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Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Competitiveness Analysis and Development
Strategies for 33 Indonesian Provinces
B. Raksaka Mahi
To cite this article: B. Raksaka Mahi (2014) Competitiveness Analysis and Development
Strategies for 33 Indonesian Provinces, Bulletin of Indonesian Economic Studies, 50:3, 489-491, DOI: 10.1080/00074918.2014.938422
To link to this article: http://dx.doi.org/10.1080/00074918.2014.938422
Published online: 03 Dec 2014.
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Book Reviews 489
as high in 2009. It is dificult to escape the conclusion that colonial governments in Asia, for all their economic failings, understood that they had to build states that would be viable alongside Japan, China, and Siam (Thailand). Even so, the economic takeoff of Southeast Asia after 1970 deserves far more study in light of the African contrast.
Ulbe Bosma’s careful study of the sugar plantation goes over betterworked terrain. Its novelty lies in a longterm economic perspective of how sugar produc -tion changed loca-tion as it adopted new technologies over the centuries. Sugar cane began as a peasant crop in Bengal thousands of years ago, and the domestic, smallscale production of India, southern China, and Chinese colonies in South -east Asia continued to dominate world supply as late as 1800. In the 19th century, however, demand for sugar soared as a sweetener for tea, coffee, and other drinks and foods, with England in the lead. Production was reorganised on the basis of a plantation model transferred from older Mediterranean models to the Caribbean. ‘A plantation’, Bosma declares, ‘is an entity in which the management of the cash cropgrowing unit is in complete control of every aspect of the work process, as well as of the applied technologies’ (pp. 26–27). Developed using African slave labour in the Caribbean, this model was adapted to Asia in the early 19th century, using various other forms of coerced labour.
The core of The Sugar Plantation in Indonesia and India explains this process in both India and Java—the latter becoming the 19thcentury success story unusu -ally well covered in the literature. Much less well known is the survival of the two sugar industries (in Bihar and in Central and East Java) after independence, discussed in the inal chapter. In both cases, there was an initial period of nation -alist experimentation with more adequate returns and agency for poor peasants, followed by the reestablishment of hierarchies that beneited government and the richer farmers. In Java, Soeharto’s smallholder sugarcane intensiication pro -gram (Tebu Rakyat Intensiikasi) in 1975 in effect brought the government hier -archy back into organising land and labour for sugar factories, even though the program’s declared intention was to empower smallholders.
Both books show the value of broadbrush comparative study. The Indonesia– Congo contrast, in particular, should stimulate further questioning of how Soe -harto’s Indonesia managed to do some things right, despite all the corruption and repression.
Anthony Reid
The Australian National University
© 2014 Anthony Reid
http://dx.doi.org/10.1080/00074918.2014.938412
Competitiveness Analysis and Development Strategies for 33 Indonesian Provinces. By Tan Khee Giap, Mulya Amri, Linda Low, and Tan Kong Yam.
Singapore: World Scientiic, 2013. Pp. xxi + 803. Hardback: $168.00.
Studies of the competitiveness of local governments are becoming increasingly important—especially for countries adopting largescale decentralisation poli -cies, such as Indonesia. A competitive local government can attract and maintain
490 Book Reviews
successful irms and increase living standards for its inhabitants, because invest -ment and skilled workers gravitate from uncompetitive regions to more competi -tive ones. This follows Tiebout’s hypothesis about individuals voting with their feet, whereby residents always choose to live in the community whose local gov -ernment most affordably provides their preferred range of services.
This book focuses on the local competitiveness of Indonesia’s provinces. It is based on a study by The Asia Competitiveness Institute, a research centre in the Lee Kuan Yew School of Public Policy, at the National University of Singapore, which has been tracking the competitiveness of the ASEAN economies since 2000 but until recently had not attempted to examine the importance of local (provin -cial) competitiveness within a country. The study was motivated by the authors’ interest in looking at the strengths and weaknesses of provinces in a competitive, decentralised Indonesia. It considered competitiveness to be not only derived from natural resources but also driven by local governance.
Each of the book’s 34 chapters—aside from the irst, which introduces the research methodology adopted by the authors—discusses the competitiveness of one of Indonesia’s provinces, in alphabetical order, from Aceh to Sumatera Utara (North Sumatra). (The study did not include North Kalimantan, which in 2012 became Indonesia’s 34th province.) The study’s ranking of provincial com -petitiveness took into account four equally weighted environments: a province’s macroeconomic stability; its governmental and institutional settings; its inan -cial, business, and labour conditions; and the quality of life it offers and its level of infrastructure development. Each environment was divided into three sub environments, which were measured against selected indicators from the 91 in the study. The study aggregated the indicators by using a standardised score, to see how well a certain province had performed against the average province, and then ranked the provinces accordingly.
Indonesia’s decentralisation is considered to be an example of ‘big bang’ decen -tralisation, as many responsibilities have been delegated to local governments. However, the central government retains control over monetary and iscal policy. Looking at the macroeconomic stability indicators used in this study (p. 799), it is obvious that most indicators are controlled by the central government and not the local government. We therefore need to be careful when interpreting provincial competitiveness in terms of macroeconomic stability, which is a result of central government policy.
The study involved two other analyses of provincial competitiveness: a ‘what if?’ competitiveness simulation and a strengths, weaknesses, opportunities, and threats (SWOT) analysis. The whatif simulation modelled how the ranking of each province would improve if the province’s weakest scores were corrected. The simulation seems unrealistic, however, as it assumed that other provinces’ scores stayed constant. Furthermore, as the authors admit, the simulation did not necessarily yield a higher ranking, most often because of large differences in the scores of consecutively ranked provinces. The SWOT analysis showed the main strengths and weaknesses of each province. It also showed that the study had its limits when attempting to explain contradictory issues. For example, since 2002 Aceh has received signiicant transfers from the central government’s special autonomy fund, yet the study found that Aceh’s iscal balance is one of its weak -nesses (p. 49). Unfortunately, the authors do not elaborate on this issue.
Book Reviews 491
The rankings are based on 2010 data from many sources, including BPS (Indo -nesia’s central statistics agency), Bank Indonesia, the Indonesia Investment Coor -dinating Board, and the Ministry of Health. It is, therefore, a static analysis, but the authors attempt to relate provincial competitiveness in 2010 to Indonesia’s longterm Master Plan for the Acceleration and Expansion of Indonesian Eco -nomic Development. By relating the study’s provincial indicators to the national longterm goal of infrastructure development, the authors attempt to ensure that their recommendations will be relevant in the long term as well as the short term. Despite the complexity of the calculations behind the rankings, the authors present their indings in igures and tables that are easy to read and understand. Nevertheless, interested readers—most likely regional economists and business -people involved in interprovincial trade—will need a strategy if they are to read the book’s 800 pages effectively and grasp the intricacies of provincial competi -tiveness in Indonesia.
B. Raksaka Mahi
University of Indonesia
© 2014 B. Raksaka Mahi
http://dx.doi.org/10.1080/00074918.2014.938422
Environmental Regulation and Public Disclosure: The Case of PROPER in Indonesia. By Shakeb Afsah, Allen Blackman, Jorge H. Garcia, and Thomas Sterner.
Abingdon: RFF Press, 2013. Pp. xiv + 135. Hardback: $109.95.
Enforcing environmental regulations and improving the environmental perfor -mance of development actors in emerging economies are Herculean tasks. There is often conlict between accelerating a country’s economic development and mitigating the environmental impacts resulting from this development. The gov -ernments of emerging economies need to ind, formulate, and apply mechanisms that can encourage environmental compliance from key development actors, namely industrial corporations. In Indonesia, in June 1995, the government launched the Program for Pollution Control, Evaluation and Rating (PROPER), an environmental disclosure initiative to map, disseminate, and improve the envi -ronmental performance of companies.
This book, Environmental Regulation and Public Disclosure, gives a comprehen -sive background and analysis of the PROPER system and its perceived success so far. In chapters 2 and 3, the authors outline the challenges faced by develop -ing countries—particularly Indonesia—in promot-ing public disclosure initiatives that can push different private and public companies to improve their environ -mental performance. The authors argue—and to some extent give empirical evi -dence—that public disclosure can generate pressure from regulators, the market, and the public on companies and other key actors to adopt more (and better) environmentally responsible practices.
The authors also show that public disclosure initiatives can often help targeted companies enhance their existing operational and relevant plans or move their operations towards cleaner technologies and systems. Based on the authors’ sur -vey of the PROPER participants (chapter 7), the most important means through
