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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
Ross H. Mcleod
To cite this article: Ross H. Mcleod (2006) IN THIS ISSUE, Bulletin of Indonesian Economic Studies, 42:3, 293-294, DOI: 10.1080/00074910601053185
To link to this article: http://dx.doi.org/10.1080/00074910601053185
Published online: 23 Nov 2006.
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Bulletin of Indonesian Economic Studies, Vol. 42, No. 3, 2006: 293–4
ISSN 0007-4918 print/ISSN 1472-7234 online/06/030293-2 © 2006 Indonesia Project ANU DOI: 10.1080/00074910601053185
IN THIS ISSUE
Notes from the editor
The new ‘Survey of recent developments’, by Chatib Basri and Arianto Patunru, reports a welcome boost in Indonesia’s economic growth rate, accompanied by exchange rate stability, declining infl ation and interest rates, and a strongly performing stock market. But evidence continues to accumulate of the govern-ment’s inability to achieve much by way of economic reform, notwithstanding the introduction of several policy packages with precisely that general objective. It is not surprising that investment spending remains at low levels, as Indonesia still ranks very poorly in international comparisons of ease of doing business; never-theless, the authors fi nd a hopeful sign in rapid growth of capital goods imports in August.
The authors refute criticism of the government for allegedly causing poverty to increase by slashing fuel subsidies last year. The main cause of the recent rise in pov-erty in fact has been big increases in rice prices as a result of the previous ban on rice imports, which has now been overturned. Concern about poverty and unemploy-ment have resulted in the governunemploy-ment casting around for a ‘quick fi x’, analogous to Roosevelt’s New Deal of the 1930s. This raises the possibility of large-scale mis-allocation of resources to projects of dubious economic merit, such as investment in the production of bio fuels. Meanwhile, there seems no end to Indonesia’s string of natural disasters, although the latest—a huge and as yet unstoppable fl ow of mud from a gas exploration well—has a signifi cant man-made element. The inability of the bureaucracy to prevent or adequately deal with this disaster, together with its failure to bring about the government’s desired reforms, suggests the importance of a thorough overhaul of the civil service.
We include in the December issue, for the second time, an extended discus-sion of political affairs in Indonesia over the last year; this paper was presented by Rodd McGibbon at the annual Indonesia Update conference at the Austral-ian National University in September. The author notes that Indonesia experi-enced relative political stability in 2006, and that important democratic gains were registered—including the continued implementation of direct elections of local government executives and the enactment of the Law on Governing Aceh. He shows that the political party system remained especially weak, however, with continuing signs of a troubling lack of popular identifi cation with, and support for, the parties. Ideological debates have become an important part of the national political agenda, especially over the vexed issue of religion and the state, but these debates have largely bypassed the party system.
In their study of ‘creative destruction’ in Indonesian manufacturing, Jan ter Wengel and Edgard Rodriguez present clear empirical support for the textbook view of the benefi ts of strong competition among fi rms, the result of which is that less effi cient fi rms eventually exit their industries, while more effi cient survivors
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294 In this issue: notes from the editor
are constantly pushed to achieve higher levels of productivity by new entrants. The authors argue that the steady increase in productivity of Indonesia’s manu-facturing sector can largely be attributed to this ‘churning’ process. The authors draw attention to government policies that discriminate in favour of small busi-ness, but which lead to ineffi ciency and high administration costs. On the other hand, they highlight the government’s failure simply to provide a regulatory environment in which it is easy to establish new fi rms and to close down those that fail. They also demonstrate that the argument that closure of fi rms leads to increased unemployment is not supported by the evidence.
In another study of Indonesian manufacturing, Virginie Vial revisits the lit-erature on total factor productivity (TFP) growth in this sector, using plant-level data. Her results suggest that average and aggregate TFP growth rates have been higher than previously estimated. Nevertheless, her results are close to earlier esti-mates and show a similar trend, indicating that they are robust to the methodology employed. Larger differences appear in the industry-level results, suggesting that detailed industry TFP calculations should be treated with caution.
The fi nal paper is a review article by Robert Cribb about three new books on Indonesian history, by Adrian Vickers, Stephen Drakeley and Ian Chalmers, respectively. Cribb argues that each benefi ts from fresh research and new analyti-cal insights into Indonesia’s enduring complexity, and that these studies will help determine the assumptions that Indonesianists of the next generation bring to their research. Vickers’s book is described as attempting to breathe fresh life into a general history of Indonesia. Chalmers is seen as making a bold effort to restore attention to Indonesian discourses and to give historical depth to the discussion of contemporary Indonesia. Drakeley’s inclusion of perspectives on gender and daily life is given special mention.
As has become our custom over the last three years, we are very pleased to present a set of abstracts of recently completed PhD dissertations on the Indo-nesian economy and closely related fi elds. Again, growth in the number of such dissertations, several of them by young Indonesian scholars, augurs well for the future of the profession in Indonesia, and for the study of economics as applied to that country.
The book review section in this issue attests to the large number of books being written on Indonesian economics and related issues these days, including many by Indonesians themselves. It is pleasing also to see several young Indonesian scholars represented among our reviewers. Indeed, to some extent this is a col-lection of reviews by the younger generation on books whose content has been supplied by an older generation of authors, some of whom are no longer with us. The topics of books reviewed here include: Indonesia’s transition to democracy; two studies of regional development under decentralisation, and one on regional demographic analysis; the politics and economics of natural resource exploita-tion; two collections of memoirs of Indonesians who have played signifi cant roles in Indonesia’s development; a history of the Borneo environment; a study of state terrorism and political culture in New Order Indonesia; and, fi nally, a collection of conference papers on the changing Asia Pacifi c economic order.
Selamat membaca!
Ross H. McLeod
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