00074918.2014.938411

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Download by: [Universitas Maritim Raja Ali Haji] Date: 17 January 2016, At: 23:29

Bulletin of Indonesian Economic Studies

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

The Rise of the Managerial State in Indonesia:

Institutional Transition during the Early

Independence Period, 1950–1965

Farabi Fakih

To cite this article: Farabi Fakih (2014) The Rise of the Managerial State in Indonesia: Institutional Transition during the Early Independence Period, 1950–1965, Bulletin of Indonesian Economic Studies, 50:2, 293-294, DOI: 10.1080/00074918.2014.938411

To link to this article: http://dx.doi.org/10.1080/00074918.2014.938411

Published online: 30 Jul 2014.

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Abstracts of Doctoral Theses on the Indonesian Economy 293

the net income multiplier effects on different groups of households (society’s net income), based on the Social Accounting Matrix, show that despite the increases in disposable income, which would be highest in households in urban areas and lowest in households of agricultural workers, the total net income of households

would fall—that is, household expenditure on imports from China would exceed household income from exports to China. This trend would be more visible

among high-income households in rural and urban areas than among households of agricultural workers and households with low incomes.

The estimation results show that, in general, Indonesia’s liberalisation of trade

with China would have a negative impact on the competitiveness of Indonesian

exports and producers. In manufacturing, for example, Indonesian producers

would have to compete with Chinese producers, and most products from China

would outperform similar products from Indonesia. Yet the distribution of com-petitiveness would vary among products and sectors; many manufacturing

prod-ucts from Indonesia would compete iercely with, and in some cases outperform, similar products from China. As for primary commodities, such as rubber, palm

oil, and natural gas, Indonesia, which relies on the exports of such commodities,

would outperform China.

The increasing competitiveness of Indonesia’s primary commodities within

ASEAN and to China suggests that Indonesia would have the greatest comparative

advantage in producing these commodities and that its income from them would

increase over time. In contrast, China would have the greatest comparative dis -advantage within the region, and the estimation results suggest that the competi-tiveness of its primary commodities would decrease over time. In manufactured products, however, Indonesia would be disadvantaged, and this condition (which

has deteriorated since 2000) would steadily worsen. China’s comparative advan -tage in manufacturing would increase rapidly, especially because of the

imple-mentation of the ASEAN–China Free Trade Area in January 2010.

The Rise of the Managerial State in Indonesia:

Institutional Transition during the Early Independence Period, 1950–1965 Farabi Fakih (farabi.fakih@gmail.com)

Accepted 2014, Leiden University

Indonesia obtained its sovereignty as an independent republic at the end of 1949, after a protracted four-year war with its former colonial master, the Netherlands.

From the early years of independence, ineficiency, corruption, labour shortages,

and managerial incapacity became major problems that the Indonesian state seemed incapable of addressing. Turning to foreign, especially American, aid, the state initiated a series of institutional developments. It sent thousands of Indone-sian students to study in American universities and invited thousands of experts into the country. It cemented institutional and personal relationships between Indonesian and American universities. It imported and developed its own dis-course on development, to transfer elite domination from nationalist-revolutionary

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294 Abstracts of Doctoral Theses on the Indonesian Economy

elites to managerial-expert elites. It also allowed the military to participate in the new managerial class, by providing new managerial posts for army personnel and developing appropriate army doctrines for a military-dominated managerial state. This dissertation argues that the new institutional and personal relationships between Indonesian and American experts and the import of new ideologies

like scientiic management, public administration, and modernisation theory

supported the rise of a developmental managerial state that was state-led and illiberal. It analyses Indonesia’s institutional and ideological development as an almost typical, textbook example of the rise of Third World managerial state. It argues that the shift from Sukarno’s Old Order (1950–65) to Soeharto’s New Order (1966–98) must be understood as part of this development.

The rise of the New Order developmental state was often viewed as a resur-gence of the colonial state. This dissertation challenges that view by positing the

importance of placing the Cold War context in a dominant position. The rise of

a managerial class composed of academics and civilian and army managers, and supported by the military and its proxies, was an institutional development that began in the early years of independence. The New Order state continued a series of institutional changes proposed by Sukarno in his Guided Democracy regime and supported by experts and their idea of using retooling, indoctrination, and traditional culture as instruments of control. Sukarno’s effort to maintain both the revolutionary project of national independence and the expert project of state-led development and growth ended in tragedy.

Similar to the Communist generational shift between the so-called reds (revo -lutionaries) and experts (administrators and bureaucrats), the generational shift

in the Indonesian elite signiies the universality of the process and points to the importance of looking at Third World, Cold War development as a shift from

a revolutionary and participatory ideology of people-led revolution towards a managerial ideology of state-led development—an ideology that was supported

by both the West and Communist countries because of its universality. The rise of

the unexpected and relatively successful New Order developmental state and the equally unexpected rise of violence and mass deaths accompanying it should be understood in the context of this managerial state and its managers.

http://dx.doi.org/10.1080/00074918.2014.938411

From Revenue Farming to State Monopoly:

The Political Economy of Taxation in Colonial Indonesia, 1816–1942 Abdul Wahid (kang_ahid@ugm.ac.id)

Accepted 2013, Utrecht University

This thesis reviews the history of the tax system in colonial Indonesia, and in Java in particular, by examining the social, political, and economic consequences of changing the way it generated revenue. It focuses on the transformation at the turn of the twentieth century of the pachtstelsel, or revenue farming, a

tax-collecting system involving private parties (mainly ethnic Chinese businessmen)

that had been in practice throughout the nineteenth century, into a regiestelsel, or