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Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Abstracts of doctoral theses on the Indonesian
economy
William A. Redfern & Mia Amalia
To cite this article: William A. Redfern & Mia Amalia (2011) Abstracts of doctoral theses on the Indonesian economy, Bulletin of Indonesian Economic Studies, 47:1, 127-129
To link to this article: http://dx.doi.org/10.1080/00074918.2011.556062
Published online: 15 Mar 2011.
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Bulletin of Indonesian Economic Studies, Vol. 47, No. 1, 2011: 127–9
ISSN 0007-4918 print/ISSN 1472-7234 online/11/010127-3 DOI: 10.1080/00074918.2011.556062
ABSTRACTS OF DOCTORAL THESES
ON THE INDONESIAN ECONOMY
Sukarno’s Guided Democracy and the Takeovers of Foreign Companies in Indonesia in the 1960s
William A. Redfern ([email protected]) Accepted 2010, University of Michigan, Ann Arbor MI
This dissertation investigates the coniscation of foreign enterprises in Indonesia
in the early 1960s. In a 28-month period from September 1963 to December 1965, at least 90 foreign companies of various nationalities, ranging from British to Amer-ican to Belgian to Malaysian, were taken over by the Indonesian government. Collectively these 90-plus companies, which included oil companies, plantations,
manufacturing plants and a variety of companies in other ields, accounted for
virtually all the existing foreign direct investment in Indonesia. Moreover, in May 1965, further foreign direct investment in the country was prohibited by law. In sum, with the major exception of two large oil companies, which were placed under government supervision but not seized, the entire foreign investment sec-tor in Indonesia was taken over by the Indonesian government, and no more for-eign investment was allowed in.
The virtual elimination of foreign investment in Indonesia during this period
was the result of a complex conluence of Indonesian domestic political conlict
and instability, domestic economic policy and foreign relations, all inter-related
and mutually reinforcing. Moreover, these coniscations occurred in separate, dis -tinct waves, generally based upon the nationality of the company. Until 1965 they were not the result of a grand plan of the Indonesian government to eliminate foreign investment, but were rather ad hoc in nature, with each event having its
own reasons and logic. The two waves of takeovers of British irms in 1963–64,
in actions that clearly contravened government policy, were closely linked to the increasing instability of domestic politics and government, in particular the assertiveness of the Communist Party of Indonesia in 1964–65, as it sought to play a more forceful political role. The separate waves of takeovers of Malaysian (1963) and American (1965) companies were closely linked to Indonesia’s increas-ingly strident nationalist foreign policy, which emphasised the worldwide anti-imperialist struggle between countries of the ‘Newly Emerging Forces’, including Indonesia and other ex-colonial nations, and countries from the ‘Old Established Forces’, generally European nations or the United States. This policy led to Kon-frontasi with Malaysia, to Indonesia’s withdrawal from the United Nations and other international agencies in 1965, to an alliance of strange bedfellows with the People’s Republic of China, and to the nadir of Indonesia – United States
rela-tions. The inal wave of takeovers in 1965 was driven by a program of economic
128 Abstracts of doctoral theses on the Indonesian economy
self-reliance known as Berdikari (berdiri di atas kaki sendiri – to stand on one’s own
feet), the inal economic policy implemented under President Sukarno’s Guided
Democracy. While its outlines were vague and implementation outside the for-eign investment sector almost non-existent, this program did result in the pro-hibition of further foreign investment and the takeover in 1965 of all remaining foreign companies in Indonesia.
These events, and in particular the 1965 policy of Berdikari, constituted the pinnacle of economic nationalism in modern Indonesian history. Beginning in 1967, just a few short years later, Indonesia under the New Order government would not only re-open Indonesia to foreign investment but also return to the original owners a large number of the companies seized between 1963 and 1965,
and thereafter foreign investment would maintain a constant, if luctuating, pres -ence in Indonesia.
© 2011 William A. Redfern
Beneit Estimation of Air Pollution Reduction: A Case Study of the Jakarta Metropolitan Area
Mia Amalia ([email protected])
Accepted 2010, Australian National University, Canberra
A combination of government, industrial and business activities in the Jakarta Metropolitan Area (JMA) has increased pressure on its air quality. This thesis aims
to estimate the economic beneits of improved air quality from an environmental
economics perspective, by integrating biophysical and economic models to form a bio-economic model. The air pollution indicator used was particulate matter with an aerodynamic diameter of less than 10 micrometres (PM10). The primary
objective of this research is to use a cost–beneit analysis framework to estimate the beneits to JMA citizens of having cleaner ambient air. The speciic hypotheses
tested in the study were that (1) the transportation sector is the largest contributor of PM10 emissions in the JMA; (2) a concentration of PM10 in the JMA’s ambient
air that is higher than the recommended threshold level is a signiicant causal
variable for the number of Restricted Activity Days (RAD) and for the incidence of fever, cold, cough and asthma in JMA citizens; and (3) JMA citizens place a positive value on a lower number of RAD, better visibility and a less disturbing odour that would result from the implementation of proposed new transportation policies.
The results from testing the irst hypothesis, using a PM10 dispersion model
(PMDM), revealed that the transportation sector was the largest contributor to PM10 pollution in only 16 of the 166 sub-districts in the JMA. The main PM10 contributor in the other 150 sub-districts was the industrial sector. The PMDM was further used to estimate PM10 concentration in every sub-district, which was useful for testing the second and third hypotheses. The second hypothesis was tested using exposure-response models (ERM) linking PM10 concentration with individuals’ incidence of illness and number of RAD. The results showed that
PM10 concentration was not a signiicant variable in causing the incidence of ill
-ness resulting in fevers, colds, coughs and asthma, but was a signiicant causal
Abstracts of doctoral theses on the Indonesian economy 129
variable in changing the number of RAD. The ERM also identiied children as the
most vulnerable group.
The third hypothesis was tested using choice modelling (CM). This method was chosen because it can separate the value people place on air quality improve-ment into its constituent attributes (the reasons they value the improveimprove-ment) and link that value with the biophysical conditions modelled with the PMDM and the ERM. The number of RAD was one of the attributes in the CM exercise, and PM10 concentration from PMDM was used as one of the explanatory variables in the utility function. Other attributes included in the choice sets were visibility and odour. A public survey was conducted in which 647 respondents from the JMA were asked about their preference for three possible new transportation poli-cies and about the relative importance they placed on the above attributes. The implicit prices for individual attributes were estimated using a random parameter
logit model. The estimation results showed that the respondents placed a signii -cantly positive value on a lower number of RAD and a less disturbing odour. The
aggregated estimated economic beneits to be obtained from a better ambient air
quality range from $282 to $324 million for the three market-based instrument policies.
© 2011 Mia Amalia
