Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 000749102320145039
Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
HEINZ ARNDT: AN APPRECIATION
Peter McCawley & Colleagues
To cite this article: Peter McCawley & Colleagues (2002) HEINZ ARNDT: AN APPRECIATION,
Bulletin of Indonesian Economic Studies, 38:2, 163-178, DOI: 10.1080/000749102320145039
To link to this article: http://dx.doi.org/10.1080/000749102320145039
Published online: 17 Jun 2010.
Submit your article to this journal
Article views: 39
View related articles
Citing articles: 3 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=cbie20
Download by: [Universitas Maritim Raja Ali Haji]
Date: 19 January 2016, At: 20:25
Bulletin of Indonesian Economic Studies, Vol. 38, No. 2, 2002: 163–76
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
HEINZ ARNDT: AN APPRECIATION
This appreciation was compiled on behalf of the Editorial Board of the Bulletin of
Indonesian Economic Studies (BIES) by Peter McCawley, one of the first of Heinz
Arndt’s graduate students to work on Indonesia, and later head of the Indonesia
Project (1981–85) and joint editor of the BIES (1983–86). Heinz was the founding
editor of the BIES (1965–82), and a member of its Editorial Board for the remainder
of his life.
Around 9 o’clock on Monday morning
6 May, Heinz Arndt parked as usual in
the front of the National Centre for Development Studies (NCDS) at The Australian National University. And as
usual, he collected the mail for his journal, Asian–Pacific Economic Literature
(APEL), and chatted to his APEL staff for
a few minutes before hurrying off, as he
so often did, to attend to the next item of
business of the day. His special task that
morning, which he was very sad about,
was to give a eulogy at the funeral of his
close friend, Sir Leslie Melville, who had
died a few days earlier at the age of 100.
Heinz left NCDS at around 9.20, planning to arrive in good time for the funeral
at 10.00 am. But he never arrived. Driving across the ANU campus, on Fellows
Road and within a few metres of the
Coombs Building where he had spent
much of his academic life, he failed to
take a turn in the road, apparently having suffered a blackout or cardiac arrest.
His car swerved and crashed directly
into a large unyielding gum tree. Heinz
died on the spot.
For scholars of Indonesian economic
studies across the world, Heinz Arndt’s
death at the age of 87 is a great loss. He
had been, as World Bank President James
Wolfensohn said in a statement issued as
soon as he heard the news, ‘Australia’s
leading scholar of Asian economic development issues for over 30 years’. A man
of strong opinions, he was never reluctant to participate vigorously in public
discussion of controversial issues, and
could always be relied upon to give as
good as he got in open debate. But he commanded enormous respect and affection
as well. He took great joy in the simple
pleasures of life—his family and friends,
music, chess, and good conversation. He
was an unfailingly gracious, kind and
considerate man who displayed charming old-world European courtesies in
both his public and his private life. He
worked immensely hard. He gave unstintingly of his time to students, colleagues,
officials, journalists, politicians, and any
other people who sought his views. And
he fostered almost single-handed a unique
group of Asian and Australian scholars
who have moved on from their initial studies under his guidance to spend the rest
of their professional lives working on issues of prosperity and welfare in the Asia–
Pacific region. Those of us who studied
and worked closely with him will miss
him immensely.
Heinz Wolfgang Arndt was born in
19 15 in B resla u in Germ any (now
Wroclaw in Poland) where he spent his
primary and secondary school years. By
the early 1930s, life had become difficult
for people with a Jewish background in
Germany. Although the Arndt family was
not part of the local active Jewish community—indeed, Heinz’s parents were
ISSN 0007-4918 print/ISSN 1472-7234 online/02/020163-14
© 2002 Indonesia Project ANU
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
164
Protestants —the political atmosphere of
the day cast its shadow over the family.
His own vivid memories of the time are
recorded in an autobiographical essay in
Quadrant (1969). He recalls that ‘one after the other my class mates at school
joined the Nazi organisations’, and that
he in turn increasingly attached himself
to the small group of active anti-Nazis in
his class. Soon after, his father was dismissed from his chair in chemistry at
Breslau University under the ‘Aryan
laws’. Thus, in 1933 the Arndt family left
Germany. Heinz moved to Oxford where
he entered Linc oln C ollege. In his
colourful Quadrant article, he notes that
during the matriculation ceremony he
was distressed by his inability to understand a word of what the Vice-Chancellor was saying. It was only later that he
discovered that the Vice-Chancellor’s
unintelligible English was really Latin
spoken in the old English pronunciation!
Heinz enjoyed his years at Oxford. He
finally left in 1938 to take up a studentship at the London School of Economics
(LSE). During the next few years he took
an interest in socialist and even mildly
Marxist ideas at LSE, and developed a
sympathy for Fabian economic policies
that would lead him during the 1950s to
an involvement in Labor Party politics
in Australia. But he was cured, he later
recalled, of any special sympathy for
communism after reading Koestler’s
Darkness at Noon, which convinced him
that adherence to communist beliefs is
destructive of intellectual integrity.
After a brief period of internment in
Canada in 1940 (on the outbreak of war,
the UK government interned many
people with German connections, but
gradually realised that people such as
the Arndts were unlikely to be sympathetic to Hitler!), Heinz accepted an appointment at Chatham House. This led
to the production of his first major book,
Peter McCawley and colleagues
The Economic Lessons of the 1930s (1944),
strongly influenced by the Keynesian
doctrines becoming dominant in Britain
at that time. It quickly became a contemporary classic.
After two years at Chatham House,
Heinz moved briefly to the University of
Manchester before taking up an appointment at the University of Sydney in 1946.
In 1950 the Arndt family moved to
Canberra, where Heinz took up the chair
in economics at the Canberra University
College, later to become part of The Australian National University. He joined
the Labor Party and spent much of his
time in the 1950s working on issues of
public policy in Australia.
During the 1950s, however, Heinz continued to follow overseas debates on international economic issues. He became
increasingly interested in the economic
problems of growth and development in
Asia, as one of his students, Peter Drake,
recalls.
Heinz’s early academic work was in
the fields of international economics,
monetary and fiscal policies, banking
and the capital market. (Indeed my
own association with him began
when, as an economics student at The
University of Melbourne, I wrote to him
in 1961 for advice about preparing my
honours thesis on the new short-term
money market in Australia. My request
drew an immediate response and a
thick envelope of Arndt papers!) However, Heinz’s interests even then were
turning towards economic growth and
development. To some extent this was
stimulated by working on issues of
Australian trade and overseas aid, but
perhaps more importantly by his contacts with prominent economists in the
field of economic development.Among
the first of these was the influential
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
Swede, Gunnar Myrdal, whom Heinz
fortuitously met on an aeroplane in
1953. Heinz’s interest in development
burgeoned further in the course of a
sabbatical at The University of South
Carolina. It was during his six-month
sojourn there that Heinz wrote two of
his seminal articles, ‘A Suggestion for
Simplifying the Theory of International Capital Movements’ (1954) and
‘External Economies in Economic
Growth’ (1955).
Back in Canberra, Heinz began to
teach a course in development economics, using the fine monographs
and texts by Lewis, Myint, Higgins
and Meier and Baldwin. Eager then
‘to learn something about economic
development in real life’, Heinz responded positively to an invitation
from Professor Mahalanobis to spend
three months in 1958–59 first as Visiting Professor at the Indian Statistical
Institute in Calcutta and subsequently
at the Planning Commission in Delhi.
In India, as well as working at his
usual fast pace, Heinz travelled widely
and was ‘powerfully affected by the
emotional experience of learning
about the abysmal poverty of hundreds of millions of human beings’ (A
Course through Life, 1985).
In 1960–61, another opportunity
arose for Heinz to work on development themes at the United Nations
Commission for Europe in Geneva.
Among those themes were ‘why
growth rates differ’ and ‘trade preferences for developing countries’, both
hot subjects at the time. Heinz was attracted to Geneva and the work there;
at the same time he was experiencing
disenchantment with the obligation to
teach monetary and macroeconomics
back in Canberra in the increasingly
mathematical style that the degree market demanded. Perhaps he would have
165
made a lasting move to Geneva had not
Sir John Crawford, director of the
ANU’s Research School of Pacific Studies, in late 1963 arranged for him to take
over the headship of the School’s infant Department of Economics. The
mission of the department was to study
‘underdeveloped and primitive economies, with emphasis on the building
up of a systematic empirical knowledge
of the Pacific and South East Asia’. (I
can testify to the empirical emphasis.
In my induction interview in early 1963,
Crawford told me, in no uncertain
terms, that he would tolerate ‘no highfaluting theoretical nonsense’ from a
graduate student!).
Crawford had initiated substantial
research programs on Malaysia and
Papua New Guinea to begin the
department’s work; but for Heinz, Indonesia had the more compelling attractions of being important, difficult
and risky. It may fairly be claimed that
1964–66 was the nadir of the Indonesian economy. Heinz’s approach was
to devote substantial resources to
studying it. Research fellows and doctoral students were recruited; relationships with Indonesian institutions
and with interested American academics were established; and a publications program was introduced.
These initiatives quickly matured formally into the ANU Indonesia Project
and the BIES.
Beyond Indonesia, Heinz took an
Asia-wide view. He promoted links
among Asian and Australian economists, bringing the one to undertake
research and study in Australia, and
sending the other to live and work in
Asia. Between 1981 and 1990, he was
co-chairman of the ASEAN–Australia
Joint Research Project, which produced a remarkable number of original research monographs and articles
166
on the ASEAN economies, and built
an enduring network of Australian
and Asian scholars.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
For students of Indonesian economic
studies, Heinz’s decision to establish the
Indonesia Project at the ANU in the mid
1960s reflected both remarkable foresight
and, observes Jamie Mackie, some good
luck.
When Heinz launched the Indonesia
Project and the BIES in 1964–65, the
likelihood that either would succeed
appeared bleak in the extreme. He mentions in A Course through Life (1985)
that ‘almost everyone I consulted advised against the effort’. (I can’t remember whether I was one of those; I
certainly would have done so if consulted, having kept a close watch on
economic developments in Indonesia
over the previous eight years.) One
compelling reason for such scepticism
was the utterly chaotic state of the Indonesian economy at that time, with
crippling shortages everywhere, inflation spiralling from 100% p.a. in 1963
towards 300% in 1965, and the resultant breakdowns in infrastructure paralysing economic activity at all levels.
Not long before, when I was writing
one of the only economic surveys of
Indonesia in English for almost five
years, I had found that the scarcity of
reliable statistics made analysis of Indonesian economic trends almost impossible. I could not imagine how
anything more than an occasional article of any value could be written
about it under prevailing conditions.
Another obstacle was the superheated
political climate of Sukarno’s ‘Sosialisme à la Indonesia’, which was
clearly building up towards a national
crisis, putting any thought of policy
continuity or worthwhile economic
analysis out of the question. Beyond
that was the near-impossibility in
Peter McCawley and colleagues
those days of recruiting any of the few
well-trained Indonesian economists—
apart from Dr Panglaykim who was
enticed to Canberra between 1966 and
1969—or of finding Australians or others with more than rudimentary firsthand experience of Indonesia and its
problems. But Heinz went ahead, and
by dint of sheer audaciousness (Steve
Grenville’s word), perseverance and
persuasiveness, he pulled it off.
He was lucky in his timing. Only two
issues of the BIES were published before the Gestapu coup attempt transformed the political scene in 1965. (The
second issue in October 1965 had a
last-minute sentence or two about the
coup but made no real comment on it.)
By 1967 the economic situation had
begun to improve markedly. The slow
return of sanity to government decision making after Soeharto took over,
and the gradual shifts in economic
policy, provided scope for worthwhile
analysis of developments. (Heinz himself did not write a BIES Survey of Recent Developments until October 1966,
when he collaborated with Panglaykim.) If Sukarno’s overthrow had
not occurred for another three years, I
wonder whether even Heinz could
have kept the BIES going as a worthwhile venture. It had only a few substantial articles in the first eight
issues—Lance Castles’s often-cited
piece on ‘Socialism and Private Enterprise’, Alex Hunter’s various contributions on the oil industry, Heinz’s
article on ‘Banking in Hyperinflation’,
and David Penny’s pioneering pieces
on various aspects of agricultural societies and poverty. By 1968 the BIES
was beginning to prove its worth, with
solid ly informative Surveys; and
within a few years it was publishing
an impressive array of analytical articles. But the early years were a
struggle.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
Heinz managed almost miraculously to bring together a workable
nucleus of people with prior knowledge of Indonesia. In addition to David
Penny and Panglaykim, he involved
Ken Thomas, Ingrid Palmer, Shamser
Ali and Dahlan Thalib in the early
work of the Indonesia Project. Alex
Hunter soon made himself knowledgeable about the oil industry and
minerals generally. Joyce Gibson wrote
some useful pieces on various topics.
The present finance minister, Boediono, became a research assistant to
Heinz in 1970. But all these moved on
in due course, except David Penny
who remained until well into the
1970s before moving to the national
Department of Aboriginal Affairs. The
next and more enduring wave of
Project staff consisted of Heinz (who
wrote most of the BIES surveys in the
years immediately after 1967), Sundrum, Penny, Fred Fisk and Ruth
Daroesman, who all helped to give the
Project greater momentum in the 1970s.
Yet Heinz was of central importance
to the whole venture. Without his leadership skills the Indonesia Project
would never have got off the ground
at all.
By the early 1970s, Heinz had recruited
a number of young postgraduate scholars to work on various aspects of the Indonesian economy. One of them was Anne
Booth.
I first met Heinz at Canberra airport in
June 1971. I had arrived back from
London to become a research student
in the Research School of Pacific Studies (as it then was). I thought at the
time (and the thought was to strike me
again on many occasions in Australia
and Southeast Asia over the next three
decades) that there was little in
Heinz’s manners, speech, or style of
167
dress to suggest that he had ever spent
even a week in Australia, let alone
most of his working life. During his
years in England he had perfected a
style of spoken and written English
that would sound unfashionably patrician in today’s Blairite Britain, but
which served Heinz remarkably well
throughout his working life.
He was a member of that vast diaspora of cultured central Europeans
whom Hitler forced to emigrate. I suppose part of Heinz continued to yearn
for Europe long after he had settled in
Australia and made the study of Asia,
and especially Indonesia, the main
focus of his professional life. But he
was a true internationalist —cosmopolitan in outlook, sceptical of all
forms of nationalism, and always
ready to take a stand against xenophobia. Over the years, his tireless efforts
to promote Indonesian economic studies paid handsome dividends. Inevitably, in the process he antagonised
some in Australia who, for whatever
reason, preferred to demonise the Soeharto regime and were unwilling to
recognise its achievements as well as
its failures.
It was wholly due to Heinz that I
became interested in Indonesia and
decided to carry out fieldwork there
for my PhD. In the early 1970s life in
Indonesia, even in the larger cities,
could be difficult. I remember arriving
in Surabaya in late 1972 when the
drought had led to an almost complete
breakdown of the electricity system.
Even a fan was impossible to operate.
After a week of sweltering heat I fled
to Malang! But the field research Heinz
had urged on me turned out to be quite
absorbing. His own enthusiasm was
infectious. As a supervisor he was always ready to provide detailed comments on drafts of work. Even when
our opinions diverged, he was remark-
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
168
ably patient with my at times callow
arguments. His own research was concerned mainly with macroeconomic
and monetary economics and was
largely Jakarta-based. But he relished
opportunities to travel to other parts
of the country. He visited many universities in Java and elsewhere over
the 1970s and 1980s.
In the 1990s, his visits to Indonesia
became less frequent. Like many others, he found the events of the financial crisis in late 1997 and 1998 both
surprising and extremely shocking. He
was, I think, especially distressed at
the vulnerable position that many Indonesians of Chinese descent found
themselves in, no doubt drawing parallels with his own experience in
Germany in the early 1930s. But he
continued to follow developments
closely. His contributions to the study
of Indonesia will continue to be valuable for scholars both in Australia and
elsewhere.
By the mid 1970s, the Indonesia Project
had become well established. Heinz had
attracted more young scholars, such as
Howard Dick, Stephen Grenville and
Phyllis Rosendale, to the Project. Another
at that time was Hal Hill, who later became Head of the Indonesia Project and
the H.W. Arndt Professor of Economics
at the ANU.
For young graduate students, Heinz
was a formidable figure. We had all
encountered him as undergraduates
through his books and articles and his
well-known political activities. I first
met him in the early 1970s at Monash
University, and mentioned my interest in Indonesia and graduate economics training. I also mentioned that
I was thinking of applying for places
like Oxford and Cornell. ‘What do you
Peter McCawley and colleagues
want to go to those places for!’ he
snorted. ‘When you’re ready to do a
PhD, let me know, and I’ll get you a
scholarship in my department.’ True
to his word, when I contacted him a
couple of years later, an offer of a scholarship duly arrived.
Heinz was a truly remarkable supervisor. Almost everything I wrote was
returned within 48 hours. There was
a standard format to his responses:
typed comments, first general then
specific comments, and usually several pages of detailed views. We
quickly came to recognise his style. (So
did others: years later, when I was editing the BIES, I asked Heinz to referee
a submission. He was unhappy with
it, and let fly in his comments. Without thinking I passed them on to the
author, who replied thanking me for
the ‘comments of your anonymous referee, Heinz Arndt’!)
As a student, I liked the way Heinz
approached his work on Indonesia. I
think he imparted this style to all of
us. He stressed the importance of both
good analytical economics and taking
countries seriously. One without the
other wouldn’t work, he emphasised.
He always had a remarkable knack of
homing in on the big issues, even for
topics about which he knew little. He
was a wonderful ‘intuitive economist’,
too. He generally eschewed rigorous
modelling, and was sceptical about
statistical techniques. (There weren’t
many R squareds in his 16 years at the
helm of BIES. And they were positively
banned from the Surveys!) But his
analytics were unerringly accurate,
nonetheless.
Heinz held firm opinions, and as
students we hesitated to disagree
strongly with him. But he was not intolerant. You had to be quick-witted,
forceful and articulate to engage in
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
argument, but he was willing to listen. Just occasionally you could persuade him to change his mind. Later, I
kept in close contact with him after
graduation. He continued to read and
comment on practically everything I
wrote, even though I would stress that
I didn’t expect comments. ‘I’m addicted to reading papers’, he once told
me. I don’t think I have encountered
anybody else in academia who is as
generous as Heinz in this respect.
Heinz was instrumental in getting
me a two-year teaching position at the
University of the Philippines. We also
worked closely together for several
years on the ASEAN–Australia Joint
Research Project. These and other
endeavours made me realise that he
was a major international figure not
just in Indonesia but in Southeast Asia
and beyond. Yet even when he ventured further afield, to the US, Europe
and Japan, Indonesia remained central. I think he regarded it as his duty
to inform people about the country,
and to get a balanced understanding
of the development record under Soeharto. He conceded that the human
rights record was not good, and that
Timor was a tragedy, but he felt that
the broad-based improvements in living standards were never accorded
sufficient attention by critics of the regime. While Heinz’s political opinions
became more conservative in his later
years, obscuring the radicalism of his
youth from younger critics, he deserves
credit for employing or teaching various Indonesia scholars, most notably
David Penny, and to some extent Peter McCawley and Anne Booth, whose
views on the Soeharto regime differed
from his.
Heinz Arndt saw his major role in
establishing the Indonesia Project as
overseeing the development of a re-
169
search unit and journal of international repute. He therefore spent much
of his time editing the BIES, encouraging others to write for it, and supervising PhD students (and, in addition,
sometimes practically writing other
people’s papers for them: he once
quipped that he was tempted to put
all these together in a volume entitled
Other People’s Collected Essays!). Notwithstanding exceptionally heavy
administrative responsibilities, he
published extensively on the Indonesian economy. Between June 1966 and
August 1983, he wrote no fewer than
20 BIES Surveys; until the late 1970s,
he authored almost half of them. Moreover, he wrote authoritative papers on
a remarkably diverse array of topics:
inflation, banking and monetary
polic y, unemployment and wage
policy, transmigration, regional price
variations, development and equality,
the oil boom, civil service compensation and corruption, development assistance, Indonesia in the world
economy, and much else. Many of his
key papers were published in the BIES
(and later brought together in The Indonesian Economy, 1984). Heinz could
have sought international outlets for
them, in the process further enhancing his reputation abroad. However,
he unselfishly took the view—as he
had also when editing The Economic
Record a decade and more earlier—that
senior staff had an obligation to nurture a new journal by publishing their
major papers in it.
The Indonesia Project faced something of
a crisis at the end of 1980 when Heinz
Arndt retired from his position as Head
both of the Department of Economics in
the Research School of Pacific Studies and
of the Indonesia Project. Thee Kian Wie,
who accepted a position as Visiting Fel-
170
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
low to the Project shortly afterwards, recalls how Heinz continued his academic
work during the 1980s, and among other
things launched a second major journal
on Asian economic affairs.
To adapt the oft-quoted statement that
‘old soldiers never die, they only fade
away’, Heinz showed that ‘old professors never retire, they just keep on
writing’, by continuing to produce an
impressive number of books and papers after his retirement, including his
perceptive intellectual autobiography
A Course through Life (1985) and his
book Economic Development: The History of an Idea (1987). A few years
earlier, in The Indonesian Economy: Collected Papers (1984), he republished
most of his Surveys and papers that
had appeared in BIES. This book
turned out to be a source of invaluable insights for the chapter on the
Soeharto era and the crisis years that
I wrote for a book on Indonesia’s modern economic history together with
Howard Dick, Vincent Houben and
Thomas Lindblad. Heinz’s prodigious scholarship was further reflected in the publication of three
other books, 50 Years of Development
Studies (1993), which contained his
papers written during the period
1942–93 on various issues relating to
economic development, Essays in Interna tional Econom ics, 1944–1994
(1996), and The Importance of Money:
Essays in Domestic Macroeconomics,
1949–1999 (2001).
In March 1986 Heinz visited Jakarta
and asked me to become the corresponding editor for Indonesia of a new
journal, Asian–Pacific Economic Literature, that he had just started. The aim
was to help academics, government
officials, and business people to keep
abreast of the burgeoning economic
Peter McCawley and colleagues
developments in the region. His editorial skill made Heinz indispensable as
editor of APEL.
Over the years I greatly benefited
from the stream of papers Heinz sent
me. Most of them dealt with economic
issues, but some contained the reminiscences of his relatives. These were
striking vignettes of the Jewish upper
middle class in Germany which had
been tragically wiped out during the
Holocaust. For my part, I started sending Heinz drafts of my papers. He usually returned these in record time with
constructive comments, including corrections of my English. While our
friendship over the years deepened,
after the early 1990s Heinz grew increasingly critical of my papers. He
thought they were too hard on the corrupt and repressive New Order regime. In his comments on one paper
that I wrote on government–business
relationships under the New Order, he
said: ‘If you continue writing in this
way, you are likely to lose your audience’. But these stern remarks were
expressed ruefully rather angrily, reflecting Heinz’s concern that I was losing my academic objectivity.
After his wife Ruth passed away in
March 2001, Heinz began to ponder the
possibilityof making a sentimental tour
of ASEAN countries. He decided to visit
Indonesia first, and in February 2002
he was able to see old friends such as
Sadli, Widjojo, Emil Salim, Radius
Prawiro, J.B. Sumarlin, Arifin Siregar,
Boediono, Anwar Nasution, Selo Soemardjan, Wiryono, Chris and Tri Manning, and Mrs Evie Panglaykim whom
he was delighted to meet after so many
years. Despite his physical frailty, he
was intellectually as sharp as ever. He
wrote copious notes for his diary about
the people he had met. Although my
wife Tjoe and I are deeply saddened by
Heinz Arndt: An Appreciation
Heinz’s unexpected death, we are very
grateful that he enjoyed his last visit to
Indonesia so much.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
By the early 1980s, staff of the Project in
Canberra were increasingly keen to find
ways of involving more of their Indonesian colleagues in Project activities. Mari
Pangestu supported this new emphasis.
I really did not become involved in the
Project and BIES until the mid 1980s,
after Professor Heinz Arndt had retired. However his input was still very
evident in the 1980s. It is a credit to
someone as strong minded as Heinz
that he was able to let go of the Project
that he had nurtured for 18 years. There
was a difficult period after he left
when there were some in the department who were sceptical about the
priority being given to work on Indonesia, and I recall many worried conversations about the fate of the Project.
Those difficult years passed, and under the stewardship of a number of his
former students, Peter McCawley and
Anne Booth in the 1980s, and Hal Hill
in the 1990s, the BIES and the Project
continued to grow and develop in
keeping with the times.
A major change in the mid 1980s was
the conscious effort to seek new contributors, especially Indonesians, to
write for the journal. Previously, all the
Surveys by Indonesians were written
by authors such as Panglaykim, Boediono and Dahlan Thalib who were
directly involved with the Project.
Beginning in the mid 1980s, other Indonesian scholars were invited to prepare the Surveys, beginning with
Anwar Nasution in 1985.
I did my own first ‘Survey of Recent
Developments’ in 1987, 22 years after my father, the late Panglaykim,
wrote his first Survey. The guidelines
and requisite visits to prepare for the
171
Survey w ere clearly a legacy of
Heinz’s work. I became aware of the
support for the BIES in Indonesia, and
of course for the man who started it
all, when I quickly found that it was
not at all difficult to get appointments
from the list of regular contacts. The
experience was invaluable. As a recent graduate, I found that writing the
Survey forced me to look at a broad
range of issues and to think through
the policy implications of what I was
saying. The process of writing the
Survey was also a valuable training
experience. I spent two intensive
weeks in the economics department
in Canberra, writing and rewriting,
and interacting with others in the
department. Heinz was still very active at the time, and provided numerous comments on my first drafts.
Another important development
during this period was the attention
given to the regional economic surveys. In the 1960s and early 1970s,
recognising the value of having perspectives from outside Jakarta, Heinz
commissioned many regional surveys, from Hendra Esmara and Makaliwe at Hasanuddin University, Ace
Partadireja and Mubyarto at Gadjah
Mada University, and various other
contributors. In the mid 1980s Hal
Hill explored the possibility of extending this pioneering work. The result
was a set of papers written collaboratively by Indonesian and Australian
authors. I myself wrote the survey on
East Kalimantan. This was another
invaluable experience. The conference in Canberra in February 1987
where the writers presented their
papers was memorable, and Heinz
an active participant. The papers
were edited by Hal Hill and published as Unity in Diversity (Oxford
University Press, 1989).
172
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
It is a great tribute to Heinz that the
Indonesia Project continued to flourish after his retirement. He built a
strong foundation, and trained many
scholars who could carry on the work,
each leaving his or her own mark on
the field of Indonesian studies.
From the beginning of his work in Indonesia in 1964 to his last visit in February
2002, Heinz kept in close touch with his
friend Mohammad Sadli. He greatly admired Professor Sadli’s enormous contribution to public policy debates in
Indonesia over a period of four decades
since the early 1960s. Of the group of senior Indonesian economists who knew
Heinz Arndt, Mohammad Sadli is perhaps
the most well placed to comment on how
his overall contribution is seen in Indonesia.
Professor Arndt came from a European intellectual background before
World War II. At one time he was sympathetic to Marxian philosophies, but
later when studying in England he
leaned more to Fabian reformist ideas.
In his later years in Australia he became more libertarian. Perhaps, having formed his views against this
varied background, he maintained his
belief that governments and policies
matter, even though he was aware that
‘governments could fail also’, just as
markets could and sometimes more
often.
When Heinz established the Indonesia Project at the ANU in the mid
1960s, he became acquainted during
his frequent travels with the group of
Indonesian economists who had been
influenced by Professor Sumitro Djojohadikusumo, himself a product of a
Western European (i.e. Dutch) intellectual tradition. In the early 1950s,
Sumitro had established the new Faculty of Economics at the University of
Peter McCawley and colleagues
Indonesia in Jakarta. His disciples in
the newly formed economics faculty
were influenced by his view that the
economics profession can play an important role in guiding the economic
development of a nation, that the role
of the state and government should be
strong, and that the guiding principles
should be economic rationality, economic growth and development.
When Heinz first came to Indonesia
in 1964, Sumitro had left, having exiled himself in 1957 from the regime of
President Sukarno. Sumitro was called
back by Soeharto in 1968. But Widjojo
and his group of young fellow economists were already home, having undertaken PhD studies in the US under
a program conceived by Sumitro to
build up the staff in the Faculty of Economics through an affiliation with the
University of California at Berkeley.
Hence when Heinz made his first reconnaissance into Jakarta in 1964, he
found a young group of university
economists inspired to make economic
development their lifelong professional mission. But they were still engaged in an uphill fight to ameliorate
the more traditional socialist and revolutionary inclinations of President
Sukarno. Sukarno’s economics was
‘wishful thinking economics’—much
more politics and ideology than economics. When Sukarno was succeeded
by Soeharto, the latter immediately
turned to the Widjojo group for ideas
about the economic reconstruction of
the country. The new economic policies were much more market friendly
than previous policies, although the
role of the government, and of state enterprises and large agencies such as
Bulog (the food logistics agency) was
still considered important.
The young economists working
with Soeharto’s new government
greatly welcomed foreign support.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
Apart from looking for aid from Western governments and Japan, they befriended Professors Jan Tinbergen
from Holland, Saburo Okita from Japan, and Heinz Arndt from Australia.
From the United States, of course, there
were more people to draw on, such as
Professor Leon Mears and Professor
Bruce Glassburner (who maintained
an especially close connection with
Heinz and the Indonesia Project), and
Dr Bernard Bell of the World Bank, but
Tinbergen, Okita and Arndt all had
good links into their own governments.
Like Sumitro, Heinz was the patron
of a new area of scholarship. He encouraged younger economists to enter
the field. Hence there developed a sort
of spiritual tie between a group of Indonesian economists and their Australian counterparts, mostly trained in
Canberra. This intellectual –spiritual
and international support was very
important as an additional ‘comfort
blanket’ for Indonesian economists in
the front line of the battle against populist, irrational, inefficient and often
ineffective economic policies.
Yet if I were asked to answer the
question ‘What was Heinz’s own specific role in this respect?’, I would find
it difficult to answer. Rather than making a specific contribution, he was the
dean of the group of Australian economists who were, and still are, part of
our comfort blanket system. In late
1998 our ANU friends invited a group
of Indonesian economists to Canberra
to discuss problems of economic policy
and recent developments in relation
to the 1997–98 economic crisis. This
meeting was later replicated by the
Japanese and the Americans.
The BIES and APEL are important
research publications read by Indonesian economists and policy makers as
an input to policy discussion. Because
of language problems, and because
173
Indonesians are not always avid readers, these two journals are not as
widely read in Indonesia as they might
be. But even if they influence only a
handful of Indonesian policy makers,
faculty members, opinion makers and
writers on economic affairs, these publications are worthwhile. In a country
like Indonesia, the influence of individuals and small groups on the bearings of the nation can be very great.
The articles in the BIES, and especially
the periodic economic Surveys, are
very useful summaries that are read
by members of the ‘liberal epistemic
society’, that is, outside the government. Top-level government economic
staff also have access to World Bank
papers, which are more directly policy
oriented, and greatly influenced by
BIES material.
Western scholars like Heinz Arndt
face something of a moral dilemma
when dealing with a country such as
Indonesia was in the Soeharto era.
During that period, it was not a democratic regime in the Western sense
with an emphasis on human and individual rights, controls on authoritarian abuses, and so on. Should
Western scholars still support the
national development of such a country? Professor Tinbergen from Holland became ambivalent after his
initial endorsement. But Heinz continued to support the work of Indonesian economists within Soeharto’s
Indonesia because he supported the
development process. In the end, by
the mid 1990s he saw much more
prosperity in Indonesia than during
his first visit in 1963. He took the view
that the welfare of the common people
should always be paramount, that
the regime they lived under was not
necessarily one of their own choosing, that development would gradually advance the progress of human
174
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
rights and the rule of law, and that
the educ a ted and pr o fes s ional
classes would also demand (and get)
these good things.
Although Heinz Arndt was an economist and placed great emphasis on the
importance of economic ideas, he accepted (admittedly with a certain reluctance at times!) that the governance of
nations depends on a lot more than economics alone. He valued the views of
his ANU colleagues from such disciplines as political science, history, anthropology and demography about
Indonesian issues, and he especially
welcomed visitors from Indonesia and
elsewhere who were specialists in these
and other subjects. Bill Liddle from Ohio
State University in the US is one such
scholar who came to know Heinz well
on various visits to Australia.
I first met Heinz Arndt in 1980, near
the end of his career, when I was a
research fellow in the Department of
Political and Social Change at the
ANU. I warmed to him immediately.
He was gracious, deeply knowledgeable about the Indonesian economy,
and willing to share his wisdom with
an economically illiterate political
scientist. He reminded me strongly of
other courtly and charismatic European refugee intellec tua ls I had
known: Harry Benda, the Southeast
Asia historian, who had been my own
dissertation adviser; Isaiah Berlin, the
gr eat polit ica l philo so pher; and
Albert Hirschman, an economist like
Heinz but on the other side of the
great divide among economists on the
role of the state in development.
Heinz taught me that Indonesianists
come in all shapes and sizes, not just
the standard issue produced by Southeast Asia studies programs that require
extensive language and multi-disciplinary training. Before arriving in
Peter McCawley and colleagues
Canberra, I had been warned—mostly
by Indonesianists trained like myself
in area programs—that Heinz did not
know much about Indonesia beyond
its economy. That was indeed my experience. On one occasion he startled
me by asking me to explain a reference
to Takdir Alisyahbana, Indonesia’s
most celebrated novelist and essayist.
In this instance, what surprised me
most was that Takdir and Heinz were
kindred souls, children of the Enlightenment and protagonists of Indonesian
modernisation. If he didn’t know much
else about Indonesia, at least he should
have been familiar with its most prominent like-minded intellectuals! About
my subject, Indonesian politics, he was
only casually curious. I think this was
because he believed that the Widjojo
team of professional economists and
policy advisers had already mastered
the most important secret of Indonesian
politics. In crises, they went straight to
President Soeharto, who made all of the
key decisions.
Despite his singular perspective, or
perhaps because of it—I really don’t
know which is true—Heinz’s contribution to Indonesian studies and to
the development of modern Indonesia
was and continues to be enormous. I
see that contribution most directly in
the pages of the BIES: in the articles
written directly by Heinz and in those
by his students and by others inspired
by his vision. In Indonesia, the impact
of the BIES, and of Heinz’s leadership,
has been vastly to expand what political scientist Rizal Mallarangeng has
labelled the ‘liberal epistemic community’, that is, those members of Indonesian so cie ty—s chola rs, po licy
makers, journalists, the educated public—who understand and appreciate
modern economics and economic
policy. Some of them read the BIES
avidly. Many more are influenced by
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
it at second hand, through the analyses of Indonesian economists writing
in the leading Jakarta dailies and
newsweeklies, like Kompas and Tempo.
If the new democratic Indonesia succeeds in getting back on the development track pioneered by Soeharto’s
authoritarian New Order, it will be due
in no small measure to the influence of
today’s members of the liberal epistemic
community. To the building and maintenance of that community, Heinz
Arndt unquestionably contributed
more than any other non-Indonesian.
It is a legacy of which any Indonesianist
would be extremely proud.
Heinz Arndt was, above all, an academic,
both by inclination and by training. But
he also had a great admiration for policy
makers. One suspects, perhaps, that he
believed that his own skills lay more in
contributing to the public policy debate
than in engaging in the day-to-day rough
and tumble of government administration that is an inevitable part of the implementation of economic policy. He always
took pleasure, however, in seeing one of
his students or colleagues appointed to
a senior position in government. He was
delighted when Boediono, a former staff
member of the Indonesia Project, was
appointed finance minister in Indonesia
in 2000. In his own tribute to Heinz Arndt
in Jakarta in late May, Boediono recalled
some highlights of his association with
Heinz.
It was a cold morning in July 1970 when
the plane that carried my family, then
consisting of my wife, my baby daughter and myself, landed in Canberra. I
was arriving to take up a research assistantship at the ANU’s Indonesia
Project. As we entered the terminal,
Heinz was there waiting for us.
He took us to his home in his light
blue Cortina. We were treated to a wel-
175
come hot breakfast that Heinz prepared before he took us to a university
flat on Canberra Avenue that he had
previously secured for us. After showing us around he lit a fire in the fireplace using coal briquettes that he had
bought earlier. He then left, but returned shortly after with a bag of groceries. My wife and I never forgot this
early encounter with Heinz. He did all
of this for us when he was a famous
professor and I a lowly research assistant. Such is the man that we pay tribute to today.
I never took a course with him, nor
did I do my thesis under his supervision. Nevertheless, I consider him my
teacher both about my profession and
about life. He must have felt the same
way. In a letter thanking me for my
contribution to the 1985 special edition of the BIES that honoured him, he
acknowledged this bond, saying that
at some stage he must have contributed to making me an economist.
Heinz’s writings on Indonesia and
development influenced me directly
and indirectly. He influenced my
thinking about the problems facing the
country, about the role of economics
in the solutions, and about how an
economist should define his or her role
in public life.
Some of us, including myself, were
fortunate to have been directly influenced by him through personal contact. But I suspect that the majority
were influenced by what he wrote. His
writing was a delight. In his hands,
abstract economic concepts came alive,
as relevant as real life problems.
I last saw Heinz on the evening of
2 March 2002. Several of his acquainta nces ho no ured him at C hr is
Manning’s house in South Jakarta, including Thee Kian Wie, Anwar Nasution and Bill Wallace. His spirit and
enthusiasm were strong, but he looked
176
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
frail. Some of us thought that it might
be his last trip to Indonesia. I had actually seen Heinz the day before at a
lunch for him organised by Professor
Widjojo. When I asked him about the
main purpose of his trip he said, ‘to
see old friends’.
Peter McCawley and colleagues
The news of his sudden death came
as a shock. My wife and I were overwhelmed by the sense of loss, the loss
of a great friend and teacher. I am sure
that this is a feeling shared by my colleagues.
Selamat Jalan, Heinz.
H.W. ARNDT
SELECTED PUBLICATIONS
(1944), The Economic Lessons of the NineteenThirties, Oxford University Press, Oxford.
(1955), ‘External Economies in Economic
Growth’, The Economic Record, November.
(1954), ‘A Suggestion for Simplifying the
Theory of International Capital Movements’, Economica Internazionale , August.
(1 95 7), T he Au stralian T rad ing Banks,
Cheshire, Melbourne.
(1957), ‘Overseas Borrowing—The New
Model’, The Economic Record, August.
(1960), ‘Control of Inflation through Fiscal
Policy: A Reappraisal’, The Economic
Record, December.
(1961), ‘Problems of External and Internal
Balance’, in Economic Survey of Europe in
1960, United Nations, Geneva.
(1968), A Small Rich Industrial Country: Studies in Australian Development, Aid and Trade,
Cheshire, Melbourne.
(1969), ‘Three Times 18: An Essay in Political Autobiography’, Quadrant, May–June.
(1972), Australia and Asia: Economic Essays,
ANU Press, Canberra.
(1976), ‘Non-traded Goods and the Balance
of Payments: The Australian Contribution’, The Economic Record, March.
(1978), The Rise and Fall of Economic Growth: A
Study in Contemporary Thought, Longman
Cheshire, Melbourne.
(1979), ‘The Modus Operandi of Protection’,
The Economic Record, June.
(1984), ‘Measuring Trade in Financial Services’, Quarterly Review, Banca Nazionale
del Lavoro, June.
(1984), The Indonesian Economy: Collected Papers, Chopmen, Singapore.
(1985), A Course through Life: Memoirs of an
Australian Economist, National Centre for
Development Studies, The Australian National University, Canberra.
(1987), Asian Diaries, Chopmen, Singapore.
(1987), Economic Development: The History of
an Idea, The University of Chicago Press,
Chicago.
(1987), ‘Industrial Policy in East Asia 19501985’, Industry and Development , UNIDO,
Vienna.
(1991), ‘Sorting Out Externalities’, Malaysian
Journal of Economic Studies, 26 (1 + 2).
(1992), ‘Comparative Advantage in Trade
in Financial Services’, in G. Jones (ed.),
Multinational and International Banking,
Edward Elgar, Aldershot.
(1992), Essays on Development in a Liberal Economic Order, Occasional Paper 14, International Centre for Economic Growth,
San Francisco.
(1993), 50 Years of Development Studies, National Centre for Development Studies,
The Australian National University,
Canberra.
(1993), ‘Sustainable Development and the
Discount Rate’, Economic Development and
Cultural Change 41 (3), April.
(1996), Essays in International Economics,
1944–1994, Avebury, Aldershot.
(2001), The Importance of Money: Essays in
Domestic Macroeconom ics, 1949–1999,
Ashgate, Aldershot.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
H.W. ARNDT
SUPPLEMENTARY SCHOLARSHIPS
The Indonesia Project in the Economics Division, Research School of Pacific
and Asian Studies (RSPAS) and Asia Pacific School of Econom
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
HEINZ ARNDT: AN APPRECIATION
Peter McCawley & Colleagues
To cite this article: Peter McCawley & Colleagues (2002) HEINZ ARNDT: AN APPRECIATION,
Bulletin of Indonesian Economic Studies, 38:2, 163-178, DOI: 10.1080/000749102320145039
To link to this article: http://dx.doi.org/10.1080/000749102320145039
Published online: 17 Jun 2010.
Submit your article to this journal
Article views: 39
View related articles
Citing articles: 3 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=cbie20
Download by: [Universitas Maritim Raja Ali Haji]
Date: 19 January 2016, At: 20:25
Bulletin of Indonesian Economic Studies, Vol. 38, No. 2, 2002: 163–76
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
HEINZ ARNDT: AN APPRECIATION
This appreciation was compiled on behalf of the Editorial Board of the Bulletin of
Indonesian Economic Studies (BIES) by Peter McCawley, one of the first of Heinz
Arndt’s graduate students to work on Indonesia, and later head of the Indonesia
Project (1981–85) and joint editor of the BIES (1983–86). Heinz was the founding
editor of the BIES (1965–82), and a member of its Editorial Board for the remainder
of his life.
Around 9 o’clock on Monday morning
6 May, Heinz Arndt parked as usual in
the front of the National Centre for Development Studies (NCDS) at The Australian National University. And as
usual, he collected the mail for his journal, Asian–Pacific Economic Literature
(APEL), and chatted to his APEL staff for
a few minutes before hurrying off, as he
so often did, to attend to the next item of
business of the day. His special task that
morning, which he was very sad about,
was to give a eulogy at the funeral of his
close friend, Sir Leslie Melville, who had
died a few days earlier at the age of 100.
Heinz left NCDS at around 9.20, planning to arrive in good time for the funeral
at 10.00 am. But he never arrived. Driving across the ANU campus, on Fellows
Road and within a few metres of the
Coombs Building where he had spent
much of his academic life, he failed to
take a turn in the road, apparently having suffered a blackout or cardiac arrest.
His car swerved and crashed directly
into a large unyielding gum tree. Heinz
died on the spot.
For scholars of Indonesian economic
studies across the world, Heinz Arndt’s
death at the age of 87 is a great loss. He
had been, as World Bank President James
Wolfensohn said in a statement issued as
soon as he heard the news, ‘Australia’s
leading scholar of Asian economic development issues for over 30 years’. A man
of strong opinions, he was never reluctant to participate vigorously in public
discussion of controversial issues, and
could always be relied upon to give as
good as he got in open debate. But he commanded enormous respect and affection
as well. He took great joy in the simple
pleasures of life—his family and friends,
music, chess, and good conversation. He
was an unfailingly gracious, kind and
considerate man who displayed charming old-world European courtesies in
both his public and his private life. He
worked immensely hard. He gave unstintingly of his time to students, colleagues,
officials, journalists, politicians, and any
other people who sought his views. And
he fostered almost single-handed a unique
group of Asian and Australian scholars
who have moved on from their initial studies under his guidance to spend the rest
of their professional lives working on issues of prosperity and welfare in the Asia–
Pacific region. Those of us who studied
and worked closely with him will miss
him immensely.
Heinz Wolfgang Arndt was born in
19 15 in B resla u in Germ any (now
Wroclaw in Poland) where he spent his
primary and secondary school years. By
the early 1930s, life had become difficult
for people with a Jewish background in
Germany. Although the Arndt family was
not part of the local active Jewish community—indeed, Heinz’s parents were
ISSN 0007-4918 print/ISSN 1472-7234 online/02/020163-14
© 2002 Indonesia Project ANU
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
164
Protestants —the political atmosphere of
the day cast its shadow over the family.
His own vivid memories of the time are
recorded in an autobiographical essay in
Quadrant (1969). He recalls that ‘one after the other my class mates at school
joined the Nazi organisations’, and that
he in turn increasingly attached himself
to the small group of active anti-Nazis in
his class. Soon after, his father was dismissed from his chair in chemistry at
Breslau University under the ‘Aryan
laws’. Thus, in 1933 the Arndt family left
Germany. Heinz moved to Oxford where
he entered Linc oln C ollege. In his
colourful Quadrant article, he notes that
during the matriculation ceremony he
was distressed by his inability to understand a word of what the Vice-Chancellor was saying. It was only later that he
discovered that the Vice-Chancellor’s
unintelligible English was really Latin
spoken in the old English pronunciation!
Heinz enjoyed his years at Oxford. He
finally left in 1938 to take up a studentship at the London School of Economics
(LSE). During the next few years he took
an interest in socialist and even mildly
Marxist ideas at LSE, and developed a
sympathy for Fabian economic policies
that would lead him during the 1950s to
an involvement in Labor Party politics
in Australia. But he was cured, he later
recalled, of any special sympathy for
communism after reading Koestler’s
Darkness at Noon, which convinced him
that adherence to communist beliefs is
destructive of intellectual integrity.
After a brief period of internment in
Canada in 1940 (on the outbreak of war,
the UK government interned many
people with German connections, but
gradually realised that people such as
the Arndts were unlikely to be sympathetic to Hitler!), Heinz accepted an appointment at Chatham House. This led
to the production of his first major book,
Peter McCawley and colleagues
The Economic Lessons of the 1930s (1944),
strongly influenced by the Keynesian
doctrines becoming dominant in Britain
at that time. It quickly became a contemporary classic.
After two years at Chatham House,
Heinz moved briefly to the University of
Manchester before taking up an appointment at the University of Sydney in 1946.
In 1950 the Arndt family moved to
Canberra, where Heinz took up the chair
in economics at the Canberra University
College, later to become part of The Australian National University. He joined
the Labor Party and spent much of his
time in the 1950s working on issues of
public policy in Australia.
During the 1950s, however, Heinz continued to follow overseas debates on international economic issues. He became
increasingly interested in the economic
problems of growth and development in
Asia, as one of his students, Peter Drake,
recalls.
Heinz’s early academic work was in
the fields of international economics,
monetary and fiscal policies, banking
and the capital market. (Indeed my
own association with him began
when, as an economics student at The
University of Melbourne, I wrote to him
in 1961 for advice about preparing my
honours thesis on the new short-term
money market in Australia. My request
drew an immediate response and a
thick envelope of Arndt papers!) However, Heinz’s interests even then were
turning towards economic growth and
development. To some extent this was
stimulated by working on issues of
Australian trade and overseas aid, but
perhaps more importantly by his contacts with prominent economists in the
field of economic development.Among
the first of these was the influential
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
Swede, Gunnar Myrdal, whom Heinz
fortuitously met on an aeroplane in
1953. Heinz’s interest in development
burgeoned further in the course of a
sabbatical at The University of South
Carolina. It was during his six-month
sojourn there that Heinz wrote two of
his seminal articles, ‘A Suggestion for
Simplifying the Theory of International Capital Movements’ (1954) and
‘External Economies in Economic
Growth’ (1955).
Back in Canberra, Heinz began to
teach a course in development economics, using the fine monographs
and texts by Lewis, Myint, Higgins
and Meier and Baldwin. Eager then
‘to learn something about economic
development in real life’, Heinz responded positively to an invitation
from Professor Mahalanobis to spend
three months in 1958–59 first as Visiting Professor at the Indian Statistical
Institute in Calcutta and subsequently
at the Planning Commission in Delhi.
In India, as well as working at his
usual fast pace, Heinz travelled widely
and was ‘powerfully affected by the
emotional experience of learning
about the abysmal poverty of hundreds of millions of human beings’ (A
Course through Life, 1985).
In 1960–61, another opportunity
arose for Heinz to work on development themes at the United Nations
Commission for Europe in Geneva.
Among those themes were ‘why
growth rates differ’ and ‘trade preferences for developing countries’, both
hot subjects at the time. Heinz was attracted to Geneva and the work there;
at the same time he was experiencing
disenchantment with the obligation to
teach monetary and macroeconomics
back in Canberra in the increasingly
mathematical style that the degree market demanded. Perhaps he would have
165
made a lasting move to Geneva had not
Sir John Crawford, director of the
ANU’s Research School of Pacific Studies, in late 1963 arranged for him to take
over the headship of the School’s infant Department of Economics. The
mission of the department was to study
‘underdeveloped and primitive economies, with emphasis on the building
up of a systematic empirical knowledge
of the Pacific and South East Asia’. (I
can testify to the empirical emphasis.
In my induction interview in early 1963,
Crawford told me, in no uncertain
terms, that he would tolerate ‘no highfaluting theoretical nonsense’ from a
graduate student!).
Crawford had initiated substantial
research programs on Malaysia and
Papua New Guinea to begin the
department’s work; but for Heinz, Indonesia had the more compelling attractions of being important, difficult
and risky. It may fairly be claimed that
1964–66 was the nadir of the Indonesian economy. Heinz’s approach was
to devote substantial resources to
studying it. Research fellows and doctoral students were recruited; relationships with Indonesian institutions
and with interested American academics were established; and a publications program was introduced.
These initiatives quickly matured formally into the ANU Indonesia Project
and the BIES.
Beyond Indonesia, Heinz took an
Asia-wide view. He promoted links
among Asian and Australian economists, bringing the one to undertake
research and study in Australia, and
sending the other to live and work in
Asia. Between 1981 and 1990, he was
co-chairman of the ASEAN–Australia
Joint Research Project, which produced a remarkable number of original research monographs and articles
166
on the ASEAN economies, and built
an enduring network of Australian
and Asian scholars.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
For students of Indonesian economic
studies, Heinz’s decision to establish the
Indonesia Project at the ANU in the mid
1960s reflected both remarkable foresight
and, observes Jamie Mackie, some good
luck.
When Heinz launched the Indonesia
Project and the BIES in 1964–65, the
likelihood that either would succeed
appeared bleak in the extreme. He mentions in A Course through Life (1985)
that ‘almost everyone I consulted advised against the effort’. (I can’t remember whether I was one of those; I
certainly would have done so if consulted, having kept a close watch on
economic developments in Indonesia
over the previous eight years.) One
compelling reason for such scepticism
was the utterly chaotic state of the Indonesian economy at that time, with
crippling shortages everywhere, inflation spiralling from 100% p.a. in 1963
towards 300% in 1965, and the resultant breakdowns in infrastructure paralysing economic activity at all levels.
Not long before, when I was writing
one of the only economic surveys of
Indonesia in English for almost five
years, I had found that the scarcity of
reliable statistics made analysis of Indonesian economic trends almost impossible. I could not imagine how
anything more than an occasional article of any value could be written
about it under prevailing conditions.
Another obstacle was the superheated
political climate of Sukarno’s ‘Sosialisme à la Indonesia’, which was
clearly building up towards a national
crisis, putting any thought of policy
continuity or worthwhile economic
analysis out of the question. Beyond
that was the near-impossibility in
Peter McCawley and colleagues
those days of recruiting any of the few
well-trained Indonesian economists—
apart from Dr Panglaykim who was
enticed to Canberra between 1966 and
1969—or of finding Australians or others with more than rudimentary firsthand experience of Indonesia and its
problems. But Heinz went ahead, and
by dint of sheer audaciousness (Steve
Grenville’s word), perseverance and
persuasiveness, he pulled it off.
He was lucky in his timing. Only two
issues of the BIES were published before the Gestapu coup attempt transformed the political scene in 1965. (The
second issue in October 1965 had a
last-minute sentence or two about the
coup but made no real comment on it.)
By 1967 the economic situation had
begun to improve markedly. The slow
return of sanity to government decision making after Soeharto took over,
and the gradual shifts in economic
policy, provided scope for worthwhile
analysis of developments. (Heinz himself did not write a BIES Survey of Recent Developments until October 1966,
when he collaborated with Panglaykim.) If Sukarno’s overthrow had
not occurred for another three years, I
wonder whether even Heinz could
have kept the BIES going as a worthwhile venture. It had only a few substantial articles in the first eight
issues—Lance Castles’s often-cited
piece on ‘Socialism and Private Enterprise’, Alex Hunter’s various contributions on the oil industry, Heinz’s
article on ‘Banking in Hyperinflation’,
and David Penny’s pioneering pieces
on various aspects of agricultural societies and poverty. By 1968 the BIES
was beginning to prove its worth, with
solid ly informative Surveys; and
within a few years it was publishing
an impressive array of analytical articles. But the early years were a
struggle.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
Heinz managed almost miraculously to bring together a workable
nucleus of people with prior knowledge of Indonesia. In addition to David
Penny and Panglaykim, he involved
Ken Thomas, Ingrid Palmer, Shamser
Ali and Dahlan Thalib in the early
work of the Indonesia Project. Alex
Hunter soon made himself knowledgeable about the oil industry and
minerals generally. Joyce Gibson wrote
some useful pieces on various topics.
The present finance minister, Boediono, became a research assistant to
Heinz in 1970. But all these moved on
in due course, except David Penny
who remained until well into the
1970s before moving to the national
Department of Aboriginal Affairs. The
next and more enduring wave of
Project staff consisted of Heinz (who
wrote most of the BIES surveys in the
years immediately after 1967), Sundrum, Penny, Fred Fisk and Ruth
Daroesman, who all helped to give the
Project greater momentum in the 1970s.
Yet Heinz was of central importance
to the whole venture. Without his leadership skills the Indonesia Project
would never have got off the ground
at all.
By the early 1970s, Heinz had recruited
a number of young postgraduate scholars to work on various aspects of the Indonesian economy. One of them was Anne
Booth.
I first met Heinz at Canberra airport in
June 1971. I had arrived back from
London to become a research student
in the Research School of Pacific Studies (as it then was). I thought at the
time (and the thought was to strike me
again on many occasions in Australia
and Southeast Asia over the next three
decades) that there was little in
Heinz’s manners, speech, or style of
167
dress to suggest that he had ever spent
even a week in Australia, let alone
most of his working life. During his
years in England he had perfected a
style of spoken and written English
that would sound unfashionably patrician in today’s Blairite Britain, but
which served Heinz remarkably well
throughout his working life.
He was a member of that vast diaspora of cultured central Europeans
whom Hitler forced to emigrate. I suppose part of Heinz continued to yearn
for Europe long after he had settled in
Australia and made the study of Asia,
and especially Indonesia, the main
focus of his professional life. But he
was a true internationalist —cosmopolitan in outlook, sceptical of all
forms of nationalism, and always
ready to take a stand against xenophobia. Over the years, his tireless efforts
to promote Indonesian economic studies paid handsome dividends. Inevitably, in the process he antagonised
some in Australia who, for whatever
reason, preferred to demonise the Soeharto regime and were unwilling to
recognise its achievements as well as
its failures.
It was wholly due to Heinz that I
became interested in Indonesia and
decided to carry out fieldwork there
for my PhD. In the early 1970s life in
Indonesia, even in the larger cities,
could be difficult. I remember arriving
in Surabaya in late 1972 when the
drought had led to an almost complete
breakdown of the electricity system.
Even a fan was impossible to operate.
After a week of sweltering heat I fled
to Malang! But the field research Heinz
had urged on me turned out to be quite
absorbing. His own enthusiasm was
infectious. As a supervisor he was always ready to provide detailed comments on drafts of work. Even when
our opinions diverged, he was remark-
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
168
ably patient with my at times callow
arguments. His own research was concerned mainly with macroeconomic
and monetary economics and was
largely Jakarta-based. But he relished
opportunities to travel to other parts
of the country. He visited many universities in Java and elsewhere over
the 1970s and 1980s.
In the 1990s, his visits to Indonesia
became less frequent. Like many others, he found the events of the financial crisis in late 1997 and 1998 both
surprising and extremely shocking. He
was, I think, especially distressed at
the vulnerable position that many Indonesians of Chinese descent found
themselves in, no doubt drawing parallels with his own experience in
Germany in the early 1930s. But he
continued to follow developments
closely. His contributions to the study
of Indonesia will continue to be valuable for scholars both in Australia and
elsewhere.
By the mid 1970s, the Indonesia Project
had become well established. Heinz had
attracted more young scholars, such as
Howard Dick, Stephen Grenville and
Phyllis Rosendale, to the Project. Another
at that time was Hal Hill, who later became Head of the Indonesia Project and
the H.W. Arndt Professor of Economics
at the ANU.
For young graduate students, Heinz
was a formidable figure. We had all
encountered him as undergraduates
through his books and articles and his
well-known political activities. I first
met him in the early 1970s at Monash
University, and mentioned my interest in Indonesia and graduate economics training. I also mentioned that
I was thinking of applying for places
like Oxford and Cornell. ‘What do you
Peter McCawley and colleagues
want to go to those places for!’ he
snorted. ‘When you’re ready to do a
PhD, let me know, and I’ll get you a
scholarship in my department.’ True
to his word, when I contacted him a
couple of years later, an offer of a scholarship duly arrived.
Heinz was a truly remarkable supervisor. Almost everything I wrote was
returned within 48 hours. There was
a standard format to his responses:
typed comments, first general then
specific comments, and usually several pages of detailed views. We
quickly came to recognise his style. (So
did others: years later, when I was editing the BIES, I asked Heinz to referee
a submission. He was unhappy with
it, and let fly in his comments. Without thinking I passed them on to the
author, who replied thanking me for
the ‘comments of your anonymous referee, Heinz Arndt’!)
As a student, I liked the way Heinz
approached his work on Indonesia. I
think he imparted this style to all of
us. He stressed the importance of both
good analytical economics and taking
countries seriously. One without the
other wouldn’t work, he emphasised.
He always had a remarkable knack of
homing in on the big issues, even for
topics about which he knew little. He
was a wonderful ‘intuitive economist’,
too. He generally eschewed rigorous
modelling, and was sceptical about
statistical techniques. (There weren’t
many R squareds in his 16 years at the
helm of BIES. And they were positively
banned from the Surveys!) But his
analytics were unerringly accurate,
nonetheless.
Heinz held firm opinions, and as
students we hesitated to disagree
strongly with him. But he was not intolerant. You had to be quick-witted,
forceful and articulate to engage in
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
argument, but he was willing to listen. Just occasionally you could persuade him to change his mind. Later, I
kept in close contact with him after
graduation. He continued to read and
comment on practically everything I
wrote, even though I would stress that
I didn’t expect comments. ‘I’m addicted to reading papers’, he once told
me. I don’t think I have encountered
anybody else in academia who is as
generous as Heinz in this respect.
Heinz was instrumental in getting
me a two-year teaching position at the
University of the Philippines. We also
worked closely together for several
years on the ASEAN–Australia Joint
Research Project. These and other
endeavours made me realise that he
was a major international figure not
just in Indonesia but in Southeast Asia
and beyond. Yet even when he ventured further afield, to the US, Europe
and Japan, Indonesia remained central. I think he regarded it as his duty
to inform people about the country,
and to get a balanced understanding
of the development record under Soeharto. He conceded that the human
rights record was not good, and that
Timor was a tragedy, but he felt that
the broad-based improvements in living standards were never accorded
sufficient attention by critics of the regime. While Heinz’s political opinions
became more conservative in his later
years, obscuring the radicalism of his
youth from younger critics, he deserves
credit for employing or teaching various Indonesia scholars, most notably
David Penny, and to some extent Peter McCawley and Anne Booth, whose
views on the Soeharto regime differed
from his.
Heinz Arndt saw his major role in
establishing the Indonesia Project as
overseeing the development of a re-
169
search unit and journal of international repute. He therefore spent much
of his time editing the BIES, encouraging others to write for it, and supervising PhD students (and, in addition,
sometimes practically writing other
people’s papers for them: he once
quipped that he was tempted to put
all these together in a volume entitled
Other People’s Collected Essays!). Notwithstanding exceptionally heavy
administrative responsibilities, he
published extensively on the Indonesian economy. Between June 1966 and
August 1983, he wrote no fewer than
20 BIES Surveys; until the late 1970s,
he authored almost half of them. Moreover, he wrote authoritative papers on
a remarkably diverse array of topics:
inflation, banking and monetary
polic y, unemployment and wage
policy, transmigration, regional price
variations, development and equality,
the oil boom, civil service compensation and corruption, development assistance, Indonesia in the world
economy, and much else. Many of his
key papers were published in the BIES
(and later brought together in The Indonesian Economy, 1984). Heinz could
have sought international outlets for
them, in the process further enhancing his reputation abroad. However,
he unselfishly took the view—as he
had also when editing The Economic
Record a decade and more earlier—that
senior staff had an obligation to nurture a new journal by publishing their
major papers in it.
The Indonesia Project faced something of
a crisis at the end of 1980 when Heinz
Arndt retired from his position as Head
both of the Department of Economics in
the Research School of Pacific Studies and
of the Indonesia Project. Thee Kian Wie,
who accepted a position as Visiting Fel-
170
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
low to the Project shortly afterwards, recalls how Heinz continued his academic
work during the 1980s, and among other
things launched a second major journal
on Asian economic affairs.
To adapt the oft-quoted statement that
‘old soldiers never die, they only fade
away’, Heinz showed that ‘old professors never retire, they just keep on
writing’, by continuing to produce an
impressive number of books and papers after his retirement, including his
perceptive intellectual autobiography
A Course through Life (1985) and his
book Economic Development: The History of an Idea (1987). A few years
earlier, in The Indonesian Economy: Collected Papers (1984), he republished
most of his Surveys and papers that
had appeared in BIES. This book
turned out to be a source of invaluable insights for the chapter on the
Soeharto era and the crisis years that
I wrote for a book on Indonesia’s modern economic history together with
Howard Dick, Vincent Houben and
Thomas Lindblad. Heinz’s prodigious scholarship was further reflected in the publication of three
other books, 50 Years of Development
Studies (1993), which contained his
papers written during the period
1942–93 on various issues relating to
economic development, Essays in Interna tional Econom ics, 1944–1994
(1996), and The Importance of Money:
Essays in Domestic Macroeconomics,
1949–1999 (2001).
In March 1986 Heinz visited Jakarta
and asked me to become the corresponding editor for Indonesia of a new
journal, Asian–Pacific Economic Literature, that he had just started. The aim
was to help academics, government
officials, and business people to keep
abreast of the burgeoning economic
Peter McCawley and colleagues
developments in the region. His editorial skill made Heinz indispensable as
editor of APEL.
Over the years I greatly benefited
from the stream of papers Heinz sent
me. Most of them dealt with economic
issues, but some contained the reminiscences of his relatives. These were
striking vignettes of the Jewish upper
middle class in Germany which had
been tragically wiped out during the
Holocaust. For my part, I started sending Heinz drafts of my papers. He usually returned these in record time with
constructive comments, including corrections of my English. While our
friendship over the years deepened,
after the early 1990s Heinz grew increasingly critical of my papers. He
thought they were too hard on the corrupt and repressive New Order regime. In his comments on one paper
that I wrote on government–business
relationships under the New Order, he
said: ‘If you continue writing in this
way, you are likely to lose your audience’. But these stern remarks were
expressed ruefully rather angrily, reflecting Heinz’s concern that I was losing my academic objectivity.
After his wife Ruth passed away in
March 2001, Heinz began to ponder the
possibilityof making a sentimental tour
of ASEAN countries. He decided to visit
Indonesia first, and in February 2002
he was able to see old friends such as
Sadli, Widjojo, Emil Salim, Radius
Prawiro, J.B. Sumarlin, Arifin Siregar,
Boediono, Anwar Nasution, Selo Soemardjan, Wiryono, Chris and Tri Manning, and Mrs Evie Panglaykim whom
he was delighted to meet after so many
years. Despite his physical frailty, he
was intellectually as sharp as ever. He
wrote copious notes for his diary about
the people he had met. Although my
wife Tjoe and I are deeply saddened by
Heinz Arndt: An Appreciation
Heinz’s unexpected death, we are very
grateful that he enjoyed his last visit to
Indonesia so much.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
By the early 1980s, staff of the Project in
Canberra were increasingly keen to find
ways of involving more of their Indonesian colleagues in Project activities. Mari
Pangestu supported this new emphasis.
I really did not become involved in the
Project and BIES until the mid 1980s,
after Professor Heinz Arndt had retired. However his input was still very
evident in the 1980s. It is a credit to
someone as strong minded as Heinz
that he was able to let go of the Project
that he had nurtured for 18 years. There
was a difficult period after he left
when there were some in the department who were sceptical about the
priority being given to work on Indonesia, and I recall many worried conversations about the fate of the Project.
Those difficult years passed, and under the stewardship of a number of his
former students, Peter McCawley and
Anne Booth in the 1980s, and Hal Hill
in the 1990s, the BIES and the Project
continued to grow and develop in
keeping with the times.
A major change in the mid 1980s was
the conscious effort to seek new contributors, especially Indonesians, to
write for the journal. Previously, all the
Surveys by Indonesians were written
by authors such as Panglaykim, Boediono and Dahlan Thalib who were
directly involved with the Project.
Beginning in the mid 1980s, other Indonesian scholars were invited to prepare the Surveys, beginning with
Anwar Nasution in 1985.
I did my own first ‘Survey of Recent
Developments’ in 1987, 22 years after my father, the late Panglaykim,
wrote his first Survey. The guidelines
and requisite visits to prepare for the
171
Survey w ere clearly a legacy of
Heinz’s work. I became aware of the
support for the BIES in Indonesia, and
of course for the man who started it
all, when I quickly found that it was
not at all difficult to get appointments
from the list of regular contacts. The
experience was invaluable. As a recent graduate, I found that writing the
Survey forced me to look at a broad
range of issues and to think through
the policy implications of what I was
saying. The process of writing the
Survey was also a valuable training
experience. I spent two intensive
weeks in the economics department
in Canberra, writing and rewriting,
and interacting with others in the
department. Heinz was still very active at the time, and provided numerous comments on my first drafts.
Another important development
during this period was the attention
given to the regional economic surveys. In the 1960s and early 1970s,
recognising the value of having perspectives from outside Jakarta, Heinz
commissioned many regional surveys, from Hendra Esmara and Makaliwe at Hasanuddin University, Ace
Partadireja and Mubyarto at Gadjah
Mada University, and various other
contributors. In the mid 1980s Hal
Hill explored the possibility of extending this pioneering work. The result
was a set of papers written collaboratively by Indonesian and Australian
authors. I myself wrote the survey on
East Kalimantan. This was another
invaluable experience. The conference in Canberra in February 1987
where the writers presented their
papers was memorable, and Heinz
an active participant. The papers
were edited by Hal Hill and published as Unity in Diversity (Oxford
University Press, 1989).
172
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
It is a great tribute to Heinz that the
Indonesia Project continued to flourish after his retirement. He built a
strong foundation, and trained many
scholars who could carry on the work,
each leaving his or her own mark on
the field of Indonesian studies.
From the beginning of his work in Indonesia in 1964 to his last visit in February
2002, Heinz kept in close touch with his
friend Mohammad Sadli. He greatly admired Professor Sadli’s enormous contribution to public policy debates in
Indonesia over a period of four decades
since the early 1960s. Of the group of senior Indonesian economists who knew
Heinz Arndt, Mohammad Sadli is perhaps
the most well placed to comment on how
his overall contribution is seen in Indonesia.
Professor Arndt came from a European intellectual background before
World War II. At one time he was sympathetic to Marxian philosophies, but
later when studying in England he
leaned more to Fabian reformist ideas.
In his later years in Australia he became more libertarian. Perhaps, having formed his views against this
varied background, he maintained his
belief that governments and policies
matter, even though he was aware that
‘governments could fail also’, just as
markets could and sometimes more
often.
When Heinz established the Indonesia Project at the ANU in the mid
1960s, he became acquainted during
his frequent travels with the group of
Indonesian economists who had been
influenced by Professor Sumitro Djojohadikusumo, himself a product of a
Western European (i.e. Dutch) intellectual tradition. In the early 1950s,
Sumitro had established the new Faculty of Economics at the University of
Peter McCawley and colleagues
Indonesia in Jakarta. His disciples in
the newly formed economics faculty
were influenced by his view that the
economics profession can play an important role in guiding the economic
development of a nation, that the role
of the state and government should be
strong, and that the guiding principles
should be economic rationality, economic growth and development.
When Heinz first came to Indonesia
in 1964, Sumitro had left, having exiled himself in 1957 from the regime of
President Sukarno. Sumitro was called
back by Soeharto in 1968. But Widjojo
and his group of young fellow economists were already home, having undertaken PhD studies in the US under
a program conceived by Sumitro to
build up the staff in the Faculty of Economics through an affiliation with the
University of California at Berkeley.
Hence when Heinz made his first reconnaissance into Jakarta in 1964, he
found a young group of university
economists inspired to make economic
development their lifelong professional mission. But they were still engaged in an uphill fight to ameliorate
the more traditional socialist and revolutionary inclinations of President
Sukarno. Sukarno’s economics was
‘wishful thinking economics’—much
more politics and ideology than economics. When Sukarno was succeeded
by Soeharto, the latter immediately
turned to the Widjojo group for ideas
about the economic reconstruction of
the country. The new economic policies were much more market friendly
than previous policies, although the
role of the government, and of state enterprises and large agencies such as
Bulog (the food logistics agency) was
still considered important.
The young economists working
with Soeharto’s new government
greatly welcomed foreign support.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
Apart from looking for aid from Western governments and Japan, they befriended Professors Jan Tinbergen
from Holland, Saburo Okita from Japan, and Heinz Arndt from Australia.
From the United States, of course, there
were more people to draw on, such as
Professor Leon Mears and Professor
Bruce Glassburner (who maintained
an especially close connection with
Heinz and the Indonesia Project), and
Dr Bernard Bell of the World Bank, but
Tinbergen, Okita and Arndt all had
good links into their own governments.
Like Sumitro, Heinz was the patron
of a new area of scholarship. He encouraged younger economists to enter
the field. Hence there developed a sort
of spiritual tie between a group of Indonesian economists and their Australian counterparts, mostly trained in
Canberra. This intellectual –spiritual
and international support was very
important as an additional ‘comfort
blanket’ for Indonesian economists in
the front line of the battle against populist, irrational, inefficient and often
ineffective economic policies.
Yet if I were asked to answer the
question ‘What was Heinz’s own specific role in this respect?’, I would find
it difficult to answer. Rather than making a specific contribution, he was the
dean of the group of Australian economists who were, and still are, part of
our comfort blanket system. In late
1998 our ANU friends invited a group
of Indonesian economists to Canberra
to discuss problems of economic policy
and recent developments in relation
to the 1997–98 economic crisis. This
meeting was later replicated by the
Japanese and the Americans.
The BIES and APEL are important
research publications read by Indonesian economists and policy makers as
an input to policy discussion. Because
of language problems, and because
173
Indonesians are not always avid readers, these two journals are not as
widely read in Indonesia as they might
be. But even if they influence only a
handful of Indonesian policy makers,
faculty members, opinion makers and
writers on economic affairs, these publications are worthwhile. In a country
like Indonesia, the influence of individuals and small groups on the bearings of the nation can be very great.
The articles in the BIES, and especially
the periodic economic Surveys, are
very useful summaries that are read
by members of the ‘liberal epistemic
society’, that is, outside the government. Top-level government economic
staff also have access to World Bank
papers, which are more directly policy
oriented, and greatly influenced by
BIES material.
Western scholars like Heinz Arndt
face something of a moral dilemma
when dealing with a country such as
Indonesia was in the Soeharto era.
During that period, it was not a democratic regime in the Western sense
with an emphasis on human and individual rights, controls on authoritarian abuses, and so on. Should
Western scholars still support the
national development of such a country? Professor Tinbergen from Holland became ambivalent after his
initial endorsement. But Heinz continued to support the work of Indonesian economists within Soeharto’s
Indonesia because he supported the
development process. In the end, by
the mid 1990s he saw much more
prosperity in Indonesia than during
his first visit in 1963. He took the view
that the welfare of the common people
should always be paramount, that
the regime they lived under was not
necessarily one of their own choosing, that development would gradually advance the progress of human
174
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
rights and the rule of law, and that
the educ a ted and pr o fes s ional
classes would also demand (and get)
these good things.
Although Heinz Arndt was an economist and placed great emphasis on the
importance of economic ideas, he accepted (admittedly with a certain reluctance at times!) that the governance of
nations depends on a lot more than economics alone. He valued the views of
his ANU colleagues from such disciplines as political science, history, anthropology and demography about
Indonesian issues, and he especially
welcomed visitors from Indonesia and
elsewhere who were specialists in these
and other subjects. Bill Liddle from Ohio
State University in the US is one such
scholar who came to know Heinz well
on various visits to Australia.
I first met Heinz Arndt in 1980, near
the end of his career, when I was a
research fellow in the Department of
Political and Social Change at the
ANU. I warmed to him immediately.
He was gracious, deeply knowledgeable about the Indonesian economy,
and willing to share his wisdom with
an economically illiterate political
scientist. He reminded me strongly of
other courtly and charismatic European refugee intellec tua ls I had
known: Harry Benda, the Southeast
Asia historian, who had been my own
dissertation adviser; Isaiah Berlin, the
gr eat polit ica l philo so pher; and
Albert Hirschman, an economist like
Heinz but on the other side of the
great divide among economists on the
role of the state in development.
Heinz taught me that Indonesianists
come in all shapes and sizes, not just
the standard issue produced by Southeast Asia studies programs that require
extensive language and multi-disciplinary training. Before arriving in
Peter McCawley and colleagues
Canberra, I had been warned—mostly
by Indonesianists trained like myself
in area programs—that Heinz did not
know much about Indonesia beyond
its economy. That was indeed my experience. On one occasion he startled
me by asking me to explain a reference
to Takdir Alisyahbana, Indonesia’s
most celebrated novelist and essayist.
In this instance, what surprised me
most was that Takdir and Heinz were
kindred souls, children of the Enlightenment and protagonists of Indonesian
modernisation. If he didn’t know much
else about Indonesia, at least he should
have been familiar with its most prominent like-minded intellectuals! About
my subject, Indonesian politics, he was
only casually curious. I think this was
because he believed that the Widjojo
team of professional economists and
policy advisers had already mastered
the most important secret of Indonesian
politics. In crises, they went straight to
President Soeharto, who made all of the
key decisions.
Despite his singular perspective, or
perhaps because of it—I really don’t
know which is true—Heinz’s contribution to Indonesian studies and to
the development of modern Indonesia
was and continues to be enormous. I
see that contribution most directly in
the pages of the BIES: in the articles
written directly by Heinz and in those
by his students and by others inspired
by his vision. In Indonesia, the impact
of the BIES, and of Heinz’s leadership,
has been vastly to expand what political scientist Rizal Mallarangeng has
labelled the ‘liberal epistemic community’, that is, those members of Indonesian so cie ty—s chola rs, po licy
makers, journalists, the educated public—who understand and appreciate
modern economics and economic
policy. Some of them read the BIES
avidly. Many more are influenced by
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
Heinz Arndt: An Appreciation
it at second hand, through the analyses of Indonesian economists writing
in the leading Jakarta dailies and
newsweeklies, like Kompas and Tempo.
If the new democratic Indonesia succeeds in getting back on the development track pioneered by Soeharto’s
authoritarian New Order, it will be due
in no small measure to the influence of
today’s members of the liberal epistemic
community. To the building and maintenance of that community, Heinz
Arndt unquestionably contributed
more than any other non-Indonesian.
It is a legacy of which any Indonesianist
would be extremely proud.
Heinz Arndt was, above all, an academic,
both by inclination and by training. But
he also had a great admiration for policy
makers. One suspects, perhaps, that he
believed that his own skills lay more in
contributing to the public policy debate
than in engaging in the day-to-day rough
and tumble of government administration that is an inevitable part of the implementation of economic policy. He always
took pleasure, however, in seeing one of
his students or colleagues appointed to
a senior position in government. He was
delighted when Boediono, a former staff
member of the Indonesia Project, was
appointed finance minister in Indonesia
in 2000. In his own tribute to Heinz Arndt
in Jakarta in late May, Boediono recalled
some highlights of his association with
Heinz.
It was a cold morning in July 1970 when
the plane that carried my family, then
consisting of my wife, my baby daughter and myself, landed in Canberra. I
was arriving to take up a research assistantship at the ANU’s Indonesia
Project. As we entered the terminal,
Heinz was there waiting for us.
He took us to his home in his light
blue Cortina. We were treated to a wel-
175
come hot breakfast that Heinz prepared before he took us to a university
flat on Canberra Avenue that he had
previously secured for us. After showing us around he lit a fire in the fireplace using coal briquettes that he had
bought earlier. He then left, but returned shortly after with a bag of groceries. My wife and I never forgot this
early encounter with Heinz. He did all
of this for us when he was a famous
professor and I a lowly research assistant. Such is the man that we pay tribute to today.
I never took a course with him, nor
did I do my thesis under his supervision. Nevertheless, I consider him my
teacher both about my profession and
about life. He must have felt the same
way. In a letter thanking me for my
contribution to the 1985 special edition of the BIES that honoured him, he
acknowledged this bond, saying that
at some stage he must have contributed to making me an economist.
Heinz’s writings on Indonesia and
development influenced me directly
and indirectly. He influenced my
thinking about the problems facing the
country, about the role of economics
in the solutions, and about how an
economist should define his or her role
in public life.
Some of us, including myself, were
fortunate to have been directly influenced by him through personal contact. But I suspect that the majority
were influenced by what he wrote. His
writing was a delight. In his hands,
abstract economic concepts came alive,
as relevant as real life problems.
I last saw Heinz on the evening of
2 March 2002. Several of his acquainta nces ho no ured him at C hr is
Manning’s house in South Jakarta, including Thee Kian Wie, Anwar Nasution and Bill Wallace. His spirit and
enthusiasm were strong, but he looked
176
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
frail. Some of us thought that it might
be his last trip to Indonesia. I had actually seen Heinz the day before at a
lunch for him organised by Professor
Widjojo. When I asked him about the
main purpose of his trip he said, ‘to
see old friends’.
Peter McCawley and colleagues
The news of his sudden death came
as a shock. My wife and I were overwhelmed by the sense of loss, the loss
of a great friend and teacher. I am sure
that this is a feeling shared by my colleagues.
Selamat Jalan, Heinz.
H.W. ARNDT
SELECTED PUBLICATIONS
(1944), The Economic Lessons of the NineteenThirties, Oxford University Press, Oxford.
(1955), ‘External Economies in Economic
Growth’, The Economic Record, November.
(1954), ‘A Suggestion for Simplifying the
Theory of International Capital Movements’, Economica Internazionale , August.
(1 95 7), T he Au stralian T rad ing Banks,
Cheshire, Melbourne.
(1957), ‘Overseas Borrowing—The New
Model’, The Economic Record, August.
(1960), ‘Control of Inflation through Fiscal
Policy: A Reappraisal’, The Economic
Record, December.
(1961), ‘Problems of External and Internal
Balance’, in Economic Survey of Europe in
1960, United Nations, Geneva.
(1968), A Small Rich Industrial Country: Studies in Australian Development, Aid and Trade,
Cheshire, Melbourne.
(1969), ‘Three Times 18: An Essay in Political Autobiography’, Quadrant, May–June.
(1972), Australia and Asia: Economic Essays,
ANU Press, Canberra.
(1976), ‘Non-traded Goods and the Balance
of Payments: The Australian Contribution’, The Economic Record, March.
(1978), The Rise and Fall of Economic Growth: A
Study in Contemporary Thought, Longman
Cheshire, Melbourne.
(1979), ‘The Modus Operandi of Protection’,
The Economic Record, June.
(1984), ‘Measuring Trade in Financial Services’, Quarterly Review, Banca Nazionale
del Lavoro, June.
(1984), The Indonesian Economy: Collected Papers, Chopmen, Singapore.
(1985), A Course through Life: Memoirs of an
Australian Economist, National Centre for
Development Studies, The Australian National University, Canberra.
(1987), Asian Diaries, Chopmen, Singapore.
(1987), Economic Development: The History of
an Idea, The University of Chicago Press,
Chicago.
(1987), ‘Industrial Policy in East Asia 19501985’, Industry and Development , UNIDO,
Vienna.
(1991), ‘Sorting Out Externalities’, Malaysian
Journal of Economic Studies, 26 (1 + 2).
(1992), ‘Comparative Advantage in Trade
in Financial Services’, in G. Jones (ed.),
Multinational and International Banking,
Edward Elgar, Aldershot.
(1992), Essays on Development in a Liberal Economic Order, Occasional Paper 14, International Centre for Economic Growth,
San Francisco.
(1993), 50 Years of Development Studies, National Centre for Development Studies,
The Australian National University,
Canberra.
(1993), ‘Sustainable Development and the
Discount Rate’, Economic Development and
Cultural Change 41 (3), April.
(1996), Essays in International Economics,
1944–1994, Avebury, Aldershot.
(2001), The Importance of Money: Essays in
Domestic Macroeconom ics, 1949–1999,
Ashgate, Aldershot.
Downloaded by [Universitas Maritim Raja Ali Haji] at 20:25 19 January 2016
H.W. ARNDT
SUPPLEMENTARY SCHOLARSHIPS
The Indonesia Project in the Economics Division, Research School of Pacific
and Asian Studies (RSPAS) and Asia Pacific School of Econom