00074918.2013.772947

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Bulletin of Indonesian Economic Studies

ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20

Land, Livelihood, the Economy and the

Environment in Indonesia: Essays in Honour of

Joan Hardjono

Arianto Patunru

To cite this article: Arianto Patunru (2013) Land, Livelihood, the Economy and the Environment in Indonesia: Essays in Honour of Joan Hardjono, Bulletin of Indonesian Economic Studies, 49:1, 121-123, DOI: 10.1080/00074918.2013.772947

To link to this article: http://dx.doi.org/10.1080/00074918.2013.772947

Published online: 21 Mar 2013.

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Book reviews 121

complexities with admirable clarity. Soesastro was probably mindful that it would be his last statement, and it shows his keen appreciation of what each forum could contribute: ASEAN Plus Three as ‘the anchor for regional cooperation and com-munity building’; the East Asia Summit as a leaders’ ‘dialogue forum’; ASEAN to drive regional cooperation; and APEC to promote trans-Paciic relations and ensure the continued engagement of the US.

What these pieces only hint at is Soesastro’s quiet but very effective diplomacy behind the scenes, within both the Indonesian government (as a lobbyist and adviser) and international forums. As a consummate insider, Soesastro knew very well that behind the different names of these forums and their various rules was a fairly similar group of players. His skill was to know with whom he could best engage to build a consensus and how each forum would best advance the grand agenda, what Americans refer to as ‘log-rolling’. By the time of his death, Soesas-tro knew that it was all a work in progress, but also that much progress had been made – Indonesia was no longer a ‘basket case’ but an inluential G20 nation – and that, barring catastrophe, the global and regional architecture would continue to evolve and, as in Europe, constrain the worst excesses of domestic nationalism and populism. It is to be hoped that one day Soesastro will ind a worthy biogra -pher and something of the inside story can be told. In the meantime, this anthol-ogy serves to remind us of a subtle mind, a true friend and colleague, a modest but very effective international diplomat, and a great Indonesian.

Howard Dick

http://dx.doi.org/10.1080/00074918.2013.772944

Anne Booth, Chris Manning and Thee Kian Wie (eds) (2012) Land, Livelihood, the

Economy and the Environment in Indonesia: Essays in Honour of Joan Hardjono, Yayasan Obor Indonesia, Jakarta, pp. ix + 314. Paper: Rp 90,000.

While this book is a festschrift to Joan Hardjono, who has been an avid and sharp observer of Indonesia’s development since the 1970s, it is also accessible to gen -eral readers. Many chapters, in addition to Booth and Thee’s introduction, draw links to Hardjono’s works. Tjondronegoro’s chapter 2, for instance, extends one of Hardjono’s pet topics, rural institutions, to Indonesia’s progress towards mod-ernisation and democratisation.

Chapter 3, by Resosudarmo, Nawir, Resosudarmo and Subiman, focuses on the dynamics of forest land use in Indonesia. The authors acknowledge Hardjono’s position that such use must balance environmental conservation and economic development objectives. Of particular note is the chapter’s historical account of how national forest policies have led to rapid deforestation, as well as its discus-sion of decentralisation and the United Nations’ REDD+ program.

Booth, in chapter 4, says that Hardjono has been rather sceptical of macro data on agricultural output. So she lays out 12 questions on Indonesian agriculture, on topics such as output growth, environmental consequences (readers might

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122 Book reviews

link this to chapter 3), farm households, land ownership, beneit distribution and agrarian reform to government support. Booth concludes that macro evidence does not conlict with the indings of village studies, the perspective supposedly evident in Hardjono’s works.

Chapter 6, by Suryadarma, Widyanti, Suryahadi and Sumarto, breaks the tra-dition of inequality studies that look only at income and consumption. It instead assesses regional and ethnic inequality among Indonesia’s Javanese, Malay, Bugis, and Chinese groups – that is, among more than half of Indonesia’s ethni -cally diverse population. Using the National Socio-Economic Survey (Susenas) and Village Potential Survey (Podes), the authors ind that there is no systematic inequality across ethnic lines in Indonesia. Instead, the highest inequality persists between urban and rural areas. Compare these indings with those of Alesina, Michalopoulos and Papaioannou’s ‘Ethnic inequality’ working paper of 2012 (NBER no. 18512), which demonstrates that ethnic differences in economic per -formance can be negatively correlated with economic development.

Chapter 7, by Pritchett, Sumarto and Suryahadi, examines the effectiveness of targeted programs in response to the Asian inancial crisis (AFC) of 1997–98. Known in Indonesia as JPS (Jaring Pengaman Sosial, or social safety nets), these programs include subsidised rice, student scholarships, health-care subsidies, employment creation and community block grants. Since the authors’ objective is to investigate the effectiveness of such programs in an economic crisis, their assessment is understandably based on data from the 1999 Susenas. It would be helpful to see an update using data from later Susenas releases. Alatas, Purna-masari and Wai-Poi’s chapter ‘Targeting the poor and vulnerable’, in Employment,

Living Standards and Poverty in Contemporary Indonesia (ISEAS, 2011), which also uses data from the 2009 Susenas, makes a good rejoinder, albeit one with a differ-ent focus. Readers interested in this topic might also consult Alatas et al.’s ‘Target-ing the poor: evidence from a ield experiment in Indonesia’, in American Economic Review 102 (4): 1206–40, which uses a ield experiment conducted in 2008–09 to

investigate targeting accuracy and community satisfaction with its outcomes. Both Pritchett et al. and Alatas et al. ind that household and community charac -teristics inluence the effectiveness of targeting. This line of study is particularly useful for providing inputs to policy makers designing similar programs. In this regard, the same appreciation is given to Sari and Widyaningrum, who, in chapter 5, criticise the approach taken by community-driven development programs.

Thee’s chapter 8, on small and medium enterprises (SMEs), argues, rightly, that the government’s approach to SMEs should facilitate their development into viable, larger and more sustainable enterprises. Government policy often encour-ages a business climate friendly to the creation of new SMEs, rather than helping existing ones to grow their assets and increase their productivity.

It is useful to juxtapose Manning’s chapter 10 (and to some extent White’s Chapter 11) and Tjandraningsih’s chapter 12, both of which focus on employ-ment and labour conditions. Manning’s view is more that of mainstream econom-ics, whereby, for example, tight labour regulations are likely to be ‘one reason for slow growth of “regular” wage employment’ (p. 239), a notion opposed by Tjandraningsih. She argues, instead, that labour policy hinders job expansion not because it is pro-labour but because it promotes increased eficiency and proits. It would be helpful if more systematic data and evidence were provided. Readers

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interested in further employment analysis might consult this issue’s ‘Survey of recent developments’, by Cornwell and Anas.

The book closes nicely with Hill’s macro assessment. With two economic crises – the AFC and the global inancial crisis (GFC) – in the background, he draws a connection between global economic development and agriculture and poverty in Indonesia. He explains why the share of agriculture in output and employment increases in the aftermath of a crisis (as it did after the AFC and, less, after the GFC) while in normal times it declines: a combination of low income elasticity of food demand, high lexibility of agriculture labour coeficients, and rupiah depre -ciation boosts the competitiveness of food and cash crops. Hill warns, however, that this pattern is not sustainable, for it goes against structural change and long-run economic development.

Arianto Patunru

http://dx.doi.org/10.1080/00074918.2013.772947

Aditya Goenka and David Henley (eds) (2011)

Southeast Asia’s Credit Revolution: From Moneylenders to Microinance, Routledge, New York, pp. xx + 212. Paper: £28.00; US$49.95.

Goenka and Henley draw on an eclectic mix of social science and historical per-spectives to paint a rich and nuanced picture of the past and present of credit in Southeast Asia. Readers looking for a detailed recounting of the development of the mass of credit institutions within most Southeast Asian nations might be disappointed: the breadth of scope of the various chapters is somewhat idiosyn-cratic. Indonesia is the major exception, receiving more detailed attention than any other country. For this reason, the book should be appreciated by anyone interested in topics such as microinance, rural and informal credit, or the complex and fascinating history of these in Indonesia. Its exposition is almost completely non-technical, yet it provides an economist’s critical attention to issues such as heterogeneity and extensive and intensive margin effects. Hence it can serve as a resource for both undergraduates and established researchers.

This volume can be divided into two sections. The irst three chapters intro -duce its main themes; provide a non-mathematical review of the well-developed theoretical literature in economics on microinance; and make the point (relative to the breathless recent discourse) that ‘microinance’ has in fact existed for cen -turies in Europe and elsewhere. Chapter 3 also traces the emergence of organised microinance in Southeast Asia back to these prior institutions, illustrating these connections by the examples of linkage banking in Indonesia and microinance in India. However, chapter 2 admits that the group-lending models it focuses on are relatively less relevant to the Southeast Asian experience (particularly Indonesia). This raises the question whether the chapter could have paid more attention to those models of lending that are more relevant to Southeast Asia, or whether this is simply a topic that is under-researched by economic theorists.