rice, cement, textile (mainly sarongs), and Indonesian-made cigarettes were big import items at the harbour. Biggest import of them all was paper money, whose value exceeded the island’s entire exports (Anon 1956:14)! The provincial gov- ernment in the 1950s regulated basic supplies on a quota system. State- owned corporations worked with both international capital and local Chinese entrepreneurs. However, the scarcities created by unattractive markets and poor infrastructure still offered possibilities for good profits. Private suppliers of modern consumables insisted on a monopoly or at least a duopoly. All gasoline and kerosine was distributed in the province by BPM, a subsidiary of Royal Dutch Shell. Sugar was monopolized by the semi-government company Nivas – Timor got allocated 50 tons a year. All soap came from the Dutch multinational Unilever, cement from Portland Padang, cigarettes from British BAT (based in Surabaya) and the Belgian company Faroka (Malang). Tires came from Goodyear in Bogor and Dunlop. Government services came to Timor via Bali, which also had by far the most developed economy in the province, but goods came directly from Java on the Pelni ships. Kupang had only one fuel agent, the famous Tjiong Koen Siong; he was also the sole Goodyear agent (Reksodihardjo 1960 [1957]:II, 7–8). An ideological commitment to privileging indigenous (‘national’) busi- ness over ethnic Chinese (‘foreign’) was one thing, finding the resources to carry it through another. The result was often a so-called Ali-Baba con- struction. For example, one regulation stated that only national entrepre- neurs could operate land transport, but this simply resulted in Chinese bus and truck operators taking a sleeping indigenous partner while continuing business as usual (Reksodihardjo 1960 [1957]:II, 3).