Decolonization of Indonesian economic

Judul        :  Indonesian economic decolonization in regional and international perspective
Editor        : J. Thomas Lindbald & Peter Post
Penerbit    : KITLV, Leiden 2009
Tebal        : 212 hlm

This eight essays in this book provides insights into the complex process of economic decolonization in Indonesia from a variety of perspectives. This collection of essays draw on a wide range of primary source materials consulted in Dutch and Indonesian archives. They present detailed evidence of waht economic decolonization entailed, especially during the transfer of sovereignity in 1949 and the nationalization of Dutch companies in 1949 and the nationalization of Dutch companies in 1959.

Specialist from Indonesia, the Netherlands and Australia work on it. Thee Kian Wie, Bambang Purwanto, Anne Booth, Tri Candra Apriyanto, Jasper van de Kerkhof, J. Thomas Lindbald, Daan Marks, Peter Post. The eight contributions to this volume are selected in such a way as to obtain a broad and multi-facetted outlook on the premise that economic decolonization in Indonesia cannot be understood from one single viewpoint alone.

The various contributions are arranged according to three perspectives complementing each other: the new nation-state, private business and the international comparison. Each warrant a separate commentary, also incorporating some of the major findings of the individual contributions.

The change in idelogical outlook had important repercussions for how economic decolonization took shape in Indonesia, as is documented in Thee Kian Wie’s opening account of economic policy-making during the 1950s. Thee provides an overview of the most important policy measures in the 1950s aiming at the transformation from a colonial into a national economy.

A uniquely Indonesian feature of the nation-state in an entrepreneurial capacity was the heavy involvement of the military in economic life. Different from previous writers, Bambang Purwanto traces the origins of military-controlled business right to the very beginning of the Indonesian Revolution in 1945. He argues that the link between economic decolonization and increasing military business was established in the late 1940s and successively strengthened in the course of the 1950s. Decolonization placed the military in a key position that was reinforced by the apparent inability of the civilian government to manage the nation’s economic resources. This nurtured the interest of soldiers and officers in conducting business, both as a group and as individuals. By the late 1950s, military officers had slotted themselves into a dependance on business activities. They were reaping large profits, not only economically, but also socially and politically. As an institution, the army in particular grew dependent on financial proceeds from its business deals. By the time that economic decolonization was nearing its end, conducting business and being in the military had become two sides of the same coin.

Indonesianisasi or pribumisasi was not confined to the post-Independence period.  In his contribution to this volume, Peter Post points out that economic decolonization started already in the late 1920s, when Japanese investment began to enter the Netherlands Indies. A Japan-oriented niche was created in the colonial economy that brought pribumi business groups in direct contact with Japanese industrial capital. Using the example of one leading pribumi entreprenur of the time, Agoes Moesin Dasaad, Peter Post demontrates that private indigenous business interests managed to influence economic policies to a significant degree during the late 1940s and 1950s. The role of Japan in Indonesia’s economic decolonization was twofold. Japanese private capital offered unique opportunities for indigenous entrepreneurship during both the late colonial period and the Japanese occupation (March 1942-August 1945), which went against the very foundations of the Dutch colonial economy. In addition, as Post emphasizes, substant

ial financial support from the Japanese government to Indonesia materialized in December 1957, precisely at the time when the Dutch enterprises were taken over by local labour unions.

In his survey of economic performance in North Sumatra before and immediately after the takeover of Dutch estates, Thomas Lindbald distinguishes between external and internal factors. Deteriorating conditions of lobal market prospects already existent in the mid-1950s. Difficulties due to the transfer of management in 1958 in the wake of the takeovers were aggravated by a short-term price fall in foreign markets. From his findings lead Lindbald to conclude that we should be cautious in establishing a direct causal link between the transfer of management in 1957-1959 and the deep economic crisis in which Indonesia found itself in the mid-1960s, an opinion which is not shared by all observers.

Tri Chandra Apriyanto takes a close look at the economic decolonization and nationalization of the sugar and tobacco plantations in the East Java region of Jember (Besuki). He traces the ideological roots of the public debate on estate agriculture during the Indonesian Revolution to nationalist writings preceding Independence.

Anne Booth deals with the colonial legacies by placing Indonesian colonial economic performance in an East Asian perspective. She raises the question whether Japanese colonialism in Korea and Taiwan was more developmental in its aims and achievements in comparison to colonial regimes in other parts of Asia. Drawing upon extensive quantitative data, Booth concludes that if one were to construct a composite index of human development on the basis of per capita Gross Domestic Product, demographic data and educational enrolment, the Philippines would rank first in 1938 and Taiwan second. Indonesia, despite four decades of efforts by the colonial authorities to ’uplift’ the indigenous population, would end up at the bottom of the ranking list.

The point of departure in the contribution by Daan Marks is whether Independence indeed formed a turning point in the long-term economic growth performance of former colonies. He applies a three-layered analysis, considering respectively the relationship in general between decolonization and economic growth, the experiences of selected former colonies in Asia and developments in the interisland shipping industry in Indonesia shortly after Independence. He argues that Independence and decolonization had a direct positive impact on economic growth in India, Malaysia and the Philippines, whereas the first couple of decades immediately following Independence in Indonesia failed to produce a significant break with the growth record of the colonial period. Indonesia remains a ’special case’, reaffirming the author’s, hypothesis, derived from the international literature, that decolonization and rapid economic growth are only positevely correlated to one another under specific circumstances.

The idea is common that the Dutch companies in Indonesia engineered their own demise by being so ill-prepared to ’indigenize’ management and respond adequately to the economic aspirations of the newly independent nation. This issue is taken up by Jasper van de Kerkhof, in his comparison of Dutch and British corporate strategies in Indonesia and Malaysia (British Malaya up to 1957). Neighbouring Malaysia makes an interisting case for comparison, since it is generally acknowledged that economic decolonization there proceeded much more smoothly and less detrimental for post-colonial economic development. Van de Kerkhof’s findings show that great care should be taken when making such generalizations. British firms in Malaysia were equally reluctant to vacate their privileged position and ’indigenuze’ top management. British and Dutch firms both took active steps to ’indigenuze’ the lower ranks of their corporation, but they found it equally difficult to appoint well-educated and capable Malay and Indonesian manag

ers into the higher echelons of the companies’ hierarchy. This leads Van de Kerkhof to conclude that it was not so much the attitudes and strategies of Dutch and British firms that caused the differences, but rather the institutional surroundings of the countries and the ideological outlook of political leadership. In Malaysia, full economic decolonization was arguably only achieved when the New Economic Policy was put into effect in the 1970s.

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