Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 00074910701286412
Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
BOOK REVIEWS
To cite this article: (2007) BOOK REVIEWS, Bulletin of Indonesian Economic Studies, 43:1,
113-127, DOI: 10.1080/00074910701286412
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Bulletin of Indonesian Economic Studies, Vol. 43, No. 1, 2007: 113–27
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BOOK REVIEWS
Hadi Soesastro, Aida Budiman, Armida Alisjahbana, Ninasapti
Triaswati and Sri Adiningsih (eds) (2005) Pemikiran dan Permasalahan Ekonomi
di Indonesia dalam Setengah Abad Terakhir [Economic Thought and Issues
in Indonesia in the Last Half Century], Ikatan Sarjana Ekonomi Indonesia
(Indonesian Economists Association), 5 volumes, pp. 2,335. Rp 1,000,000.
Historical perspective on how an economy develops is of interest when trying
to understand its present state of development. Tracing the evolution of economic thinking is an essential part of that perspective, and policy makers who
understand past debates may avoid repeating the mistakes of their predecessors.
Pemikiran dan Permasalahan Ekonomi di Indonesia dalam Setengah Abad Terakhir is a
collection of academic and media articles covering the development of issues and
thinking on the Indonesian economy over the last half-century. It was published
to celebrate the 50th anniversary of the founding of the Indonesian Economists
Association (Ikatan Sarjana Ekonomi Indonesia, ISEI). The collection’s five main
volumes divide the writings into five periods of Indonesian economic development, each with a volume introduction.
Each volume is organised in thematic sections: System and Basic Principles;
Economic Institutions; Political Economy; Development Planning; Macroeconomics; Agriculture, Industry and Trade; Regional Development; and Socio-economic
Development. Although this may disappoint readers who would prefer a more
chronological development within every volume, it in fact allows interesting thematic comparison among periods. Readers may be able, for example, to see how
issues and paradigms on ‘regional development’ differ between the early New
Order period of the 1970s (third volume) and the latter part of the 1990s (fourth
volume). Indeed, the compilers suggest such an approach to reading the collection in its introductory booklet.
The first volume covers the establishment of the post-colonial Indonesian
economy (1945–59). It touches on issues from institution building to problems in
specific economic sectors. The papers emphasise that the economy ought to be
based on socialist principles, and that its development should follow a ‘bottom-up’
approach.
Apart from providing discussion of the basic system and principles under which
thinkers of the time believed the economy should be developed, the book also helps
to explain Indonesian scepticism about foreign capital. While understandable for
that period, it is surprising that this attitude survives (at least partly) even today.
Another striking inclusion in the book is Hatta’s short article on regional development and autonomy. It stresses that the initial concept of Indonesian development
was to place districts (kabupaten) at the centre of regional autonomy. How this vision
ISSN 0007-4918 print/ISSN 1472-7234 online/07/010113-15
DOI: 10.1080/00074910701286412
© 2007 Indonesia Project ANU
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eventually failed, with Indonesian economic management instead becoming highly
centralised, is an interesting question, probably beyond the scope of the collection.
However, it is remarkable that this approach to regional autonomy is now treated as
a post-crisis breakthrough, when in fact Indonesia is only moving back to an earlier
post-independence concept of development.
Economic policy debate in the early years of independence was characterised by
two conflicting approaches. The nationalists believed the government should have
a central role in managing the economy. The more pro-market thinkers saw the
market mechanism as the driver of the economy, with indirect government intervention through monitoring and regulation. In implementation, policy was driven
mainly by the first group, resulting in a highly centralised economy with regulated
prices, which then failed to send appropriate economic signals to the market. The
volume has very little to say about why that happened, however.
The second volume covers the years known as the periode ekonomi terpimpin (the
‘guided’ economy period) from 1959 to 1966. This time is characterised by highly
nationalistic and revolutionary idealism, and a disregard for basic economic reasoning. As a result of this approach, the economy went into decline, with a dramatic fall in per capita GDP and investment, accompanied by galloping inflation
and huge balance of payments and current account deficits.
Most articles in this second volume discuss economic problems of the period
either by focusing on their causes or by analysing how to overcome them. In general, the analysis points to a need to turn attention back to basic economic principles. Better management of state enterprises, the government budget and the
distribution of rice and oil are particularly emphasised, and there is general agreement about the need to pay attention to the market mechanism and price signals.
Unfortunately, the volume fails to explain why this agreement was not reflected
in policy implementation during the period it covers.
The first two volumes of the collection present various authors’ conceptual
understanding of how the Indonesian economy should develop. Rather than
offering current analysis of the historical situation, the volumes present papers
written by policy makers and academics of the time. This feature is the main contribution of the collection: it guides readers through the evolving thinking behind
the process of economic development in Indonesia.
The third and the fourth volumes represent the ideas, thought and economic
issues of the New Order era from 1966 to 1997. The third volume covers the first
15 years of the period, to 1981, and the fourth covers the years 1982–97, known as
the era of deregulation and economic liberalisation.
The third volume starts with the very basic issue of returning to economic principles and reasoning in managing the economy. These principles had been seriously neglected by the Sukarno regime. Although it was assumed by many that
the economy would be based upon market principles, voices promoting a rather
adapted or modified market system are also heard in the volume.
Among the ideas regularly advocated in this era were the notion of ekonomi
Pancasila, which combined planning with market mechanisms and promoted
the view that cooperatives should be leading players in the economy. At certain
stages of the discussion, the spirit of socialism could still be heard, for example,
in the 1981 article by the late Professor Mubyarto, which urged a re-ordering of
the ‘development trilogy’ to place equality ahead of growth as the first prior-
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115
ity in economic development (the third element of the trilogy being economic
stability).
In the fourth volume, covering the period of deregulation and economic liberalisation, the discussion of the system and basic principles is almost unambiguous. The authors are straightforward about how to carry out structural adjustment
effectively, and how to manage economic policy reform. Readers will note that in
this period questions such as whether an adapted market economy was necessary,
or how to define ekonomi Pancasila, were less often heard than the question of how
to get the price right and let the market work.
In the discussion of economic institutions, the distinctive features of thought
in both periods also seem clear. The substantial discussion of the importance of
cooperatives, their problems and prospects, and of the practical implementation
of these ideas in the form of the widely advocated village cooperatives (Koperasi
Unit Desa) and village enterprises (Badan Usaha Unit Desa), dominates the treatment of economic institutions in the early years of the New Order economy.
In the later period, covered in the fourth volume, the focus is on institutional
change in more free market terms, such as how to accelerate privatisation in the
pursuit of economic efficiency, or how to improve free market institutions such as
capital markets. In this sense, the volume manages to show that the evolution of
ideas runs parallel with the evolution of policies. The period of deregulation and
economic liberalisation from 1982 to 1997 produced policies that touched almost
all aspects of trade, finance and the real sector, and can be seen as the realisation
of ideas that are quite distinct from those of the previous period.
The deregulation of the 1980s and 1990s, especially in the financial sector,
may have helped make the Indonesian economy vulnerable and exacerbated the
1997 financial crisis. Readers may wonder why there are hardly any papers in
the fourth volume that seriously discuss the potential danger caused by excessive deregulation, especially in the financial sector and in debt mismanagement
before the crisis. Had the euphoria of economic liberalisation led economic
thinkers to overlook the vulnerability that it might have created? Could it be
the case that the financial crisis of the late 1990s was completely unexpected and
shocked everyone?
Volume 5 covers the episodes of crisis and economic recovery between 1997
and 2005. The emphasis is on the problems and challenges facing the Indonesian
government during the period of reformasi following the severe economic and
subsequent political crisis. The 55 articles cover a broad range of issues and seem,
not surprisingly, more like an anthology than a book, as the papers are not connected with one another. Moreover, the differences in methodology, approach and
level of analysis across papers make it hard for the reader to gain deeper information on a particular issue. In general, the papers selected here share just one
similarity—the period of study. Adiningsih’s introduction provides a good overview of the key issues of the crisis and recovery period. Unfortunately, it does not
highlight many of the debates and contradictions among the papers. In addition,
only a few papers are mentioned in the introduction, leaving the reader puzzled
about the argument of other papers and their position in the debate.
The crisis generated discussion about the ‘proper’ economic system and the
basic principles that can deliver prosperity to the Indonesian people. In 2000, ISEI
proposed the idea of a ‘managed market concept’ (konsep ekonomi pasar terkelola)
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that promotes private sector involvement in economic activities on the one hand,
and supports a government contribution on the other hand to ensure fairness.
Another basic principle was introduced by the National Economic Council
(Dewan Ekonomi Nasional) in the Gus Dur era (1999 to 2001). The New Indonesian Economy Framework set out 10 basic principles in the areas of the financial sector; a people’s economy; poverty alleviation; education; competitiveness;
and good governance. This idea was followed by a debate on the need to amend
article 33 of the 1945 constitution, which includes the statement that ‘sectors of
production that are important for the country and affect the life of the people shall
be controlled by the state’. The nationalist view, which is critical of the free market
system, was part of the debate on this issue.
One important lesson from the crisis for Indonesia is an awareness of the need
to reform its institutions. Efficiency, transparency and law enforcement are the key
issues for institutional reform, and are discussed in contributions on cooperatives,
state enterprises, and the role of the Commission for the Supervision of Business
Competition. Papers analysing reform of financial institutions focus on the independence and accountability of Bank Indonesia, and on the development of the
Financial Services Authority (Otoritas Jasa Keuangan, OJK) and its relationship to
the central bank. The paper on the latter issue argues that Bank Indonesia should
be responsible for maintaining monetary stability and OJK for prudential safety
and market conduct of the financial sector. A paper on the controversy surrounding the government and central bank policy known as Bank Indonesia Liquidity
Support (Bantuan Likuiditas Bank Indonesia, BLBI) is followed by a discussion
of the performance of the Indonesian Bank Restructuring Agency known as IBRA
or BPPN.
In the political economy section, most of the debate relates to the pros and cons
of IMF involvement in policy and to the foreign debt issue. Differences in the political atmosphere of economic policy during the Soeharto, Habibie, Gus Dur and
Megawati eras are evaluated. Another contribution, which explains the rationale
for reducing the government subsidy on oil prices, stimulated debate on the issue in
the Indonesian media. The political economy of competition policy, competitiveness
and liberalisation is highlighted by another author, and linked with notions of globalisation and rationalisation. Three key issues arise in the development planning
section: methodology; sectoral issues and the role of agriculture as prime mover;
and the role of Bappenas as the development planning agency.
Macroeconomic stability is the key issue during the recovery period. Some
papers focus on the monetary policy agenda, others on fiscal policies. These two
policies brought macroeconomic stability to Indonesia, but without significantly
improving economic growth. This failure stimulates discussion in the microeconomic section. Agriculture-based industry becomes one favoured path. Another
contributor explores the phenomena of de-industrialisation and industry competitiveness, while low competitiveness is examined in one paper on industry
in general and another on textiles. A further crucial issue in this section is trade
arrangements, with contributions analysing liberalisation and the role of the
World Trade Organization. Several papers consider aspects of regional autonomy. The last section covers socio-economic development, with a focus on poverty and income distribution, population and human development, and labour
policy.
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This fifth volume would be a good introduction to issues in the Indonesian
economy during the crisis—the individual articles reflect many parts of the
debate—but the volume lacks coherence. Indeed, within all volumes, a better
introduction to each section, that highlighted the essential arguments of all the
papers and their place in contemporary debates, would significantly improve the
collection. It would also help the reader to negotiate the different views among
the authors.
Despite its obvious usefulness, the collection has some limitations. A significant number of typographical errors appear throughout the volumes. It is also
unfortunate that the collection fails to elaborate sufficiently how the concepts discussed relate to actual developments in the Indonesian economy. The articles do
not adequately bridge the gap between the ideas and actual policy implementation in each period. Nonetheless, this collection will be a valuable reference for
students of economic policy and economic thought. Let us hope that policy makers (or perhaps their advisers) will take the time to absorb from these pages some
of the lessons of past failures and successes.
Arief Ramayandi, Arief Anshory Yusuf and Della Temenggung
ANU
© 2007Arief Ramayandi, Arief Anshory Yusuf and Della Temenggung
John Monfries (ed.) (2006) Different Societies, Shared Futures: Australia,
Indonesia and the Region, Institute of Southeast Asian Studies, Singapore, pp. 206. Paper: S$29.90/US$19.90; Cloth: S$49.90/US$29.90.
The bilateral relationship between Australia and Indonesia has been described
variously as ‘a roller-coaster’, ‘a yoyo’ and ‘an elevator’. At times the relations
between these two close neighbours have also been categorised as ‘delicate and
fragile’. The first three metaphors describe a relationship in which there are constant ups and downs, where, in the case of a roller-coaster, the going up tends to
be slow and ponderous and once at the peak the rushing down is fast and furious,
before a slow return to an upward direction. In the second description, bilateral
relations between Jakarta and Canberra are seen to demand special handling, like
transporting a basket of eggs or thin glasses, so that one must not travel too fast
and must try to avoid bumps.
The difficulties in developing, nurturing and managing relations between
Indonesia and Australia—relations that everyone concerned seems to agree are
extremely important—have been attributed to the great differences between these
two neighbours. Probably no two countries are as physically close to one another
as Australia and Indonesia and yet so unalike. Indonesia is an archipelago with a
large population mainly of Austronesian stock, predominantly Muslim and with
a still developing economy, the majority of whose population is poor. Australia is
a continent with a relatively small population that arrived largely through white
immigration, mainly Christian, with a developed economy and a relatively wealthy
population. For decades Australia was seen and saw itself as a white, European
outpost on the fringe of Asia, physically in the region, but culturally, politically and
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economically tied to Europe and later to the United States. Australia felt alien to
and alienated from its rather rough neighbourhood, and constantly threatened.
In the past decade Australia has become more integrated into the Asia Pacific
region. Internally it is now more multicultural, with large migrant groups coming
from Asia and the Middle East, while Australia’s security and economic relations
with Asia have grown much stronger over the years. Relations between Jakarta
and Canberra have also become closer, as the two countries share many common
national and regional interests, as well as valuing each other as friends in international fora. Yet there is an element of prickliness, of unpredictability, in these
essentially close bilateral relations.
Different Societies, Shared Futures: Australia, Indonesia and the Region, a product
of the 23rd Indonesia Update, organised by the Australian National University in
2005, provides valuable insights into the dynamics of relations between Canberra
and Jakarta. It is surprising that, although the Update has become a tradition,
organised annually since the 1980s, the 23rd Update was the first one devoted
exclusively to discussing Indonesia–Australia bilateral relations. The contributors
to the book are well-known scholars on Indonesia, as well as commentators on
and practitioners of Indonesia–Australia relations.
As the title suggests, Indonesia and Australia are very different societies; this is
a given and will always cause some difficulties in their relations, but geographic
proximity dictates that their futures will be inextricably bound together for better or for worse. It is in both countries’ interests to manage relations in ways that
maximise positive outcomes and minimise unavoidable irritations. The book
starts with a succinct and illuminating list of markers by the doyen of Indonesia–
Australia relations, Richard Woolcott, and a comprehensive introduction by the
editor, John Monfries. It is then divided into five parts: Regional Viewpoints;
Security Aspects; Mutual Perceptions and Irritations; The Economic Partnership:
Aid, Economics and Business; and the conclusion.
Each contribution is well thought out, well argued and highly readable. The
discussions at the conference on which this volume was based must have been
very lively. The book’s value lies in its attempt to address the issues in a fairly comprehensive manner and in ways that do not gloss over the problems or become
unrealistically optimistic. It is an honest assessment of the sometimes turbulent
relations across the Arafura Sea, emphasising their importance but recognising
the perennial challenges.
While I do not wish to diminish the significance of the other chapters, those by
former Indonesian Ambassador to Australia, S. Wiryono, and by Paul Kelly are
important for understanding the perspectives of the two countries. The papers
were written in a year when the bilateral relationship was improving, after President Susilo Bambang Yudhoyono’s successful visit to Australia. The president
received a warm welcome and was regarded by many Australian commentators
as the first Indonesian president who genuinely understood Australia. This led
Paul Kelly to remark with foreboding that something was bound to go wrong,
and sure enough not long afterwards Indonesia recalled its ambassador as a mark
of Jakarta’s anger at the granting of asylum by the Australian government to a
number of people fleeing from Papua.
The chapter on security by Hugh White is also worth noting. White warns
about the risks of signing a security agreement without obtaining grassroots sup-
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port from the peoples of Australia and Indonesia. This warning was effectively
ignored by the two governments, which again signed a bilateral security agreement in November 2006 without sufficient prior consultation with their respective
constituents. Time will tell whether this second agreement will suffer the same
fate as the first, revoked as bilateral relations deteriorate, or whether it will act as
an important linchpin in helping to stabilise relations. As Richard Chauvel points
out, the issue of Papua will continue to bedevil Australia–Indonesia relations for
the foreseeable future, and if the Indonesian government mishandles Papua all
bets are off. The excellent conclusion by an eminent student of Indonesia, Jamie
Mackie, rounds up a thoroughly informative and highly readable book. Incidentally, I read this book from cover to cover on the long flight from Jakarta to Washington DC, and my only regret is that I missed the 23rd Indonesia Update.
Dewi Fortuna Anwar
Indonesian Institute of Sciences (LIPI) and The Habibie Center, Jakarta
Johns Hopkins University, Washington DC
© 2007 Dewi Fortuna Anwar
Mohamed Ariff and Ahmed M. Khalid (2005) Liberalization and Growth
in Asia: 21st Century Challenges, Edward Elgar, Cheltenham, pp. 424.
Paper: £35.00 (web price £28.00); Cloth: £75.00 (web price £67.50).
This is a well-written book on the development experiences of eight Asian countries: China, India, Indonesia, South Korea, Malaysia, Pakistan, Singapore and
Thailand. It has eight country chapters along with an introduction, a chapter on
the Asia crisis and a concluding one on lessons for development strategy.
The book is useful on many counts, including the fact that it does not limit
itself to just sub-regions in Asia, but rather cuts across both East and South Asia.
Indeed, any book that purports to discuss Asia and the 21st century surely cannot exclude China or India, the world’s two most populous and fastest growing
countries. In addition, the authors offer a useful description of the development
paths of the selected countries.
The book focuses on four dimensions pertaining to the real sector (trade liberalisation and removing behind-the-border barriers, including anti-competitive
regulations); the financial sector (liberalisation and supervision of financial institutions); the fiscal sector (the need for fiscal discipline); and the external sector (gradual capital account deregulation and issues relating to exchange rate reform).
In some senses the book tries to do too much under the rubric of development
strategy. By attempting to examine all the four dimensions for each of the eight
countries, the discussion at times appears too broad and ends up being much
more descriptive than analytical. It would also have been useful if the authors
had attempted to draw more on the recent analytical literature in the field of
development by Dani Rodrik, Ricardo Hausman and others in thinking about
development strategies in Asia (Rodrik and Hausman 2003). One would also
have liked an evaluation of the four dimensions of development discussed by the
authors relative to the extended Washington Consensus (Rodrik 2006). Similarly,
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in discussing exchange rate regimes for countries, this reviewer would have liked
to see greater use of some of the recent studies of de facto currency regimes.
It is unfortunate that most of the data stop at 2002. Because of this, the authors
are somewhat less bullish on the prospects for India and Pakistan, both countries that have done well in recent times. The book speaks with some authority
on Malaysia and Pakistan in particular, but is found somewhat wanting when it
comes to examining China and India (Kelly, Rajan and Goh 2006). The chapter on
Indonesia is useful, focusing on the crisis period, though once again the fact that
the data stop at 2002 makes the analysis somewhat dated in some areas.
Overall, notwithstanding the above caveats, and if one were to ignore some
rather unnecessary comments on international security issues (e.g. atomic bombs)
or sweeping generalisations on certain countries (e.g. on India the authors start
the chapter by saying: ‘This country experienced three decades of violence and
civil disorder …’), the book offers a good overview of Asian economic development in the selected countries. It would be a useful read for an advanced undergraduate class on Asian economic development.
Ramkishen S. Rajan
George Mason University, Arlington VA
© 2007 Ramkishen S. Rajan
References
Kelly, David, Rajan, Ramkishen S. and Goh, Gillian (eds) (2006) Managing Globalisation: Lessons from China and India, World Scientific Press, Singapore.
Rodrik, Dani (2006) ‘Goodbye Washington consensus, hello Washington confusion? A
review of the World Bank’s Economic Growth in the 1990s: Learning from a Decade of
Reform’, Journal of Economic Literature XLIV (December): 973–87.
Rodrik, Dani and Hausmann, Ricardo (2003) ‘Economic development as self-discovery,
Journal of Development Economics 72 (December): 603–33.
Seiji F. Naya and Michael G. Plummer (2005) The Economics of the Enterprise for
ASEAN Initiative, Institute of Southeast Asian Studies
(ISEAS), Singapore, pp. 443. S$49.90/US$29.90.
This ISEAS book is a study of the Enterprise for ASEAN Initiative (EAI) proposed
by President George W. Bush at the 2002 APEC Annual Summit. The aim of the
EAI is to pursue the establishment of free trade areas (FTAs) between the US and
ASEAN–WTO members who are also in ‘trade and investment facilitation and liberalisation (TIFL ) agreement’ with the US. It is a follow-up to the ASEAN–US Initiative (AUI), and is supported by the East–West Center, Hawaii, the US–ASEAN
Business Council and the ASEAN–US Technical Assistance and Training Facility.
The book has six chapters, each with a short summary.
Chapter 1 gives a good glimpse of the main issues and conclusions in the subsequent chapters. Chapter 2 contains a descriptive (not analytical) study of the trade
(not economic) relationship between the US and ASEAN, where trade involves
goods, services and foreign direct investment (FDI). Useful appendix tables give
1993–2001 data on the disaggregated goods exports and imports of four ASEAN
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countries (Indonesia, Malaysia, the Philippines and Thailand). Chapter 3 discusses
the static or price effects (trade creation and diversion) and the dynamic impact of
FTAs (economies of scale, efficiency improvements, FDI flow changes), and provides empirical evidence on the trade effects of a US–ASEAN relationship. The
effects are found to be small or even insignificant and declining over time. A total
of 14 appendix tables, including US protection and expansion potential predictions for 2001 for all six original ASEAN economies, are also provided. Chapter 4
contains country studies by nine contributors on the economic and trade issues
in these six ASEAN members, and offers suggestions for country-specific policy
and further analysis. Chapter 5 points out the importance of the US market for
ASEAN and of ASEAN’s increasing internal trade and ‘open regionalism’, the
implications of regionalism in Japan, the EU and the US, and the ‘Chinese competitive threat’. Chapter 6 summarises the case for the EAI in terms of economic
realities, an ASEAN defensive strategy, and a US proactive strategy.
In my assessment, the book, in its attempt to lend support to an EAI, provides
two sets of apparently conflicting evidence: it charts the rise of ASEAN as an economic and trading power in a global economy, and argues the need for ASEAN
to engage the US in a trade agreement even though there is little statistical support for this. It is true that, while most Asian economies do need trade with the
US (and the EU) in the quest for advanced technology transfer through FDI, for
example, the share of US trade with (and its importance to) Asia has been declining in recent years. In the special case of Indonesia, which has recorded the fastest
fall in merchandise trade with the US in the past two decades, and is a newcomer
in FTAs, a US–Indonesia FTA is inevitably complicated, with many border and
non-border policy changes and controversial features. It is also well known that
the benign neglect by the US (and the EU) of Asian economies (including both
ASEAN and Northeast Asian economies such as Korea) during their 1997–98 economic and financial crises—and the strong recovery of the major crisis economies
in Asia—have assisted these economies in their regional and global assertion of
power and identity. An EAI seems in this context an admirable but belated and at
best ineffective effort to respond to these developments in Asia. A more relevant
initiative would be an ‘ASEAN or AFTA Plus’ (including an ‘ASEAN or AFTA
plus US’), as discussed by the world’s leaders at the First East Asia Summit in
Kuala Lumpur on 14 December 2005 (Tran Van Hoa and Harvie 2007).
The book has a few editorial problems: in chapter 4, section V is placed after
section VI; chapter 4’s title is a misnomer: ‘Special Issues’ should be ‘CountrySpecific Issues’; the book is on trade and not really on broader economics. In spite
of this, it could be used as background to the study of the EAI, or of some aspects
of the trade relations of the major non-transition ASEAN economies (e.g. Indonesia) to 2001.
Tran Van Hoa
Victoria University, Melbourne
© 2007 Tran Van Hoa
Reference
Tran Van Hoa and Harvie, C. (2007) Regional Trade Agreements in Asia, Edward Elgar, Cheltenham and New York, forthcoming.
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Douglas Arner, Paul Lejot and S. Ghon Rhee (2005) Impediments to Cross-border
Investments in Asian Bonds, Pacific Economic Cooperation Council and
Institute of Southeast Asian Studies, Singapore, pp. xii + 58. S$19.90/US$14.20.
This small book begins with the observation that after the Asian financial crisis
the development of local currency bond markets received high priority ‘as an
alternative vehicle for domestic savings mobilisation and also as a critical means
of mitigating the dual mismatch problems of currency and maturity’. It is not
until the second chapter that the underlying argument emerges: that ‘private sector financing behaviour was the main cause of these [maturity and currency] mismatch problems’.
Although the view has often been expressed that private firms erred by borrowing in foreign currency and on short maturities to finance long-term investments, it
has little appeal for this reviewer. On the contrary, the main cause was incompatible
monetary and exchange rate policies, most obviously in Thailand and Indonesia.
Currency crises are virtually inevitable when central banks hold exchange rates
away from the market equilibrium values consistent with their monetary policies.
The view that the crisis was a central bank problem rather than a private sector
problem provides an explanation for the authors’ observation that, despite the high
priority allegedly given to building local currency bond markets in Asia, the fact is
that ‘tangible achievements have yet to materialise’. Chapters 2 and 3 present data
on Asian bond markets and on inter- and intra-regional capital flows, and show
that both are of little significance, strongly suggesting that the development of such
markets is not seen as important by private sector investors and borrowers. The
history of the development of financial markets is that finance law develops when
market players put pressure on governments to provide any necessary legal underpinning for newly emerging financial products. The present case appears to provide a clear example of what happens when the initiative for such change emerges
from governments and multilateral institutions like APEC: very little.
To the extent that this book is useful, it is in the effort the authors have made
in chapter 4 to draw up a list of ‘blockages’: legal, regulatory and policy shortcomings that have a negative impact on the functioning of financial markets in
general, as distinct from local currency bond markets.
Ross H. McLeod
ANU
© 2007 Ross H. McLeod
David Henley (2005) Fertility, Food and Fever: Population, Economy
and Environment in North and Central Sulawesi, 1600–1930,
KITLV Press, Leiden, pp. xii + 711. €45.00.
This is a remarkable book: remarkable for its length (over 700 pages), but more
importantly for its breadth and depth. It covers the fields of historical demography and historical geography, but also delves quite deeply into sociology, agronomy, epidemiology, colonial history and economic history. It mines the available
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historical sources exhaustively, and engages fully with the academic controversies relevant to the book’s subject matter.
The historical demography of Indonesia has come a long way since Widjojo
Nitisastro wrote his classic Population Trends in Indonesia in 1970. Gooszen has
shown the broad outlines of population growth in the early 20th century, and for
Java, Ricklefs has some indirect evidence for the 17th and 18th centuries, while
Boomgaard’s classic study, Children of the Colonial State: Population Growth and Economic Development in Java, 1795–1880, exploits the Dutch sources expertly. For 19th
century trends outside Java, attempts to discern general patterns have been made
by Fox for the Lesser Sundas, Reid for Sumatra and Knapen for Kalimantan.
Sulawesi has hitherto remained relatively untouched by systematic historical
demographic studies, despite the wealth of archival data available. David Henley’s
study changes that in fundamental ways. Based at KITLV (the Royal Netherlands
Institute of Southeast Asian and Caribbean Studies) in Leiden, Henley had access
to the National Archive in The Hague, as well as to the ‘67 metres of administrative
records’ in the Manado residency archive at the Indonesian National Archive in
Jakarta. In addition, he mined the wealth of material in Christian mission records,
and writings by administrators, missionary anthropologists, ethnographers and
naturalists.
The book begins with an introductory section on Indonesian historical demography, the geography and societies of northern Sulawesi, the history of European
expansion in the region and the historical sources. A chapter follows on economic
patterns, then four chapters on the population data and what they show about
trends in the island realm of Sangir and Talaud, peninsular North Sulawesi and
Central Sulawesi. Three subsequent chapters deal with death and disease, disease control, and the food supply and its relationship to mortality. The book then
moves on to examine fertility, demographic patterns (emphasising regional and
local differences in density and growth), and causes of population growth or stagnation. Finally, there are chapters on vegetation and deforestation, the making of
the landscape and population and environment.
Detailed tables are included on matters such as the population data for each of
the sub-regions covered; historical trends in vegetation cover and deforestation;
and patterns of swidden cultivation. The scope, type, and various indicators of
accuracy are given for each estimate.
At various points through the book, Henley briefly recapitulates what his study
has found. For example, on population change he notes on p. 434 that
The most common chronological pattern seems to have been one of crisis-ridden
quasi-equilibrium, with epidemics and other disasters regularly killing substantial
fractions of the population, but with little or no net growth in the long term.
On the other hand, parts of the region experienced sustained growth over some
periods, and other parts long-term decline.
Explaining such patterns involves coming to terms with major debates that
have long raged in the literature. For example, is it war, disease, famines or other
factors that are mainly responsible for slow population growth or population
decline? What of slavery and slaving raids? What is the relationship between population density and population growth, and what are the mechanisms through
which this relationship is mediated? What were the effects of the labour demands
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of the colonial regime on fertility? To what extent was fertility deliberately controlled through contraception and abortion? Why in many parts of Indonesia was
population concentrated in high inland valleys and plateaux, while the coastlands
were sparsely settled? What was the agricultural ‘carrying capacity’ of the areas
studied? Was the establishment of wet rice farming determined more by population pressure or by the physical conditions of each area? Was there a 17th century crisis of particularly frequent droughts? Why was population density always
higher in Sangir–Talaud than elsewhere in the region?
There is insufficient space in a review of this kind to elaborate on the answers
Henley gives to these questions. Suffice it to say that he engages with all these
issues and others, and provides at least tentative answers, appropriately qualified
because of shortcomings in the data. In doing so, he draws widely on the relevant
international literature as well as that relating to other parts of Indonesia.
One key conclusion drawn in the book deserves mention. Whereas Reid and
others have argued that warfare was the main reason for slow population growth
in the populous states of Java and mainland Southeast Asia, Henley argues that in
northern Sulawesi, disease, poor nutrition and periodic food shortages were far
more important. Fertility was prevented from reaching very high levels by abortion, by long periods of breastfeeding, in some places by frequent separation of
spouses, and in Minahasa and Sangir by relatively late marriage.
In summary, then, this book is a major addition to studies on Indonesian historical demography and historical geography. It deserves the careful attention of
researchers anywhere in the world interested in the balance between population
and resources and the mechanisms through which such balance is disturbed or
reinforced.
Gavin W. Jones
National University of Singapore
© 2007 Gavin W. Jones
Aris Ananta and Evi Nurvidya Arifin (eds) (2004) International Migration
in Southeast Asia, Institute of Southeast Asian Studies (ISEAS), Singapore,
pp. 374. Paper: S$39.90/US$25.90; Cloth: S$69.90/US$44.90.
There is little doubt that the current decade marks the emergence of the subject
of international migration from the shadows to the centre stage of public policy
discussion. The UN General Assembly devoted its High Level Dialogue in 2006
to international migration and development, following the creation by the United
Nations in 2003 of a Global Commission on International Migration. These are
indications of the growing importance of the subject. Globalisation, aging work
forces in rich countries and falling transport costs are some of the key factors fuelling this phenomenon. On the other hand, the surge in migration from less developed to developed countries is raising the tempo of debate in the latter, so that
even in a traditionally migrant-friendly country like the US, political concerns
about job losses for locals, burdening of public services and the perceived threat
to customs and values has, in September 2006, made the lower house pass a bill to
fence the southern border to keep out illegal entrants.
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Southeast Asia is not the region where the maximum extent of international
migration can be witnessed. That honour probably goes either to the US, where
the illegal immigrant population alone stands at 11 million, or to the Indian subcontinent, where unofficial estimates place the number of foreign entrants even
higher. Yet Southeast Asia is one relatively compact region that has witnessed,
in recent times, international migration on a substantial scale and in all its manifestations—regular, irregular, skilled, unskilled, male and female migration. This
makes it an ideal case study for serious students of the subject.
Therein lies the value of International Migration in Southeast Asia, a volume of
essays written by some of the region’s leading scholars on migration and labour
studies. The topics have been well chosen to cover the subject comprehensively,
and include the history of migration in the region; the linkage between migration
and development; national policies of sending and receiving countries; the problem of illegal migrants; and the exploitation of unskilled workers.
Containing both descriptive and analytical approaches to the subject (including a chapter that uses a theoretical paradigm that links migration and investment
at different stages of development), the book is a treasure trove of information on
international migration in Southeast Asia. We learn, for example, that Chinese
migration to Southeast Asia began in the 18th century and prospered during the
colonial period, with many Chinese serving as middlemen between the colonial
powers and the local population. After World War II, when Southeast Asian countries attained independence, these Chinese confronted the same problem faced
by intermediary classes elsewhere. Left behind by a departing colonial power,
they were looked upon with suspicion by locals. However, it is a tribute to the
assimilative policies of the newly independent states of the region that nearly
everywhere they were offered citizenship and genuine integration, and did not
have to face the problem of exclusion that dogged, say, ethnic Tamils in Sri Lanka
or ethnic Biharis in Bangladesh when these countries gained their independence.
The essays also contain important policy insights, many of which are discussed
through the use of vivid examples. For instance, one chapter describes how nearly
100% of Indonesian housemaids in Hong Kong work for Chinese employers,
while up to a fourth of total immigrant Filipino maids in the same city prefer to
serve other Asian and Western families who may be more willing to pay the prescribed minimum wage for this occupation. This difference is explained by official
government policy in the Philippines, which encourages the existence of NGOs
who fight for the rights of the country’s overseas workers. On the other hand, by
adopting a ‘hands off’ approach to the recruitment process, the government of
Indonesia may actually be instituting policies that increase the vulnerability of
its own citizens abroad, thereby playing into the hands of recruiting agencies and
foreign employers.
The appeal of the book is further enhanced by the fact that most of the articles
are politically neutral towards the subject of international migration—they do not
specifically recommend that countries should encourage or discourage migration. The sole exception is the opening chapter, in which the authors attempt to
argue against the international migration of unskilled workers. Unfortunately, the
valuable information, insights and first-rate analysis that the book generally provides are slightly offset by the fact that data used in some of the chapters appear
outdated. In the chapter on remittances, for example, Mexico and Colombia are
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shown as the world’s leading remittance-receiving countries, whereas India and
China have long overtaken the rest in this significant aspect of the international
migration of workers. Similarly, chapter 2, which describes migration in Southeast Asia after World War II, uses some tables that contain data only up to 1994.
On the whole, however, the book is a ‘must-read’ for all scholars and policy
makers interested in this important subject, which is poised to dominate public
policy and public debate in the coming years.
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Pradip Bhatnagar
Technical Support Facility, Group of Fifteen, Geneva
© 2007 Pradip Bhatnagar
Charles A. Coppel (ed.) (2006) Violent Conflicts in Indonesia: Analysis,
Representation, Resolution, Routledge, Oxford and
New York, pp. vii + 325. Cloth: £70.00
Charles Coppel has edited a wonderful collection of essays on contemporary conflict in Indonesia, drawing attention not only to the complexities of violence but
also to the challenges for effective conflict resolution. This book taps into a popular theme of recent scholarship on Indonesia which includes edited volumes by
Colombijn and Lindblad (2002), among others. The Coppel collection builds on
and continues the tradition of high quality research in earlier studies, and is essential reading for any scholar interested in understanding violence in Indonesia.
The collection includes 18 essays, the focus ranging from the May 1998 riots to
the broader conflicts in Kalimantan, Ambon, Aceh, East Timor and Papua. The
essays are written by younger and senior scholars, with nearly half of the contributors from Indonesia. There are a number of gems in the collection: Tim Lindsey’s
analysis of the preman state (one in which gangsters and stand-over criminals
wield considerable influence), Jemma Purdey’s study of the anti-Chinese violence
in Solo (subsequently developed into a book), Nicholas Herriman’s exploration
of sorcerer killings in South Malang, Nancy Peluso’s analysis of violence in West
Kalimantan, James J. Fox’s short essay on a reconciliation ceremony in East Timor,
and Budiawan’s discussion of the narrative of torture in the novel Merajut Harkat
stand out (among a strong field overall) for their originality, analytical rigour or
depth of research. Peluso’s essay, for example, compares the violence in Dayak
communities in the 1960s with that of the 1990s, and shows how the New Order
shaped ethnic identity and history itself served as a legacy underscoring conflict.
The essays on the whole aim to show that violence is not the result of dalang—
puppeteers master-minded by the state—but the product of a broader range of
phenomena, including local actors and the weaknesses of the state.
The collection is unique less for its analysis of why conflict occurs (something
that is arguably not as cohesive in the volume as it might have been) than for the
themes it brings to the study of violence in contemporary Indonesia. One of the
common threads is the idea of representation, whether through the media and
the internet or through text and discourse. The authors collectively show that
how different groups and events are represented affects violence. Stanley’s analytical essay on the role that the media has played in shaping conflict, for exam-
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127
ple, draws attention to both the shortcomings of reporting and the strengths of a
more open press. Similarly, Elaine Tay’s essay assesses the impact of the internet
on the May Chinese riots, illustrating the powerful effect of this new technology
in shaping identity and defining violence. The focus on established patterns of
representation in local communities and new mediums points to an exciting area
of research.
A second theme of note in the volume is the significant attention given to
women, as victims of violence and as agents for conflict reso
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113-127, DOI: 10.1080/00074910701286412
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Bulletin of Indonesian Economic Studies, Vol. 43, No. 1, 2007: 113–27
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BOOK REVIEWS
Hadi Soesastro, Aida Budiman, Armida Alisjahbana, Ninasapti
Triaswati and Sri Adiningsih (eds) (2005) Pemikiran dan Permasalahan Ekonomi
di Indonesia dalam Setengah Abad Terakhir [Economic Thought and Issues
in Indonesia in the Last Half Century], Ikatan Sarjana Ekonomi Indonesia
(Indonesian Economists Association), 5 volumes, pp. 2,335. Rp 1,000,000.
Historical perspective on how an economy develops is of interest when trying
to understand its present state of development. Tracing the evolution of economic thinking is an essential part of that perspective, and policy makers who
understand past debates may avoid repeating the mistakes of their predecessors.
Pemikiran dan Permasalahan Ekonomi di Indonesia dalam Setengah Abad Terakhir is a
collection of academic and media articles covering the development of issues and
thinking on the Indonesian economy over the last half-century. It was published
to celebrate the 50th anniversary of the founding of the Indonesian Economists
Association (Ikatan Sarjana Ekonomi Indonesia, ISEI). The collection’s five main
volumes divide the writings into five periods of Indonesian economic development, each with a volume introduction.
Each volume is organised in thematic sections: System and Basic Principles;
Economic Institutions; Political Economy; Development Planning; Macroeconomics; Agriculture, Industry and Trade; Regional Development; and Socio-economic
Development. Although this may disappoint readers who would prefer a more
chronological development within every volume, it in fact allows interesting thematic comparison among periods. Readers may be able, for example, to see how
issues and paradigms on ‘regional development’ differ between the early New
Order period of the 1970s (third volume) and the latter part of the 1990s (fourth
volume). Indeed, the compilers suggest such an approach to reading the collection in its introductory booklet.
The first volume covers the establishment of the post-colonial Indonesian
economy (1945–59). It touches on issues from institution building to problems in
specific economic sectors. The papers emphasise that the economy ought to be
based on socialist principles, and that its development should follow a ‘bottom-up’
approach.
Apart from providing discussion of the basic system and principles under which
thinkers of the time believed the economy should be developed, the book also helps
to explain Indonesian scepticism about foreign capital. While understandable for
that period, it is surprising that this attitude survives (at least partly) even today.
Another striking inclusion in the book is Hatta’s short article on regional development and autonomy. It stresses that the initial concept of Indonesian development
was to place districts (kabupaten) at the centre of regional autonomy. How this vision
ISSN 0007-4918 print/ISSN 1472-7234 online/07/010113-15
DOI: 10.1080/00074910701286412
© 2007 Indonesia Project ANU
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eventually failed, with Indonesian economic management instead becoming highly
centralised, is an interesting question, probably beyond the scope of the collection.
However, it is remarkable that this approach to regional autonomy is now treated as
a post-crisis breakthrough, when in fact Indonesia is only moving back to an earlier
post-independence concept of development.
Economic policy debate in the early years of independence was characterised by
two conflicting approaches. The nationalists believed the government should have
a central role in managing the economy. The more pro-market thinkers saw the
market mechanism as the driver of the economy, with indirect government intervention through monitoring and regulation. In implementation, policy was driven
mainly by the first group, resulting in a highly centralised economy with regulated
prices, which then failed to send appropriate economic signals to the market. The
volume has very little to say about why that happened, however.
The second volume covers the years known as the periode ekonomi terpimpin (the
‘guided’ economy period) from 1959 to 1966. This time is characterised by highly
nationalistic and revolutionary idealism, and a disregard for basic economic reasoning. As a result of this approach, the economy went into decline, with a dramatic fall in per capita GDP and investment, accompanied by galloping inflation
and huge balance of payments and current account deficits.
Most articles in this second volume discuss economic problems of the period
either by focusing on their causes or by analysing how to overcome them. In general, the analysis points to a need to turn attention back to basic economic principles. Better management of state enterprises, the government budget and the
distribution of rice and oil are particularly emphasised, and there is general agreement about the need to pay attention to the market mechanism and price signals.
Unfortunately, the volume fails to explain why this agreement was not reflected
in policy implementation during the period it covers.
The first two volumes of the collection present various authors’ conceptual
understanding of how the Indonesian economy should develop. Rather than
offering current analysis of the historical situation, the volumes present papers
written by policy makers and academics of the time. This feature is the main contribution of the collection: it guides readers through the evolving thinking behind
the process of economic development in Indonesia.
The third and the fourth volumes represent the ideas, thought and economic
issues of the New Order era from 1966 to 1997. The third volume covers the first
15 years of the period, to 1981, and the fourth covers the years 1982–97, known as
the era of deregulation and economic liberalisation.
The third volume starts with the very basic issue of returning to economic principles and reasoning in managing the economy. These principles had been seriously neglected by the Sukarno regime. Although it was assumed by many that
the economy would be based upon market principles, voices promoting a rather
adapted or modified market system are also heard in the volume.
Among the ideas regularly advocated in this era were the notion of ekonomi
Pancasila, which combined planning with market mechanisms and promoted
the view that cooperatives should be leading players in the economy. At certain
stages of the discussion, the spirit of socialism could still be heard, for example,
in the 1981 article by the late Professor Mubyarto, which urged a re-ordering of
the ‘development trilogy’ to place equality ahead of growth as the first prior-
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115
ity in economic development (the third element of the trilogy being economic
stability).
In the fourth volume, covering the period of deregulation and economic liberalisation, the discussion of the system and basic principles is almost unambiguous. The authors are straightforward about how to carry out structural adjustment
effectively, and how to manage economic policy reform. Readers will note that in
this period questions such as whether an adapted market economy was necessary,
or how to define ekonomi Pancasila, were less often heard than the question of how
to get the price right and let the market work.
In the discussion of economic institutions, the distinctive features of thought
in both periods also seem clear. The substantial discussion of the importance of
cooperatives, their problems and prospects, and of the practical implementation
of these ideas in the form of the widely advocated village cooperatives (Koperasi
Unit Desa) and village enterprises (Badan Usaha Unit Desa), dominates the treatment of economic institutions in the early years of the New Order economy.
In the later period, covered in the fourth volume, the focus is on institutional
change in more free market terms, such as how to accelerate privatisation in the
pursuit of economic efficiency, or how to improve free market institutions such as
capital markets. In this sense, the volume manages to show that the evolution of
ideas runs parallel with the evolution of policies. The period of deregulation and
economic liberalisation from 1982 to 1997 produced policies that touched almost
all aspects of trade, finance and the real sector, and can be seen as the realisation
of ideas that are quite distinct from those of the previous period.
The deregulation of the 1980s and 1990s, especially in the financial sector,
may have helped make the Indonesian economy vulnerable and exacerbated the
1997 financial crisis. Readers may wonder why there are hardly any papers in
the fourth volume that seriously discuss the potential danger caused by excessive deregulation, especially in the financial sector and in debt mismanagement
before the crisis. Had the euphoria of economic liberalisation led economic
thinkers to overlook the vulnerability that it might have created? Could it be
the case that the financial crisis of the late 1990s was completely unexpected and
shocked everyone?
Volume 5 covers the episodes of crisis and economic recovery between 1997
and 2005. The emphasis is on the problems and challenges facing the Indonesian
government during the period of reformasi following the severe economic and
subsequent political crisis. The 55 articles cover a broad range of issues and seem,
not surprisingly, more like an anthology than a book, as the papers are not connected with one another. Moreover, the differences in methodology, approach and
level of analysis across papers make it hard for the reader to gain deeper information on a particular issue. In general, the papers selected here share just one
similarity—the period of study. Adiningsih’s introduction provides a good overview of the key issues of the crisis and recovery period. Unfortunately, it does not
highlight many of the debates and contradictions among the papers. In addition,
only a few papers are mentioned in the introduction, leaving the reader puzzled
about the argument of other papers and their position in the debate.
The crisis generated discussion about the ‘proper’ economic system and the
basic principles that can deliver prosperity to the Indonesian people. In 2000, ISEI
proposed the idea of a ‘managed market concept’ (konsep ekonomi pasar terkelola)
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that promotes private sector involvement in economic activities on the one hand,
and supports a government contribution on the other hand to ensure fairness.
Another basic principle was introduced by the National Economic Council
(Dewan Ekonomi Nasional) in the Gus Dur era (1999 to 2001). The New Indonesian Economy Framework set out 10 basic principles in the areas of the financial sector; a people’s economy; poverty alleviation; education; competitiveness;
and good governance. This idea was followed by a debate on the need to amend
article 33 of the 1945 constitution, which includes the statement that ‘sectors of
production that are important for the country and affect the life of the people shall
be controlled by the state’. The nationalist view, which is critical of the free market
system, was part of the debate on this issue.
One important lesson from the crisis for Indonesia is an awareness of the need
to reform its institutions. Efficiency, transparency and law enforcement are the key
issues for institutional reform, and are discussed in contributions on cooperatives,
state enterprises, and the role of the Commission for the Supervision of Business
Competition. Papers analysing reform of financial institutions focus on the independence and accountability of Bank Indonesia, and on the development of the
Financial Services Authority (Otoritas Jasa Keuangan, OJK) and its relationship to
the central bank. The paper on the latter issue argues that Bank Indonesia should
be responsible for maintaining monetary stability and OJK for prudential safety
and market conduct of the financial sector. A paper on the controversy surrounding the government and central bank policy known as Bank Indonesia Liquidity
Support (Bantuan Likuiditas Bank Indonesia, BLBI) is followed by a discussion
of the performance of the Indonesian Bank Restructuring Agency known as IBRA
or BPPN.
In the political economy section, most of the debate relates to the pros and cons
of IMF involvement in policy and to the foreign debt issue. Differences in the political atmosphere of economic policy during the Soeharto, Habibie, Gus Dur and
Megawati eras are evaluated. Another contribution, which explains the rationale
for reducing the government subsidy on oil prices, stimulated debate on the issue in
the Indonesian media. The political economy of competition policy, competitiveness
and liberalisation is highlighted by another author, and linked with notions of globalisation and rationalisation. Three key issues arise in the development planning
section: methodology; sectoral issues and the role of agriculture as prime mover;
and the role of Bappenas as the development planning agency.
Macroeconomic stability is the key issue during the recovery period. Some
papers focus on the monetary policy agenda, others on fiscal policies. These two
policies brought macroeconomic stability to Indonesia, but without significantly
improving economic growth. This failure stimulates discussion in the microeconomic section. Agriculture-based industry becomes one favoured path. Another
contributor explores the phenomena of de-industrialisation and industry competitiveness, while low competitiveness is examined in one paper on industry
in general and another on textiles. A further crucial issue in this section is trade
arrangements, with contributions analysing liberalisation and the role of the
World Trade Organization. Several papers consider aspects of regional autonomy. The last section covers socio-economic development, with a focus on poverty and income distribution, population and human development, and labour
policy.
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117
This fifth volume would be a good introduction to issues in the Indonesian
economy during the crisis—the individual articles reflect many parts of the
debate—but the volume lacks coherence. Indeed, within all volumes, a better
introduction to each section, that highlighted the essential arguments of all the
papers and their place in contemporary debates, would significantly improve the
collection. It would also help the reader to negotiate the different views among
the authors.
Despite its obvious usefulness, the collection has some limitations. A significant number of typographical errors appear throughout the volumes. It is also
unfortunate that the collection fails to elaborate sufficiently how the concepts discussed relate to actual developments in the Indonesian economy. The articles do
not adequately bridge the gap between the ideas and actual policy implementation in each period. Nonetheless, this collection will be a valuable reference for
students of economic policy and economic thought. Let us hope that policy makers (or perhaps their advisers) will take the time to absorb from these pages some
of the lessons of past failures and successes.
Arief Ramayandi, Arief Anshory Yusuf and Della Temenggung
ANU
© 2007Arief Ramayandi, Arief Anshory Yusuf and Della Temenggung
John Monfries (ed.) (2006) Different Societies, Shared Futures: Australia,
Indonesia and the Region, Institute of Southeast Asian Studies, Singapore, pp. 206. Paper: S$29.90/US$19.90; Cloth: S$49.90/US$29.90.
The bilateral relationship between Australia and Indonesia has been described
variously as ‘a roller-coaster’, ‘a yoyo’ and ‘an elevator’. At times the relations
between these two close neighbours have also been categorised as ‘delicate and
fragile’. The first three metaphors describe a relationship in which there are constant ups and downs, where, in the case of a roller-coaster, the going up tends to
be slow and ponderous and once at the peak the rushing down is fast and furious,
before a slow return to an upward direction. In the second description, bilateral
relations between Jakarta and Canberra are seen to demand special handling, like
transporting a basket of eggs or thin glasses, so that one must not travel too fast
and must try to avoid bumps.
The difficulties in developing, nurturing and managing relations between
Indonesia and Australia—relations that everyone concerned seems to agree are
extremely important—have been attributed to the great differences between these
two neighbours. Probably no two countries are as physically close to one another
as Australia and Indonesia and yet so unalike. Indonesia is an archipelago with a
large population mainly of Austronesian stock, predominantly Muslim and with
a still developing economy, the majority of whose population is poor. Australia is
a continent with a relatively small population that arrived largely through white
immigration, mainly Christian, with a developed economy and a relatively wealthy
population. For decades Australia was seen and saw itself as a white, European
outpost on the fringe of Asia, physically in the region, but culturally, politically and
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economically tied to Europe and later to the United States. Australia felt alien to
and alienated from its rather rough neighbourhood, and constantly threatened.
In the past decade Australia has become more integrated into the Asia Pacific
region. Internally it is now more multicultural, with large migrant groups coming
from Asia and the Middle East, while Australia’s security and economic relations
with Asia have grown much stronger over the years. Relations between Jakarta
and Canberra have also become closer, as the two countries share many common
national and regional interests, as well as valuing each other as friends in international fora. Yet there is an element of prickliness, of unpredictability, in these
essentially close bilateral relations.
Different Societies, Shared Futures: Australia, Indonesia and the Region, a product
of the 23rd Indonesia Update, organised by the Australian National University in
2005, provides valuable insights into the dynamics of relations between Canberra
and Jakarta. It is surprising that, although the Update has become a tradition,
organised annually since the 1980s, the 23rd Update was the first one devoted
exclusively to discussing Indonesia–Australia bilateral relations. The contributors
to the book are well-known scholars on Indonesia, as well as commentators on
and practitioners of Indonesia–Australia relations.
As the title suggests, Indonesia and Australia are very different societies; this is
a given and will always cause some difficulties in their relations, but geographic
proximity dictates that their futures will be inextricably bound together for better or for worse. It is in both countries’ interests to manage relations in ways that
maximise positive outcomes and minimise unavoidable irritations. The book
starts with a succinct and illuminating list of markers by the doyen of Indonesia–
Australia relations, Richard Woolcott, and a comprehensive introduction by the
editor, John Monfries. It is then divided into five parts: Regional Viewpoints;
Security Aspects; Mutual Perceptions and Irritations; The Economic Partnership:
Aid, Economics and Business; and the conclusion.
Each contribution is well thought out, well argued and highly readable. The
discussions at the conference on which this volume was based must have been
very lively. The book’s value lies in its attempt to address the issues in a fairly comprehensive manner and in ways that do not gloss over the problems or become
unrealistically optimistic. It is an honest assessment of the sometimes turbulent
relations across the Arafura Sea, emphasising their importance but recognising
the perennial challenges.
While I do not wish to diminish the significance of the other chapters, those by
former Indonesian Ambassador to Australia, S. Wiryono, and by Paul Kelly are
important for understanding the perspectives of the two countries. The papers
were written in a year when the bilateral relationship was improving, after President Susilo Bambang Yudhoyono’s successful visit to Australia. The president
received a warm welcome and was regarded by many Australian commentators
as the first Indonesian president who genuinely understood Australia. This led
Paul Kelly to remark with foreboding that something was bound to go wrong,
and sure enough not long afterwards Indonesia recalled its ambassador as a mark
of Jakarta’s anger at the granting of asylum by the Australian government to a
number of people fleeing from Papua.
The chapter on security by Hugh White is also worth noting. White warns
about the risks of signing a security agreement without obtaining grassroots sup-
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port from the peoples of Australia and Indonesia. This warning was effectively
ignored by the two governments, which again signed a bilateral security agreement in November 2006 without sufficient prior consultation with their respective
constituents. Time will tell whether this second agreement will suffer the same
fate as the first, revoked as bilateral relations deteriorate, or whether it will act as
an important linchpin in helping to stabilise relations. As Richard Chauvel points
out, the issue of Papua will continue to bedevil Australia–Indonesia relations for
the foreseeable future, and if the Indonesian government mishandles Papua all
bets are off. The excellent conclusion by an eminent student of Indonesia, Jamie
Mackie, rounds up a thoroughly informative and highly readable book. Incidentally, I read this book from cover to cover on the long flight from Jakarta to Washington DC, and my only regret is that I missed the 23rd Indonesia Update.
Dewi Fortuna Anwar
Indonesian Institute of Sciences (LIPI) and The Habibie Center, Jakarta
Johns Hopkins University, Washington DC
© 2007 Dewi Fortuna Anwar
Mohamed Ariff and Ahmed M. Khalid (2005) Liberalization and Growth
in Asia: 21st Century Challenges, Edward Elgar, Cheltenham, pp. 424.
Paper: £35.00 (web price £28.00); Cloth: £75.00 (web price £67.50).
This is a well-written book on the development experiences of eight Asian countries: China, India, Indonesia, South Korea, Malaysia, Pakistan, Singapore and
Thailand. It has eight country chapters along with an introduction, a chapter on
the Asia crisis and a concluding one on lessons for development strategy.
The book is useful on many counts, including the fact that it does not limit
itself to just sub-regions in Asia, but rather cuts across both East and South Asia.
Indeed, any book that purports to discuss Asia and the 21st century surely cannot exclude China or India, the world’s two most populous and fastest growing
countries. In addition, the authors offer a useful description of the development
paths of the selected countries.
The book focuses on four dimensions pertaining to the real sector (trade liberalisation and removing behind-the-border barriers, including anti-competitive
regulations); the financial sector (liberalisation and supervision of financial institutions); the fiscal sector (the need for fiscal discipline); and the external sector (gradual capital account deregulation and issues relating to exchange rate reform).
In some senses the book tries to do too much under the rubric of development
strategy. By attempting to examine all the four dimensions for each of the eight
countries, the discussion at times appears too broad and ends up being much
more descriptive than analytical. It would also have been useful if the authors
had attempted to draw more on the recent analytical literature in the field of
development by Dani Rodrik, Ricardo Hausman and others in thinking about
development strategies in Asia (Rodrik and Hausman 2003). One would also
have liked an evaluation of the four dimensions of development discussed by the
authors relative to the extended Washington Consensus (Rodrik 2006). Similarly,
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in discussing exchange rate regimes for countries, this reviewer would have liked
to see greater use of some of the recent studies of de facto currency regimes.
It is unfortunate that most of the data stop at 2002. Because of this, the authors
are somewhat less bullish on the prospects for India and Pakistan, both countries that have done well in recent times. The book speaks with some authority
on Malaysia and Pakistan in particular, but is found somewhat wanting when it
comes to examining China and India (Kelly, Rajan and Goh 2006). The chapter on
Indonesia is useful, focusing on the crisis period, though once again the fact that
the data stop at 2002 makes the analysis somewhat dated in some areas.
Overall, notwithstanding the above caveats, and if one were to ignore some
rather unnecessary comments on international security issues (e.g. atomic bombs)
or sweeping generalisations on certain countries (e.g. on India the authors start
the chapter by saying: ‘This country experienced three decades of violence and
civil disorder …’), the book offers a good overview of Asian economic development in the selected countries. It would be a useful read for an advanced undergraduate class on Asian economic development.
Ramkishen S. Rajan
George Mason University, Arlington VA
© 2007 Ramkishen S. Rajan
References
Kelly, David, Rajan, Ramkishen S. and Goh, Gillian (eds) (2006) Managing Globalisation: Lessons from China and India, World Scientific Press, Singapore.
Rodrik, Dani (2006) ‘Goodbye Washington consensus, hello Washington confusion? A
review of the World Bank’s Economic Growth in the 1990s: Learning from a Decade of
Reform’, Journal of Economic Literature XLIV (December): 973–87.
Rodrik, Dani and Hausmann, Ricardo (2003) ‘Economic development as self-discovery,
Journal of Development Economics 72 (December): 603–33.
Seiji F. Naya and Michael G. Plummer (2005) The Economics of the Enterprise for
ASEAN Initiative, Institute of Southeast Asian Studies
(ISEAS), Singapore, pp. 443. S$49.90/US$29.90.
This ISEAS book is a study of the Enterprise for ASEAN Initiative (EAI) proposed
by President George W. Bush at the 2002 APEC Annual Summit. The aim of the
EAI is to pursue the establishment of free trade areas (FTAs) between the US and
ASEAN–WTO members who are also in ‘trade and investment facilitation and liberalisation (TIFL ) agreement’ with the US. It is a follow-up to the ASEAN–US Initiative (AUI), and is supported by the East–West Center, Hawaii, the US–ASEAN
Business Council and the ASEAN–US Technical Assistance and Training Facility.
The book has six chapters, each with a short summary.
Chapter 1 gives a good glimpse of the main issues and conclusions in the subsequent chapters. Chapter 2 contains a descriptive (not analytical) study of the trade
(not economic) relationship between the US and ASEAN, where trade involves
goods, services and foreign direct investment (FDI). Useful appendix tables give
1993–2001 data on the disaggregated goods exports and imports of four ASEAN
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countries (Indonesia, Malaysia, the Philippines and Thailand). Chapter 3 discusses
the static or price effects (trade creation and diversion) and the dynamic impact of
FTAs (economies of scale, efficiency improvements, FDI flow changes), and provides empirical evidence on the trade effects of a US–ASEAN relationship. The
effects are found to be small or even insignificant and declining over time. A total
of 14 appendix tables, including US protection and expansion potential predictions for 2001 for all six original ASEAN economies, are also provided. Chapter 4
contains country studies by nine contributors on the economic and trade issues
in these six ASEAN members, and offers suggestions for country-specific policy
and further analysis. Chapter 5 points out the importance of the US market for
ASEAN and of ASEAN’s increasing internal trade and ‘open regionalism’, the
implications of regionalism in Japan, the EU and the US, and the ‘Chinese competitive threat’. Chapter 6 summarises the case for the EAI in terms of economic
realities, an ASEAN defensive strategy, and a US proactive strategy.
In my assessment, the book, in its attempt to lend support to an EAI, provides
two sets of apparently conflicting evidence: it charts the rise of ASEAN as an economic and trading power in a global economy, and argues the need for ASEAN
to engage the US in a trade agreement even though there is little statistical support for this. It is true that, while most Asian economies do need trade with the
US (and the EU) in the quest for advanced technology transfer through FDI, for
example, the share of US trade with (and its importance to) Asia has been declining in recent years. In the special case of Indonesia, which has recorded the fastest
fall in merchandise trade with the US in the past two decades, and is a newcomer
in FTAs, a US–Indonesia FTA is inevitably complicated, with many border and
non-border policy changes and controversial features. It is also well known that
the benign neglect by the US (and the EU) of Asian economies (including both
ASEAN and Northeast Asian economies such as Korea) during their 1997–98 economic and financial crises—and the strong recovery of the major crisis economies
in Asia—have assisted these economies in their regional and global assertion of
power and identity. An EAI seems in this context an admirable but belated and at
best ineffective effort to respond to these developments in Asia. A more relevant
initiative would be an ‘ASEAN or AFTA Plus’ (including an ‘ASEAN or AFTA
plus US’), as discussed by the world’s leaders at the First East Asia Summit in
Kuala Lumpur on 14 December 2005 (Tran Van Hoa and Harvie 2007).
The book has a few editorial problems: in chapter 4, section V is placed after
section VI; chapter 4’s title is a misnomer: ‘Special Issues’ should be ‘CountrySpecific Issues’; the book is on trade and not really on broader economics. In spite
of this, it could be used as background to the study of the EAI, or of some aspects
of the trade relations of the major non-transition ASEAN economies (e.g. Indonesia) to 2001.
Tran Van Hoa
Victoria University, Melbourne
© 2007 Tran Van Hoa
Reference
Tran Van Hoa and Harvie, C. (2007) Regional Trade Agreements in Asia, Edward Elgar, Cheltenham and New York, forthcoming.
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Douglas Arner, Paul Lejot and S. Ghon Rhee (2005) Impediments to Cross-border
Investments in Asian Bonds, Pacific Economic Cooperation Council and
Institute of Southeast Asian Studies, Singapore, pp. xii + 58. S$19.90/US$14.20.
This small book begins with the observation that after the Asian financial crisis
the development of local currency bond markets received high priority ‘as an
alternative vehicle for domestic savings mobilisation and also as a critical means
of mitigating the dual mismatch problems of currency and maturity’. It is not
until the second chapter that the underlying argument emerges: that ‘private sector financing behaviour was the main cause of these [maturity and currency] mismatch problems’.
Although the view has often been expressed that private firms erred by borrowing in foreign currency and on short maturities to finance long-term investments, it
has little appeal for this reviewer. On the contrary, the main cause was incompatible
monetary and exchange rate policies, most obviously in Thailand and Indonesia.
Currency crises are virtually inevitable when central banks hold exchange rates
away from the market equilibrium values consistent with their monetary policies.
The view that the crisis was a central bank problem rather than a private sector
problem provides an explanation for the authors’ observation that, despite the high
priority allegedly given to building local currency bond markets in Asia, the fact is
that ‘tangible achievements have yet to materialise’. Chapters 2 and 3 present data
on Asian bond markets and on inter- and intra-regional capital flows, and show
that both are of little significance, strongly suggesting that the development of such
markets is not seen as important by private sector investors and borrowers. The
history of the development of financial markets is that finance law develops when
market players put pressure on governments to provide any necessary legal underpinning for newly emerging financial products. The present case appears to provide a clear example of what happens when the initiative for such change emerges
from governments and multilateral institutions like APEC: very little.
To the extent that this book is useful, it is in the effort the authors have made
in chapter 4 to draw up a list of ‘blockages’: legal, regulatory and policy shortcomings that have a negative impact on the functioning of financial markets in
general, as distinct from local currency bond markets.
Ross H. McLeod
ANU
© 2007 Ross H. McLeod
David Henley (2005) Fertility, Food and Fever: Population, Economy
and Environment in North and Central Sulawesi, 1600–1930,
KITLV Press, Leiden, pp. xii + 711. €45.00.
This is a remarkable book: remarkable for its length (over 700 pages), but more
importantly for its breadth and depth. It covers the fields of historical demography and historical geography, but also delves quite deeply into sociology, agronomy, epidemiology, colonial history and economic history. It mines the available
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historical sources exhaustively, and engages fully with the academic controversies relevant to the book’s subject matter.
The historical demography of Indonesia has come a long way since Widjojo
Nitisastro wrote his classic Population Trends in Indonesia in 1970. Gooszen has
shown the broad outlines of population growth in the early 20th century, and for
Java, Ricklefs has some indirect evidence for the 17th and 18th centuries, while
Boomgaard’s classic study, Children of the Colonial State: Population Growth and Economic Development in Java, 1795–1880, exploits the Dutch sources expertly. For 19th
century trends outside Java, attempts to discern general patterns have been made
by Fox for the Lesser Sundas, Reid for Sumatra and Knapen for Kalimantan.
Sulawesi has hitherto remained relatively untouched by systematic historical
demographic studies, despite the wealth of archival data available. David Henley’s
study changes that in fundamental ways. Based at KITLV (the Royal Netherlands
Institute of Southeast Asian and Caribbean Studies) in Leiden, Henley had access
to the National Archive in The Hague, as well as to the ‘67 metres of administrative
records’ in the Manado residency archive at the Indonesian National Archive in
Jakarta. In addition, he mined the wealth of material in Christian mission records,
and writings by administrators, missionary anthropologists, ethnographers and
naturalists.
The book begins with an introductory section on Indonesian historical demography, the geography and societies of northern Sulawesi, the history of European
expansion in the region and the historical sources. A chapter follows on economic
patterns, then four chapters on the population data and what they show about
trends in the island realm of Sangir and Talaud, peninsular North Sulawesi and
Central Sulawesi. Three subsequent chapters deal with death and disease, disease control, and the food supply and its relationship to mortality. The book then
moves on to examine fertility, demographic patterns (emphasising regional and
local differences in density and growth), and causes of population growth or stagnation. Finally, there are chapters on vegetation and deforestation, the making of
the landscape and population and environment.
Detailed tables are included on matters such as the population data for each of
the sub-regions covered; historical trends in vegetation cover and deforestation;
and patterns of swidden cultivation. The scope, type, and various indicators of
accuracy are given for each estimate.
At various points through the book, Henley briefly recapitulates what his study
has found. For example, on population change he notes on p. 434 that
The most common chronological pattern seems to have been one of crisis-ridden
quasi-equilibrium, with epidemics and other disasters regularly killing substantial
fractions of the population, but with little or no net growth in the long term.
On the other hand, parts of the region experienced sustained growth over some
periods, and other parts long-term decline.
Explaining such patterns involves coming to terms with major debates that
have long raged in the literature. For example, is it war, disease, famines or other
factors that are mainly responsible for slow population growth or population
decline? What of slavery and slaving raids? What is the relationship between population density and population growth, and what are the mechanisms through
which this relationship is mediated? What were the effects of the labour demands
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of the colonial regime on fertility? To what extent was fertility deliberately controlled through contraception and abortion? Why in many parts of Indonesia was
population concentrated in high inland valleys and plateaux, while the coastlands
were sparsely settled? What was the agricultural ‘carrying capacity’ of the areas
studied? Was the establishment of wet rice farming determined more by population pressure or by the physical conditions of each area? Was there a 17th century crisis of particularly frequent droughts? Why was population density always
higher in Sangir–Talaud than elsewhere in the region?
There is insufficient space in a review of this kind to elaborate on the answers
Henley gives to these questions. Suffice it to say that he engages with all these
issues and others, and provides at least tentative answers, appropriately qualified
because of shortcomings in the data. In doing so, he draws widely on the relevant
international literature as well as that relating to other parts of Indonesia.
One key conclusion drawn in the book deserves mention. Whereas Reid and
others have argued that warfare was the main reason for slow population growth
in the populous states of Java and mainland Southeast Asia, Henley argues that in
northern Sulawesi, disease, poor nutrition and periodic food shortages were far
more important. Fertility was prevented from reaching very high levels by abortion, by long periods of breastfeeding, in some places by frequent separation of
spouses, and in Minahasa and Sangir by relatively late marriage.
In summary, then, this book is a major addition to studies on Indonesian historical demography and historical geography. It deserves the careful attention of
researchers anywhere in the world interested in the balance between population
and resources and the mechanisms through which such balance is disturbed or
reinforced.
Gavin W. Jones
National University of Singapore
© 2007 Gavin W. Jones
Aris Ananta and Evi Nurvidya Arifin (eds) (2004) International Migration
in Southeast Asia, Institute of Southeast Asian Studies (ISEAS), Singapore,
pp. 374. Paper: S$39.90/US$25.90; Cloth: S$69.90/US$44.90.
There is little doubt that the current decade marks the emergence of the subject
of international migration from the shadows to the centre stage of public policy
discussion. The UN General Assembly devoted its High Level Dialogue in 2006
to international migration and development, following the creation by the United
Nations in 2003 of a Global Commission on International Migration. These are
indications of the growing importance of the subject. Globalisation, aging work
forces in rich countries and falling transport costs are some of the key factors fuelling this phenomenon. On the other hand, the surge in migration from less developed to developed countries is raising the tempo of debate in the latter, so that
even in a traditionally migrant-friendly country like the US, political concerns
about job losses for locals, burdening of public services and the perceived threat
to customs and values has, in September 2006, made the lower house pass a bill to
fence the southern border to keep out illegal entrants.
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Southeast Asia is not the region where the maximum extent of international
migration can be witnessed. That honour probably goes either to the US, where
the illegal immigrant population alone stands at 11 million, or to the Indian subcontinent, where unofficial estimates place the number of foreign entrants even
higher. Yet Southeast Asia is one relatively compact region that has witnessed,
in recent times, international migration on a substantial scale and in all its manifestations—regular, irregular, skilled, unskilled, male and female migration. This
makes it an ideal case study for serious students of the subject.
Therein lies the value of International Migration in Southeast Asia, a volume of
essays written by some of the region’s leading scholars on migration and labour
studies. The topics have been well chosen to cover the subject comprehensively,
and include the history of migration in the region; the linkage between migration
and development; national policies of sending and receiving countries; the problem of illegal migrants; and the exploitation of unskilled workers.
Containing both descriptive and analytical approaches to the subject (including a chapter that uses a theoretical paradigm that links migration and investment
at different stages of development), the book is a treasure trove of information on
international migration in Southeast Asia. We learn, for example, that Chinese
migration to Southeast Asia began in the 18th century and prospered during the
colonial period, with many Chinese serving as middlemen between the colonial
powers and the local population. After World War II, when Southeast Asian countries attained independence, these Chinese confronted the same problem faced
by intermediary classes elsewhere. Left behind by a departing colonial power,
they were looked upon with suspicion by locals. However, it is a tribute to the
assimilative policies of the newly independent states of the region that nearly
everywhere they were offered citizenship and genuine integration, and did not
have to face the problem of exclusion that dogged, say, ethnic Tamils in Sri Lanka
or ethnic Biharis in Bangladesh when these countries gained their independence.
The essays also contain important policy insights, many of which are discussed
through the use of vivid examples. For instance, one chapter describes how nearly
100% of Indonesian housemaids in Hong Kong work for Chinese employers,
while up to a fourth of total immigrant Filipino maids in the same city prefer to
serve other Asian and Western families who may be more willing to pay the prescribed minimum wage for this occupation. This difference is explained by official
government policy in the Philippines, which encourages the existence of NGOs
who fight for the rights of the country’s overseas workers. On the other hand, by
adopting a ‘hands off’ approach to the recruitment process, the government of
Indonesia may actually be instituting policies that increase the vulnerability of
its own citizens abroad, thereby playing into the hands of recruiting agencies and
foreign employers.
The appeal of the book is further enhanced by the fact that most of the articles
are politically neutral towards the subject of international migration—they do not
specifically recommend that countries should encourage or discourage migration. The sole exception is the opening chapter, in which the authors attempt to
argue against the international migration of unskilled workers. Unfortunately, the
valuable information, insights and first-rate analysis that the book generally provides are slightly offset by the fact that data used in some of the chapters appear
outdated. In the chapter on remittances, for example, Mexico and Colombia are
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shown as the world’s leading remittance-receiving countries, whereas India and
China have long overtaken the rest in this significant aspect of the international
migration of workers. Similarly, chapter 2, which describes migration in Southeast Asia after World War II, uses some tables that contain data only up to 1994.
On the whole, however, the book is a ‘must-read’ for all scholars and policy
makers interested in this important subject, which is poised to dominate public
policy and public debate in the coming years.
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Pradip Bhatnagar
Technical Support Facility, Group of Fifteen, Geneva
© 2007 Pradip Bhatnagar
Charles A. Coppel (ed.) (2006) Violent Conflicts in Indonesia: Analysis,
Representation, Resolution, Routledge, Oxford and
New York, pp. vii + 325. Cloth: £70.00
Charles Coppel has edited a wonderful collection of essays on contemporary conflict in Indonesia, drawing attention not only to the complexities of violence but
also to the challenges for effective conflict resolution. This book taps into a popular theme of recent scholarship on Indonesia which includes edited volumes by
Colombijn and Lindblad (2002), among others. The Coppel collection builds on
and continues the tradition of high quality research in earlier studies, and is essential reading for any scholar interested in understanding violence in Indonesia.
The collection includes 18 essays, the focus ranging from the May 1998 riots to
the broader conflicts in Kalimantan, Ambon, Aceh, East Timor and Papua. The
essays are written by younger and senior scholars, with nearly half of the contributors from Indonesia. There are a number of gems in the collection: Tim Lindsey’s
analysis of the preman state (one in which gangsters and stand-over criminals
wield considerable influence), Jemma Purdey’s study of the anti-Chinese violence
in Solo (subsequently developed into a book), Nicholas Herriman’s exploration
of sorcerer killings in South Malang, Nancy Peluso’s analysis of violence in West
Kalimantan, James J. Fox’s short essay on a reconciliation ceremony in East Timor,
and Budiawan’s discussion of the narrative of torture in the novel Merajut Harkat
stand out (among a strong field overall) for their originality, analytical rigour or
depth of research. Peluso’s essay, for example, compares the violence in Dayak
communities in the 1960s with that of the 1990s, and shows how the New Order
shaped ethnic identity and history itself served as a legacy underscoring conflict.
The essays on the whole aim to show that violence is not the result of dalang—
puppeteers master-minded by the state—but the product of a broader range of
phenomena, including local actors and the weaknesses of the state.
The collection is unique less for its analysis of why conflict occurs (something
that is arguably not as cohesive in the volume as it might have been) than for the
themes it brings to the study of violence in contemporary Indonesia. One of the
common threads is the idea of representation, whether through the media and
the internet or through text and discourse. The authors collectively show that
how different groups and events are represented affects violence. Stanley’s analytical essay on the role that the media has played in shaping conflict, for exam-
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ple, draws attention to both the shortcomings of reporting and the strengths of a
more open press. Similarly, Elaine Tay’s essay assesses the impact of the internet
on the May Chinese riots, illustrating the powerful effect of this new technology
in shaping identity and defining violence. The focus on established patterns of
representation in local communities and new mediums points to an exciting area
of research.
A second theme of note in the volume is the significant attention given to
women, as victims of violence and as agents for conflict reso