Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 00074910600632427
Bulletin of Indonesian Economic Studies
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Book reviews
To cite this article: (2006) Book reviews, Bulletin of Indonesian Economic Studies, 42:1,
113-130, DOI: 10.1080/00074910600632427
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BOOK REVIEWS
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Tim Lindsey and Helen Pausacker (eds) (2005) Chinese Indonesians:
Remembering, Distorting, Forgetting, Institute of Southeast Asian
Studies, Singapore, and Monash Asia Institute, Melbourne,
pp. xxvii + 215. Paper: S$39.90/US$25.90; Cloth: S$69.90/US$49.90.
Indonesia’s ethnic Chinese minority is so crucial to the country’s economy that a reliable grasp of its complex political and socio-cultural status is essential for any social
scientist aiming to comprehend its strengths and vulnerabilities. For such persons,
several essays in this book would be extremely valuable—and others intrinsically
interesting. It is not only the most up-to-date but also the best informed and most
discerning set of studies on the subject to have appeared in recent years. It consists
of nine articles contributed by Australian and other specialists on the Chinese Indonesians—note which is the noun and which the adjective there: they are nearly all
now Indonesian nationals, but ‘ethnic Chinese’; my own preference would be to
call them ‘Sino-Indonesians’, by analogy with the now widely accepted term ‘SinoThai’. The articles were prepared for a festschrift to honour the retirement in 2002 of
Charles Coppel, the doyen of Australian scholars in this field. The book is edited by
two of his former students, of whom one, Tim Lindsey, is now Australia’s leading
specialist in Indonesian law and legal procedures.
Let me summarise briefly what is in the book. Its most contemporary pieces
are the account by Lindsey of ‘the uneven trajectory of reform of Indonesia’s
racially discriminatory legal management of the ethnic Chinese since 1998’; a useful survey of some episodes of anti-Chinese violence in 1998–99 by Jemma Purdey
(another of Coppel’s former graduate students, who has written a wider-ranging
PhD on that subject); an intriguing account by Leo Suryadinata of recent official
policies towards Confucianism and Buddhism; and a brief but challenging ‘Portrait of the Chinese in post-Soeharto Indonesia’ by Arief Budiman. (Of the latter, I
can only say that I hope he is right in his very confident generalisations about how
the attitudes of pribumi towards ethnic Chinese have changed for the better, as
also the attitudes of ethnic Chinese towards pribumi, since 1998; but I feel we need
much stronger evidence to that effect than he provides.) The other five chapters
are more historical and recondite in approach, some by eminent scholars in this
field: Mary Somers-Heidhues, Claudine Salmon and Jean Gelman Taylor.
Tim Lindsey’s piece on ‘Reconstituting the ethnic Chinese in post-Soeharto
Indonesia: law, racial discrimination and reform’ is a major contribution on the
administrative and legal bases of anti-Chinese discrimination there. He explains
well how the Soeharto-era policy of urging ‘assimilation’ of the ethnic Chinese
into the majority population was pursued ‘through a series of interlocking and
sometimes overlapping bureaucratic subordinate regulations, often issued in the
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form of “circular letters” and “decisions” by a range of ministries … These are
ambiguous and … are intended as codes, often signalling official approval and
encouragement for institutionalised discrimination rather than expressly authorising it in detail. The effect, however, was the same’, as seen in regulations dealing
with identity bar codes on official identity documents—the most insidious and
direct mode of discrimination, still operating regardless of claims to have abandoned it; the pressure on ethnic Chinese to adopt ‘Indonesian’ names; the limiting of public use of the Chinese language; the restrictions on educational access;
and the limiting of commercial opportunities for the ethnic Chinese. The changes
to these since May 1998 have been largely symbolic, despite official declarations
of intent to abolish all discriminatory regulations and international pressure to do
so. Discrimination has become ‘firmly fixed in a web of ambiguous regulations
and less ambiguous policy’.
Lindsey makes the interesting suggestion that what would be most effective
in the current reformasi era would be steps by the ethnic Chinese to ‘enforce their
rights through court action’ in the Human Rights Commission (KomnasHAM),
which has already identified 60 regulations that discriminate against them. But
that ‘would require great courage indeed’ in the light of such a long history of
overt and covert discrimination.
In her article on ‘Anti-Chinese violence and transitions in Indonesia: June 1998
– October 1999’ (but with only passing reference to the far more serious and politically motivated May 1998 riots in Jakarta which helped to precipitate Soeharto’s
downfall), Jemma Purdey contrasts the extent and nature of the outbreaks that
occurred then with the much worse violence that followed the overthrow of President Sukarno in 1965–66. Her essay, which usefully links the anti-Chinese violence
of the late 1990s with other forms of state terrorism and premanisme (gangsterism)
as well, examines in detail the social dynamics of two localised episodes in Central Java and Bandung to show their diversities and complexities. In the former
case, in Kebumen, ‘the processes of assimilation and harmony between groups
that had been present for so long were all but destroyed following the violence’,
and the Kebumen Chinese ‘shifted from a position of making pronounced efforts
to assimilate and to assist the indigenous urban poor to questioning whether
there was a place for them in that community at all’. In the Bandung case (in
Holis) deteriorating economic conditions in 1997–99 had created conditions ‘so
tense that they were almost at breaking point’. And the new post-Soeharto political climate of reformasi was interpreted by many Indonesians as meaning ‘a new
freedom to resolve injustices, perceived or real, by means of mass mobilisation’.
Expectations that the end of the New Order would deliver ‘greater equality for
the ethnic Chinese’—or, conversely, better conditions for pribumi Indonesians—
were not realised. Purdey concludes that: ‘[though these episodes were] set off
by various different sets of conditions, the association of Chinese with economic
stress, marginalisation and injustice has been deeply entrenched in Indonesians’.
Unfortunately space limitations precluded her from exploring that very important aspect of the entire problem as fully as it deserves. But as a first step towards
the analysis of the dynamics of anti-Chinese violence, her paper is both valuable
and almost unique.
Jamie Mackie
ANU
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Terence H. Hull (ed.) (2005) People, Population, and Policy in Indonesia,
Equinox Publishing, Jakarta, pp. 185. Cloth: S$35.90/US$19.95
(Indonesian version published by Equinox in 2006 as
Masyarakat, Kependudukan, dan Kebijakan di Indonesia).
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The story of Indonesia’s post-independence demographic transition and reproductive revolution is recounted in People, Population and Policy in Indonesia, edited
by Terence Hull. This publication is part of a series offering ‘critical perspectives’
on development issues addressed by the Ford Foundation during its 50 years of
involvement in Indonesia.
Terence and Valerie Hull provide an overview of Indonesia’s efforts to reduce
fertility and provide universal access to reproductive health care. Their account
begins with the early efforts of Indonesia’s family planning pioneers, such as Dr
Julie Sulianti Saroso and Dr H.M. Judono, to promote women’s health during the
Sukarno years, when family planning was discouraged as national policy. The coming of the New Order government in 1965 saw growing alarm about Indonesia’s
rapid rate of population growth. Population control became a major element of President Soeharto’s development armamentarium, and the National Family Planning
Coordinating Board (Badan Koordinasi Keluarga Berencana Nasional, BKKBN)
emerged as an energetic bureaucratic entity. However, with the onset of Indonesia’s
economic crisis in 1997–98 and the fall of President Soeharto in 1998, critics of New
Order population policies were more widely heard, and they gained political power
following the election of President Abdurrahman Wahid in 1999.
A central tenet of the Hulls’ account is that much of Indonesia’s success in family planning can be attributed to the authoritarian bureaucratic culture of the New
Order government. They observe that ‘these successes need to be seen as segments
of a larger socio-political transformation characterized by patrimonial authoritarianism and broad institutions of social control and governance’ (p. 47). While the
governance culture of the Soeharto era was critical in mobilising enthusiasm for
family planning among government officials and community leaders, it is debatable
how much this factored into the reproductive decisions of families and individual
women. Many Indonesian women came to see modern contraception as offering a
miraculous escape from unwanted fertility and pregnancy-related ill health. Strong
contraceptive demand coupled with the growth of private sector distribution may
largely explain why contraceptive use did not falter during the crisis years.
While Indonesia’s family planning program has been successful in providing
access to contraceptive services, the country has been slow to implement the sexuality, reproductive health and rights agendas espoused at the 1994 International
Conference on Population and Development (ICPD). The Hulls consider this issue,
beginning with BKKBN’s early resistance to addressing quality of care questions.
They note that ‘the demand to improve service quality, including elements such as
informed choice and better follow-up services, represented a threat to existing patrimonial approaches’ (p. 49). They also argue that BKKBN’s championing of family
welfare (keluarga sejahtera) served to deflect attention from the reproductive health and
welfare of individual women. A more charitable rendering of events might also allow
for the fact that the ICPD Programme of Action was a formidably ambitious blueprint
for action that perplexed as much as inspired BKKBN’s senior management.
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Iwu Dwisetyani Utomo’s chapter provides an appraisal of attitudinal and
behavioural changes affecting marriage, reproduction and women’s roles in postindependence Indonesia. She notes that gains in women’s educational attainment
over the past 50 years, combined with the country’s enriched division of labour,
have opened new opportunities for women that compete with traditional childrearing and familial responsibilities. The chapter also provides an informative discussion of the country’s current reproductive health challenges, for example high
rates of maternal mortality; the risk of HIV infection; unsafe abortion and inadequate post-abortion care; and continued reliance on harmful traditional practices
such as the use of jamu (traditional medicines) as vaginal drying agents.
Utomo concludes that a new ‘gender order’ offering women greater autonomy
and empowerment is taking root in Indonesia. While gains in women’s educational attainment and economic status, and growing respect for reproductive and
human rights, certainly bode well for the future, one fears the author has overly
discounted the possibility of conservative retrenchment (fed in part by growing
anti-Western sentiment and resurgent Islamic belief).
Sri Moertiningsih Adioetomo presents an overview of major demographic
changes that have occurred in post-independence Indonesia. Of particular note
is the chapter’s account of Indonesia’s growing statistical capacity, as the Central Bureau of Statistics (Biro [later Badan] Pusat Statistik) flowered into a worldclass statistical agency, and university-based survey research grew in professional
accomplishment. It is startling how little demographic information was available
during the Sukarno years to inform the development plans of ‘long gone bureaucrats’. The first post-independence population census in 1961 was a revelation,
and early population projections prepared by Widjojo Nitisastro and Nathanael
Iskanadar were pored over with fascination and growing alarm. As Adioetomo
notes, these projections did not foresee the rapid decline in fertility that ensued,
but they did galvanise official concern about rapid population growth and the
advisability of instituting a national family planning program.
Fifty years on, Indonesia’s demographic transition is nearly complete. Fertility
is approaching the replacement level of 2.1 births per woman, and infant and child
mortality are well below levels prevailing at the time of independence. And while
Indonesia was slow to urbanise compared with neighbouring countries in Southeast Asia, it has now done so with a vengeance. As Adioetomo demonstrates, this
altered demographic landscape has major implications for Indonesia’s development prospects. For example, the country is currently attempting to accommodate large numbers of young adults who are marrying later, becoming sexually
active earlier, and entering the labour force in unprecedented numbers. Whether
this ‘demographic bonus’ will translate into more rapid economic growth (as forecast by some economists easily lulled onto the treacherous shoals of demographic
determinism) remains to be seen. Indonesia will also be a rapidly aging society
over the coming half-century, and this will have major implications for health and
social services, as well as household budgets and living arrangements.
In conclusion, People, Population and Policy in Indonesia is an essential resource
for anyone interested in Indonesia’s demographic past and future prospects. It
also provides one of the most thorough historical accounts of the country’s family
planning and reproductive health efforts. The volume’s only shortcoming is that
the reader emerges with little sense of the contributions of international donors
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other than the Ford Foundation—and that is inadequately rendered, especially
in recounting the impact of Ford’s shift from technical capacity-building in government and university programs during the 1960s and 1970s to an emphasis on
‘gender’, ‘enabling environments’, ‘empowerment’ and NGO advocacy in the late
eighties and nineties.
Andrew Kantner
Pennsylvania State University
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Jamie Mackie (2005) Bandung 1955: Non-Alignment and Afro-Asian
Solidarity, Editions Didier Millet, Singapore, pp. 120. Paper: US$25.00.
This is a little gem of book, to mark the 50th anniversary of what to an earlier
generation was an iconic event. For that generation—those who were young professionals or students in the 1950s and 1960s—the book is a nostalgic reminder
of a world of ideas about development and international relations that has long
been forgotten. For younger people, it is a chance for brief immersion in ideas and
names that helped shape today’s world in ways that none of the leaders of that
time would have imagined.
The Bandung Conference of 1955 brought together leaders of 29 developing
countries in Africa and Asia, all but a couple of them newly released from colonialism. These included most of the countries of Asia (but not Malaysia or Singapore, and two Vietnams where now there is one, and only one Pakistan where
now there are two countries). It covered the few independent countries of Africa
on the eve of the ‘winds of change’ that soon after brought an end to colonialism
in almost the whole of that continent.
Mackie describes the varied hopes for the conference, with the most ambitious
being an aspiration of some for Asian and African developing countries to interact
cooperatively outside the great divide between the Soviet Union–oriented communist countries and the United States–led West. He explains as well the deliberate avoidance of that hope by leaders of a number of countries that were already
thoroughly aligned with one or the other side of that divide. The Cold War was
more important in Africa and Asia than notions of Afro-Asian solidarity.
One fine feature of the book is the wonderful set of photographs of participants
in the meeting, and providing historical and geographic context for it: Sukarno as
a boy and in his prime; various images reminding us of the distorted perspectives
of colonialism and the post-colonial succession; a chubby-faced Sihanouk, then
less than a quarter of the way into what was to become a 63-year ‘sort of’ reign;
and Zhou Enlai and Jawaharlal Nehru at high points of their influence and charm.
Indira Gandhi is a young, well-groomed assistant to her father.
The text recounts the background to the feelings that brought the post-colonial
countries together, in an illustrated brief history of the ‘Vasco da Gama Era’—that
short half millennium when the North Atlantic countries became influential as
traders in, and then, late in the period, as rulers of, most of Africa and Asia. This
background explains why it seemed relevant then for Sukarno to speak of ‘coloured peoples’. We receive a glimpse of why the large failures and successes of
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development that immediately succeeded the Vasco da Gama story leave no-one
seeking common themes among the diverse group of countries and communities
represented at Bandung.
Reading the book reminds us of the blind development alley down which postcolonial rhetoric took most of the countries represented at Bandung—and also of
the failure of those countries at Bandung that even then avoided alignment with
the ‘non-aligned’. Many, perhaps most, of the great leaders of the post-colonial
era were at Bandung, but none of these is remembered now for what each would
most have wanted—leadership in successful economic development that could
provide a sustainable basis for political influence and genuine independence. The
Bandung doubts about integration into an international economy had to be dispelled by later leaders before the successful development stories of Asia began,
which over recent decades have widened the contrast between Asian and African
development experiences.
There are intriguing sketches of great national leaders brought together in international context for the only time. Unsurprisingly, Zhou, Nehru and Sukarno are
most prominent among them. Mackie shows that Zhou was the diplomatic star
of the show—a glimpse of the personal quality that caused the great convulsions
in his own country a decade or so after Bandung to be less permanently damaging to long-term unity and development than they might have been. Sukarno’s
charisma and energy made Bandung important—but was he really able ‘to fascinate and enthral the audience for a whole hour, despite speaking in English’? And
Mackie’s commendable feminism outweighs judgment when he says of Indira
Gandhi that she later rose to greater heights than ‘all the women and men attending the conference’: among those who were not already in high office, perhaps.
This book, by an Australian, reminds us of the participation at the Bandung
conference of Australians John Burton and ANU professor C.P. Fitzgerald, and the
expression of their views at that early time that Australia should be involved officially in any conference of Asian countries. More remarkably, it records Nehru’s
welcoming of this theme in his concluding speech to this conference of ‘coloured
people’, a decade before the beginnings of dismantlement of the White Australia
Policy.
The book tells us of a couple of lasting achievements of the interactions at and
around the conference. None was as important to the future political and economic development of Asia and the Pacific as the Chinese prime minister’s declaration that ethnic Chinese in Southeast Asia could adopt the nationality of the
country in which they resided, and that it would be best if they complied with the
laws and customs of their adopted country. Mackie notes the historic importance
in the articulation of the Nehru–Zhou understanding on the ‘Five Principles’ of
peaceful coexistence, which included respect for all religious beliefs (alongside
Zhou’s declaration of his own atheism and the participation of a Chinese Muslim
in his delegation), and a statement that differences in ideology need not lead to
exclusion.
There is nothing left today of aspirations for Afro-Asian solidarity. But it is valuable to be reminded of why these aspirations once existed, and why the failure of
their realisation was inherent in the view of the world of which they were a part.
Ross Garnaut
ANU
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Jeffrey Sachs (2005) The End of Poverty: How We Can Make It
Happen in Our Lifetime, Penguin Books, London, pp. 320. A$24.95.*
1
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The End of Poverty is a lively book that relies heavily on Sachs’s advisory adventures in developing countries. The first four chapters give an unflattering view of
the role of economics and economic policy in development. Although Sachs nods
to the usefulness of mainstream economics in the growth of the world economy,
he sees formal economics and the policies to which it leads as bearing the principal
responsibility for the failure of developing and transitional (former communist)
countries to rid themselves of poverty. In Asia he claims that the technology of the
‘green revolution’, not the policies that led to its widespread adoption, was the
principal driver of growth. This is a curious conclusion for a poverty alleviation
program. It ignores the considerable analytical economic literature on the waves
of economic reform that started with the ‘Four Tigers’ and moved to Southeast
Asia and then to China and India, to make key contributions to the reduction of
absolute poverty in the world from a peak of some 1.5 billion people in 1980 to
less than 650 million people, with more than half in sub-Saharan Africa, in 2000
(Bhalla 2002: 148).
The next three chapters are a travelogue of Sachs’s principal activities as ‘advisor
to developing countries’. Bolivia, where inflation did fall after Sachs’s visit, takes
pride of place, although sustained economic development did not follow. The
Altiplano remains mired in poverty and the consequent populist revolt threatens
such minimal growth as has been achieved in the lowlands. The country is again
destabilised. Sachs also claims credit for freeing the Polish economy from communism, but Poland is one of the slowest growing of the former European communist
economies. History is being even less kind to Sachs’s ‘advisory’ activities in Russia. He was head of the Harvard Institute for International Development (HIID)
when it became embroiled in a scandal involving the dubious use of United States
Agency for International Development funds in Russia’s privatisation program
(Wedel 2000; The National Interest 2000). HIID had previously made considerable
inputs into rapid Indonesian growth and supported Indonesian economists who
played a key role in maintaining their country’s stability and forward impetus
(Stern 2000). Regrettably, Harvard University had to close HIID down following
this episode. Sachs moved to the Earth Institute at Columbia University and to a
leading role in the UN Millennium Development Goals program.
The second half of The End of Poverty is a manifesto of support for wealthy
industrial countries to contribute 0.7% of their national income to aid to developing countries to end poverty in our lifetime. Like Marx’s Communist Manifesto,
The End of Poverty does not lack conviction or popular appeal, but it is short on
economic analysis and common sense.
Sachs passionately believes that aid transfers of taxpayers’ funds from wealthy
industrial to poor countries are the key to ending poverty, but his book ignores
the debate about the absorptive capacity and effectiveness of aid. However measured, aid to Africa has been far higher than aid to Asia, notably during the last 25
* A different review by Profesor Hughes of this book has been previously published in
Policy 21 (4), Summer 2005–06: 58–9.
1
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years, when poverty increased in Africa and declined markedly in Asia because
of the latter’s growth. Peter Bauer already argued in the 1950s that aid has ‘Dutch
disease’ economic effects that make growth difficult, and that it maintains in place
inept and corrupt governments that grow poverty. Although forgiving debt to
African countries plays a considerable role in Sachs’s manifesto, the debate about
the effectiveness of this form of aid is also not reflected in his book. Sachs claims
credit for the campaign that forgave the Heavily Indebted (mostly African) Poor
Countries (HIPCs) their official debt. These countries have also not been servicing their debt to the international financial organisations for the last two decades
under the International Monetary Fund–World Bank HIPC scheme. Part of the
cost of this scheme in terms of aid funds forgone has been borne by countries such
as Indonesia that have not been profligate, but have serviced their debt.
Perhaps aware that his proposals for welfare handouts rather than for growth
processes do not resonate in countries where domestic welfare has led to social and
economic problems, Sachs calls his proposals ‘investments in sustained economic
growth’ (p. 42). But handouts do not create competitive markets, employment,
rising productivity, savings and investment. Sachs maintains that the analysts
who see internal and inter-country fighting, counter-productive economic policies that appropriate the benefits of growth to small elites, and egregious corruption as principal causes of African poverty are exaggerating. But he does not
explain why Botswana and Mauritius (which are not on his list of advisees) have
been able to nearly double their GDP almost every 10 years since 1970 by pursuing mainstream economics. Nor does he discuss the hard evidence that nowhere
in the world has poverty been reduced without growth. As poverty ambassador
for the UN, Sachs follows the ‘rockenomics’ of Bono, the rock star who has written a preface to this book. The Communist Manifesto won wide support but led
to enormous costs in the socialist economies that followed its flawed economic
analysis. The End of Poverty similarly threatens millions of lives because it is not
soundly based on evidence and economic analysis.
Helen Hughes
ANU, Canberra, and
Centre for Independent Studies, Sydney
References
Bhalla, S.S. (2002) Imagine There’s No Country: Poverty, Inequality, and Growth in the Era of
Globalization, Institute for International Economics, Washington DC.
Stern, Joseph J. (2000) ‘Indonesia–Harvard University: lessons from a long-term technical
assistance project’, Bulletin of Indonesian Economic Studies 36 (3): 113–25.
The National Interest (2000) ‘Tainted transactions: an exchange, The National Interest 60, Summer: 98.
Wedel, Janine R. (2000) ‘Tainted transactions: Harvard, the Chubais Clan and Russia’s
ruin’, The National Interest 59, Spring: 23–34.
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Andrew Rosser (2002) The Politics of Economic Liberalisation in Indonesia: State,
Market and Power, Curzon Press, Richmond, Surrey, pp. xv + 232. Cloth: £75.00.
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The process by which economic policy is formulated is a subject that has both
fascinated and perplexed close observers of Indonesia for many years. The topic
has recently assumed particular significance, however, in view of the economic
collapse that succeeded the boom years of the 1980s and 1990s. As this study asks,
will policies encouraging liberalisation continue to integrate Indonesia more
closely into the international economy? Or is there likely to be a shift towards
policies favouring populism and economic nationalism? This empirically rich
account puts the question into an historical context, suggesting that the outcome
will depend upon the struggle between opposing socio-political forces.
The book’s thesis is quite straightforward, and can be summarised briefly. Writing within the tradition of Indonesian political economy represented by Richard
Robison and Jeffrey Winters, Rosser suggests that economic policy is ultimately
determined by struggles within society. Thus, the liberalising reforms of the 1980s
and 1990s were not simply due to policy makers responding rationally to structural
economic changes and ‘market-friendly’ policy choices. Rather, they were made
possible because the business and bureaucratic forces that benefited previously
from state patronage had less political influence, such that the reform-minded technocrats were able to implement their economic policy preferences. In short, economic liberalisation was made possible by a shift in social and political power.
After a general introduction, chapter 2 describes various approaches to analysis
of the New Order. None of the analysis here is new, but it provides a useful survey
of behavouralist, statist and class-based perspectives on the Indonesian political
economy. Rosser is critical of the ‘neo-Weberian’ and public choice perspectives,
and proposes instead a model of the state as a ‘multi-dimensional’ entity, responding at different times to class, state-centred or structural pressures, depending on
the circumstances (p. 30). The following chapter provides a summary of economic
policies since the advent of the New Order, and develops the analytical framework
used throughout the book. Focusing on the period between the early 1980s and
1997, Rosser suggests that structural economic pressures for reform were mediated
by socio-political forces. Specifically, economic liberalisation involved a struggle
between ‘politico-bureaucrats’ allied to large capitalist conglomerates and marketoriented technocrats, often supported by what Rosser calls ‘mobile capitalists’. ‘The
extent of liberalisation in Indonesia has been a function of the extent to which economic shocks have shifted power and influence away from the politico-bureaucrats
and the conglomerates and towards mobile capitalists’ (p. 32). And because the
conglomerates retained considerable political influence, the deregulation measures
implemented prior to 1998 only ever resulted in partial liberalisation.
The four chapters in part II of the book are perhaps the most useful, describing in detail the outcome of this struggle in four arenas of policy formulation. The
author shows how the banking industry was successfully deregulated because
the reformist objectives of the technocrats were supported by the conglomerates:
deregulation allowed them to expand into newly privatised areas. By contrast,
the conglomerates strongly resisted reforms that would have allowed closer state
scrutiny of their business dealings. As a result, the banking sector remained largely
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disorganised prior to the 1997 crash. Similarly, chapter 5 shows how deregulation
of the capital market in the 1980s was welcomed by domestic conglomerates, for it
provided them with easier access to new sources of credit. Better company reporting, greater control of share trading, and more protection for minority shareholders indicate important improvements. Large national corporations successfully
resisted other regulatory pressures, however, with the result that by mid-1997 little progress had been made towards the regulation of share allocation practices
and privatisation of the Jakarta stock exchange. As a result, Rosser suggests, the
depth of the 1997–98 collapse needs also to be considered in terms of the weakness of state controls in the capital market sector.
Chapter 6 shows that the entrenched interests of the conglomerates made the
deregulation of trade and industry especially difficult. Liberalisation of the television and electricity sectors did proceed, but only because it opened up new
investment opportunities to conglomerates linked to the Soeharto family. By contrast, the technocrats were generally unable to overcome business opposition to
rationalisation of other major trade and industry sectors. This policy failure confirmed fears that the government could not protect the interests of mobile capitalists, and ‘helped lay the foundations for the dramatic collapse of the Indonesian
economy’ (p. 146). As chapter 7 describes, reform of the laws on intellectual property presents a different case entirely, for liberalisation in this sector proceeded
relatively unhindered. Once again, the reason is to be found in the political influence of business. Intense international pressure to reduce counterfeiting encountered little domestic opposition, for few Indonesian capitalists had substantial
interests in this sector.
Rosser has thus produced a well-researched and well-supported argument. The
book’s strength lies in the four case studies, which provide an important record of
a crucial period in Indonesia’s recent development experience. This study of Indonesia’s recent economic history is also useful for those who seek a better understanding of how policy making under the New Order contributed to the severity
of the subsequent economic collapse.
The description of the period 1997–99 (part III) is less convincing, however.
We are left uncertain, for example, about the forces now acting on the ‘multidimensional state’ mentioned in chapter 2. Presumably, structural economic pressures made the state less ‘multi-dimensional’. But the loss of relative influence by
state and class-based forces is not made explicit—or dealt with theoretically.
The book would also have benefited from more careful editing. In particular,
precise definitions of key organisational concepts at an early stage would have
helped the reader. As it is, we are left to infer the meaning from the context of
terms such as ‘neo-Weberian’ and ‘mobile capitalists’. By the end of the book
the reader is confident of what is intended, but questions are raised that are not
answered. We are left wondering, for example, how the mobile capitalists who
emerged after 1997 differed from those of earlier periods.
This is nevertheless an important study of a crucial period in Indonesia’s political economy. It provides a valuable description of domestic socio-political forces
underpinning the recent boom—and a compelling account of why so many opportunities were wasted.
Ian Chalmers
Curtin University, Perth, Western Australia
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Ho Khai Leong (ed.) (2005) Reforming Corporate Governance in Southeast Asia:
Economics, Politics, and Regulations, Institute of Southeast Asian Studies,
Singapore, pp. 387. Paper: S$49.90/US$29.90; Cloth: S$69.90/US$46.90.
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This book provides an excellent sampler of corporate governance reforms in the
Southeast Asian countries, reaching similar conclusions for each country. Most
writers agree that it is not that the regulations and laws do not offer good guidance
on corporate governance in Southeast Asia, but that the business infrastructure
does not provide a supportive environment for implementing these rules. For
example, a patriarchal culture, which embraces respect at all costs for one’s seniors, has to some degree inhibited the punishment mechanism and prevented fair
competition. Further, corruption and bribery have become the plague of Asian
financial markets. All these issues pose challenges for Southeast Asian financial
market participants in practising good corporate governance.
In chapter 1, Madhav Mehra provides a summary of issues that may either
encourage market participants to practise good corporate governance or dissuade
them from doing so. In chapter 2, Wu Xun argues that political institutions play
an important role in shaping the structure of corporate governance in Asia. More
importantly, he suggests that in formulating a reform agenda, policy makers in
this region should incorporate necessary adjustments that take into account the
unique political system of each country. He also suggests that forces outside the
corporate boardrooms, such as unfamiliarity with procedures of disclosure, and
the widespread practice of obtaining favours from corrupt government officers,
must be carefully controlled in the laws of governance. In chapter 3, Low Chee
Keong proposes that empowering shareholders with legal infrastructure for class
and derivative action lawsuits may make enforcement of good corporate governance more effective. Chapter 4, by Dipinder S. Randhawa, provides an explanation of how the governance of financial institutions in Southeast Asia differs from
that of other industries. Unfortunately, he becomes diverted by a discussion of
the impact and causes of the Asian crisis, and his conclusion strays from the main
purpose of the chapter.
Chapters 5 and 6 of the book contain discussion of corporate governance
reforms in Malaysia. Cheah Kooi Guan (chapter 5) examines the practical implications of various governance reforms implemented in Malaysia since the Asian
crisis of 1997. He concludes that while there is still room for improvement, financial participants in Malaysia have taken the right path by actively participating in
the promotion of effective corporate governance practices. Philip Koh Tong Ngee
(chapter 6) provides a more in-depth discussion of regulations and actions taken
in Malaysia in respect of the laws on disclosure and transparency, shareholder
rights, management oversight, other internal mechanisms, governance in relation
to large creditors, and creditor rights.
Djisman S. Simandjuntak (chapter 7) describes Indonesia’s corporate governance
reform as low-speed and difficult to achieve while legal uncertainties persist in the
country. Unfortunately, although the chapter is filled with important information
and interesting lines of reasoning, Simandjuntak does not offer clear recommendations for Indonesian regulators as to how best to manage the reform of the country’s corporate governance. Chapter 8 contains an investigation by Andrew Rosser
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of why Indonesia has failed to develop an effective system of corporate governance. Having analysed this issue from the political economy perspective, he arrives
at a similar conclusion to that of Simandjuntak: that it will be impossible to impose
good corporate governance if enforcement of the rule of law is weak.
In chapter 9, Deunden Nikomborirak examines the approaches and measures that can be taken by Thailand’s financial market participants to build corporate governance after the Asian crisis. He concludes that although a ‘non-legal’
approach is helpful, public disclosure of violators is necessary and the law needs
to be implemented more forcefully. Saravuth Pitiyasak (chapter 10) suggests that
a combination of ‘self’, ‘market’, and ‘regulatory’ disciplines is the key to efficient
governance implementation.
Chapter 11, by Kala Anandarajah, provides a success story about corporate
governance practices in Singapore that may inspire other countries in the region.
Ho Khai Leong (chapter 12) investigates a specific niche in the Singaporean business environment, composed of government-linked companies (GLCs). He discusses major controversies on the existence of GLCs and their contribution to the
economy and political accountability in Singapore, concluding that GLCs are a
special case that needs an exclusive set of rules of corporate governance.
Felipe B. Alfonso, Branka A. Jikich and René G. Bañez (chapter 13) provide a
broad picture of corporate governance reform in the Philippines. They end with
the remark that basic reforms must allow companies to thrive and compete in the
global market in a ‘distinctly Filipino way’, but unfortunately offer no explanation of what this means. In chapter 14, Mario A. Lamberte and Ma. Chelo V. Manlagñit provide empirical evidence that market conditions, corporate governance
and agency costs explain variations in profit efficiencies across financial institutions in the Philippines.
Nick J. Freeman (chapter 15) tries to illustrate the ironies of introducing corporate governance in Vietnam. The country began secondary stock trading only in
mid-2000, the state owns most large companies, and regulations for small companies have not been established because they are considered too small to matter.
Nonetheless, Freeman offers suggestions on how best to approach good corporate
governance in the country. The book’s last chapter (16), by Nguyen Van Thang,
provides an interesting discussion of how Vietnam equitises state-owned enterprises based on socialist ideology, and of current corporate governance practices
in the country, concluding with an optimistic view of Vietnam’s future.
This book offers strong and comprehensive analysis of one of the most intriguing subjects in financial economics (despite the flowery greenish cover’s suggestion of insubstantial content). Ho Khai Leong deserves applause for having
succeeded in his aim of providing readers with a compilation of cross-disciplinary
studies of corporate governance in Southeast Asia.
Elisa Muresan
Long Island University, New York
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125
Sukardi Rinakit (2005) The Indonesian Military after the New Order,
NIAS Press, Copenhagen, and Institute of Southeast Asian
Studies, Singapore, pp. 278. Paper: S$39.90/US$22.95.
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With the return of democracy in 1998, Indonesians could resume writing
about their military history analytically, rather than through the lens of some
Orwellian ideology. Sukardi Rinakit had the advantage of working within the
state bureaucracy as a ministerial speech writer in the key ministries of defence
and home affairs. In researching the book he was able to interview some of
the key actors in Indonesia’s democratic transition, as well as former President
Soeharto.
The book focuses on the Indonesian military’s role in securing the Soeharto
regime and in the transition to democracy. It covers a lot of familiar ground for
those who follow Indonesian affairs, and attempts to answer two fundamental
questions. First, why did the Indonesian National Army (TNI) not seize power
when Soeharto stepped down and, secondly, is a resurgence of military political
power likely? There is also a lengthy exposition on military finances, but it does
not significantly extend the boundaries of knowledge on this topic. For example,
while it contains a list of military companies, it does not discuss ownership or
management structures or their particular significance to the military.
Inadequate space and analysis is devoted to the key questions. This is the result
partly of not making the best use of the interviews conducted, and partly of not
interviewing, or not exploring the motivations of, the various actors in the drama,
namely members of the two principal factions of the TNI, and the Soeharto and
Habibie camps. Those looking for fresh insights from interviews with Soeharto or
other key figures will be disappointed.
The author attributes General Wiranto’s failure to seize power when offered
it by Soeharto, and when urged to do so by some anti-Habibie generals, to his
awareness of popular opposition to the military. Although this factor cannot be
ignored, Sukardi does not explore the possible consequences had Wiranto seized
power. For example, would he have been able to unite the TNI behind him, or
would General Prabowo have launched a counter-coup either on his own behalf
or as the defender of Habibie? Unfortunately, the research does not shed any new
light on such questions.
On the second question, the response is more of an afterthought than a central
part of the study. Sukardi comes to the rather gloomy conclusion that a resurgence
of military political power is likely, using either the doctrinal bridges to authoritarianism left in Indonesian law and military doctrine—for example, the recent
reactivation of the territorial structure for counter-terrorism purposes—or raw
military power, or some combination thereof.
Sukardi attributes the propensity of the new generation of officers to reclaim
their lost power to a decline in the collective IQ of the officer corps in recent years,
and to their motivation for enlisting in the military being political power rather
than a desire for a professional career.
The first characteristic is measured from a decline in the average scholastic achievement of recent generations of officers. The author fails to analyse
whether this is based on a valid comparison of the two groups; for example, it
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might be a consequence of internal or external variation in the statistics. If the
decline is real, what does it mean in practice; will it impact on professional competence and, if so, in what way? It must also be borne in mind that the figures
represent averages and that there may still be sufficient bright officers to fill the
higher ranks.
No account is taken of what a reformed military might look like and what its
requirement for officers might be. Even if the figures Sukardi has are correct and
valid, it might not be a problem for a reformed military, which should theoretically
be far less top-heavy than the current one. The contention that an officer corps of
lower IQ than previous generations is more likely to resort to brute force to defeat
its intellectual superiors in the other institutions of state is also spurious.
The question of motivation for enlisting in the military relies on even more
subjective assessments, although it cannot be ignored. There is no measure of
motivation to rely on other than anecdotal observation. Certainly, it is unlikely
that aspiring navy and air force officer cadets would have seen a military career
as an assured stepping stone to a political career. Moreover, the rhetoric, if not
the reality, of the military during the 1990s was towards a declining political role
for the military. If such political motivations remain, they are unlikely to surface
unless the government fails to revive the economy and national unity is seriously threatened, or unless the government fails to take the initiative in security
sector reform, and allows the military to brood directionless on the sidelines
about lost glory.
Much has been done in relation to security sector reform since 1998, but one
area that has remained relatively untouched is military reform. Until now no government has had the political capital to seize the initiative and formulate a new
defence policy—one more appropriate to a democracy in a dynamic region—as a
basis for fundamental military reform. Instead, we are seeing a drift that allows
fashions such as counter-terrorism, rather than sound analysis, to dictate policy
and structure.
The government of Susilo Bambang Yudhoyono has the potential to address
this challenge. The resolution of the Aceh conflict, and learning to manage Papua
with minimum force, are essential elements of state consolidation and security
sector reform. Well-managed government-directed military reform could help
achieve these objectives and reduce the potential for authoritarian ambitions to
resurface in the TNI.
The publishers of this book can take little pride in their product. There has been
virtually no editing of the content, grammar or spelling, and several clusters of
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Book reviews
To cite this article: (2006) Book reviews, Bulletin of Indonesian Economic Studies, 42:1,
113-130, DOI: 10.1080/00074910600632427
To link to this article: http://dx.doi.org/10.1080/00074910600632427
Published online: 18 Jan 2007.
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BOOK REVIEWS
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Tim Lindsey and Helen Pausacker (eds) (2005) Chinese Indonesians:
Remembering, Distorting, Forgetting, Institute of Southeast Asian
Studies, Singapore, and Monash Asia Institute, Melbourne,
pp. xxvii + 215. Paper: S$39.90/US$25.90; Cloth: S$69.90/US$49.90.
Indonesia’s ethnic Chinese minority is so crucial to the country’s economy that a reliable grasp of its complex political and socio-cultural status is essential for any social
scientist aiming to comprehend its strengths and vulnerabilities. For such persons,
several essays in this book would be extremely valuable—and others intrinsically
interesting. It is not only the most up-to-date but also the best informed and most
discerning set of studies on the subject to have appeared in recent years. It consists
of nine articles contributed by Australian and other specialists on the Chinese Indonesians—note which is the noun and which the adjective there: they are nearly all
now Indonesian nationals, but ‘ethnic Chinese’; my own preference would be to
call them ‘Sino-Indonesians’, by analogy with the now widely accepted term ‘SinoThai’. The articles were prepared for a festschrift to honour the retirement in 2002 of
Charles Coppel, the doyen of Australian scholars in this field. The book is edited by
two of his former students, of whom one, Tim Lindsey, is now Australia’s leading
specialist in Indonesian law and legal procedures.
Let me summarise briefly what is in the book. Its most contemporary pieces
are the account by Lindsey of ‘the uneven trajectory of reform of Indonesia’s
racially discriminatory legal management of the ethnic Chinese since 1998’; a useful survey of some episodes of anti-Chinese violence in 1998–99 by Jemma Purdey
(another of Coppel’s former graduate students, who has written a wider-ranging
PhD on that subject); an intriguing account by Leo Suryadinata of recent official
policies towards Confucianism and Buddhism; and a brief but challenging ‘Portrait of the Chinese in post-Soeharto Indonesia’ by Arief Budiman. (Of the latter, I
can only say that I hope he is right in his very confident generalisations about how
the attitudes of pribumi towards ethnic Chinese have changed for the better, as
also the attitudes of ethnic Chinese towards pribumi, since 1998; but I feel we need
much stronger evidence to that effect than he provides.) The other five chapters
are more historical and recondite in approach, some by eminent scholars in this
field: Mary Somers-Heidhues, Claudine Salmon and Jean Gelman Taylor.
Tim Lindsey’s piece on ‘Reconstituting the ethnic Chinese in post-Soeharto
Indonesia: law, racial discrimination and reform’ is a major contribution on the
administrative and legal bases of anti-Chinese discrimination there. He explains
well how the Soeharto-era policy of urging ‘assimilation’ of the ethnic Chinese
into the majority population was pursued ‘through a series of interlocking and
sometimes overlapping bureaucratic subordinate regulations, often issued in the
ISSN 0007-4918 print/ISSN 1472-7234 online/06/010113-18
DOI: 10.1080/00074910600632427
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form of “circular letters” and “decisions” by a range of ministries … These are
ambiguous and … are intended as codes, often signalling official approval and
encouragement for institutionalised discrimination rather than expressly authorising it in detail. The effect, however, was the same’, as seen in regulations dealing
with identity bar codes on official identity documents—the most insidious and
direct mode of discrimination, still operating regardless of claims to have abandoned it; the pressure on ethnic Chinese to adopt ‘Indonesian’ names; the limiting of public use of the Chinese language; the restrictions on educational access;
and the limiting of commercial opportunities for the ethnic Chinese. The changes
to these since May 1998 have been largely symbolic, despite official declarations
of intent to abolish all discriminatory regulations and international pressure to do
so. Discrimination has become ‘firmly fixed in a web of ambiguous regulations
and less ambiguous policy’.
Lindsey makes the interesting suggestion that what would be most effective
in the current reformasi era would be steps by the ethnic Chinese to ‘enforce their
rights through court action’ in the Human Rights Commission (KomnasHAM),
which has already identified 60 regulations that discriminate against them. But
that ‘would require great courage indeed’ in the light of such a long history of
overt and covert discrimination.
In her article on ‘Anti-Chinese violence and transitions in Indonesia: June 1998
– October 1999’ (but with only passing reference to the far more serious and politically motivated May 1998 riots in Jakarta which helped to precipitate Soeharto’s
downfall), Jemma Purdey contrasts the extent and nature of the outbreaks that
occurred then with the much worse violence that followed the overthrow of President Sukarno in 1965–66. Her essay, which usefully links the anti-Chinese violence
of the late 1990s with other forms of state terrorism and premanisme (gangsterism)
as well, examines in detail the social dynamics of two localised episodes in Central Java and Bandung to show their diversities and complexities. In the former
case, in Kebumen, ‘the processes of assimilation and harmony between groups
that had been present for so long were all but destroyed following the violence’,
and the Kebumen Chinese ‘shifted from a position of making pronounced efforts
to assimilate and to assist the indigenous urban poor to questioning whether
there was a place for them in that community at all’. In the Bandung case (in
Holis) deteriorating economic conditions in 1997–99 had created conditions ‘so
tense that they were almost at breaking point’. And the new post-Soeharto political climate of reformasi was interpreted by many Indonesians as meaning ‘a new
freedom to resolve injustices, perceived or real, by means of mass mobilisation’.
Expectations that the end of the New Order would deliver ‘greater equality for
the ethnic Chinese’—or, conversely, better conditions for pribumi Indonesians—
were not realised. Purdey concludes that: ‘[though these episodes were] set off
by various different sets of conditions, the association of Chinese with economic
stress, marginalisation and injustice has been deeply entrenched in Indonesians’.
Unfortunately space limitations precluded her from exploring that very important aspect of the entire problem as fully as it deserves. But as a first step towards
the analysis of the dynamics of anti-Chinese violence, her paper is both valuable
and almost unique.
Jamie Mackie
ANU
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Terence H. Hull (ed.) (2005) People, Population, and Policy in Indonesia,
Equinox Publishing, Jakarta, pp. 185. Cloth: S$35.90/US$19.95
(Indonesian version published by Equinox in 2006 as
Masyarakat, Kependudukan, dan Kebijakan di Indonesia).
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The story of Indonesia’s post-independence demographic transition and reproductive revolution is recounted in People, Population and Policy in Indonesia, edited
by Terence Hull. This publication is part of a series offering ‘critical perspectives’
on development issues addressed by the Ford Foundation during its 50 years of
involvement in Indonesia.
Terence and Valerie Hull provide an overview of Indonesia’s efforts to reduce
fertility and provide universal access to reproductive health care. Their account
begins with the early efforts of Indonesia’s family planning pioneers, such as Dr
Julie Sulianti Saroso and Dr H.M. Judono, to promote women’s health during the
Sukarno years, when family planning was discouraged as national policy. The coming of the New Order government in 1965 saw growing alarm about Indonesia’s
rapid rate of population growth. Population control became a major element of President Soeharto’s development armamentarium, and the National Family Planning
Coordinating Board (Badan Koordinasi Keluarga Berencana Nasional, BKKBN)
emerged as an energetic bureaucratic entity. However, with the onset of Indonesia’s
economic crisis in 1997–98 and the fall of President Soeharto in 1998, critics of New
Order population policies were more widely heard, and they gained political power
following the election of President Abdurrahman Wahid in 1999.
A central tenet of the Hulls’ account is that much of Indonesia’s success in family planning can be attributed to the authoritarian bureaucratic culture of the New
Order government. They observe that ‘these successes need to be seen as segments
of a larger socio-political transformation characterized by patrimonial authoritarianism and broad institutions of social control and governance’ (p. 47). While the
governance culture of the Soeharto era was critical in mobilising enthusiasm for
family planning among government officials and community leaders, it is debatable
how much this factored into the reproductive decisions of families and individual
women. Many Indonesian women came to see modern contraception as offering a
miraculous escape from unwanted fertility and pregnancy-related ill health. Strong
contraceptive demand coupled with the growth of private sector distribution may
largely explain why contraceptive use did not falter during the crisis years.
While Indonesia’s family planning program has been successful in providing
access to contraceptive services, the country has been slow to implement the sexuality, reproductive health and rights agendas espoused at the 1994 International
Conference on Population and Development (ICPD). The Hulls consider this issue,
beginning with BKKBN’s early resistance to addressing quality of care questions.
They note that ‘the demand to improve service quality, including elements such as
informed choice and better follow-up services, represented a threat to existing patrimonial approaches’ (p. 49). They also argue that BKKBN’s championing of family
welfare (keluarga sejahtera) served to deflect attention from the reproductive health and
welfare of individual women. A more charitable rendering of events might also allow
for the fact that the ICPD Programme of Action was a formidably ambitious blueprint
for action that perplexed as much as inspired BKKBN’s senior management.
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Iwu Dwisetyani Utomo’s chapter provides an appraisal of attitudinal and
behavioural changes affecting marriage, reproduction and women’s roles in postindependence Indonesia. She notes that gains in women’s educational attainment
over the past 50 years, combined with the country’s enriched division of labour,
have opened new opportunities for women that compete with traditional childrearing and familial responsibilities. The chapter also provides an informative discussion of the country’s current reproductive health challenges, for example high
rates of maternal mortality; the risk of HIV infection; unsafe abortion and inadequate post-abortion care; and continued reliance on harmful traditional practices
such as the use of jamu (traditional medicines) as vaginal drying agents.
Utomo concludes that a new ‘gender order’ offering women greater autonomy
and empowerment is taking root in Indonesia. While gains in women’s educational attainment and economic status, and growing respect for reproductive and
human rights, certainly bode well for the future, one fears the author has overly
discounted the possibility of conservative retrenchment (fed in part by growing
anti-Western sentiment and resurgent Islamic belief).
Sri Moertiningsih Adioetomo presents an overview of major demographic
changes that have occurred in post-independence Indonesia. Of particular note
is the chapter’s account of Indonesia’s growing statistical capacity, as the Central Bureau of Statistics (Biro [later Badan] Pusat Statistik) flowered into a worldclass statistical agency, and university-based survey research grew in professional
accomplishment. It is startling how little demographic information was available
during the Sukarno years to inform the development plans of ‘long gone bureaucrats’. The first post-independence population census in 1961 was a revelation,
and early population projections prepared by Widjojo Nitisastro and Nathanael
Iskanadar were pored over with fascination and growing alarm. As Adioetomo
notes, these projections did not foresee the rapid decline in fertility that ensued,
but they did galvanise official concern about rapid population growth and the
advisability of instituting a national family planning program.
Fifty years on, Indonesia’s demographic transition is nearly complete. Fertility
is approaching the replacement level of 2.1 births per woman, and infant and child
mortality are well below levels prevailing at the time of independence. And while
Indonesia was slow to urbanise compared with neighbouring countries in Southeast Asia, it has now done so with a vengeance. As Adioetomo demonstrates, this
altered demographic landscape has major implications for Indonesia’s development prospects. For example, the country is currently attempting to accommodate large numbers of young adults who are marrying later, becoming sexually
active earlier, and entering the labour force in unprecedented numbers. Whether
this ‘demographic bonus’ will translate into more rapid economic growth (as forecast by some economists easily lulled onto the treacherous shoals of demographic
determinism) remains to be seen. Indonesia will also be a rapidly aging society
over the coming half-century, and this will have major implications for health and
social services, as well as household budgets and living arrangements.
In conclusion, People, Population and Policy in Indonesia is an essential resource
for anyone interested in Indonesia’s demographic past and future prospects. It
also provides one of the most thorough historical accounts of the country’s family
planning and reproductive health efforts. The volume’s only shortcoming is that
the reader emerges with little sense of the contributions of international donors
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other than the Ford Foundation—and that is inadequately rendered, especially
in recounting the impact of Ford’s shift from technical capacity-building in government and university programs during the 1960s and 1970s to an emphasis on
‘gender’, ‘enabling environments’, ‘empowerment’ and NGO advocacy in the late
eighties and nineties.
Andrew Kantner
Pennsylvania State University
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Jamie Mackie (2005) Bandung 1955: Non-Alignment and Afro-Asian
Solidarity, Editions Didier Millet, Singapore, pp. 120. Paper: US$25.00.
This is a little gem of book, to mark the 50th anniversary of what to an earlier
generation was an iconic event. For that generation—those who were young professionals or students in the 1950s and 1960s—the book is a nostalgic reminder
of a world of ideas about development and international relations that has long
been forgotten. For younger people, it is a chance for brief immersion in ideas and
names that helped shape today’s world in ways that none of the leaders of that
time would have imagined.
The Bandung Conference of 1955 brought together leaders of 29 developing
countries in Africa and Asia, all but a couple of them newly released from colonialism. These included most of the countries of Asia (but not Malaysia or Singapore, and two Vietnams where now there is one, and only one Pakistan where
now there are two countries). It covered the few independent countries of Africa
on the eve of the ‘winds of change’ that soon after brought an end to colonialism
in almost the whole of that continent.
Mackie describes the varied hopes for the conference, with the most ambitious
being an aspiration of some for Asian and African developing countries to interact
cooperatively outside the great divide between the Soviet Union–oriented communist countries and the United States–led West. He explains as well the deliberate avoidance of that hope by leaders of a number of countries that were already
thoroughly aligned with one or the other side of that divide. The Cold War was
more important in Africa and Asia than notions of Afro-Asian solidarity.
One fine feature of the book is the wonderful set of photographs of participants
in the meeting, and providing historical and geographic context for it: Sukarno as
a boy and in his prime; various images reminding us of the distorted perspectives
of colonialism and the post-colonial succession; a chubby-faced Sihanouk, then
less than a quarter of the way into what was to become a 63-year ‘sort of’ reign;
and Zhou Enlai and Jawaharlal Nehru at high points of their influence and charm.
Indira Gandhi is a young, well-groomed assistant to her father.
The text recounts the background to the feelings that brought the post-colonial
countries together, in an illustrated brief history of the ‘Vasco da Gama Era’—that
short half millennium when the North Atlantic countries became influential as
traders in, and then, late in the period, as rulers of, most of Africa and Asia. This
background explains why it seemed relevant then for Sukarno to speak of ‘coloured peoples’. We receive a glimpse of why the large failures and successes of
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development that immediately succeeded the Vasco da Gama story leave no-one
seeking common themes among the diverse group of countries and communities
represented at Bandung.
Reading the book reminds us of the blind development alley down which postcolonial rhetoric took most of the countries represented at Bandung—and also of
the failure of those countries at Bandung that even then avoided alignment with
the ‘non-aligned’. Many, perhaps most, of the great leaders of the post-colonial
era were at Bandung, but none of these is remembered now for what each would
most have wanted—leadership in successful economic development that could
provide a sustainable basis for political influence and genuine independence. The
Bandung doubts about integration into an international economy had to be dispelled by later leaders before the successful development stories of Asia began,
which over recent decades have widened the contrast between Asian and African
development experiences.
There are intriguing sketches of great national leaders brought together in international context for the only time. Unsurprisingly, Zhou, Nehru and Sukarno are
most prominent among them. Mackie shows that Zhou was the diplomatic star
of the show—a glimpse of the personal quality that caused the great convulsions
in his own country a decade or so after Bandung to be less permanently damaging to long-term unity and development than they might have been. Sukarno’s
charisma and energy made Bandung important—but was he really able ‘to fascinate and enthral the audience for a whole hour, despite speaking in English’? And
Mackie’s commendable feminism outweighs judgment when he says of Indira
Gandhi that she later rose to greater heights than ‘all the women and men attending the conference’: among those who were not already in high office, perhaps.
This book, by an Australian, reminds us of the participation at the Bandung
conference of Australians John Burton and ANU professor C.P. Fitzgerald, and the
expression of their views at that early time that Australia should be involved officially in any conference of Asian countries. More remarkably, it records Nehru’s
welcoming of this theme in his concluding speech to this conference of ‘coloured
people’, a decade before the beginnings of dismantlement of the White Australia
Policy.
The book tells us of a couple of lasting achievements of the interactions at and
around the conference. None was as important to the future political and economic development of Asia and the Pacific as the Chinese prime minister’s declaration that ethnic Chinese in Southeast Asia could adopt the nationality of the
country in which they resided, and that it would be best if they complied with the
laws and customs of their adopted country. Mackie notes the historic importance
in the articulation of the Nehru–Zhou understanding on the ‘Five Principles’ of
peaceful coexistence, which included respect for all religious beliefs (alongside
Zhou’s declaration of his own atheism and the participation of a Chinese Muslim
in his delegation), and a statement that differences in ideology need not lead to
exclusion.
There is nothing left today of aspirations for Afro-Asian solidarity. But it is valuable to be reminded of why these aspirations once existed, and why the failure of
their realisation was inherent in the view of the world of which they were a part.
Ross Garnaut
ANU
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Jeffrey Sachs (2005) The End of Poverty: How We Can Make It
Happen in Our Lifetime, Penguin Books, London, pp. 320. A$24.95.*
1
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The End of Poverty is a lively book that relies heavily on Sachs’s advisory adventures in developing countries. The first four chapters give an unflattering view of
the role of economics and economic policy in development. Although Sachs nods
to the usefulness of mainstream economics in the growth of the world economy,
he sees formal economics and the policies to which it leads as bearing the principal
responsibility for the failure of developing and transitional (former communist)
countries to rid themselves of poverty. In Asia he claims that the technology of the
‘green revolution’, not the policies that led to its widespread adoption, was the
principal driver of growth. This is a curious conclusion for a poverty alleviation
program. It ignores the considerable analytical economic literature on the waves
of economic reform that started with the ‘Four Tigers’ and moved to Southeast
Asia and then to China and India, to make key contributions to the reduction of
absolute poverty in the world from a peak of some 1.5 billion people in 1980 to
less than 650 million people, with more than half in sub-Saharan Africa, in 2000
(Bhalla 2002: 148).
The next three chapters are a travelogue of Sachs’s principal activities as ‘advisor
to developing countries’. Bolivia, where inflation did fall after Sachs’s visit, takes
pride of place, although sustained economic development did not follow. The
Altiplano remains mired in poverty and the consequent populist revolt threatens
such minimal growth as has been achieved in the lowlands. The country is again
destabilised. Sachs also claims credit for freeing the Polish economy from communism, but Poland is one of the slowest growing of the former European communist
economies. History is being even less kind to Sachs’s ‘advisory’ activities in Russia. He was head of the Harvard Institute for International Development (HIID)
when it became embroiled in a scandal involving the dubious use of United States
Agency for International Development funds in Russia’s privatisation program
(Wedel 2000; The National Interest 2000). HIID had previously made considerable
inputs into rapid Indonesian growth and supported Indonesian economists who
played a key role in maintaining their country’s stability and forward impetus
(Stern 2000). Regrettably, Harvard University had to close HIID down following
this episode. Sachs moved to the Earth Institute at Columbia University and to a
leading role in the UN Millennium Development Goals program.
The second half of The End of Poverty is a manifesto of support for wealthy
industrial countries to contribute 0.7% of their national income to aid to developing countries to end poverty in our lifetime. Like Marx’s Communist Manifesto,
The End of Poverty does not lack conviction or popular appeal, but it is short on
economic analysis and common sense.
Sachs passionately believes that aid transfers of taxpayers’ funds from wealthy
industrial to poor countries are the key to ending poverty, but his book ignores
the debate about the absorptive capacity and effectiveness of aid. However measured, aid to Africa has been far higher than aid to Asia, notably during the last 25
* A different review by Profesor Hughes of this book has been previously published in
Policy 21 (4), Summer 2005–06: 58–9.
1
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years, when poverty increased in Africa and declined markedly in Asia because
of the latter’s growth. Peter Bauer already argued in the 1950s that aid has ‘Dutch
disease’ economic effects that make growth difficult, and that it maintains in place
inept and corrupt governments that grow poverty. Although forgiving debt to
African countries plays a considerable role in Sachs’s manifesto, the debate about
the effectiveness of this form of aid is also not reflected in his book. Sachs claims
credit for the campaign that forgave the Heavily Indebted (mostly African) Poor
Countries (HIPCs) their official debt. These countries have also not been servicing their debt to the international financial organisations for the last two decades
under the International Monetary Fund–World Bank HIPC scheme. Part of the
cost of this scheme in terms of aid funds forgone has been borne by countries such
as Indonesia that have not been profligate, but have serviced their debt.
Perhaps aware that his proposals for welfare handouts rather than for growth
processes do not resonate in countries where domestic welfare has led to social and
economic problems, Sachs calls his proposals ‘investments in sustained economic
growth’ (p. 42). But handouts do not create competitive markets, employment,
rising productivity, savings and investment. Sachs maintains that the analysts
who see internal and inter-country fighting, counter-productive economic policies that appropriate the benefits of growth to small elites, and egregious corruption as principal causes of African poverty are exaggerating. But he does not
explain why Botswana and Mauritius (which are not on his list of advisees) have
been able to nearly double their GDP almost every 10 years since 1970 by pursuing mainstream economics. Nor does he discuss the hard evidence that nowhere
in the world has poverty been reduced without growth. As poverty ambassador
for the UN, Sachs follows the ‘rockenomics’ of Bono, the rock star who has written a preface to this book. The Communist Manifesto won wide support but led
to enormous costs in the socialist economies that followed its flawed economic
analysis. The End of Poverty similarly threatens millions of lives because it is not
soundly based on evidence and economic analysis.
Helen Hughes
ANU, Canberra, and
Centre for Independent Studies, Sydney
References
Bhalla, S.S. (2002) Imagine There’s No Country: Poverty, Inequality, and Growth in the Era of
Globalization, Institute for International Economics, Washington DC.
Stern, Joseph J. (2000) ‘Indonesia–Harvard University: lessons from a long-term technical
assistance project’, Bulletin of Indonesian Economic Studies 36 (3): 113–25.
The National Interest (2000) ‘Tainted transactions: an exchange, The National Interest 60, Summer: 98.
Wedel, Janine R. (2000) ‘Tainted transactions: Harvard, the Chubais Clan and Russia’s
ruin’, The National Interest 59, Spring: 23–34.
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Andrew Rosser (2002) The Politics of Economic Liberalisation in Indonesia: State,
Market and Power, Curzon Press, Richmond, Surrey, pp. xv + 232. Cloth: £75.00.
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The process by which economic policy is formulated is a subject that has both
fascinated and perplexed close observers of Indonesia for many years. The topic
has recently assumed particular significance, however, in view of the economic
collapse that succeeded the boom years of the 1980s and 1990s. As this study asks,
will policies encouraging liberalisation continue to integrate Indonesia more
closely into the international economy? Or is there likely to be a shift towards
policies favouring populism and economic nationalism? This empirically rich
account puts the question into an historical context, suggesting that the outcome
will depend upon the struggle between opposing socio-political forces.
The book’s thesis is quite straightforward, and can be summarised briefly. Writing within the tradition of Indonesian political economy represented by Richard
Robison and Jeffrey Winters, Rosser suggests that economic policy is ultimately
determined by struggles within society. Thus, the liberalising reforms of the 1980s
and 1990s were not simply due to policy makers responding rationally to structural
economic changes and ‘market-friendly’ policy choices. Rather, they were made
possible because the business and bureaucratic forces that benefited previously
from state patronage had less political influence, such that the reform-minded technocrats were able to implement their economic policy preferences. In short, economic liberalisation was made possible by a shift in social and political power.
After a general introduction, chapter 2 describes various approaches to analysis
of the New Order. None of the analysis here is new, but it provides a useful survey
of behavouralist, statist and class-based perspectives on the Indonesian political
economy. Rosser is critical of the ‘neo-Weberian’ and public choice perspectives,
and proposes instead a model of the state as a ‘multi-dimensional’ entity, responding at different times to class, state-centred or structural pressures, depending on
the circumstances (p. 30). The following chapter provides a summary of economic
policies since the advent of the New Order, and develops the analytical framework
used throughout the book. Focusing on the period between the early 1980s and
1997, Rosser suggests that structural economic pressures for reform were mediated
by socio-political forces. Specifically, economic liberalisation involved a struggle
between ‘politico-bureaucrats’ allied to large capitalist conglomerates and marketoriented technocrats, often supported by what Rosser calls ‘mobile capitalists’. ‘The
extent of liberalisation in Indonesia has been a function of the extent to which economic shocks have shifted power and influence away from the politico-bureaucrats
and the conglomerates and towards mobile capitalists’ (p. 32). And because the
conglomerates retained considerable political influence, the deregulation measures
implemented prior to 1998 only ever resulted in partial liberalisation.
The four chapters in part II of the book are perhaps the most useful, describing in detail the outcome of this struggle in four arenas of policy formulation. The
author shows how the banking industry was successfully deregulated because
the reformist objectives of the technocrats were supported by the conglomerates:
deregulation allowed them to expand into newly privatised areas. By contrast,
the conglomerates strongly resisted reforms that would have allowed closer state
scrutiny of their business dealings. As a result, the banking sector remained largely
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disorganised prior to the 1997 crash. Similarly, chapter 5 shows how deregulation
of the capital market in the 1980s was welcomed by domestic conglomerates, for it
provided them with easier access to new sources of credit. Better company reporting, greater control of share trading, and more protection for minority shareholders indicate important improvements. Large national corporations successfully
resisted other regulatory pressures, however, with the result that by mid-1997 little progress had been made towards the regulation of share allocation practices
and privatisation of the Jakarta stock exchange. As a result, Rosser suggests, the
depth of the 1997–98 collapse needs also to be considered in terms of the weakness of state controls in the capital market sector.
Chapter 6 shows that the entrenched interests of the conglomerates made the
deregulation of trade and industry especially difficult. Liberalisation of the television and electricity sectors did proceed, but only because it opened up new
investment opportunities to conglomerates linked to the Soeharto family. By contrast, the technocrats were generally unable to overcome business opposition to
rationalisation of other major trade and industry sectors. This policy failure confirmed fears that the government could not protect the interests of mobile capitalists, and ‘helped lay the foundations for the dramatic collapse of the Indonesian
economy’ (p. 146). As chapter 7 describes, reform of the laws on intellectual property presents a different case entirely, for liberalisation in this sector proceeded
relatively unhindered. Once again, the reason is to be found in the political influence of business. Intense international pressure to reduce counterfeiting encountered little domestic opposition, for few Indonesian capitalists had substantial
interests in this sector.
Rosser has thus produced a well-researched and well-supported argument. The
book’s strength lies in the four case studies, which provide an important record of
a crucial period in Indonesia’s recent development experience. This study of Indonesia’s recent economic history is also useful for those who seek a better understanding of how policy making under the New Order contributed to the severity
of the subsequent economic collapse.
The description of the period 1997–99 (part III) is less convincing, however.
We are left uncertain, for example, about the forces now acting on the ‘multidimensional state’ mentioned in chapter 2. Presumably, structural economic pressures made the state less ‘multi-dimensional’. But the loss of relative influence by
state and class-based forces is not made explicit—or dealt with theoretically.
The book would also have benefited from more careful editing. In particular,
precise definitions of key organisational concepts at an early stage would have
helped the reader. As it is, we are left to infer the meaning from the context of
terms such as ‘neo-Weberian’ and ‘mobile capitalists’. By the end of the book
the reader is confident of what is intended, but questions are raised that are not
answered. We are left wondering, for example, how the mobile capitalists who
emerged after 1997 differed from those of earlier periods.
This is nevertheless an important study of a crucial period in Indonesia’s political economy. It provides a valuable description of domestic socio-political forces
underpinning the recent boom—and a compelling account of why so many opportunities were wasted.
Ian Chalmers
Curtin University, Perth, Western Australia
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Ho Khai Leong (ed.) (2005) Reforming Corporate Governance in Southeast Asia:
Economics, Politics, and Regulations, Institute of Southeast Asian Studies,
Singapore, pp. 387. Paper: S$49.90/US$29.90; Cloth: S$69.90/US$46.90.
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This book provides an excellent sampler of corporate governance reforms in the
Southeast Asian countries, reaching similar conclusions for each country. Most
writers agree that it is not that the regulations and laws do not offer good guidance
on corporate governance in Southeast Asia, but that the business infrastructure
does not provide a supportive environment for implementing these rules. For
example, a patriarchal culture, which embraces respect at all costs for one’s seniors, has to some degree inhibited the punishment mechanism and prevented fair
competition. Further, corruption and bribery have become the plague of Asian
financial markets. All these issues pose challenges for Southeast Asian financial
market participants in practising good corporate governance.
In chapter 1, Madhav Mehra provides a summary of issues that may either
encourage market participants to practise good corporate governance or dissuade
them from doing so. In chapter 2, Wu Xun argues that political institutions play
an important role in shaping the structure of corporate governance in Asia. More
importantly, he suggests that in formulating a reform agenda, policy makers in
this region should incorporate necessary adjustments that take into account the
unique political system of each country. He also suggests that forces outside the
corporate boardrooms, such as unfamiliarity with procedures of disclosure, and
the widespread practice of obtaining favours from corrupt government officers,
must be carefully controlled in the laws of governance. In chapter 3, Low Chee
Keong proposes that empowering shareholders with legal infrastructure for class
and derivative action lawsuits may make enforcement of good corporate governance more effective. Chapter 4, by Dipinder S. Randhawa, provides an explanation of how the governance of financial institutions in Southeast Asia differs from
that of other industries. Unfortunately, he becomes diverted by a discussion of
the impact and causes of the Asian crisis, and his conclusion strays from the main
purpose of the chapter.
Chapters 5 and 6 of the book contain discussion of corporate governance
reforms in Malaysia. Cheah Kooi Guan (chapter 5) examines the practical implications of various governance reforms implemented in Malaysia since the Asian
crisis of 1997. He concludes that while there is still room for improvement, financial participants in Malaysia have taken the right path by actively participating in
the promotion of effective corporate governance practices. Philip Koh Tong Ngee
(chapter 6) provides a more in-depth discussion of regulations and actions taken
in Malaysia in respect of the laws on disclosure and transparency, shareholder
rights, management oversight, other internal mechanisms, governance in relation
to large creditors, and creditor rights.
Djisman S. Simandjuntak (chapter 7) describes Indonesia’s corporate governance
reform as low-speed and difficult to achieve while legal uncertainties persist in the
country. Unfortunately, although the chapter is filled with important information
and interesting lines of reasoning, Simandjuntak does not offer clear recommendations for Indonesian regulators as to how best to manage the reform of the country’s corporate governance. Chapter 8 contains an investigation by Andrew Rosser
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of why Indonesia has failed to develop an effective system of corporate governance. Having analysed this issue from the political economy perspective, he arrives
at a similar conclusion to that of Simandjuntak: that it will be impossible to impose
good corporate governance if enforcement of the rule of law is weak.
In chapter 9, Deunden Nikomborirak examines the approaches and measures that can be taken by Thailand’s financial market participants to build corporate governance after the Asian crisis. He concludes that although a ‘non-legal’
approach is helpful, public disclosure of violators is necessary and the law needs
to be implemented more forcefully. Saravuth Pitiyasak (chapter 10) suggests that
a combination of ‘self’, ‘market’, and ‘regulatory’ disciplines is the key to efficient
governance implementation.
Chapter 11, by Kala Anandarajah, provides a success story about corporate
governance practices in Singapore that may inspire other countries in the region.
Ho Khai Leong (chapter 12) investigates a specific niche in the Singaporean business environment, composed of government-linked companies (GLCs). He discusses major controversies on the existence of GLCs and their contribution to the
economy and political accountability in Singapore, concluding that GLCs are a
special case that needs an exclusive set of rules of corporate governance.
Felipe B. Alfonso, Branka A. Jikich and René G. Bañez (chapter 13) provide a
broad picture of corporate governance reform in the Philippines. They end with
the remark that basic reforms must allow companies to thrive and compete in the
global market in a ‘distinctly Filipino way’, but unfortunately offer no explanation of what this means. In chapter 14, Mario A. Lamberte and Ma. Chelo V. Manlagñit provide empirical evidence that market conditions, corporate governance
and agency costs explain variations in profit efficiencies across financial institutions in the Philippines.
Nick J. Freeman (chapter 15) tries to illustrate the ironies of introducing corporate governance in Vietnam. The country began secondary stock trading only in
mid-2000, the state owns most large companies, and regulations for small companies have not been established because they are considered too small to matter.
Nonetheless, Freeman offers suggestions on how best to approach good corporate
governance in the country. The book’s last chapter (16), by Nguyen Van Thang,
provides an interesting discussion of how Vietnam equitises state-owned enterprises based on socialist ideology, and of current corporate governance practices
in the country, concluding with an optimistic view of Vietnam’s future.
This book offers strong and comprehensive analysis of one of the most intriguing subjects in financial economics (despite the flowery greenish cover’s suggestion of insubstantial content). Ho Khai Leong deserves applause for having
succeeded in his aim of providing readers with a compilation of cross-disciplinary
studies of corporate governance in Southeast Asia.
Elisa Muresan
Long Island University, New York
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Sukardi Rinakit (2005) The Indonesian Military after the New Order,
NIAS Press, Copenhagen, and Institute of Southeast Asian
Studies, Singapore, pp. 278. Paper: S$39.90/US$22.95.
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With the return of democracy in 1998, Indonesians could resume writing
about their military history analytically, rather than through the lens of some
Orwellian ideology. Sukardi Rinakit had the advantage of working within the
state bureaucracy as a ministerial speech writer in the key ministries of defence
and home affairs. In researching the book he was able to interview some of
the key actors in Indonesia’s democratic transition, as well as former President
Soeharto.
The book focuses on the Indonesian military’s role in securing the Soeharto
regime and in the transition to democracy. It covers a lot of familiar ground for
those who follow Indonesian affairs, and attempts to answer two fundamental
questions. First, why did the Indonesian National Army (TNI) not seize power
when Soeharto stepped down and, secondly, is a resurgence of military political
power likely? There is also a lengthy exposition on military finances, but it does
not significantly extend the boundaries of knowledge on this topic. For example,
while it contains a list of military companies, it does not discuss ownership or
management structures or their particular significance to the military.
Inadequate space and analysis is devoted to the key questions. This is the result
partly of not making the best use of the interviews conducted, and partly of not
interviewing, or not exploring the motivations of, the various actors in the drama,
namely members of the two principal factions of the TNI, and the Soeharto and
Habibie camps. Those looking for fresh insights from interviews with Soeharto or
other key figures will be disappointed.
The author attributes General Wiranto’s failure to seize power when offered
it by Soeharto, and when urged to do so by some anti-Habibie generals, to his
awareness of popular opposition to the military. Although this factor cannot be
ignored, Sukardi does not explore the possible consequences had Wiranto seized
power. For example, would he have been able to unite the TNI behind him, or
would General Prabowo have launched a counter-coup either on his own behalf
or as the defender of Habibie? Unfortunately, the research does not shed any new
light on such questions.
On the second question, the response is more of an afterthought than a central
part of the study. Sukardi comes to the rather gloomy conclusion that a resurgence
of military political power is likely, using either the doctrinal bridges to authoritarianism left in Indonesian law and military doctrine—for example, the recent
reactivation of the territorial structure for counter-terrorism purposes—or raw
military power, or some combination thereof.
Sukardi attributes the propensity of the new generation of officers to reclaim
their lost power to a decline in the collective IQ of the officer corps in recent years,
and to their motivation for enlisting in the military being political power rather
than a desire for a professional career.
The first characteristic is measured from a decline in the average scholastic achievement of recent generations of officers. The author fails to analyse
whether this is based on a valid comparison of the two groups; for example, it
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might be a consequence of internal or external variation in the statistics. If the
decline is real, what does it mean in practice; will it impact on professional competence and, if so, in what way? It must also be borne in mind that the figures
represent averages and that there may still be sufficient bright officers to fill the
higher ranks.
No account is taken of what a reformed military might look like and what its
requirement for officers might be. Even if the figures Sukardi has are correct and
valid, it might not be a problem for a reformed military, which should theoretically
be far less top-heavy than the current one. The contention that an officer corps of
lower IQ than previous generations is more likely to resort to brute force to defeat
its intellectual superiors in the other institutions of state is also spurious.
The question of motivation for enlisting in the military relies on even more
subjective assessments, although it cannot be ignored. There is no measure of
motivation to rely on other than anecdotal observation. Certainly, it is unlikely
that aspiring navy and air force officer cadets would have seen a military career
as an assured stepping stone to a political career. Moreover, the rhetoric, if not
the reality, of the military during the 1990s was towards a declining political role
for the military. If such political motivations remain, they are unlikely to surface
unless the government fails to revive the economy and national unity is seriously threatened, or unless the government fails to take the initiative in security
sector reform, and allows the military to brood directionless on the sidelines
about lost glory.
Much has been done in relation to security sector reform since 1998, but one
area that has remained relatively untouched is military reform. Until now no government has had the political capital to seize the initiative and formulate a new
defence policy—one more appropriate to a democracy in a dynamic region—as a
basis for fundamental military reform. Instead, we are seeing a drift that allows
fashions such as counter-terrorism, rather than sound analysis, to dictate policy
and structure.
The government of Susilo Bambang Yudhoyono has the potential to address
this challenge. The resolution of the Aceh conflict, and learning to manage Papua
with minimum force, are essential elements of state consolidation and security
sector reform. Well-managed government-directed military reform could help
achieve these objectives and reduce the potential for authoritarian ambitions to
resurface in the TNI.
The publishers of this book can take little pride in their product. There has been
virtually no editing of the content, grammar or spelling, and several clusters of