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Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
In this issue: Notes from the editor
Ross H. McLeod
To cite this article: Ross H. McLeod (2006) In this issue: Notes from the editor , Bulletin of Indonesian Economic Studies, 42:2, 141-142, DOI: 10.1080/00074910600873617
To link to this article: http://dx.doi.org/10.1080/00074910600873617
Published online: 20 Aug 2006.
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Bulletin of Indonesian Economic Studies, Vol. 42, No. 2, 2006: 141–2
ISSN 0007-4918 print/ISSN 1472-7234 online/06/020141-2 © 2006 Indonesia Project ANU DOI: 10.1080/00074910600873617
IN THIS ISSUE
Notes from the editor
The ‘Survey of recent developments’ by Chris Manning and Kurnya Roesad returns to a theme sometimes evident in previous Surveys: the contrast between reasonably competent macroeconomic management and disappointing microeco-nomic policy making. The infl ationary surge caused by last year’s fuel price adjust-ments has been quickly brought under control, and for much of the Survey period this was refl ected in considerable strengthening of the exchange rate (although most of this gain was lost in May after the authorities proved too eager to loosen monetary policy). The private sector still lacks the confi dence to boost investment spending, however, and so the rate of output growth continues to decline steadily. This is perhaps not surprising, given the failure of the government to follow up its announcements of largely sensible policy reforms with concrete actions.
Progress with infrastructure enhancements has been disappointing, and although the government has announced a long list of intended improvements to the environment for business activity, it has yet to record signifi cant achieve-ments. Indeed, it has betrayed its own lack of optimism in this regard by announc-ing its intention to set up a number of Special Economic Zones in which red tape will be minimised: these would serve little purpose if the business environment could be signifi cantly improved nationwide. The basic problem is irresolution in the face of resistance to reform, epitomised by the surreptitious overturning of a key proposal in the government’s draft investment law to change the Invest-ment Coordinating Board from regulatory bottleneck to investInvest-ment promotion agency. Opposition to desirable reforms is coming not only from a bureaucracy attempting to protect its own interests, but also from civil society. Noisy demon-strations have resulted in postponement of the government’s intended reforms to existing labour legislation—which is holding back the creation of relatively high-productivity job opportunities.
Prema-chandra Athukorala looks at Indonesia’s post-crisis export perform-ance in comparison with that of other ASEAN countries in the third paper in our series of comparative studies of Indonesia in regional perspective. Of particular interest is Indonesia’s performance in a context in which world trade patterns are being dramatically transformed following the winding up of the long-standing Multi-Fibre Arrangement, and as a result of China’s lusty embrace of international trade. The emergence of processed food as a dynamic line in Indonesian exports is noted, but Indonesia’s failure to become involved more heavily in the export of parts and components within increasingly important vertically integrated global production systems is also documented. It is argued that Indonesia’s export per-formance has failed to regain its pre-crisis dynamism, and that this is attributable to domestic rather than external factors—in particular, the government’s failure to push forward with the unfi nished trade reform agenda of the Soeharto regime.
142 In this issue: notes from the editor
Indonesia’s economic progress is also being hampered by ineffi cient public administration at local government level. Blane Lewis looks into this general problem in relation to a particular aspect of district and municipality operations: taxation. He observes that the cost of collecting revenue is far too high relative to the amounts collected, and also that there are large differences among local governments in this respect. Of particular interest is his fi nding that local govern-ments that obtain relatively large amounts of funding from the centre are espe-cially likely to be ineffi cient in collecting revenues of their own. A problem for the central government—to the extent it concerns itself with local government tax administration—is that different approaches to measuring effi ciency yield inconsistent results across local governments; further research in this area would therefore seem appropriate.
In their discussion of labour market dimensions of poverty in Indonesia, Armida Alisjahbana and Chris Manning focus on a range of correlates of poverty, in the con-text of relatively slow growth of modern sector jobs since the 1997–98 economic crisis. Some key fi ndings are that poverty tends to be positively correlated with low partici-pation in work, as indicated by measures of unemployment and underemployment, and with location of the workers in question within the agricultural and informal sectors. Such fi ndings call into question the logic of tackling poverty through labour market regulations such as the imposition of minimum wages and requirements for large severance payments when workers lose their jobs. They confi rm that the bulk of the poor are unlikely to benefi t from such policy interventions, because they are underemployed, not working at all, or working in the agricultural or informal sectors where such policies have little impact. Policies that encourage expansion of formal sector jobs outside agriculture are therefore likely to be far more effective in reducing poverty.
With deep sadness we mark the passing of one of Indonesia’s greatest inter-national supporters: John (‘Jack’) Bresnan. In their obituary, Ann Marie Murphy and Hadi Soesastro present an invaluable reminder to younger generations of Indonesianists and Indonesians of the remarkable part Professor Bresnan played in Indonesia’s progress during the last half-century. Not least important was his role in infl uencing the career development of the group that came to be known as the ‘Berkeley mafi a’, and which had such a strong impact on economic policy making throughout the Soeharto era and beyond.
As usual, the book review section covers a wide range of topics. These include law making on the environment; an approach to systematic appraisal of economic policy choices (applied to agriculture) designed to maximise benefi ts to society as a whole; the contributions of APEC to the economic progress of Indonesia and other Asia Pacifi c nations; approaches to poverty targeting in Asia; perspectives of local state-elites (i.e. senior bureaucrats and politicians) on decentralisation; opposition to autocratic rule under Soeharto; the impact on social science and social scien-tists of strong and coercive government during the Soeharto era, and the change in this relationship with the transition to democracy; approaches to understand-ing the long-term evolution of food crop and livestock farmunderstand-ing in Southeast Asia; the changing relationship between women and the state in modern Indonesia; and, fi nally, the political history of the women’s movement in Indonesia in the 1950s.
Selamat membaca!
Ross H. McLeod
