Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 00074910701286412

(1)

Full Terms & Conditions of access and use can be found at

http://www.tandfonline.com/action/journalInformation?journalCode=cbie20

Download by: [Universitas Maritim Raja Ali Haji] Date: 18 January 2016, At: 20:02

Bulletin of Indonesian Economic Studies

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

BOOK REVIEWS

To cite this article: (2007) BOOK REVIEWS, Bulletin of Indonesian Economic Studies, 43:1, 113-127, DOI: 10.1080/00074910701286412

To link to this article: http://dx.doi.org/10.1080/00074910701286412

Published online: 08 Nov 2007.

Submit your article to this journal

Article views: 38

(2)

BOOK REVIEWS

Hadi Soesastro, Aida Budiman, Armida Alisjahbana, Ninasapti Triaswati and Sri Adiningsih (eds) (2005) Pemikiran dan Permasalahan Ekonomi

di Indonesia dalam Setengah Abad Terakhir [Economic Thought and Issues in Indonesia in the Last Half Century], Ikatan Sarjana Ekonomi Indonesia

(Indonesian Economists Association), 5 volumes, pp. 2,335. Rp 1,000,000.

Historical perspective on how an economy develops is of interest when trying to understand its present state of development. Tracing the evolution of eco-nomic thinking is an essential part of that perspective, and policy makers who understand past debates may avoid repeating the mistakes of their predecessors. Pemikiran dan Permasalahan Ekonomi di Indonesia dalam Setengah Abad Terakhir is a collection of academic and media articles covering the development of issues and thinking on the Indonesian economy over the last half-century. It was published to celebrate the 50th anniversary of the founding of the Indonesian Economists Association (Ikatan Sarjana Ekonomi Indonesia, ISEI). The collection’s ﬁ_{ve main}

volumes divide the writings into ﬁ_{ve periods of Indonesian economic}

develop-ment, each with a volume introduction.

Each volume is organised in thematic sections: System and Basic Principles; Economic Institutions; Political Economy; Development Planning; Macroeconom-ics; Agriculture, Industry and Trade; Regional Development; and Socio-economic Development. Although this may disappoint readers who would prefer a more chronological development within every volume, it in fact allows interesting the-matic comparison among periods. Readers may be able, for example, to see how issues and paradigms on ‘regional development’ differ between the early New Order period of the 1970s (third volume) and the latter part of the 1990s (fourth volume). Indeed, the compilers suggest such an approach to reading the collec-tion in its introductory booklet.

The ﬁ_{rst volume covers the establishment of the post-colonial Indonesian}

economy (1945–59). It touches on issues from institution building to problems in speciﬁ_{c economic sectors. The papers emphasise that the economy ought to be}

based on socialist principles, and that its development should follow a ‘bottom-up’ approach.

Apart from providing discussion of the basic system and principles under which thinkers of the time believed the economy should be developed, the book also helps to explain Indonesian scepticism about foreign capital. While understandable for that period, it is surprising that this attitude survives (at least partly) even today. Another striking inclusion in the book is Hatta’s short article on regional develop-ment and autonomy. It stresses that the initial concept of Indonesian developdevelop-ment was to place districts (kabupaten) at the centre of regional autonomy. How this vision

(3)

eventually failed, with Indonesian economic management instead becoming highly centralised, is an interesting question, probably beyond the scope of the collection. However, it is remarkable that this approach to regional autonomy is now treated as a post-crisis breakthrough, when in fact Indonesia is only moving back to an earlier post-independence concept of development.

Economic policy debate in the early years of independence was characterised by two conﬂ_{icting approaches. The nationalists believed the government should have}

a central role in managing the economy. The more pro-market thinkers saw the market mechanism as the driver of the economy, with indirect government inter-vention through monitoring and regulation. In implementation, policy was driven mainly by the ﬁ_{rst group, resulting in a highly centralised economy with regulated}

prices, which then failed to send appropriate economic signals to the market. The volume has very little to say about why that happened, however.

The second volume covers the years known as the periode ekonomi terpimpin (the ‘guided’ economy period) from 1959 to 1966. This time is characterised by highly nationalistic and revolutionary idealism, and a disregard for basic economic rea-soning. As a result of this approach, the economy went into decline, with a dra-matic fall in per capita GDP and investment, accompanied by galloping inﬂ_ation

and huge balance of payments and current account deﬁ_cits.

Most articles in this second volume discuss economic problems of the period either by focusing on their causes or by analysing how to overcome them. In gen-eral, the analysis points to a need to turn attention back to basic economic prin-ciples. Better management of state enterprises, the government budget and the distribution of rice and oil are particularly emphasised, and there is general agree-ment about the need to pay attention to the market mechanism and price signals. Unfortunately, the volume fails to explain why this agreement was not reﬂ_ected

in policy implementation during the period it covers.

The ﬁ_{rst two volumes of the collection present various authors’ conceptual}

understanding of how the Indonesian economy should develop. Rather than offering current analysis of the historical situation, the volumes present papers written by policy makers and academics of the time. This feature is the main con-tribution of the collection: it guides readers through the evolving thinking behind the process of economic development in Indonesia.

The third and the fourth volumes represent the ideas, thought and economic issues of the New Order era from 1966 to 1997. The third volume covers the ﬁ_rst

15 years of the period, to 1981, and the fourth covers the years 1982–97, known as the era of deregulation and economic liberalisation.

The third volume starts with the very basic issue of returning to economic prin-ciples and reasoning in managing the economy. These prinprin-ciples had been seri-ously neglected by the Sukarno regime. Although it was assumed by many that the economy would be based upon market principles, voices promoting a rather adapted or modiﬁ_{ed market system are also heard in the volume.}

Among the ideas regularly advocated in this era were the notion of ekonomi Pancasila, which combined planning with market mechanisms and promoted the view that cooperatives should be leading players in the economy. At certain stages of the discussion, the spirit of socialism could still be heard, for example, in the 1981 article by the late Professor Mubyarto, which urged a re-ordering of the ‘development trilogy’ to place equality ahead of growth as the ﬁ_rst

(4)

ity in economic development (the third element of the trilogy being economic stability).

In the fourth volume, covering the period of deregulation and economic liber-alisation, the discussion of the system and basic principles is almost unambigu-ous. The authors are straightforward about how to carry out structural adjustment effectively, and how to manage economic policy reform. Readers will note that in this period questions such as whether an adapted market economy was necessary, or how to deﬁ_{ne ekonomi Pancasila, were less often heard than the question of how}

to get the price right and let the market work.

In the discussion of economic institutions, the distinctive features of thought in both periods also seem clear. The substantial discussion of the importance of cooperatives, their problems and prospects, and of the practical implementation of these ideas in the form of the widely advocated village cooperatives (Koperasi Unit Desa) and village enterprises (Badan Usaha Unit Desa), dominates the treat-ment of economic institutions in the early years of the New Order economy.

In the later period, covered in the fourth volume, the focus is on institutional change in more free market terms, such as how to accelerate privatisation in the pursuit of economic efﬁ_{ciency, or how to improve free market institutions such as}

capital markets. In this sense, the volume manages to show that the evolution of ideas runs parallel with the evolution of policies. The period of deregulation and economic liberalisation from 1982 to 1997 produced policies that touched almost all aspects of trade, ﬁ_{nance and the real sector, and can be seen as the realisation}

of ideas that are quite distinct from those of the previous period.

The deregulation of the 1980s and 1990s, especially in the ﬁ_{nancial sector,}

may have helped make the Indonesian economy vulnerable and exacerbated the 1997 ﬁ_{nancial crisis. Readers may wonder why there are hardly any papers in}

the fourth volume that seriously discuss the potential danger caused by exces-sive deregulation, especially in the ﬁ_{nancial sector and in debt mismanagement}

before the crisis. Had the euphoria of economic liberalisation led economic thinkers to overlook the vulnerability that it might have created? Could it be the case that the ﬁ_{nancial crisis of the late 1990s was completely unexpected and}

shocked everyone?

Volume 5 covers the episodes of crisis and economic recovery between 1997 and 2005. The emphasis is on the problems and challenges facing the Indonesian government during the period of reformasi following the severe economic and subsequent political crisis. The 55 articles cover a broad range of issues and seem, not surprisingly, more like an anthology than a book, as the papers are not con-nected with one another. Moreover, the differences in methodology, approach and level of analysis across papers make it hard for the reader to gain deeper infor-mation on a particular issue. In general, the papers selected here share just one similarity—the period of study. Adiningsih’s introduction provides a good over-view of the key issues of the crisis and recovery period. Unfortunately, it does not highlight many of the debates and contradictions among the papers. In addition, only a few papers are mentioned in the introduction, leaving the reader puzzled about the argument of other papers and their position in the debate.

The crisis generated discussion about the ‘proper’ economic system and the basic principles that can deliver prosperity to the Indonesian people. In 2000, ISEI proposed the idea of a ‘managed market concept’ (konsep ekonomi pasar terkelola)

(5)

that promotes private sector involvement in economic activities on the one hand, and supports a government contribution on the other hand to ensure fairness. Another basic principle was introduced by the National Economic Council (Dewan Ekonomi Nasional) in the Gus Dur era (1999 to 2001). The New Indo-nesian Economy Framework set out 10 basic principles in the areas of the ﬁ

nan-cial sector; a people’s economy; poverty alleviation; education; competitiveness; and good governance. This idea was followed by a debate on the need to amend article 33 of the 1945 constitution, which includes the statement that ‘sectors of production that are important for the country and affect the life of the people shall be controlled by the state’. The nationalist view, which is critical of the free market system, was part of the debate on this issue.

One important lesson from the crisis for Indonesia is an awareness of the need to reform its institutions. Efﬁ_{ciency, transparency and law enforcement are the key}

issues for institutional reform, and are discussed in contributions on cooperatives, state enterprises, and the role of the Commission for the Supervision of Business Competition. Papers analysing reform of ﬁ_{nancial institutions focus on the}

inde-pendence and accountability of Bank Indonesia, and on the development of the Financial Services Authority (Otoritas Jasa Keuangan, OJK) and its relationship to the central bank. The paper on the latter issue argues that Bank Indonesia should be responsible for maintaining monetary stability and OJK for prudential safety and market conduct of the ﬁ_{nancial sector. A paper on the controversy}

surround-ing the government and central bank policy known as Bank Indonesia Liquidity Support (Bantuan Likuiditas Bank Indonesia, BLBI) is followed by a discussion of the performance of the Indonesian Bank Restructuring Agency known as IBRA or BPPN.

In the political economy section, most of the debate relates to the pros and cons of IMF involvement in policy and to the foreign debt issue. Differences in the politi-cal atmosphere of economic policy during the Soeharto, Habibie, Gus Dur and Megawati eras are evaluated. Another contribution, which explains the rationale for reducing the government subsidy on oil prices, stimulated debate on the issue in the Indonesian media. The political economy of competition policy, competitiveness and liberalisation is highlighted by another author, and linked with notions of glo-balisation and rationalisation. Three key issues arise in the development planning section: methodology; sectoral issues and the role of agriculture as prime mover; and the role of Bappenas as the development planning agency.

Macroeconomic stability is the key issue during the recovery period. Some papers focus on the monetary policy agenda, others on ﬁ_{scal policies. These two}

policies brought macroeconomic stability to Indonesia, but without signiﬁ_cantly

improving economic growth. This failure stimulates discussion in the microeco-nomic section. Agriculture-based industry becomes one favoured path. Another contributor explores the phenomena of de-industrialisation and industry com-petitiveness, while low competitiveness is examined in one paper on industry in general and another on textiles. A further crucial issue in this section is trade arrangements, with contributions analysing liberalisation and the role of the World Trade Organization. Several papers consider aspects of regional auton-omy. The last section covers socio-economic development, with a focus on pov-erty and income distribution, population and human development, and labour policy.

(6)

This ﬁ_{fth volume would be a good introduction to issues in the Indonesian}

economy during the crisis—the individual articles reﬂ_{ect many parts of the}

debate—but the volume lacks coherence. Indeed, within all volumes, a better introduction to each section, that highlighted the essential arguments of all the papers and their place in contemporary debates, would signiﬁ_{cantly improve the}

collection. It would also help the reader to negotiate the different views among the authors.

Despite its obvious usefulness, the collection has some limitations. A signiﬁ

-cant number of typographical errors appear throughout the volumes. It is also unfortunate that the collection fails to elaborate sufﬁ_{ciently how the concepts}

dis-cussed relate to actual developments in the Indonesian economy. The articles do not adequately bridge the gap between the ideas and actual policy implementa-tion in each period. Nonetheless, this collecimplementa-tion will be a valuable reference for students of economic policy and economic thought. Let us hope that policy mak-ers (or perhaps their advismak-ers) will take the time to absorb from these pages some of the lessons of past failures and successes.

Arief Ramayandi, Arief Anshory Yusuf and Della Temenggung ANU

John Monfries (ed.) (2006) Different Societies, Shared Futures: Australia, Indonesia and the Region, Institute of Southeast Asian Studies,

Singa-pore, pp. 206. Paper: S$29.90/US$19.90; Cloth: S$49.90/US$29.90.

The bilateral relationship between Australia and Indonesia has been described variously as ‘a roller-coaster’, ‘a yoyo’ and ‘an elevator’. At times the relations between these two close neighbours have also been categorised as ‘delicate and fragile’. The ﬁ_{rst three metaphors describe a relationship in which there are}

con-stant ups and downs, where, in the case of a roller-coaster, the going up tends to be slow and ponderous and once at the peak the rushing down is fast and furious, before a slow return to an upward direction. In the second description, bilateral relations between Jakarta and Canberra are seen to demand special handling, like transporting a basket of eggs or thin glasses, so that one must not travel too fast and must try to avoid bumps.

The difﬁ_{culties in developing, nurturing and managing relations between}

Indonesia and Australia—relations that everyone concerned seems to agree are extremely important—have been attributed to the great differences between these two neighbours. Probably no two countries are as physically close to one another as Australia and Indonesia and yet so unalike. Indonesia is an archipelago with a large population mainly of Austronesian stock, predominantly Muslim and with a still developing economy, the majority of whose population is poor. Australia is a continent with a relatively small population that arrived largely through white immigration, mainly Christian, with a developed economy and a relatively wealthy population. For decades Australia was seen and saw itself as a white, European outpost on the fringe of Asia, physically in the region, but culturally, politically and

(7)

economically tied to Europe and later to the United States. Australia felt alien to and alienated from its rather rough neighbourhood, and constantly threatened.

In the past decade Australia has become more integrated into the Asia Paciﬁ_c

region. Internally it is now more multicultural, with large migrant groups coming from Asia and the Middle East, while Australia’s security and economic relations with Asia have grown much stronger over the years. Relations between Jakarta and Canberra have also become closer, as the two countries share many common national and regional interests, as well as valuing each other as friends in inter-national fora. Yet there is an element of prickliness, of unpredictability, in these essentially close bilateral relations.

Different Societies, Shared Futures: Australia, Indonesia and the Region, a product of the 23rd Indonesia Update, organised by the Australian National University in 2005, provides valuable insights into the dynamics of relations between Canberra and Jakarta. It is surprising that, although the Update has become a tradition, organised annually since the 1980s, the 23rd Update was the ﬁ_{rst one devoted}

exclusively to discussing Indonesia–Australia bilateral relations. The contributors to the book are well-known scholars on Indonesia, as well as commentators on and practitioners of Indonesia–Australia relations.

As the title suggests, Indonesia and Australia are very different societies; this is a given and will always cause some difﬁ_{culties in their relations, but geographic}

proximity dictates that their futures will be inextricably bound together for bet-ter or for worse. It is in both countries’ inbet-terests to manage relations in ways that maximise positive outcomes and minimise unavoidable irritations. The book starts with a succinct and illuminating list of markers by the doyen of Indonesia– Australia relations, Richard Woolcott, and a comprehensive introduction by the editor, John Monfries. It is then divided into ﬁ_{ve parts: Regional Viewpoints;}

Security Aspects; Mutual Perceptions and Irritations; The Economic Partnership: Aid, Economics and Business; and the conclusion.

Each contribution is well thought out, well argued and highly readable. The discussions at the conference on which this volume was based must have been very lively. The book’s value lies in its attempt to address the issues in a fairly com-prehensive manner and in ways that do not gloss over the problems or become unrealistically optimistic. It is an honest assessment of the sometimes turbulent relations across the Arafura Sea, emphasising their importance but recognising the perennial challenges.

While I do not wish to diminish the signiﬁ_{cance of the other chapters, those by}

former Indonesian Ambassador to Australia, S. Wiryono, and by Paul Kelly are important for understanding the perspectives of the two countries. The papers were written in a year when the bilateral relationship was improving, after Presi-dent Susilo Bambang Yudhoyono’s successful visit to Australia. The presiPresi-dent received a warm welcome and was regarded by many Australian commentators as the ﬁ_{rst Indonesian president who genuinely understood Australia. This led}

Paul Kelly to remark with foreboding that something was bound to go wrong, and sure enough not long afterwards Indonesia recalled its ambassador as a mark of Jakarta’s anger at the granting of asylum by the Australian government to a number of people ﬂ_{eeing from Papua.}

The chapter on security by Hugh White is also worth noting. White warns about the risks of signing a security agreement without obtaining grassroots

(8)

port from the peoples of Australia and Indonesia. This warning was effectively ignored by the two governments, which again signed a bilateral security agree-ment in November 2006 without sufﬁ_{cient prior consultation with their respective}

constituents. Time will tell whether this second agreement will suffer the same fate as the ﬁ_{rst, revoked as bilateral relations deteriorate, or whether it will act as}

an important linchpin in helping to stabilise relations. As Richard Chauvel points out, the issue of Papua will continue to bedevil Australia–Indonesia relations for the foreseeable future, and if the Indonesian government mishandles Papua all bets are off. The excellent conclusion by an eminent student of Indonesia, Jamie Mackie, rounds up a thoroughly informative and highly readable book. Inciden-tally, I read this book from cover to cover on the long ﬂ_{ight from Jakarta to}

Wash-ington DC, and my only regret is that I missed the 23rd Indonesia Update.

Dewi Fortuna Anwar Indonesian Institute of Sciences (LIPI) and The Habibie Center, Jakarta Johns Hopkins University, Washington DC

Mohamed Ariff and Ahmed M. Khalid (2005) Liberalization and Growth in Asia: 21st Century Challenges, Edward Elgar, Cheltenham, pp. 424.

Paper: £35.00 (web price £28.00); Cloth: £75.00 (web price £67.50).

This is a well-written book on the development experiences of eight Asian coun-tries: China, India, Indonesia, South Korea, Malaysia, Pakistan, Singapore and Thailand. It has eight country chapters along with an introduction, a chapter on the Asia crisis and a concluding one on lessons for development strategy.

The book is useful on many counts, including the fact that it does not limit itself to just sub-regions in Asia, but rather cuts across both East and South Asia. Indeed, any book that purports to discuss Asia and the 21st century surely can-not exclude China or India, the world’s two most populous and fastest growing countries. In addition, the authors offer a useful description of the development paths of the selected countries.

The book focuses on four dimensions pertaining to the real sector (trade lib-eralisation and removing behind-the-border barriers, including anti- competitive regulations); the ﬁ_{nancial sector (liberalisation and supervision of}ﬁ_nancial

institu-tions); the ﬁ_{scal sector (the need for}ﬁ_{scal discipline); and the external sector}

(grad-ual capital account deregulation and issues relating to exchange rate reform). In some senses the book tries to do too much under the rubric of development strategy. By attempting to examine all the four dimensions for each of the eight countries, the discussion at times appears too broad and ends up being much more descriptive than analytical. It would also have been useful if the authors had attempted to draw more on the recent analytical literature in the ﬁ_{eld of}

development by Dani Rodrik, Ricardo Hausman and others in thinking about development strategies in Asia (Rodrik and Hausman 2003). One would also have liked an evaluation of the four dimensions of development discussed by the authors relative to the extended Washington Consensus (Rodrik 2006). Similarly,

(9)

in discussing exchange rate regimes for countries, this reviewer would have liked to see greater use of some of the recent studies of de facto currency regimes.

It is unfortunate that most of the data stop at 2002. Because of this, the authors are somewhat less bullish on the prospects for India and Pakistan, both coun-tries that have done well in recent times. The book speaks with some authority on Malaysia and Pakistan in particular, but is found somewhat wanting when it comes to examining China and India (Kelly, Rajan and Goh 2006). The chapter on Indonesia is useful, focusing on the crisis period, though once again the fact that the data stop at 2002 makes the analysis somewhat dated in some areas.

Overall, notwithstanding the above caveats, and if one were to ignore some rather unnecessary comments on international security issues (e.g. atomic bombs) or sweeping generalisations on certain countries (e.g. on India the authors start the chapter by saying: ‘This country experienced three decades of violence and civil disorder …’), the book offers a good overview of Asian economic develop-ment in the selected countries. It would be a useful read for an advanced under-graduate class on Asian economic development.

Ramkishen S. Rajan George Mason University, Arlington VA

References

Kelly, David, Rajan, Ramkishen S. and Goh, Gillian (eds) (2006) Managing Globalisation: Les-sons from China and India, World Scientiﬁ_{c Press, Singapore.}

Rodrik, Dani (2006) ‘Goodbye Washington consensus, hello Washington confusion? A review of the World Bank’s Economic Growth in the 1990s: Learning from a Decade of Reform’, Journal of Economic Literature XLIV (December): 973–87.

Rodrik, Dani and Hausmann, Ricardo (2003) ‘Economic development as self-discovery, Journal of Development Economics 72 (December): 603–33.

Seiji F. Naya and Michael G. Plummer (2005) The Economics of the Enterprise for ASEAN Initiative, Institute of Southeast Asian Studies

(ISEAS), Singapore, pp. 443. S$49.90/US$29.90.

This ISEAS book is a study of the Enterprise for ASEAN Initiative (EAI) proposed by President George W. Bush at the 2002 APEC Annual Summit. The aim of the EAI is to pursue the establishment of free trade areas (FTAs) between the US and ASEAN–WTO members who are also in ‘trade and investment facilitation and lib-eralisation (TIFL ) agreement’ with the US. It is a follow-up to the ASEAN–US Ini-tiative (AUI), and is supported by the East–West Center, Hawaii, the US–ASEAN Business Council and the ASEAN–US Technical Assistance and Training Facility. The book has six chapters, each with a short summary.

Chapter 1 gives a good glimpse of the main issues and conclusions in the subse-quent chapters. Chapter 2 contains a descriptive (not analytical) study of the trade (not economic) relationship between the US and ASEAN, where trade involves goods, services and foreign direct investment (FDI). Useful appendix tables give 1993–2001 data on the disaggregated goods exports and imports of four ASEAN

(10)

countries (Indonesia, Malaysia, the Philippines and Thailand). Chapter 3 discusses the static or price effects (trade creation and diversion) and the dynamic impact of FTAs (economies of scale, efﬁ_{ciency improvements, FDI}ﬂ_{ow changes), and}

pro-vides empirical evidence on the trade effects of a US–ASEAN relationship. The effects are found to be small or even insigniﬁ_{cant and declining over time. A total}

of 14 appendix tables, including US protection and expansion potential predic-tions for 2001 for all six original ASEAN economies, are also provided. Chapter 4 contains country studies by nine contributors on the economic and trade issues in these six ASEAN members, and offers suggestions for country-speciﬁ_{c policy}

and further analysis. Chapter 5 points out the importance of the US market for ASEAN and of ASEAN’s increasing internal trade and ‘open regionalism’, the implications of regionalism in Japan, the EU and the US, and the ‘Chinese com-petitive threat’. Chapter 6 summarises the case for the EAI in terms of economic realities, an ASEAN defensive strategy, and a US proactive strategy.

In my assessment, the book, in its attempt to lend support to an EAI, provides two sets of apparently conﬂ_{icting evidence: it charts the rise of ASEAN as an}

eco-nomic and trading power in a global economy, and argues the need for ASEAN to engage the US in a trade agreement even though there is little statistical sup-port for this. It is true that, while most Asian economies do need trade with the US (and the EU) in the quest for advanced technology transfer through FDI, for example, the share of US trade with (and its importance to) Asia has been declin-ing in recent years. In the special case of Indonesia, which has recorded the fastest fall in merchandise trade with the US in the past two decades, and is a newcomer in FTAs, a US–Indonesia FTA is inevitably complicated, with many border and non-border policy changes and controversial features. It is also well known that the benign neglect by the US (and the EU) of Asian economies (including both ASEAN and Northeast Asian economies such as Korea) during their 1997–98 eco-nomic and ﬁ_{nancial crises—and the strong recovery of the major crisis economies}

in Asia—have assisted these economies in their regional and global assertion of power and identity. An EAI seems in this context an admirable but belated and at best ineffective effort to respond to these developments in Asia. A more relevant initiative would be an ‘ASEAN or AFTA Plus’ (including an ‘ASEAN or AFTA plus US’), as discussed by the world’s leaders at the First East Asia Summit in Kuala Lumpur on 14 December 2005 (Tran Van Hoa and Harvie 2007).

The book has a few editorial problems: in chapter 4, section V is placed after section VI; chapter 4’s title is a misnomer: ‘Special Issues’ should be ‘Country-Speciﬁ_{c Issues’; the book is on trade and not really on broader economics. In spite}

of this, it could be used as background to the study of the EAI, or of some aspects of the trade relations of the major non-transition ASEAN economies (e.g. Indo-nesia) to 2001.

Tran Van Hoa Victoria University, Melbourne

Reference

Tran Van Hoa and Harvie, C. (2007) Regional Trade Agreements in Asia, Edward Elgar, Chel-tenham and New York, forthcoming.

(11)

Douglas Arner, Paul Lejot and S. Ghon Rhee (2005) Impediments to Cross-border Investments in Asian Bonds, Paciﬁ_{c Economic Cooperation Council and}

Institute of Southeast Asian Studies, Singapore, pp. xii + 58. S$19.90/US$14.20.

This small book begins with the observation that after the Asian ﬁ_{nancial crisis}

the development of local currency bond markets received high priority ‘as an alternative vehicle for domestic savings mobilisation and also as a critical means of mitigating the dual mismatch problems of currency and maturity’. It is not until the second chapter that the underlying argument emerges: that ‘private sec-tor ﬁ_{nancing behaviour was the main cause of these [maturity and currency]}

mis-match problems’.

Although the view has often been expressed that private ﬁ_{rms erred by}

borrow-ing in foreign currency and on short maturities to ﬁ_{nance long-term investments, it}

has little appeal for this reviewer. On the contrary, the main cause was incompatible monetary and exchange rate policies, most obviously in Thailand and Indonesia. Currency crises are virtually inevitable when central banks hold exchange rates away from the market equilibrium values consistent with their monetary policies.

The view that the crisis was a central bank problem rather than a private sector problem provides an explanation for the authors’ observation that, despite the high priority allegedly given to building local currency bond markets in Asia, the fact is that ‘tangible achievements have yet to materialise’. Chapters 2 and 3 present data on Asian bond markets and on inter- and intra-regional capital ﬂ_{ows, and show}

that both are of little signiﬁ_{cance, strongly suggesting that the development of such}

markets is not seen as important by private sector investors and borrowers. The history of the development of ﬁ_{nancial markets is that}ﬁ_{nance law develops when}

market players put pressure on governments to provide any necessary legal under-pinning for newly emerging ﬁ_{nancial products. The present case appears to}

pro-vide a clear example of what happens when the initiative for such change emerges from governments and multilateral institutions like APEC: very little.

To the extent that this book is useful, it is in the effort the authors have made in chapter 4 to draw up a list of ‘blockages’: legal, regulatory and policy short-comings that have a negative impact on the functioning of ﬁ_{nancial markets in}

general, as distinct from local currency bond markets.

Ross H. McLeod ANU

David Henley (2005) Fertility, Food and Fever: Population, Economy and Environment in North and Central Sulawesi, 1600–1930,

KITLV Press, Leiden, pp. xii + 711. €45.00.

This is a remarkable book: remarkable for its length (over 700 pages), but more importantly for its breadth and depth. It covers the ﬁ_{elds of historical}

demogra-phy and historical geogrademogra-phy, but also delves quite deeply into sociology, agron-omy, epidemiology, colonial history and economic history. It mines the available

(12)

historical sources exhaustively, and engages fully with the academic controver-sies relevant to the book’s subject matter.

The historical demography of Indonesia has come a long way since Widjojo Niti sastro wrote his classic Population Trends in Indonesia in 1970. Gooszen has shown the broad outlines of population growth in the early 20th century, and for Java, Ricklefs has some indirect evidence for the 17th and 18th centuries, while Boomgaard’s classic study, Children of the Colonial State: Population Growth and Eco-nomic Development in Java, 1795–1880, exploits the Dutch sources expertly. For 19th century trends outside Java, attempts to discern general patterns have been made by Fox for the Lesser Sundas, Reid for Sumatra and Knapen for Kalimantan.

Sulawesi has hitherto remained relatively untouched by systematic historical demographic studies, despite the wealth of archival data available. David Henley’s study changes that in fundamental ways. Based at KITLV (the Royal Netherlands Institute of Southeast Asian and Caribbean Studies) in Leiden, Henley had access to the National Archive in The Hague, as well as to the ‘67 metres of administrative records’ in the Manado residency archive at the Indonesian National Archive in Jakarta. In addition, he mined the wealth of material in Christian mission records, and writings by administrators, missionary anthropologists, ethnographers and naturalists.

The book begins with an introductory section on Indonesian historical demog-raphy, the geography and societies of northern Sulawesi, the history of European expansion in the region and the historical sources. A chapter follows on economic patterns, then four chapters on the population data and what they show about trends in the island realm of Sangir and Talaud, peninsular North Sulawesi and Central Sulawesi. Three subsequent chapters deal with death and disease, dis-ease control, and the food supply and its relationship to mortality. The book then moves on to examine fertility, demographic patterns (emphasising regional and local differences in density and growth), and causes of population growth or stag-nation. Finally, there are chapters on vegetation and deforestation, the making of the landscape and population and environment.

Detailed tables are included on matters such as the population data for each of the sub-regions covered; historical trends in vegetation cover and deforestation; and patterns of swidden cultivation. The scope, type, and various indicators of accuracy are given for each estimate.

At various points through the book, Henley brieﬂ_{y recapitulates what his study}

has found. For example, on population change he notes on p. 434 that

The most common chronological pattern seems to have been one of crisis-ridden quasi-equilibrium, with epidemics and other disasters regularly killing substantial fractions of the population, but with little or no net growth in the long term.

On the other hand, parts of the region experienced sustained growth over some periods, and other parts long-term decline.

Explaining such patterns involves coming to terms with major debates that have long raged in the literature. For example, is it war, disease, famines or other factors that are mainly responsible for slow population growth or population decline? What of slavery and slaving raids? What is the relationship between pop-ulation density and poppop-ulation growth, and what are the mechanisms through which this relationship is mediated? What were the effects of the labour demands

(13)

of the colonial regime on fertility? To what extent was fertility deliberately con-trolled through contraception and abortion? Why in many parts of Indonesia was population concentrated in high inland valleys and plateaux, while the coastlands were sparsely settled? What was the agricultural ‘carrying capacity’ of the areas studied? Was the establishment of wet rice farming determined more by popula-tion pressure or by the physical condipopula-tions of each area? Was there a 17th cen-tury crisis of particularly frequent droughts? Why was population density always higher in Sangir–Talaud than elsewhere in the region?

There is insufﬁ_{cient space in a review of this kind to elaborate on the answers}

Henley gives to these questions. Sufﬁ_{ce it to say that he engages with all these}

issues and others, and provides at least tentative answers, appropriately qualiﬁ_ed

because of shortcomings in the data. In doing so, he draws widely on the relevant international literature as well as that relating to other parts of Indonesia.

One key conclusion drawn in the book deserves mention. Whereas Reid and others have argued that warfare was the main reason for slow population growth in the populous states of Java and mainland Southeast Asia, Henley argues that in northern Sulawesi, disease, poor nutrition and periodic food shortages were far more important. Fertility was prevented from reaching very high levels by abor-tion, by long periods of breastfeeding, in some places by frequent separation of spouses, and in Minahasa and Sangir by relatively late marriage.

In summary, then, this book is a major addition to studies on Indonesian his-torical demography and hishis-torical geography. It deserves the careful attention of researchers anywhere in the world interested in the balance between population and resources and the mechanisms through which such balance is disturbed or reinforced.

Gavin W. Jones National University of Singapore

Aris Ananta and Evi Nurvidya Ariﬁ_{n (eds) (2004) International Migration}

in Southeast Asia, Institute of Southeast Asian Studies (ISEAS), Singapore, pp. 374. Paper: S$39.90/US$25.90; Cloth: S$69.90/US$44.90.

There is little doubt that the current decade marks the emergence of the subject of international migration from the shadows to the centre stage of public policy discussion. The UN General Assembly devoted its High Level Dialogue in 2006 to international migration and development, following the creation by the United Nations in 2003 of a Global Commission on International Migration. These are indications of the growing importance of the subject. Globalisation, aging work forces in rich countries and falling transport costs are some of the key factors fuel-ling this phenomenon. On the other hand, the surge in migration from less devel-oped to develdevel-oped countries is raising the tempo of debate in the latter, so that even in a traditionally migrant-friendly country like the US, political concerns about job losses for locals, burdening of public services and the perceived threat to customs and values has, in September 2006, made the lower house pass a bill to fence the southern border to keep out illegal entrants.

(14)

Southeast Asia is not the region where the maximum extent of international migration can be witnessed. That honour probably goes either to the US, where the illegal immigrant population alone stands at 11 million, or to the Indian sub-continent, where unofﬁ_{cial estimates place the number of foreign entrants even}

higher. Yet Southeast Asia is one relatively compact region that has witnessed, in recent times, international migration on a substantial scale and in all its mani-festations—regular, irregular, skilled, unskilled, male and female migration. This makes it an ideal case study for serious students of the subject.

Therein lies the value of International Migration in Southeast Asia, a volume of essays written by some of the region’s leading scholars on migration and labour studies. The topics have been well chosen to cover the subject comprehensively, and include the history of migration in the region; the linkage between migration and development; national policies of sending and receiving countries; the prob-lem of illegal migrants; and the exploitation of unskilled workers.

Containing both descriptive and analytical approaches to the subject (includ-ing a chapter that uses a theoretical paradigm that links migration and investment at different stages of development), the book is a treasure trove of information on international migration in Southeast Asia. We learn, for example, that Chinese migration to Southeast Asia began in the 18th century and prospered during the colonial period, with many Chinese serving as middlemen between the colonial powers and the local population. After World War II, when Southeast Asian coun-tries attained independence, these Chinese confronted the same problem faced by intermediary classes elsewhere. Left behind by a departing colonial power, they were looked upon with suspicion by locals. However, it is a tribute to the assimilative policies of the newly independent states of the region that nearly everywhere they were offered citizenship and genuine integration, and did not have to face the problem of exclusion that dogged, say, ethnic Tamils in Sri Lanka or ethnic Biharis in Bangladesh when these countries gained their independence.

The essays also contain important policy insights, many of which are discussed through the use of vivid examples. For instance, one chapter describes how nearly 100% of Indonesian housemaids in Hong Kong work for Chinese employers, while up to a fourth of total immigrant Filipino maids in the same city prefer to serve other Asian and Western families who may be more willing to pay the pre-scribed minimum wage for this occupation. This difference is explained by ofﬁ_cial

government policy in the Philippines, which encourages the existence of NGOs who ﬁ_{ght for the rights of the country’s overseas workers. On the other hand, by}

adopting a ‘hands off’ approach to the recruitment process, the government of Indonesia may actually be instituting policies that increase the vulnerability of its own citizens abroad, thereby playing into the hands of recruiting agencies and foreign employers.

The appeal of the book is further enhanced by the fact that most of the articles are politically neutral towards the subject of international migration—they do not speciﬁ_{cally recommend that countries should encourage or discourage}

migra-tion. The sole exception is the opening chapter, in which the authors attempt to argue against the international migration of unskilled workers. Unfortunately, the valuable information, insights and ﬁ_{rst-rate analysis that the book generally}

pro-vides are slightly offset by the fact that data used in some of the chapters appear outdated. In the chapter on remittances, for example, Mexico and Colombia are

(15)

shown as the world’s leading remittance-receiving countries, whereas India and China have long overtaken the rest in this signiﬁ_{cant aspect of the international}

migration of workers. Similarly, chapter 2, which describes migration in South-east Asia after World War II, uses some tables that contain data only up to 1994.

On the whole, however, the book is a ‘must-read’ for all scholars and policy makers interested in this important subject, which is poised to dominate public policy and public debate in the coming years.

Pradip Bhatnagar Technical Support Facility, Group of Fifteen, Geneva

Charles A. Coppel (ed.) (2006) Violent Conﬂ icts in Indonesia: Analysis, Representation, Resolution, Routledge, Oxford and

New York, pp. vii + 325. Cloth: £70.00

Charles Coppel has edited a wonderful collection of essays on contemporary

con-ﬂ_{ict in Indonesia, drawing attention not only to the complexities of violence but}

also to the challenges for effective conﬂ_{ict resolution. This book taps into a}

popu-lar theme of recent schopopu-larship on Indonesia which includes edited volumes by Colombijn and Lindblad (2002), among others. The Coppel collection builds on and continues the tradition of high quality research in earlier studies, and is essen-tial reading for any scholar interested in understanding violence in Indonesia.

The collection includes 18 essays, the focus ranging from the May 1998 riots to the broader conﬂ_{icts in Kalimantan, Ambon, Aceh, East Timor and Papua. The}

essays are written by younger and senior scholars, with nearly half of the contrib-utors from Indonesia. There are a number of gems in the collection: Tim Lindsey’s analysis of the preman state (one in which gangsters and stand-over criminals wield considerable inﬂ_{uence), Jemma Purdey’s study of the anti-Chinese violence}

in Solo (subsequently developed into a book), Nicholas Herriman’s exploration of sorcerer killings in South Malang, Nancy Peluso’s analysis of violence in West Kalimantan, James J. Fox’s short essay on a reconciliation ceremony in East Timor, and Budiawan’s discussion of the narrative of torture in the novel Merajut Harkat stand out (among a strong ﬁ_{eld overall) for their originality, analytical rigour or}

depth of research. Peluso’s essay, for example, compares the violence in Dayak communities in the 1960s with that of the 1990s, and shows how the New Order shaped ethnic identity and history itself served as a legacy underscoring conﬂ_ict.

The essays on the whole aim to show that violence is not the result of dalang— puppeteers master-minded by the state—but the product of a broader range of phenomena, including local actors and the weaknesses of the state.

The collection is unique less for its analysis of why conﬂ_{ict occurs (something}

that is arguably not as cohesive in the volume as it might have been) than for the themes it brings to the study of violence in contemporary Indonesia. One of the common threads is the idea of representation, whether through the media and the internet or through text and discourse. The authors collectively show that how different groups and events are represented affects violence. Stanley’s ana-lytical essay on the role that the media has played in shaping conﬂ_{ict, for}

(16)

ple, draws attention to both the shortcomings of reporting and the strengths of a more open press. Similarly, Elaine Tay’s essay assesses the impact of the internet on the May Chinese riots, illustrating the powerful effect of this new technology in shaping identity and deﬁ_{ning violence. The focus on established patterns of}

representation in local communities and new mediums points to an exciting area of research.

A second theme of note in the volume is the signiﬁ_{cant attention given to}

women, as victims of violence and as agents for conﬂ_{ict resolution and justice.}

Many of the essays examine the issues of rape and internal displacement of fami-lies, and speciﬁ_{cally focus on the importance of women. Mely Tan’s essay on the}

Indonesian Commission on Violence against Women is perhaps the most fascinat-ing in this regard, since she examines how women become victims as well the strategies they adopt to empower themselves against violence.

Finally, the volume addresses the critical issue of conﬂ_{ict resolution and justice.}

This is where the collection has special value, in that it aims to raise issues and provide frameworks for understanding how to address the effects of violence. It touches on a broad range of concerns, from the economic impact to the pos-sibilities of education to promote conﬂ_{ict resolution and commissions of inquiry}

to bring about justice. The discussion and analysis here needs more depth, but the ideas are perhaps the most innovative and offer a different lens on Indonesian violence.

Like all collections, the volume is uneven, but the richness of the essays and the uniqueness of the themes make a valuable contribution to the scholarship on contemporary Indonesian violence.

Bridget Welsh Johns Hopkins University, Washington DC

References

Colombijn, Freek and Lindblad, J. Thomas (eds) (2002) Roots of Violence in Indonesia, KITLV (Royal Netherlands Institute of Southeast Asian and Caribbean Studies), Leiden.

(17)

DEMOCRACY AND THE PROMISE OF

GOOD GOVERNANCE

Ross H. McLeod

and

Andrew MacIntyre

editors

Indonesia Project and Crawford School of Economics and Government The Australian National University

The success or failure of democratic reform in Indonesia is a key question for Indonesia itself and for the surrounding region. Although Indonesia’s transition to democracy holds out the promise of good governance, this cannot be taken for granted—as the recent military takeover in Thailand shows. This book is about the challenge of making democracy work in Asia’s third-largest nation.

The book deals with various aspects of democratic governance in Indonesia, to some extent drawing on comparisons with other countries in the region and elsewhere. It discusses the architecture of government at both the national and regional levels, bearing in mind the dramatic changes in the overall system of government that have occurred since the fall of Soeharto—including decentralisation from the beginning of 2001. It also discusses various aspects of the actual and desirable roles of government: the extent of intervention in the workings of markets; the role of the state in managing natural resources and the environment, and in protecting disadvantaged members of society; and the state’s interactions with private business and with organised religion. Finally, it turns to the functioning of two of the most important institutions of democracy: the bureaucracy and the legal system.

Contributors include:

•Andrew Ellis, International IDEA

•Staffan Synnerstrom, Asian Development Bank

•Ron Duncan, Crawford School of Economics and Government, ANU •Natasha Hamilton-Hart, National University of Singapore •I Ketut Putra Erawan, Gadjah Mada University

•Benjamin Reilly, Centre for Democratic Institutions, ANU •Arskal Salim, State Islamic University Syarif Hidayatullah •Simon Butt, University of Melbourne

•Sharon Bessell, Crawford School of Economics and Government, ANU

Forthcoming 2007

Publisher The Institute of Southeast Asian Studies, Singapore, in cooperation with The Australian National University, Canberra

The Managing Editor Tel +65 6870 2447

Institute of Southeast Asian Studies Fax +65 6775 6259 30 Heng Mui Keng Terrace

Pasir Panjang Road e-mail pubsunit@iseas.edu.sg

SINGAPORE 119614 http://bookshop.iseas.edu.sg