Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 00074910500072773
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: (2005) Book reviews, Bulletin of Indonesian Economic Studies, 41:1,
103-117, DOI: 10.1080/00074910500072773
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Bulletin of Indonesian Economic Studies, Vol. 41, No. 1, 2005: 103–17
BOOK REVIEWS
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M. Chatib Basri and Pierre van der Eng (eds) (2004), Business in Indonesia:
New Challenges, Old Problems, Institute of Southeast Asian Studies, Singapore,
pp. 276. Paper: S$39.90/US$28.50; Cloth: S$59.90/US$43.90.
The democratic transition in Indonesia has had large implications for business
and therefore for the economy. It has expanded the influence of popular suspicions of business and the market economy. It has allowed expression of ethnic
jealousies and tensions that have the potential to encourage official control of the
operation of the market economy. It has rendered policy making less decisive,
more uncertain in outcome, and less stable over time.
These tendencies had been widely anticipated, and so the business community
had expected that the replacement of authoritarian by democratic government
would be associated with lower levels of investment and economic growth, and
less economic stability. Some of the expectations have been realised. And yet the
reality has been more complex. Economic performance, while in most respects
weaker than at the long high tide of authoritarianism, has been rather stronger
than business had predicted, and has shown some promise of improvement as
the political community learns its way through the new relationships between
polity and economy.
Business in Indonesia: New Challenges, Old Problems explores the business realities of Indonesia’s democratisation, on the eve of the second elections of the modern democratic era. One of its editors is a brilliant young Indonesian economist
who is a senior university researcher and also provides economic advice to the
new government. The other is a scholar based at the Australian National University, who has brought the historian’s long perspectives to examination of the tensions between political perceptions and preferences, and the desires and perhaps
the needs of the private business sector in Indonesia. Together, the editors have
assembled an interesting and varied picture of some of contemporary Indonesia’s
more important but less frequently discussed problems.
The book is a worthy product of the fruitful and long-standing collaboration
between the Australian National University’s Indonesia Project and the Institute
of Southeast Asian Studies.
This is a wide-ranging, interesting and authoritative book on business in democratic Indonesia. Some chapters describe Indonesian economic performance in
the years since the financial crisis that triggered the collapse of the Soeharto government; some discuss the policies that have determined that performance; some
focus on the underlying political forces that have generated the outcomes; and
several present suggestions for improvement in policies and performance.
Van der Eng’s introductory chapter informs us that the cry for reformasi was
not a call for economic reform. And yet reformasi had large implications for all
ISSN 0007-4918 print/ISSN 1472-7234 online/05/010103-15
DOI: 10.1080/00074910500072773
© 2005 Indonesia Project ANU
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aspects of economic life. One main outcome was a more inward-looking economy, with many old micro-economic problems rendered more difficult than
before. This and other chapters note that the corruption that had been the bane of
business under the New Order had become even more damaging. On the other
hand, the turmoil in the macro-economy at the time of the collapse of the authoritarian government had been replaced by a tolerable and improving stability.
Jones’s assessment of the political situation emphasises the dominance of the
prosaic, local and internal. While the Iraq war had heightened anti-American or
anti-Western feelings, these were not main themes. The Indonesian reality denied
the contemporary Western world’s tendency to see Indonesian politics through
the lens of the international war on terror. Jones is pessimistic about the focus on
prosaic, local and internal problems leading to their effective management.
Basri’s chapter on the macro-economy alerts us to the compexity of the economic reality. It warns of adverse consequences should economic affairs be left to
drift too long, as had been the case in 2003 and early 2004. The many weaknesses
in policy were reflected especially in low private investment and poor export performance. The end of the IMF program put in place during the financial crisis had
been an occasion for constructive reflection on policy. Improved government performance was an essential precondition for sustained economic improvement,
and limited progress so far would leave the big determinants of future performance in the hands of a new government.
One of the strengths of the book is Dhume’s elegant discussion of how democratisation had allowed the expression and heightened influence of ancient tensions in the interaction between Islam, ethnicity and the market economy. We are
reminded that ‘one of the fundamental freedoms offered by democracy is the
freedom to make bad policy so long as it is good politics’. Dhume notes the
restraint with which this freedom has been exercised, and wonders whether it
will persist.
Castle’s private sector perspective leaves us in no doubt about the extent of the
problems in the early years of the new democracy. He sees much ambivalence in
the polity about whether private investment and especially foreign investment
are really welcome. Resolution of this basic issue is a precondition to improved
economic performance.
Several chapters travel by different routes to the conclusion that the traded
goods sectors of the economy, including labour-intensive manufactures, which
had contributed hugely to employment and incomes growth in the dozen years
before the financial crisis and the political system transition, have performed
especially poorly in recent years. Manning’s authoritative discussion of the
labour market ascribes some of the decline to misplaced hopes for regulation as
a means of raising the living standards of workers.
And yet a theme through many chapters is that things could have been worse.
The political doubts about ‘free fight capitalism’ were bound to emerge as
arbitary intervention in business affairs once the authoritarian lid had been lifted.
Pressures for administrative devolution had been inevitable after the extreme
centralisation of the Soeharto years. Difficult though these developments had
been for business, the outcomes had mostly been moderate. The fact that growth
could continue in these most difficult of times, albeit at a rate well below the
golden growth years of the New Order, held out hope for improvement.
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A book about business can glaze the eyes of readers who are interested in the
big stories of political and economic development. This one will hold the attention of many with general interests. In this book, the problems of business are
placed in their interesting and important context, as central determinants and
outcomes of Indonesia’s struggle for the restoration of rising living standards and
the entrenchment of democracy.
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Ross Garnaut
ANU
Richard Robison and Vedi R. Hadiz (2004), Reorganising Power in Indonesia: The
Politics of Oligarchy in an Age of Markets, RoutledgeCurzon, London and New
York, pp. xx + 304. Paper: £19.99; Cloth: £60.00.
‘Oligarchy’ is defined here as ‘any system of government in which virtually all
political power is held by a very small number of wealthy ... people who shape
public policy primarily to benefit themselves financially ... while displaying little
or no concern for the broader interests of the rest of the citizenry’ (pp. 16–17). The
authors’ main argument is that Soeharto created such an oligarchy, and that
although the economic crisis of 1997–98 led to his demise, the oligarchy had by
then taken on a life of its own, and has since been engaged in a struggle to
reassert and consolidate its earlier position within some new political system.
The book consists of four main sections. Part I sets out some theories of economic and political change, and discusses the case of Indonesia briefly within this
context. The authors describe how the oligarchy emerged during the first 17 years
of Soeharto’s New Order—how ‘powerful officials harnessed their possession of
public office and their control of strategic economic gateways to their collective
private interests’ (p. 14). In Part II, they discuss how the system worked: how
markets were hijacked (chapter 3), how the political regime was captured (chapter 4), and how civil society was systematically disorganised so that it could not
threaten the regime (chapter 5).
Part III focuses on the crisis of 1997–98—the ‘fatal collision of [the] politicobusiness families’ oligarchy with global capital markets’ (p. 15)—which resulted
eventually not only in economic catastrophe (chapter 6), but in political unravelling (chapter 7). The gist of the story is that most components of the oligarchy he
created had become more resilient than Soeharto himself. When the crisis hit, it
‘weakened the coherence of the complex alliance of officials and business that …
underpinned the New Order’ (p. 166). The oligarchy then came to regard its creator as dispensable, and its constituents’ only concern was how they could protect their individual positions ‘by reorganising themselves within a new regime
and with new allies’ (p. 166).
Part IV deals with the struggles to reorganise economic and political power in
circumstances in which ‘elections, political parties and parliament have become
the arenas of power, and in the context of alliances with new political players constituting social and economic interests formerly at the fringes of power under
Soeharto’ (p. 16). The concluding chapter asks whether the oligarchy can survive,
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or whether democratic constitutionalism can transform the nation, concluding—
pessimistically but plausibly—that ‘oligarchies rather than markets will prevail’
(p. 265).
The book succeeds admirably as an explanation of how Soeharto fashioned a
system of government that generated enormous benefits for the oligarchy over
some three decades. (It also delivered rapid economic advancement to the public
at large, but this aspect is largely ignored here.) The authors clearly document
how Soeharto constructed a seemingly unassailable regime through a combination of co-optation and repression, making skilful use of Indonesia’s natural
resource wealth and of the capacity of government to extend economic privileges
to supportive individuals and institutions. At first he relied heavily on military
support, but his steadily expanding influence over promotions eventually culminated in his control over, rather than dependence on, the military. By repression
of civil society, and especially the nominally democratic process, he was able to
perpetuate his hold on power. And by bestowing a wide range of valuable privileges on a select group of business people (whose enterprises were thereby transformed rapidly into giant conglomerates) he generated a steady flow of rents that
were used to reinforce the regime further—at least for as long as the economy
remained healthy.
The book is described, somewhat extravagantly, as ‘a study of the vast and bitter struggles that accompany the spread of market capitalism and the forging of
those economic and political regimes within which it is defined’—processes that
are ‘widely regarded as steps in the inevitable and inexorable triumph of liberal
markets, democracy and legal–rational forms of bureaucratic authority’(p. 3). It is
the debunking of the latter implied premise—supposedly the received wisdom of
‘neo-liberal’ economists and political scientists—that the authors claim as their
special contribution. ‘Neo-liberals’ are mentioned explicitly over 90 times in a
protracted effort to persuade the reader that their views of the world are erroneous. The economists are criticised for their alleged belief that market-friendly
economic reforms lead inevitably to the destruction of economic privilege, the
political scientists for their alleged belief that democratic reforms lead inevitably
to better governance.
The reality has certainly been different. Deregulation of markets and more
intensive interaction with the global economy under Soeharto were accompanied
by the simultaneous strengthening of the position of the oligarchy, and the more
recent opening up of the democratic process to competition among numerous
political parties has done little to offset this. In short, ‘even destructive economic
shocks and … the collapse of the Soeharto regime itself, have not dismantled the
system of power focused around the private expropriation of public authority’
(p. 3).
It was not just young students who naïvely imagined that getting rid of Soeharto was all that was needed to usher in a new era in which honest and capable
politicians would be freely elected by the people, and would actively represent
their interests. At least some from the economic and political intelligentsia held
similar views (including presidential aspirant Amien Rais, p. 28), and the authors
are well justified in drawing attention to this. But they have greatly exaggerated
the extent to which such views are actually held by serious observers. Most socalled ‘neo-liberal’ economists would indeed argue in favour of deregulation, pri-
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vatisation, the freeing up of trade and investment flows and so on, without being
under any illusion that such policies would be meekly accepted by the vested
interests threatened by them. The principal–agent problem that confounds
attempts to ensure good public sector governance is very familiar to economists,
who see the solution to it in the design of better mechanisms of government
(involving much more than just free elections) rather than in changes to particular economic policies. No economist that I know believes that the reform process,
once started, is ‘inexorable’. I suspect that many political scientists might protest
that their views also appear here in grossly misleading caricature.
Ross H. McLeod
ANU
Colin Brown (2003), A Short History of Indonesia: The Unlikely Nation?,
Allen & Unwin, Sydney, pp. xviii + 270. Paper: A$29.95.
Short histories of Southeast Asian countries, of which there have been a number
over the years, provide an opportunity for an author to reflect on changing perceptions of the past. Colin Brown’s short history of Indonesia is one of a new
series edited by Milton Osborne (whose own short history of Southeast Asia has
remained an influential introduction to the region over the 25 years since its first
edition). Its subtitle, ‘The Unlikely Nation?’, gives an indication of the main thrust
of his argument. Brown opens with a definition of ‘Indonesia’ as the state existing at the end of the 20th century, but he recognises that, just as its emergence may
have been the result of an unlikely process, its future may also be problematical.
Brown’s account is cast in narrative form, with perhaps half of the text—the
first five chapters—taking the story up to the end of the 19th century. After a brief
survey of the physical, cultural and ethnic diversity of the archipelago and of the
trade that flowed through the islands and brought them into early contact with
India to the west and China to the north-east, the writer proceeds, in a second
chapter, to sketch the rise of indigenous states from perhaps the 5th to the 14th
century—Srivijaya, Mataram, Kediri, Majapahit. Three more chapters cover the
‘age of commerce’ (borrowing the term from Anthony Reid), the spread of Islam,
the growth of European commercial activity—Portuguese, Dutch and British—
and the establishment of European empire over the course of the 18th and 19th
centuries.
Brown’s periodisation follows, in broad outline, the conventional picture
though, more than most, he sees the Java War (1825–30) as marking a major
watershed in Indonesian history, separating a period when Javanese states were
independent political entities from the subsequent period in which they were
increasingly absorbed into the colonial state (p. 78). At the same time the narrative form allows some reference to alternative emphases. He notices, for example,
the classical debate about the nature of Indian influence. Was this imposed from
without or borrowed from within? Similarly he refers to differing accounts of the
character of the centralised and hierarchical inland kingdoms of Java (p. 22) and
of the geographical extent of the kingdom of Majapahit (p. 26).
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The text makes clear Brown’s own judgment on these and other debates and
his bibliographical notes provide, in general, the main sources for his account.
However, he does not link these sources specifically to his narrative and, where
alternative interpretations are in question, he does not identify the contending
authorities. For example, given the significance of the debate, extending from the
1930s to the 1970s, about the importance of external versus internal forces in
shaping local societies, and hence about the autonomy of Southeast Asian history,
it is surprising that he makes no specific mention of J.C. van Leur, John Smail and
other contributors to that debate (pp. 15–17). Similarly with his treatment of the
nature of the Javanese kingdoms and of the Dutch East India Company’s gradual
absorption of these into its expanding territorial system. The Company, he
argues, in ruling through existing authorities, was creating what it wrongly
believed had always been the case (p. 59). One might have expected some reference here to Heather Sutherland’s The Making of a Modern Bureaucratic Elite: The
Colonial Transformation of the Javanese Priyayi and to the account by M.C. Ricklefs
of the division of the realm in his Jogjakarta under Sultan Mangkubumi, 1749–1792.
And the treatment of political authority in Minangkabau should make reference
to J.E. Drakard’s A Kingdom of Words.
One could point to other omissions from the volume’s Bibliographical Essay.
However these are niggles. The narrative itself is concise and clear and offers the
reader a useful introduction to Indonesian history.
The remaining chapters deal with the 20th century. Here Brown adopts a rather
unusual periodisation in identifying the successive stages in his story. The conventional picture, following the pattern set by Kahin’s Nationalism and Revolution
in Indonesia, sees nationalism as a natural response to colonial rule, and the subsequent struggle for independence as a heroic but expected outcome. For Brown
the outcome was never a foregone conclusion. He treats the period from 1900 to
the end of the Japanese occupation as one continuous process. A single chapter
entitled ‘Times of Change’ examines changes in the character of Dutch policies
and colonial society after 1900, and traces the rise of a nationalist movement and
Dutch efforts to contain it. It then proceeds immediately to Japanese rule and its
impact on different elements within Indonesian ranks, culminating in the proclamation of independence in August 1945.
The next chapter, ‘From Revolution to Authoritarian Rule, 1945–1957’, combines treatment of the struggle leading to the Dutch transfer of sovereignty in
1949 with the early years of independence. Differences in nationalist ranks during the revolution are presented as continuing into the early years of independence when political divisions prevented the emergence of an overall unity of
purpose until Sukarno and the army, in partnership, introduced the authoritarian
forms of Guided Democracy.
Finally the closing years of Sukarno’s presidency are treated as essentially continuous with the authoritarian regime of Soeharto. Noticing Soeharto’s early economic achievements, Brown goes on to examine the emergence of the regime’s
authoritarian techniques of control—institutional and ideological—designed to
reduce the level of political activity.
These chapter divisions reflect the author’s overall picture of an unlikely
nation. It is a picture of successive attempts—by the Dutch, the Japanese, Sukarno
and the army, and then Soeharto’s New Order—to contain the divisions cutting
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across the notion of ‘Indonesia’. The point is underlined in the final chapter. After
a brief account of the developments following the fall of Soeharto the story concludes before the elections of a new parliament and a new president in 2004. A
final judgment is that political power is now more dispersed than ever before,
that the presidency itself is weaker than it was and that, with major question
marks over the future of Aceh and West Papua, the continued unity of Indonesia
itself may be in doubt.
Any history taking the story up to the present is likely to be caught up by subsequent events. In this case, until the new President, Susilo Bambang Yudhoyono,
establishes his own style and direction, the Megawati presidency is as good as
any place to stop.
John Legge
Monash University, Melbourne
Yunita Triwardani Winarto (2004), Seeds of Knowledge: The Beginning of Integrated
Pest Management in Java, Monograph 53/Yale Southeast Asia Studies,
New Haven CT, pp. xxi + 429. Paper: US$28.00; Cloth: US$39.00.
This book is the result of exhaustive research conducted on the north coast of
West Java during the early 1990s, a watershed period in Indonesian agriculture
with sweeping changes to the way the nation’s rice staple was produced. The
Green Revolution of the late 1960s had resulted in a dramatic intensification of
wet-rice cultivation, especially in Java and Bali. Double and triple cropping of
new high-yielding varieties required massive inputs of chemical fertilisers, but
was also accompanied by saturation spraying of pesticides. The disastrous environmental impact was soon apparent. During several growing seasons throughout the 1970s, resistant insect pests such as the brown plant hopper (wereng)
devastated the rice crop in many areas. As a result, a presidential ban on the use
of the most dangerous pesticides was announced in November 1986, along with
the government’s decision to embrace the principles of integrated pest management (IPM) as recommended by FAO (Food and Agriculture Organization) scientists. Crash training programs for agricultural officials and field workers were
conducted as a basis for the establishment of field schools for rice farmers—
‘schools without walls’—drawing on discovery-based learning techniques.
This is the setting for Yunita Winarto’s remarkable book, a landmark study that
makes a major contribution to understanding how this difficult transition played
out at the village level, as farmers were pressed to implement a dramatic shift in
their agricultural practices, while struggling from one season to the next to secure
healthy crops and achieve satisfactory yields. The fundamental issue that the
book seeks to address is the extraordinarily complex process by which new
knowledge is acquired.
Casual observers of the book’s title may be surprised to discover that the
author is neither an agronomist nor a geographer but a social anthropologist.
This was clearly no barrier to her capacity to master her field of inquiry, as the
book ranges over many aspects of rice cultivation: the irrigation network, land
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tenure arrangements, the seasonal tasks of cultivation, the selection of rice varieties, and the application of fertilisers and pest control measures. The physical
and social setting of the particular villages that were the target area of her study
is presented in considerable detail. Focus then shifts to the fortunes of one particular group of 25 rice farmers from a single hamlet—almost all related by blood or
marriage ties—who were selected to take part in an IPM field school that the
author was able to observe.
Drawing on detailed records of the discussions that occurred during the
school, and on the arguments and debates that continued outside the formal sessions, Winarto provides a graphic account of the entire process. During guided
learning experiences based on field observation, the farmers began to identify
those pests dangerous to their rice crops and to distinguish them from useful
predator insects and animals that can actually assist farmers to achieve a natural
balance but can be destroyed by the indiscriminate application of pesticides. The
farmers gradually became aware of the problems associated with entrenched concepts such as regarding pesticides as ‘medicine’ (obat) instead of as ‘poison’
(racun). Consequently, they began to question accepted wisdom: the old slogan
‘have the umbrella ready before it rains’ (sedia payung sebelum hujan) was gradually replaced with ‘if there is no illness, spraying medicine is old fashioned’ (kalau
enggak ada penyakit, nyemprot obat itu kuno).
There is an absorbing account of events during the growing seasons after the
IPM training concluded, as the farmer participants struggled to implement their
own individual versions of the new knowledge. The entire process to acquire and
then to apply such knowledge is neither easy nor straightforward. The author’s
painstaking and meticulous study draws out the human frailties of all those
involved, and the degree of difficulty faced by the farmers as they began to take
responsibility for making hard decisions about their farming methods. Apart
from their own doubts and confusion, these farmers had to face the scorn of
neighbours who had not taken part in the IPM field school and who continued to
apply pesticides liberally on adjacent rice paddies. There was also the problem of
dealing with powerful bureaucratic forces, often with economic interests divergent from those of the rice farmers. One telling incident involves the attempts by
some of the farmers to negotiate a partial version of the official credit package
intended to support intensive rice cultivation. Armed with their new understanding of IPM principles, the farmers argued—unsuccessfully—that they should not
be forced to accept the pesticide component of the package.
Winarto describes a visit by a group of the most persistent and committed
farmers to a government agricultural research station where they were able to
engage with the scientists and seek answers to some of their most pressing problems. Ironically, although this facility is situated only a few kilometres from their
village, it had never before been visited by any of these farmers.
Numerous maps and line drawings supplement the text, and several appendices with material translated from official documents provide additional
explanatory details about the IPM program. The superb duotone photo on the
front cover suggests that more of the author’s field photographs would have been
a welcome addition to enhance the book’s themes. The glossary is rather perfunctory, given the long list of Indonesian language terms throughout the text, but a
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more serious omission is the publisher’s failure to ensure that the volume is complemented by a proper index.
This sympathetic ethnographic account of the farmers’ struggles will be
absorbing reading for anyone interested in the history of Indonesian agriculture.
But the central themes about the process by which new knowledge is gained and
then passed on to others at the micro level of the village will challenge and provoke anyone interested in issues of social change and development, especially in
Indonesia. One final point: such a masterful study depends upon a lengthy and
sustained period of fieldwork. As university managers, under pressure from
funding agencies, adopt a factory mentality to the higher degree process and seek
to apply strict time limits to candidature, it will become increasingly difficult to
sustain such research conditions.
John Maxwell
ANU
François Ruf and Frederic Lançon (eds) (2004), From Slash and Burn to
Replanting: Green Revolutions in the Indonesian Uplands,
World Bank Regional and Sectoral Studies, Washington DC, pp. xix + 341.
Paper: US$25.00 from the World Bank.
This book is an interesting mixture. The editors state that it is based largely on
three days fieldwork undertaken in 1996 in each of 40 small regions of Indonesia.
However, in addition to chapters based on these brief case studies, carried out
mainly in Java and the dry environments of West Timor and Flores (NTT), its core
consists of detailed research by the CIRAD group (Centre du Coopération Internationale en Recherche Agronomique pour le Développement, a French government agricultural development research institute) into smallholder coffee, rubber
and cocoa in Sumatra, Kalimantan and Sulawesi. Short chapters on specific innovations in parts of those areas (such as ginger and vanilla in the coffee lands of
Kepahiang, Bengkulu, and cocoa in Malinau, East Kalimantan) benefit from the
authors’ deep understanding of the systems concerned.
A quite lengthy first chapter introduces the major themes, definitions and
hypotheses. The leading theme is the ability of ‘upland’ agricultural smallholders
to innovate, an ability said to be often overlooked by government authorities and
project organisers. Like the ICRAF (World Agroforestry Centre) research of the
same name, their innovations are characterised as ‘alternatives to slash and burn’,
with a strong emphasis on the shift from the food-based swidden to perennial
tree crops. This is seen as happening in two steps: the initial plantings benefit
from the swidden’s fertile and disease-free environment, which the authors term
‘forest rent’. Once access to forest is no longer available, further innovations must
take place, intensifying tree crop production by incorporating chemical inputs,
new varieties, improved planting materials or a different agroforestry mix. Natural resources may be ‘adjusted’, in terrace or hedgerow construction. These
innovations, which often require some capital, are termed a ‘spontaneous Green
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Revolution’ in the uplands (p. 5). Defining the ‘uplands’ is not simple: the
authors’ working definition includes all agricultural systems that are not swampbased or irrigated, specifically shifting cultivation, agroforests and non-irrigated
dryland systems, with no regard to elevation. This leads to some illogical descriptions, with the rubber-growing peneplains of Sumatra and the cocoa and coconut
plains in Sulawesi being considered ‘uplands’.
The next 10 chapters present short case studies, covering only 100 pages in all.
The first four deal with livestock, on-farm reservoirs, upland food crops and specialised vegetable production. These studies relate particularly to conditions in
Java (plus a few in West Timor) and appear the least important, but are included
to secure a more comprehensive picture. The following six studies include various innovations featuring perennial crops, especially coffee (three studies), cocoa,
cashew and oranges.
The three chapters on coffee include two on ancillary crops introduced by particular individuals and one on the adoption of a new variety. They may be read
together with chapter 16 on replanting coffee. Farmers wanting to keep producing coffee but without access to extra land must either shorten or lengthen the
cultivation cycle. To lengthen the cycle they use shade trees and carefully prune
their coffee bushes. Shortening the cycle means extra replanting costs and no
crop for two years, but eventually higher yields. Difficult and costly access to
land is one reason for replanting, with coffee yields doubling if forest ‘rent’ is
available.
Chapter 12 is a long and useful discussion on rubber, and especially the problems of improving the productivity of the biodiverse but low-yielding ‘jungle
rubber’ forests. Unreliability in the clones of higher-yielding cloned rubber, even
from government projects, has increased the difficulties, though the demand for
improved seedlings is high. The author (Penot) suggests inter-planting of cloned
rubber seedlings with useful trees to mimic the diversity of jungle rubber, but
such rubber agroforestry systems are still experimental. Despite the expansion of
oil palm into rubber areas, Penot suggests that rubber and oil palm should be
seen as complementary, rather than competitive.
Chapters 13–15 and 17 are concerned with cocoa, predominantly in Sulawesi,
but include short comparisons with Halmahera (Maluku) and Côte D’Ivoire. In
these four chapters Ruf and Yoddang strongly urge the need for chemical inputs:
pesticide is recommended to control the pod borer pest, which spread in Sulawesi
at an accelerated rate after the 1997 drought; fertiliser is needed to ensure high
yields and herbicide (Roundup) to eliminate Imperata (an aggressive grass that
colonises cleared forest areas). Sulawesi farmers adopted a high frequency of harvesting and more intense use of fertiliser and herbicides than other cocoa growing countries, partly because fertiliser was cheap in the early years of the
industry. Ruf concludes with a general model: ‘A basic tree crop, possibly intercropped with another tree or trees and combined with fertiliser, pesticides and
herbicides, remains the key option towards a spontaneous Green Revolution in
the uplands’ (p. 257).
The most important finding of the book’s conclusion is that real innovations
owe more to smallholders and traders than to official projects. Smugglers will
bring information, planting material and even pesticide across borders, while
migrants are often leading innovators, as are influential individuals. Estates
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unwilling to transfer their technology will unwittingly ensure its rapid dissemination.
Most chapters contain information on prices, yields and profits, while annexes
2–4 have details of cocoa farm budgets on the Sulawesi hills and plains. Cultural
aspects of the transitions discussed are hardly considered. On the environmental
effects and sustainability of the high input ‘Green Revolution’ Ruf is cautious,
suggesting that herbicide use could be decreased if Gliricidia sepium, a small tree
with a particular ability to shade out Imperata grass, was employed, while some
chemical fertilisers (which have become very expensive in Indonesia) could be
replaced by chicken manure. He is less cautious in strongly advocating pesticides
(especially Malaysian pesticides) to eliminate the cocoa pod borer, despite various projects advocating alternative techniques, such as frequent harvesting, to
break the life cycle of the pest.
While it is somewhat repetitive in putting over its ‘message’ and although
some of the short research projects are quite limited (and dated), I nevertheless
found this book to contain useful material. The ‘sustainability’ of the paperback
volume itself is dubious, however, as my copy is already falling apart.
Lesley Potter
ANU
J. Strauss, K. Beegle, A. Dwiyanto, Y. Herawati, D. Pattinasarany, E. Satriawan,
B. Sikoki, Sukamdi and F. Witoelar (2004), Indonesian Living Standards Before
and After the Financial Crisis: Evidence from the Indonesia Family Life Survey,
Rand Corporation Center for the Study of the Family and Economic
Development and Institute of Southeast Asian Studies, Singapore,
pp. xxii + 400. Paper: S$39.90/US$25.90.
This book is probably the most comprehensive collection of empirical analyses of
the impact of the financial and economic crisis on living standards and poverty
in Indonesia. Based on three rounds of the Indonesia Family Life Survey (IFLS)
conducted in 1997, 1998 and 2000,1 the book reports on field research at the
household level conducted by several foreign researchers attached to the Rand
Corporation, working in cooperation with Indonesian researchers in Jakarta and
Yogyakarta. The authors (a remarkable nine in all!) conclude that, for the most
part, household living standards, and the incidence of poverty, had recovered to
pre-crisis levels or better by 2000. This finding is not new. But the book provides
1This
book focuses on findings from the second and third rounds of IFLS conducted in
1997 (before the crisis) and 2000, covering some 8,000–10,000 households. A special round
with a much smaller sample was conducted in 1998, and provides some information on
how far incomes fell during the crisis. The first round of IFLS covering some 7,000 households was conducted in 13 provinces in Indonesia in 1994. The first and second rounds
represented a joint project between Rand and the Demographic Institute of the University
of Indonesia, whereas the third round was conducted jointly by Rand and the Center for
Population and Policy Studies at Gadjah Mada University.
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information on a wider range of issues than most other studies. Besides examining household expenditure and poverty status, it deals with subjective assessments of standards of living, health, education and family planning.
Almost half the book is devoted to discussion of health and family planning
outcomes, input utilisation and service delivery. As with those on living standards, the findings on health are ‘nuanced’. There was no significant drop in the
health status of the population (although effects in some areas might have been
delayed). But the researchers find that there was a substantial drop in the use of
local health care centres (posyandu) for both health and family planning services.
One valuable characteristic of the IFLS is that it covers many of the same
households in successive rounds and hence addresses the issue of the transitory
versus more permanent poverty status of the sample population. And, consistently with other studies, it finds that a high proportion (around half) of the population in poverty in 1997 had moved out of poverty by 2000, while another half
of those in poverty in 2000 were not in poverty three years earlier. Lack of education was found to be the most important predictor of whether an individual was
poor and remained poor.
An interesting chapter is devoted to the impact of a variety of social safety net
programs, which has been the subject of investigation in several other studies by
the SMERU (Social Monitoring and Early Response Unit) Research Institute and
other researchers. A wide range of support programs are discussed, including the
subsidised rice program (OPK), public works (padat karya), scholarships and
school subsidies, health subsidies and loans to poor households for incomegenerating projects. Two findings stand out. First, several of the programs such
as OPK and scholarships did mainly reach the poor, despite some ‘leakage’ to
non-poor households, although their scope was often too small to affect large
numbers of poor people. For example, the scholarships program was targeted
mainly to poor students, but missed many poor children who were not in school.
Second, wastage was high in several of the programs. The public works program suffered from setting wages too high and hence providing employment for
many people who were not poor or already had jobs. The income-generating programs were poorly targeted, going to villagers who were not poor, and not necessarily providing jobs for the poor.
Although seemingly tacked on at the end, a final chapter (based on data collected in December 2000) provides a benchmark for later analysis of the impact of
decentralisation on changes in decision-making processes and budget allocations
in social expenditures, especially with regard to health and education.
The book will serve as a major reference on the impact of the economic crisis
on living standards and poverty in Indonesia. For this reader, what seems
remarkable from the analysis of these authors is the capacity of many poorer
households to adapt to the substantial loss of purchasing power and, in some
cases, employment. The book reminds us that the crisis was predominantly a
modern sector financial crisis in which the poor got tangled up. It also serves to
remind us that for all the criticism of the Indonesian government over corruption,
inefficiency and wastage, public programs did and do work: they do get through
to many of the poor and are important for their welfare. Of course, ‘leakage’ is a
major problem, there are many shortcomings, and governance issues loom large
in efforts to improve the social returns from public programs. But evidence from
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this book suggests that the bureaucracy and institutions put in place by the Soeharto government are not always as dysfunctional as some foreign and domestic
critics would have it.
At the same time, potential readers should be warned that this book is not for
researchers primarily interested in the qualitative aspects of poverty alleviation
or indeed in broader relationships between Indonesian development and
poverty. The authors have not presented their findings, many of them based on
statistical and econometric (mainly regression) analysis, in a user-friendly way.
Probably one-third to one-half of the book consists of figures and tables (some 40odd figures and well over 100 tables, many stretching over several pages). There
are very few references to other research in this field (for example, only one of the
many SMERU studies is cited in the list of references), and hence the reader is not
informed about the contribution of this research to vigorous debates on poverty
issues in Indonesia. While readers will find the book a valuable reference on
empirical analysis of the impact of the crisis, they will need to look elsewhere for
stimulating discussions of how broader political, social and economic developments and policies impacted on poverty during the crisis.
Chris Manning
ANU
Yasutami Shimomura (ed.) (2003), The Role of Governance in Asia,
Institute of Southeast Asian Studies, Singapore, pp. 376.
Paper: S$39.90/US$28.50; Cloth: S$59.90/US$43.90.
Governance is a hot topic these days and is closely intertwined with the trend
towards democratisation and decentralisation in various parts of the world. Multilateral agencies such as the IMF and the World Bank can be seen as the promoters of better governance, which has quickly become a mantra in most developing
countries, especially when it comes to explaining why certain countries are developed while others are still developing or underdeveloped. This book, based on
studies conducted by various researchers in East Asia, is an early attempt to
define and analyse governance using case studies from different countries in the
region.
The title of the book is somewhat misleading. Rather than providing a picture
of governance in Asia more broadly, the book focuses heavily on the original five
ASEAN countries, with four of the 10 chapters dealing with Indonesia. The only
treatment of a non-Southeast Asian country is the South Korea story that forms
part of chapter 1 (Shiroyama), which is more about decentralisation than governance. Indeed, the book pays so much attention to decentralisation in some countries that readers might at first glance conclude that decentralisation is a
precondition of good governance. Of course, further reading makes it clear that it
is rather a matter of good governance being one of the preconditions of successful
decentralisation. The extensive discussion of decentralisation in certain countries
could have been reduced and more prominence given to the debate on local governance itself.
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It is extremely difficult to give a general definition of governance, as the editor
shows, especially when those trying to define it have different backgounds. The
majority of the book’s authors come from an economics-related background, so
definitions of governance tend to describe the role of institutions in promoting
sound economic development activities. For these authors, the outcome is measured by economic indicators such as GDP and employment growth, and poverty
reduction. Authors whose expertise is in political science place more emphasis on
factors that contribute to a healthy democratic process, such as accountability,
transparency and public participation. No single and general definition of governance can readily be applied to every case. The book aims to use various case
studies of governance practice to draw some conclusions about the kinds of governance that work in different contexts.
The last chapter, on Singapore (Iwasaki), may reflect the best governance practice, in terms of outcome, in the region. It is an amazing story of how the Singapore bureaucracy became an asset to the country, rather than a liability as in other
countries. There are still imperfections, however, as the chapter indicates, with
the possibility of insider trading of information among the country’s government
officials. And it is still difficult to assess whether Singapore is a good role model
of governance, since the usual components of governance, such as transparency,
accountability and other features of democracy, may not be too familiar to most
Singaporeans. The story of Malaysia’s management of its macroeconomic affairs
during the Asian crisis (Abidin) also demonstrates how capable and clean government was able to minimise the impact of the crisis without too much reliance
on the help of the IMF. This chapter shows that sustained national economic
growth must be supported by good governance at both macro and micro levels.
The editor’s own chapter on Thailand, ‘In Search of the Endogenous Elements
of Good Governance’, shows how the Thai government, supported by capable
officials, proved that multilateral agencies, in this case the World Bank, are not
always right. A government proposal to build a new port to alleviate congestion
in the existing seaports proved a better solution than the World Bank proposal to
use the existing ports. This chapter argues that policy makers in a developing
country are not necessarily inferior to advisers in international agencies, as long
as the government is supported by clean and able bureaucrats who practise good
governance. A similar point is made in the other chapter on Thailand (Kuwajima), concerning health service delivery at the local level. Without implementing
drastic and massive decentralisation, as Indonesia has done, the Thai government
has been able to decentralise its health service gradually through the intensive
adoption of key components of good governance. The chapter on the Philippines
(Tigno) places more emphasis on the history of political decentralisation. An
important conclusion drawn from the Philippine case concerns the crucial role of
political transparency and accountability, together with local economic viability
through sustained generation of local revenue and reduced dependence on
national transfers. This is the real reason why decentralisation is a must for most
countries, making local governments more independent and accountable to the
local people.
For Indonesianists, the book provides case studies of both public sector and
corporate governance. Chapter 2 (Suryahadi and Arifianto) deals with quantitative investigations of the influence of governance on poverty at the local level. It
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is obvious that good governance will lead to better poverty red
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Book reviews
To cite this article: (2005) Book reviews, Bulletin of Indonesian Economic Studies, 41:1,
103-117, DOI: 10.1080/00074910500072773
To link to this article: http://dx.doi.org/10.1080/00074910500072773
Published online: 19 Oct 2010.
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Bulletin of Indonesian Economic Studies, Vol. 41, No. 1, 2005: 103–17
BOOK REVIEWS
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M. Chatib Basri and Pierre van der Eng (eds) (2004), Business in Indonesia:
New Challenges, Old Problems, Institute of Southeast Asian Studies, Singapore,
pp. 276. Paper: S$39.90/US$28.50; Cloth: S$59.90/US$43.90.
The democratic transition in Indonesia has had large implications for business
and therefore for the economy. It has expanded the influence of popular suspicions of business and the market economy. It has allowed expression of ethnic
jealousies and tensions that have the potential to encourage official control of the
operation of the market economy. It has rendered policy making less decisive,
more uncertain in outcome, and less stable over time.
These tendencies had been widely anticipated, and so the business community
had expected that the replacement of authoritarian by democratic government
would be associated with lower levels of investment and economic growth, and
less economic stability. Some of the expectations have been realised. And yet the
reality has been more complex. Economic performance, while in most respects
weaker than at the long high tide of authoritarianism, has been rather stronger
than business had predicted, and has shown some promise of improvement as
the political community learns its way through the new relationships between
polity and economy.
Business in Indonesia: New Challenges, Old Problems explores the business realities of Indonesia’s democratisation, on the eve of the second elections of the modern democratic era. One of its editors is a brilliant young Indonesian economist
who is a senior university researcher and also provides economic advice to the
new government. The other is a scholar based at the Australian National University, who has brought the historian’s long perspectives to examination of the tensions between political perceptions and preferences, and the desires and perhaps
the needs of the private business sector in Indonesia. Together, the editors have
assembled an interesting and varied picture of some of contemporary Indonesia’s
more important but less frequently discussed problems.
The book is a worthy product of the fruitful and long-standing collaboration
between the Australian National University’s Indonesia Project and the Institute
of Southeast Asian Studies.
This is a wide-ranging, interesting and authoritative book on business in democratic Indonesia. Some chapters describe Indonesian economic performance in
the years since the financial crisis that triggered the collapse of the Soeharto government; some discuss the policies that have determined that performance; some
focus on the underlying political forces that have generated the outcomes; and
several present suggestions for improvement in policies and performance.
Van der Eng’s introductory chapter informs us that the cry for reformasi was
not a call for economic reform. And yet reformasi had large implications for all
ISSN 0007-4918 print/ISSN 1472-7234 online/05/010103-15
DOI: 10.1080/00074910500072773
© 2005 Indonesia Project ANU
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aspects of economic life. One main outcome was a more inward-looking economy, with many old micro-economic problems rendered more difficult than
before. This and other chapters note that the corruption that had been the bane of
business under the New Order had become even more damaging. On the other
hand, the turmoil in the macro-economy at the time of the collapse of the authoritarian government had been replaced by a tolerable and improving stability.
Jones’s assessment of the political situation emphasises the dominance of the
prosaic, local and internal. While the Iraq war had heightened anti-American or
anti-Western feelings, these were not main themes. The Indonesian reality denied
the contemporary Western world’s tendency to see Indonesian politics through
the lens of the international war on terror. Jones is pessimistic about the focus on
prosaic, local and internal problems leading to their effective management.
Basri’s chapter on the macro-economy alerts us to the compexity of the economic reality. It warns of adverse consequences should economic affairs be left to
drift too long, as had been the case in 2003 and early 2004. The many weaknesses
in policy were reflected especially in low private investment and poor export performance. The end of the IMF program put in place during the financial crisis had
been an occasion for constructive reflection on policy. Improved government performance was an essential precondition for sustained economic improvement,
and limited progress so far would leave the big determinants of future performance in the hands of a new government.
One of the strengths of the book is Dhume’s elegant discussion of how democratisation had allowed the expression and heightened influence of ancient tensions in the interaction between Islam, ethnicity and the market economy. We are
reminded that ‘one of the fundamental freedoms offered by democracy is the
freedom to make bad policy so long as it is good politics’. Dhume notes the
restraint with which this freedom has been exercised, and wonders whether it
will persist.
Castle’s private sector perspective leaves us in no doubt about the extent of the
problems in the early years of the new democracy. He sees much ambivalence in
the polity about whether private investment and especially foreign investment
are really welcome. Resolution of this basic issue is a precondition to improved
economic performance.
Several chapters travel by different routes to the conclusion that the traded
goods sectors of the economy, including labour-intensive manufactures, which
had contributed hugely to employment and incomes growth in the dozen years
before the financial crisis and the political system transition, have performed
especially poorly in recent years. Manning’s authoritative discussion of the
labour market ascribes some of the decline to misplaced hopes for regulation as
a means of raising the living standards of workers.
And yet a theme through many chapters is that things could have been worse.
The political doubts about ‘free fight capitalism’ were bound to emerge as
arbitary intervention in business affairs once the authoritarian lid had been lifted.
Pressures for administrative devolution had been inevitable after the extreme
centralisation of the Soeharto years. Difficult though these developments had
been for business, the outcomes had mostly been moderate. The fact that growth
could continue in these most difficult of times, albeit at a rate well below the
golden growth years of the New Order, held out hope for improvement.
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A book about business can glaze the eyes of readers who are interested in the
big stories of political and economic development. This one will hold the attention of many with general interests. In this book, the problems of business are
placed in their interesting and important context, as central determinants and
outcomes of Indonesia’s struggle for the restoration of rising living standards and
the entrenchment of democracy.
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Ross Garnaut
ANU
Richard Robison and Vedi R. Hadiz (2004), Reorganising Power in Indonesia: The
Politics of Oligarchy in an Age of Markets, RoutledgeCurzon, London and New
York, pp. xx + 304. Paper: £19.99; Cloth: £60.00.
‘Oligarchy’ is defined here as ‘any system of government in which virtually all
political power is held by a very small number of wealthy ... people who shape
public policy primarily to benefit themselves financially ... while displaying little
or no concern for the broader interests of the rest of the citizenry’ (pp. 16–17). The
authors’ main argument is that Soeharto created such an oligarchy, and that
although the economic crisis of 1997–98 led to his demise, the oligarchy had by
then taken on a life of its own, and has since been engaged in a struggle to
reassert and consolidate its earlier position within some new political system.
The book consists of four main sections. Part I sets out some theories of economic and political change, and discusses the case of Indonesia briefly within this
context. The authors describe how the oligarchy emerged during the first 17 years
of Soeharto’s New Order—how ‘powerful officials harnessed their possession of
public office and their control of strategic economic gateways to their collective
private interests’ (p. 14). In Part II, they discuss how the system worked: how
markets were hijacked (chapter 3), how the political regime was captured (chapter 4), and how civil society was systematically disorganised so that it could not
threaten the regime (chapter 5).
Part III focuses on the crisis of 1997–98—the ‘fatal collision of [the] politicobusiness families’ oligarchy with global capital markets’ (p. 15)—which resulted
eventually not only in economic catastrophe (chapter 6), but in political unravelling (chapter 7). The gist of the story is that most components of the oligarchy he
created had become more resilient than Soeharto himself. When the crisis hit, it
‘weakened the coherence of the complex alliance of officials and business that …
underpinned the New Order’ (p. 166). The oligarchy then came to regard its creator as dispensable, and its constituents’ only concern was how they could protect their individual positions ‘by reorganising themselves within a new regime
and with new allies’ (p. 166).
Part IV deals with the struggles to reorganise economic and political power in
circumstances in which ‘elections, political parties and parliament have become
the arenas of power, and in the context of alliances with new political players constituting social and economic interests formerly at the fringes of power under
Soeharto’ (p. 16). The concluding chapter asks whether the oligarchy can survive,
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or whether democratic constitutionalism can transform the nation, concluding—
pessimistically but plausibly—that ‘oligarchies rather than markets will prevail’
(p. 265).
The book succeeds admirably as an explanation of how Soeharto fashioned a
system of government that generated enormous benefits for the oligarchy over
some three decades. (It also delivered rapid economic advancement to the public
at large, but this aspect is largely ignored here.) The authors clearly document
how Soeharto constructed a seemingly unassailable regime through a combination of co-optation and repression, making skilful use of Indonesia’s natural
resource wealth and of the capacity of government to extend economic privileges
to supportive individuals and institutions. At first he relied heavily on military
support, but his steadily expanding influence over promotions eventually culminated in his control over, rather than dependence on, the military. By repression
of civil society, and especially the nominally democratic process, he was able to
perpetuate his hold on power. And by bestowing a wide range of valuable privileges on a select group of business people (whose enterprises were thereby transformed rapidly into giant conglomerates) he generated a steady flow of rents that
were used to reinforce the regime further—at least for as long as the economy
remained healthy.
The book is described, somewhat extravagantly, as ‘a study of the vast and bitter struggles that accompany the spread of market capitalism and the forging of
those economic and political regimes within which it is defined’—processes that
are ‘widely regarded as steps in the inevitable and inexorable triumph of liberal
markets, democracy and legal–rational forms of bureaucratic authority’(p. 3). It is
the debunking of the latter implied premise—supposedly the received wisdom of
‘neo-liberal’ economists and political scientists—that the authors claim as their
special contribution. ‘Neo-liberals’ are mentioned explicitly over 90 times in a
protracted effort to persuade the reader that their views of the world are erroneous. The economists are criticised for their alleged belief that market-friendly
economic reforms lead inevitably to the destruction of economic privilege, the
political scientists for their alleged belief that democratic reforms lead inevitably
to better governance.
The reality has certainly been different. Deregulation of markets and more
intensive interaction with the global economy under Soeharto were accompanied
by the simultaneous strengthening of the position of the oligarchy, and the more
recent opening up of the democratic process to competition among numerous
political parties has done little to offset this. In short, ‘even destructive economic
shocks and … the collapse of the Soeharto regime itself, have not dismantled the
system of power focused around the private expropriation of public authority’
(p. 3).
It was not just young students who naïvely imagined that getting rid of Soeharto was all that was needed to usher in a new era in which honest and capable
politicians would be freely elected by the people, and would actively represent
their interests. At least some from the economic and political intelligentsia held
similar views (including presidential aspirant Amien Rais, p. 28), and the authors
are well justified in drawing attention to this. But they have greatly exaggerated
the extent to which such views are actually held by serious observers. Most socalled ‘neo-liberal’ economists would indeed argue in favour of deregulation, pri-
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vatisation, the freeing up of trade and investment flows and so on, without being
under any illusion that such policies would be meekly accepted by the vested
interests threatened by them. The principal–agent problem that confounds
attempts to ensure good public sector governance is very familiar to economists,
who see the solution to it in the design of better mechanisms of government
(involving much more than just free elections) rather than in changes to particular economic policies. No economist that I know believes that the reform process,
once started, is ‘inexorable’. I suspect that many political scientists might protest
that their views also appear here in grossly misleading caricature.
Ross H. McLeod
ANU
Colin Brown (2003), A Short History of Indonesia: The Unlikely Nation?,
Allen & Unwin, Sydney, pp. xviii + 270. Paper: A$29.95.
Short histories of Southeast Asian countries, of which there have been a number
over the years, provide an opportunity for an author to reflect on changing perceptions of the past. Colin Brown’s short history of Indonesia is one of a new
series edited by Milton Osborne (whose own short history of Southeast Asia has
remained an influential introduction to the region over the 25 years since its first
edition). Its subtitle, ‘The Unlikely Nation?’, gives an indication of the main thrust
of his argument. Brown opens with a definition of ‘Indonesia’ as the state existing at the end of the 20th century, but he recognises that, just as its emergence may
have been the result of an unlikely process, its future may also be problematical.
Brown’s account is cast in narrative form, with perhaps half of the text—the
first five chapters—taking the story up to the end of the 19th century. After a brief
survey of the physical, cultural and ethnic diversity of the archipelago and of the
trade that flowed through the islands and brought them into early contact with
India to the west and China to the north-east, the writer proceeds, in a second
chapter, to sketch the rise of indigenous states from perhaps the 5th to the 14th
century—Srivijaya, Mataram, Kediri, Majapahit. Three more chapters cover the
‘age of commerce’ (borrowing the term from Anthony Reid), the spread of Islam,
the growth of European commercial activity—Portuguese, Dutch and British—
and the establishment of European empire over the course of the 18th and 19th
centuries.
Brown’s periodisation follows, in broad outline, the conventional picture
though, more than most, he sees the Java War (1825–30) as marking a major
watershed in Indonesian history, separating a period when Javanese states were
independent political entities from the subsequent period in which they were
increasingly absorbed into the colonial state (p. 78). At the same time the narrative form allows some reference to alternative emphases. He notices, for example,
the classical debate about the nature of Indian influence. Was this imposed from
without or borrowed from within? Similarly he refers to differing accounts of the
character of the centralised and hierarchical inland kingdoms of Java (p. 22) and
of the geographical extent of the kingdom of Majapahit (p. 26).
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The text makes clear Brown’s own judgment on these and other debates and
his bibliographical notes provide, in general, the main sources for his account.
However, he does not link these sources specifically to his narrative and, where
alternative interpretations are in question, he does not identify the contending
authorities. For example, given the significance of the debate, extending from the
1930s to the 1970s, about the importance of external versus internal forces in
shaping local societies, and hence about the autonomy of Southeast Asian history,
it is surprising that he makes no specific mention of J.C. van Leur, John Smail and
other contributors to that debate (pp. 15–17). Similarly with his treatment of the
nature of the Javanese kingdoms and of the Dutch East India Company’s gradual
absorption of these into its expanding territorial system. The Company, he
argues, in ruling through existing authorities, was creating what it wrongly
believed had always been the case (p. 59). One might have expected some reference here to Heather Sutherland’s The Making of a Modern Bureaucratic Elite: The
Colonial Transformation of the Javanese Priyayi and to the account by M.C. Ricklefs
of the division of the realm in his Jogjakarta under Sultan Mangkubumi, 1749–1792.
And the treatment of political authority in Minangkabau should make reference
to J.E. Drakard’s A Kingdom of Words.
One could point to other omissions from the volume’s Bibliographical Essay.
However these are niggles. The narrative itself is concise and clear and offers the
reader a useful introduction to Indonesian history.
The remaining chapters deal with the 20th century. Here Brown adopts a rather
unusual periodisation in identifying the successive stages in his story. The conventional picture, following the pattern set by Kahin’s Nationalism and Revolution
in Indonesia, sees nationalism as a natural response to colonial rule, and the subsequent struggle for independence as a heroic but expected outcome. For Brown
the outcome was never a foregone conclusion. He treats the period from 1900 to
the end of the Japanese occupation as one continuous process. A single chapter
entitled ‘Times of Change’ examines changes in the character of Dutch policies
and colonial society after 1900, and traces the rise of a nationalist movement and
Dutch efforts to contain it. It then proceeds immediately to Japanese rule and its
impact on different elements within Indonesian ranks, culminating in the proclamation of independence in August 1945.
The next chapter, ‘From Revolution to Authoritarian Rule, 1945–1957’, combines treatment of the struggle leading to the Dutch transfer of sovereignty in
1949 with the early years of independence. Differences in nationalist ranks during the revolution are presented as continuing into the early years of independence when political divisions prevented the emergence of an overall unity of
purpose until Sukarno and the army, in partnership, introduced the authoritarian
forms of Guided Democracy.
Finally the closing years of Sukarno’s presidency are treated as essentially continuous with the authoritarian regime of Soeharto. Noticing Soeharto’s early economic achievements, Brown goes on to examine the emergence of the regime’s
authoritarian techniques of control—institutional and ideological—designed to
reduce the level of political activity.
These chapter divisions reflect the author’s overall picture of an unlikely
nation. It is a picture of successive attempts—by the Dutch, the Japanese, Sukarno
and the army, and then Soeharto’s New Order—to contain the divisions cutting
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across the notion of ‘Indonesia’. The point is underlined in the final chapter. After
a brief account of the developments following the fall of Soeharto the story concludes before the elections of a new parliament and a new president in 2004. A
final judgment is that political power is now more dispersed than ever before,
that the presidency itself is weaker than it was and that, with major question
marks over the future of Aceh and West Papua, the continued unity of Indonesia
itself may be in doubt.
Any history taking the story up to the present is likely to be caught up by subsequent events. In this case, until the new President, Susilo Bambang Yudhoyono,
establishes his own style and direction, the Megawati presidency is as good as
any place to stop.
John Legge
Monash University, Melbourne
Yunita Triwardani Winarto (2004), Seeds of Knowledge: The Beginning of Integrated
Pest Management in Java, Monograph 53/Yale Southeast Asia Studies,
New Haven CT, pp. xxi + 429. Paper: US$28.00; Cloth: US$39.00.
This book is the result of exhaustive research conducted on the north coast of
West Java during the early 1990s, a watershed period in Indonesian agriculture
with sweeping changes to the way the nation’s rice staple was produced. The
Green Revolution of the late 1960s had resulted in a dramatic intensification of
wet-rice cultivation, especially in Java and Bali. Double and triple cropping of
new high-yielding varieties required massive inputs of chemical fertilisers, but
was also accompanied by saturation spraying of pesticides. The disastrous environmental impact was soon apparent. During several growing seasons throughout the 1970s, resistant insect pests such as the brown plant hopper (wereng)
devastated the rice crop in many areas. As a result, a presidential ban on the use
of the most dangerous pesticides was announced in November 1986, along with
the government’s decision to embrace the principles of integrated pest management (IPM) as recommended by FAO (Food and Agriculture Organization) scientists. Crash training programs for agricultural officials and field workers were
conducted as a basis for the establishment of field schools for rice farmers—
‘schools without walls’—drawing on discovery-based learning techniques.
This is the setting for Yunita Winarto’s remarkable book, a landmark study that
makes a major contribution to understanding how this difficult transition played
out at the village level, as farmers were pressed to implement a dramatic shift in
their agricultural practices, while struggling from one season to the next to secure
healthy crops and achieve satisfactory yields. The fundamental issue that the
book seeks to address is the extraordinarily complex process by which new
knowledge is acquired.
Casual observers of the book’s title may be surprised to discover that the
author is neither an agronomist nor a geographer but a social anthropologist.
This was clearly no barrier to her capacity to master her field of inquiry, as the
book ranges over many aspects of rice cultivation: the irrigation network, land
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tenure arrangements, the seasonal tasks of cultivation, the selection of rice varieties, and the application of fertilisers and pest control measures. The physical
and social setting of the particular villages that were the target area of her study
is presented in considerable detail. Focus then shifts to the fortunes of one particular group of 25 rice farmers from a single hamlet—almost all related by blood or
marriage ties—who were selected to take part in an IPM field school that the
author was able to observe.
Drawing on detailed records of the discussions that occurred during the
school, and on the arguments and debates that continued outside the formal sessions, Winarto provides a graphic account of the entire process. During guided
learning experiences based on field observation, the farmers began to identify
those pests dangerous to their rice crops and to distinguish them from useful
predator insects and animals that can actually assist farmers to achieve a natural
balance but can be destroyed by the indiscriminate application of pesticides. The
farmers gradually became aware of the problems associated with entrenched concepts such as regarding pesticides as ‘medicine’ (obat) instead of as ‘poison’
(racun). Consequently, they began to question accepted wisdom: the old slogan
‘have the umbrella ready before it rains’ (sedia payung sebelum hujan) was gradually replaced with ‘if there is no illness, spraying medicine is old fashioned’ (kalau
enggak ada penyakit, nyemprot obat itu kuno).
There is an absorbing account of events during the growing seasons after the
IPM training concluded, as the farmer participants struggled to implement their
own individual versions of the new knowledge. The entire process to acquire and
then to apply such knowledge is neither easy nor straightforward. The author’s
painstaking and meticulous study draws out the human frailties of all those
involved, and the degree of difficulty faced by the farmers as they began to take
responsibility for making hard decisions about their farming methods. Apart
from their own doubts and confusion, these farmers had to face the scorn of
neighbours who had not taken part in the IPM field school and who continued to
apply pesticides liberally on adjacent rice paddies. There was also the problem of
dealing with powerful bureaucratic forces, often with economic interests divergent from those of the rice farmers. One telling incident involves the attempts by
some of the farmers to negotiate a partial version of the official credit package
intended to support intensive rice cultivation. Armed with their new understanding of IPM principles, the farmers argued—unsuccessfully—that they should not
be forced to accept the pesticide component of the package.
Winarto describes a visit by a group of the most persistent and committed
farmers to a government agricultural research station where they were able to
engage with the scientists and seek answers to some of their most pressing problems. Ironically, although this facility is situated only a few kilometres from their
village, it had never before been visited by any of these farmers.
Numerous maps and line drawings supplement the text, and several appendices with material translated from official documents provide additional
explanatory details about the IPM program. The superb duotone photo on the
front cover suggests that more of the author’s field photographs would have been
a welcome addition to enhance the book’s themes. The glossary is rather perfunctory, given the long list of Indonesian language terms throughout the text, but a
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more serious omission is the publisher’s failure to ensure that the volume is complemented by a proper index.
This sympathetic ethnographic account of the farmers’ struggles will be
absorbing reading for anyone interested in the history of Indonesian agriculture.
But the central themes about the process by which new knowledge is gained and
then passed on to others at the micro level of the village will challenge and provoke anyone interested in issues of social change and development, especially in
Indonesia. One final point: such a masterful study depends upon a lengthy and
sustained period of fieldwork. As university managers, under pressure from
funding agencies, adopt a factory mentality to the higher degree process and seek
to apply strict time limits to candidature, it will become increasingly difficult to
sustain such research conditions.
John Maxwell
ANU
François Ruf and Frederic Lançon (eds) (2004), From Slash and Burn to
Replanting: Green Revolutions in the Indonesian Uplands,
World Bank Regional and Sectoral Studies, Washington DC, pp. xix + 341.
Paper: US$25.00 from the World Bank.
This book is an interesting mixture. The editors state that it is based largely on
three days fieldwork undertaken in 1996 in each of 40 small regions of Indonesia.
However, in addition to chapters based on these brief case studies, carried out
mainly in Java and the dry environments of West Timor and Flores (NTT), its core
consists of detailed research by the CIRAD group (Centre du Coopération Internationale en Recherche Agronomique pour le Développement, a French government agricultural development research institute) into smallholder coffee, rubber
and cocoa in Sumatra, Kalimantan and Sulawesi. Short chapters on specific innovations in parts of those areas (such as ginger and vanilla in the coffee lands of
Kepahiang, Bengkulu, and cocoa in Malinau, East Kalimantan) benefit from the
authors’ deep understanding of the systems concerned.
A quite lengthy first chapter introduces the major themes, definitions and
hypotheses. The leading theme is the ability of ‘upland’ agricultural smallholders
to innovate, an ability said to be often overlooked by government authorities and
project organisers. Like the ICRAF (World Agroforestry Centre) research of the
same name, their innovations are characterised as ‘alternatives to slash and burn’,
with a strong emphasis on the shift from the food-based swidden to perennial
tree crops. This is seen as happening in two steps: the initial plantings benefit
from the swidden’s fertile and disease-free environment, which the authors term
‘forest rent’. Once access to forest is no longer available, further innovations must
take place, intensifying tree crop production by incorporating chemical inputs,
new varieties, improved planting materials or a different agroforestry mix. Natural resources may be ‘adjusted’, in terrace or hedgerow construction. These
innovations, which often require some capital, are termed a ‘spontaneous Green
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Revolution’ in the uplands (p. 5). Defining the ‘uplands’ is not simple: the
authors’ working definition includes all agricultural systems that are not swampbased or irrigated, specifically shifting cultivation, agroforests and non-irrigated
dryland systems, with no regard to elevation. This leads to some illogical descriptions, with the rubber-growing peneplains of Sumatra and the cocoa and coconut
plains in Sulawesi being considered ‘uplands’.
The next 10 chapters present short case studies, covering only 100 pages in all.
The first four deal with livestock, on-farm reservoirs, upland food crops and specialised vegetable production. These studies relate particularly to conditions in
Java (plus a few in West Timor) and appear the least important, but are included
to secure a more comprehensive picture. The following six studies include various innovations featuring perennial crops, especially coffee (three studies), cocoa,
cashew and oranges.
The three chapters on coffee include two on ancillary crops introduced by particular individuals and one on the adoption of a new variety. They may be read
together with chapter 16 on replanting coffee. Farmers wanting to keep producing coffee but without access to extra land must either shorten or lengthen the
cultivation cycle. To lengthen the cycle they use shade trees and carefully prune
their coffee bushes. Shortening the cycle means extra replanting costs and no
crop for two years, but eventually higher yields. Difficult and costly access to
land is one reason for replanting, with coffee yields doubling if forest ‘rent’ is
available.
Chapter 12 is a long and useful discussion on rubber, and especially the problems of improving the productivity of the biodiverse but low-yielding ‘jungle
rubber’ forests. Unreliability in the clones of higher-yielding cloned rubber, even
from government projects, has increased the difficulties, though the demand for
improved seedlings is high. The author (Penot) suggests inter-planting of cloned
rubber seedlings with useful trees to mimic the diversity of jungle rubber, but
such rubber agroforestry systems are still experimental. Despite the expansion of
oil palm into rubber areas, Penot suggests that rubber and oil palm should be
seen as complementary, rather than competitive.
Chapters 13–15 and 17 are concerned with cocoa, predominantly in Sulawesi,
but include short comparisons with Halmahera (Maluku) and Côte D’Ivoire. In
these four chapters Ruf and Yoddang strongly urge the need for chemical inputs:
pesticide is recommended to control the pod borer pest, which spread in Sulawesi
at an accelerated rate after the 1997 drought; fertiliser is needed to ensure high
yields and herbicide (Roundup) to eliminate Imperata (an aggressive grass that
colonises cleared forest areas). Sulawesi farmers adopted a high frequency of harvesting and more intense use of fertiliser and herbicides than other cocoa growing countries, partly because fertiliser was cheap in the early years of the
industry. Ruf concludes with a general model: ‘A basic tree crop, possibly intercropped with another tree or trees and combined with fertiliser, pesticides and
herbicides, remains the key option towards a spontaneous Green Revolution in
the uplands’ (p. 257).
The most important finding of the book’s conclusion is that real innovations
owe more to smallholders and traders than to official projects. Smugglers will
bring information, planting material and even pesticide across borders, while
migrants are often leading innovators, as are influential individuals. Estates
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unwilling to transfer their technology will unwittingly ensure its rapid dissemination.
Most chapters contain information on prices, yields and profits, while annexes
2–4 have details of cocoa farm budgets on the Sulawesi hills and plains. Cultural
aspects of the transitions discussed are hardly considered. On the environmental
effects and sustainability of the high input ‘Green Revolution’ Ruf is cautious,
suggesting that herbicide use could be decreased if Gliricidia sepium, a small tree
with a particular ability to shade out Imperata grass, was employed, while some
chemical fertilisers (which have become very expensive in Indonesia) could be
replaced by chicken manure. He is less cautious in strongly advocating pesticides
(especially Malaysian pesticides) to eliminate the cocoa pod borer, despite various projects advocating alternative techniques, such as frequent harvesting, to
break the life cycle of the pest.
While it is somewhat repetitive in putting over its ‘message’ and although
some of the short research projects are quite limited (and dated), I nevertheless
found this book to contain useful material. The ‘sustainability’ of the paperback
volume itself is dubious, however, as my copy is already falling apart.
Lesley Potter
ANU
J. Strauss, K. Beegle, A. Dwiyanto, Y. Herawati, D. Pattinasarany, E. Satriawan,
B. Sikoki, Sukamdi and F. Witoelar (2004), Indonesian Living Standards Before
and After the Financial Crisis: Evidence from the Indonesia Family Life Survey,
Rand Corporation Center for the Study of the Family and Economic
Development and Institute of Southeast Asian Studies, Singapore,
pp. xxii + 400. Paper: S$39.90/US$25.90.
This book is probably the most comprehensive collection of empirical analyses of
the impact of the financial and economic crisis on living standards and poverty
in Indonesia. Based on three rounds of the Indonesia Family Life Survey (IFLS)
conducted in 1997, 1998 and 2000,1 the book reports on field research at the
household level conducted by several foreign researchers attached to the Rand
Corporation, working in cooperation with Indonesian researchers in Jakarta and
Yogyakarta. The authors (a remarkable nine in all!) conclude that, for the most
part, household living standards, and the incidence of poverty, had recovered to
pre-crisis levels or better by 2000. This finding is not new. But the book provides
1This
book focuses on findings from the second and third rounds of IFLS conducted in
1997 (before the crisis) and 2000, covering some 8,000–10,000 households. A special round
with a much smaller sample was conducted in 1998, and provides some information on
how far incomes fell during the crisis. The first round of IFLS covering some 7,000 households was conducted in 13 provinces in Indonesia in 1994. The first and second rounds
represented a joint project between Rand and the Demographic Institute of the University
of Indonesia, whereas the third round was conducted jointly by Rand and the Center for
Population and Policy Studies at Gadjah Mada University.
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information on a wider range of issues than most other studies. Besides examining household expenditure and poverty status, it deals with subjective assessments of standards of living, health, education and family planning.
Almost half the book is devoted to discussion of health and family planning
outcomes, input utilisation and service delivery. As with those on living standards, the findings on health are ‘nuanced’. There was no significant drop in the
health status of the population (although effects in some areas might have been
delayed). But the researchers find that there was a substantial drop in the use of
local health care centres (posyandu) for both health and family planning services.
One valuable characteristic of the IFLS is that it covers many of the same
households in successive rounds and hence addresses the issue of the transitory
versus more permanent poverty status of the sample population. And, consistently with other studies, it finds that a high proportion (around half) of the population in poverty in 1997 had moved out of poverty by 2000, while another half
of those in poverty in 2000 were not in poverty three years earlier. Lack of education was found to be the most important predictor of whether an individual was
poor and remained poor.
An interesting chapter is devoted to the impact of a variety of social safety net
programs, which has been the subject of investigation in several other studies by
the SMERU (Social Monitoring and Early Response Unit) Research Institute and
other researchers. A wide range of support programs are discussed, including the
subsidised rice program (OPK), public works (padat karya), scholarships and
school subsidies, health subsidies and loans to poor households for incomegenerating projects. Two findings stand out. First, several of the programs such
as OPK and scholarships did mainly reach the poor, despite some ‘leakage’ to
non-poor households, although their scope was often too small to affect large
numbers of poor people. For example, the scholarships program was targeted
mainly to poor students, but missed many poor children who were not in school.
Second, wastage was high in several of the programs. The public works program suffered from setting wages too high and hence providing employment for
many people who were not poor or already had jobs. The income-generating programs were poorly targeted, going to villagers who were not poor, and not necessarily providing jobs for the poor.
Although seemingly tacked on at the end, a final chapter (based on data collected in December 2000) provides a benchmark for later analysis of the impact of
decentralisation on changes in decision-making processes and budget allocations
in social expenditures, especially with regard to health and education.
The book will serve as a major reference on the impact of the economic crisis
on living standards and poverty in Indonesia. For this reader, what seems
remarkable from the analysis of these authors is the capacity of many poorer
households to adapt to the substantial loss of purchasing power and, in some
cases, employment. The book reminds us that the crisis was predominantly a
modern sector financial crisis in which the poor got tangled up. It also serves to
remind us that for all the criticism of the Indonesian government over corruption,
inefficiency and wastage, public programs did and do work: they do get through
to many of the poor and are important for their welfare. Of course, ‘leakage’ is a
major problem, there are many shortcomings, and governance issues loom large
in efforts to improve the social returns from public programs. But evidence from
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this book suggests that the bureaucracy and institutions put in place by the Soeharto government are not always as dysfunctional as some foreign and domestic
critics would have it.
At the same time, potential readers should be warned that this book is not for
researchers primarily interested in the qualitative aspects of poverty alleviation
or indeed in broader relationships between Indonesian development and
poverty. The authors have not presented their findings, many of them based on
statistical and econometric (mainly regression) analysis, in a user-friendly way.
Probably one-third to one-half of the book consists of figures and tables (some 40odd figures and well over 100 tables, many stretching over several pages). There
are very few references to other research in this field (for example, only one of the
many SMERU studies is cited in the list of references), and hence the reader is not
informed about the contribution of this research to vigorous debates on poverty
issues in Indonesia. While readers will find the book a valuable reference on
empirical analysis of the impact of the crisis, they will need to look elsewhere for
stimulating discussions of how broader political, social and economic developments and policies impacted on poverty during the crisis.
Chris Manning
ANU
Yasutami Shimomura (ed.) (2003), The Role of Governance in Asia,
Institute of Southeast Asian Studies, Singapore, pp. 376.
Paper: S$39.90/US$28.50; Cloth: S$59.90/US$43.90.
Governance is a hot topic these days and is closely intertwined with the trend
towards democratisation and decentralisation in various parts of the world. Multilateral agencies such as the IMF and the World Bank can be seen as the promoters of better governance, which has quickly become a mantra in most developing
countries, especially when it comes to explaining why certain countries are developed while others are still developing or underdeveloped. This book, based on
studies conducted by various researchers in East Asia, is an early attempt to
define and analyse governance using case studies from different countries in the
region.
The title of the book is somewhat misleading. Rather than providing a picture
of governance in Asia more broadly, the book focuses heavily on the original five
ASEAN countries, with four of the 10 chapters dealing with Indonesia. The only
treatment of a non-Southeast Asian country is the South Korea story that forms
part of chapter 1 (Shiroyama), which is more about decentralisation than governance. Indeed, the book pays so much attention to decentralisation in some countries that readers might at first glance conclude that decentralisation is a
precondition of good governance. Of course, further reading makes it clear that it
is rather a matter of good governance being one of the preconditions of successful
decentralisation. The extensive discussion of decentralisation in certain countries
could have been reduced and more prominence given to the debate on local governance itself.
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It is extremely difficult to give a general definition of governance, as the editor
shows, especially when those trying to define it have different backgounds. The
majority of the book’s authors come from an economics-related background, so
definitions of governance tend to describe the role of institutions in promoting
sound economic development activities. For these authors, the outcome is measured by economic indicators such as GDP and employment growth, and poverty
reduction. Authors whose expertise is in political science place more emphasis on
factors that contribute to a healthy democratic process, such as accountability,
transparency and public participation. No single and general definition of governance can readily be applied to every case. The book aims to use various case
studies of governance practice to draw some conclusions about the kinds of governance that work in different contexts.
The last chapter, on Singapore (Iwasaki), may reflect the best governance practice, in terms of outcome, in the region. It is an amazing story of how the Singapore bureaucracy became an asset to the country, rather than a liability as in other
countries. There are still imperfections, however, as the chapter indicates, with
the possibility of insider trading of information among the country’s government
officials. And it is still difficult to assess whether Singapore is a good role model
of governance, since the usual components of governance, such as transparency,
accountability and other features of democracy, may not be too familiar to most
Singaporeans. The story of Malaysia’s management of its macroeconomic affairs
during the Asian crisis (Abidin) also demonstrates how capable and clean government was able to minimise the impact of the crisis without too much reliance
on the help of the IMF. This chapter shows that sustained national economic
growth must be supported by good governance at both macro and micro levels.
The editor’s own chapter on Thailand, ‘In Search of the Endogenous Elements
of Good Governance’, shows how the Thai government, supported by capable
officials, proved that multilateral agencies, in this case the World Bank, are not
always right. A government proposal to build a new port to alleviate congestion
in the existing seaports proved a better solution than the World Bank proposal to
use the existing ports. This chapter argues that policy makers in a developing
country are not necessarily inferior to advisers in international agencies, as long
as the government is supported by clean and able bureaucrats who practise good
governance. A similar point is made in the other chapter on Thailand (Kuwajima), concerning health service delivery at the local level. Without implementing
drastic and massive decentralisation, as Indonesia has done, the Thai government
has been able to decentralise its health service gradually through the intensive
adoption of key components of good governance. The chapter on the Philippines
(Tigno) places more emphasis on the history of political decentralisation. An
important conclusion drawn from the Philippine case concerns the crucial role of
political transparency and accountability, together with local economic viability
through sustained generation of local revenue and reduced dependence on
national transfers. This is the real reason why decentralisation is a must for most
countries, making local governments more independent and accountable to the
local people.
For Indonesianists, the book provides case studies of both public sector and
corporate governance. Chapter 2 (Suryahadi and Arifianto) deals with quantitative investigations of the influence of governance on poverty at the local level. It
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is obvious that good governance will lead to better poverty red