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Book reviews
To cite this article: (2005) Book reviews, Bulletin of Indonesian Economic Studies, 41:1, 103-117, DOI: 10.1080/00074910500072773
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BOOK REVIEWS
M. Chatib Basri and Pierre van der Eng (eds) (2004), Business in Indonesia: New Challenges, Old Problems, Institute of Southeast Asian Studies, Singapore,
pp. 276. Paper: S$39.90/US$28.50; Cloth: S$59.90/US$43.90.
The democratic transition in Indonesia has had large implications for business and therefore for the economy. It has expanded the influence of popular suspi-cions of business and the market economy. It has allowed expression of ethnic jealousies and tensions that have the potential to encourage official control of the operation of the market economy. It has rendered policy making less decisive, more uncertain in outcome, and less stable over time.
These tendencies had been widely anticipated, and so the business community had expected that the replacement of authoritarian by democratic government would be associated with lower levels of investment and economic growth, and less economic stability. Some of the expectations have been realised. And yet the reality has been more complex. Economic performance, while in most respects weaker than at the long high tide of authoritarianism, has been rather stronger than business had predicted, and has shown some promise of improvement as the political community learns its way through the new relationships between polity and economy.
Business in Indonesia: New Challenges, Old Problemsexplores the business reali-ties of Indonesia’s democratisation, on the eve of the second elections of the mod-ern democratic era. One of its editors is a brilliant young Indonesian economist who is a senior university researcher and also provides economic advice to the new government. The other is a scholar based at the Australian National Univer-sity, who has brought the historian’s long perspectives to examination of the ten-sions between political perceptions and preferences, and the desires and perhaps the needs of the private business sector in Indonesia. Together, the editors have assembled an interesting and varied picture of some of contemporary Indonesia’s more important but less frequently discussed problems.
The book is a worthy product of the fruitful and long-standing collaboration between the Australian National University’s Indonesia Project and the Institute of Southeast Asian Studies.
This is a wide-ranging, interesting and authoritative book on business in dem-ocratic Indonesia. Some chapters describe Indonesian economic performance in the years since the financial crisis that triggered the collapse of the Soeharto gov-ernment; some discuss the policies that have determined that performance; some focus on the underlying political forces that have generated the outcomes; and several present suggestions for improvement in policies and performance.
Van der Eng’s introductory chapter informs us that the cry for reformasiwas not a call for economic reform. And yet reformasi had large implications for all
aspects of economic life. One main outcome was a more inward-looking econ-omy, with many old micro-economic problems rendered more difficult than before. This and other chapters note that the corruption that had been the bane of business under the New Order had become even more damaging. On the other hand, the turmoil in the macro-economy at the time of the collapse of the author-itarian government had been replaced by a tolerable and improving stability.
Jones’s assessment of the political situation emphasises the dominance of the prosaic, local and internal. While the Iraq war had heightened anti-American or anti-Western feelings, these were not main themes. The Indonesian reality denied the contemporary Western world’s tendency to see Indonesian politics through the lens of the international war on terror. Jones is pessimistic about the focus on prosaic, local and internal problems leading to their effective management.
Basri’s chapter on the macro-economy alerts us to the compexity of the eco-nomic reality. It warns of adverse consequences should ecoeco-nomic affairs be left to drift too long, as had been the case in 2003 and early 2004. The many weaknesses in policy were reflected especially in low private investment and poor export per-formance. The end of the IMF program put in place during the financial crisis had been an occasion for constructive reflection on policy. Improved government per-formance was an essential precondition for sustained economic improvement, and limited progress so far would leave the big determinants of future perform-ance in the hands of a new government.
One of the strengths of the book is Dhume’s elegant discussion of how democ-ratisation had allowed the expression and heightened influence of ancient ten-sions in the interaction between Islam, ethnicity and the market economy. We are reminded that ‘one of the fundamental freedoms offered by democracy is the freedom to make bad policy so long as it is good politics’. Dhume notes the restraint with which this freedom has been exercised, and wonders whether it will persist.
Castle’s private sector perspective leaves us in no doubt about the extent of the problems in the early years of the new democracy. He sees much ambivalence in the polity about whether private investment and especially foreign investment are really welcome. Resolution of this basic issue is a precondition to improved economic performance.
Several chapters travel by different routes to the conclusion that the traded goods sectors of the economy, including labour-intensive manufactures, which had contributed hugely to employment and incomes growth in the dozen years before the financial crisis and the political system transition, have performed especially poorly in recent years. Manning’s authoritative discussion of the labour market ascribes some of the decline to misplaced hopes for regulation as a means of raising the living standards of workers.
And yet a theme through many chapters is that things could have been worse. The political doubts about ‘free fight capitalism’ were bound to emerge as arbitary intervention in business affairs once the authoritarian lid had been lifted. Pressures for administrative devolution had been inevitable after the extreme centralisation of the Soeharto years. Difficult though these developments had been for business, the outcomes had mostly been moderate. The fact that growth could continue in these most difficult of times, albeit at a rate well below the golden growth years of the New Order, held out hope for improvement.
A book about business can glaze the eyes of readers who are interested in the big stories of political and economic development. This one will hold the atten-tion of many with general interests. In this book, the problems of business are placed in their interesting and important context, as central determinants and outcomes of Indonesia’s struggle for the restoration of rising living standards and the entrenchment of democracy.
Ross Garnaut
ANU
Richard Robison and Vedi R. Hadiz (2004), Reorganising Power in Indonesia: The Politics of Oligarchy in an Age of Markets, RoutledgeCurzon, London and New
York, pp. xx + 304. Paper: £19.99; Cloth: £60.00.
‘Oligarchy’ is defined here as ‘any system of government in which virtually all political power is held by a very small number of wealthy ... people who shape public policy primarily to benefit themselves financially ... while displaying little or no concern for the broader interests of the rest of the citizenry’ (pp. 16–17). The authors’ main argument is that Soeharto created such an oligarchy, and that although the economic crisis of 1997–98 led to his demise, the oligarchy had by then taken on a life of its own, and has since been engaged in a struggle to reassert and consolidate its earlier position within some new political system.
The book consists of four main sections. Part I sets out some theories of eco-nomic and political change, and discusses the case of Indonesia briefly within this context. The authors describe how the oligarchy emerged during the first 17 years of Soeharto’s New Order—how ‘powerful officials harnessed their possession of public office and their control of strategic economic gateways to their collective private interests’ (p. 14). In Part II, they discuss how the system worked: how markets were hijacked (chapter 3), how the political regime was captured (chap-ter 4), and how civil society was systematically disorganised so that it could not threaten the regime (chapter 5).
Part III focuses on the crisis of 1997–98—the ‘fatal collision of [the] politico-business families’ oligarchy with global capital markets’ (p. 15)—which resulted eventually not only in economic catastrophe (chapter 6), but in political unravel-ling (chapter 7). The gist of the story is that most components of the oligarchy he created had become more resilient than Soeharto himself. When the crisis hit, it ‘weakened the coherence of the complex alliance of officials and business that … underpinned the New Order’ (p. 166). The oligarchy then came to regard its cre-ator as dispensable, and its constituents’ only concern was how they could pro-tect their individual positions ‘by reorganising themselves within a new regime and with new allies’ (p. 166).
Part IV deals with the struggles to reorganise economic and political power in circumstances in which ‘elections, political parties and parliament have become the arenas of power, and in the context of alliances with new political players con-stituting social and economic interests formerly at the fringes of power under Soeharto’ (p. 16). The concluding chapter asks whether the oligarchy can survive,
or whether democratic constitutionalism can transform the nation, concluding— pessimistically but plausibly—that ‘oligarchies rather than markets will prevail’ (p. 265).
The book succeeds admirably as an explanation of how Soeharto fashioned a system of government that generated enormous benefits for the oligarchy over some three decades. (It also delivered rapid economic advancement to the public at large, but this aspect is largely ignored here.) The authors clearly document how Soeharto constructed a seemingly unassailable regime through a combina-tion of co-optacombina-tion and repression, making skilful use of Indonesia’s natural resource wealth and of the capacity of government to extend economic privileges to supportive individuals and institutions. At first he relied heavily on military support, but his steadily expanding influence over promotions eventually culmi-nated in his control over, rather than dependence on, the military. By repression of civil society, and especially the nominally democratic process, he was able to perpetuate his hold on power. And by bestowing a wide range of valuable privi-leges on a select group of business people (whose enterprises were thereby trans-formed rapidly into giant conglomerates) he generated a steady flow of rents that were used to reinforce the regime further—at least for as long as the economy remained healthy.
The book is described, somewhat extravagantly, as ‘a study of the vast and bit-ter struggles that accompany the spread of market capitalism and the forging of those economic and political regimes within which it is defined’—processes that are ‘widely regarded as steps in the inevitable and inexorable triumph of liberal markets, democracy and legal–rational forms of bureaucratic authority’(p. 3). It is the debunking of the latter implied premise—supposedly the received wisdom of ‘neo-liberal’ economists and political scientists—that the authors claim as their special contribution. ‘Neo-liberals’ are mentioned explicitly over 90 times in a protracted effort to persuade the reader that their views of the world are erro-neous. The economists are criticised for their alleged belief that market-friendly economic reforms lead inevitably to the destruction of economic privilege, the political scientists for their alleged belief that democratic reforms lead inevitably to better governance.
The reality has certainly been different. Deregulation of markets and more intensive interaction with the global economy under Soeharto were accompanied by the simultaneous strengthening of the position of the oligarchy, and the more recent opening up of the democratic process to competition among numerous political parties has done little to offset this. In short, ‘even destructive economic shocks and … the collapse of the Soeharto regime itself, have not dismantled the system of power focused around the private expropriation of public authority’ (p. 3).
It was not just young students who naïvely imagined that getting rid of Soe-harto was all that was needed to usher in a new era in which honest and capable politicians would be freely elected by the people, and would actively represent their interests. At least some from the economic and political intelligentsia held similar views (including presidential aspirant Amien Rais, p. 28), and the authors are well justified in drawing attention to this. But they have greatly exaggerated the extent to which such views are actually held by serious observers. Most so-called ‘neo-liberal’ economists would indeed argue in favour of deregulation,
vatisation, the freeing up of trade and investment flows and so on, without being under any illusion that such policies would be meekly accepted by the vested interests threatened by them. The principal–agent problem that confounds attempts to ensure good public sector governance is very familiar to economists, who see the solution to it in the design of better mechanisms of government (involving much more than just free elections) rather than in changes to particu-lar economic policies. No economist that I know believes that the reform process, once started, is ‘inexorable’. I suspect that many political scientists might protest that their views also appear here in grossly misleading caricature.
Ross H. McLeod
ANU
Colin Brown (2003), A Short History of Indonesia: The Unlikely Nation?,
Allen & Unwin, Sydney, pp. xviii + 270. Paper: A$29.95.
Short histories of Southeast Asian countries, of which there have been a number over the years, provide an opportunity for an author to reflect on changing per-ceptions of the past. Colin Brown’s short history of Indonesia is one of a new series edited by Milton Osborne (whose own short history of Southeast Asia has remained an influential introduction to the region over the 25 years since its first edition). Its subtitle, ‘The Unlikely Nation?’, gives an indication of the main thrust of his argument. Brown opens with a definition of ‘Indonesia’ as the state exist-ing at the end of the 20th century, but he recognises that, just as its emergence may have been the result of an unlikely process, its future may also be problematical. Brown’s account is cast in narrative form, with perhaps half of the text—the first five chapters—taking the story up to the end of the 19thcentury. After a brief
survey of the physical, cultural and ethnic diversity of the archipelago and of the trade that flowed through the islands and brought them into early contact with India to the west and China to the north-east, the writer proceeds, in a second chapter, to sketch the rise of indigenous states from perhaps the 5thto the 14th
century—Srivijaya, Mataram, Kediri, Majapahit. Three more chapters cover the ‘age of commerce’ (borrowing the term from Anthony Reid), the spread of Islam, the growth of European commercial activity—Portuguese, Dutch and British— and the establishment of European empire over the course of the 18thand 19th
centuries.
Brown’s periodisation follows, in broad outline, the conventional picture though, more than most, he sees the Java War (1825–30) as marking a major watershed in Indonesian history, separating a period when Javanese states were independent political entities from the subsequent period in which they were increasingly absorbed into the colonial state (p. 78). At the same time the narra-tive form allows some reference to alternanarra-tive emphases. He notices, for example, the classical debate about the nature of Indian influence. Was this imposed from without or borrowed from within? Similarly he refers to differing accounts of the character of the centralised and hierarchical inland kingdoms of Java (p. 22) and of the geographical extent of the kingdom of Majapahit (p. 26).
The text makes clear Brown’s own judgment on these and other debates and his bibliographical notes provide, in general, the main sources for his account. However, he does not link these sources specifically to his narrative and, where alternative interpretations are in question, he does not identify the contending authorities. For example, given the significance of the debate, extending from the 1930s to the 1970s, about the importance of external versus internal forces in shaping local societies, and hence about the autonomy of Southeast Asian history, it is surprising that he makes no specific mention of J.C. van Leur, John Smail and other contributors to that debate (pp. 15–17). Similarly with his treatment of the nature of the Javanese kingdoms and of the Dutch East India Company’s gradual absorption of these into its expanding territorial system. The Company, he argues, in ruling through existing authorities, was creating what it wrongly believed had always been the case (p. 59). One might have expected some refer-ence here to Heather Sutherland’s The Making of a Modern Bureaucratic Elite: The Colonial Transformation of the Javanese Priyayiand to the account by M.C. Ricklefs of the division of the realm in his Jogjakarta under Sultan Mangkubumi, 1749–1792. And the treatment of political authority in Minangkabau should make reference to J.E. Drakard’s A Kingdom of Words.
One could point to other omissions from the volume’s Bibliographical Essay. However these are niggles. The narrative itself is concise and clear and offers the reader a useful introduction to Indonesian history.
The remaining chapters deal with the 20thcentury. Here Brown adopts a rather
unusual periodisation in identifying the successive stages in his story. The con-ventional picture, following the pattern set by Kahin’s Nationalism and Revolution in Indonesia, sees nationalism as a natural response to colonial rule, and the sub-sequent struggle for independence as a heroic but expected outcome. For Brown the outcome was never a foregone conclusion. He treats the period from 1900 to the end of the Japanese occupation as one continuous process. A single chapter entitled ‘Times of Change’ examines changes in the character of Dutch policies and colonial society after 1900, and traces the rise of a nationalist movement and Dutch efforts to contain it. It then proceeds immediately to Japanese rule and its impact on different elements within Indonesian ranks, culminating in the procla-mation of independence in August 1945.
The next chapter, ‘From Revolution to Authoritarian Rule, 1945–1957’, com-bines treatment of the struggle leading to the Dutch transfer of sovereignty in 1949 with the early years of independence. Differences in nationalist ranks dur-ing the revolution are presented as continudur-ing into the early years of independ-ence when political divisions prevented the emergindepend-ence of an overall unity of purpose until Sukarno and the army, in partnership, introduced the authoritarian forms of Guided Democracy.
Finally the closing years of Sukarno’s presidency are treated as essentially con-tinuous with the authoritarian regime of Soeharto. Noticing Soeharto’s early eco-nomic achievements, Brown goes on to examine the emergence of the regime’s authoritarian techniques of control—institutional and ideological—designed to reduce the level of political activity.
These chapter divisions reflect the author’s overall picture of an unlikely nation. It is a picture of successive attempts—by the Dutch, the Japanese, Sukarno and the army, and then Soeharto’s New Order—to contain the divisions cutting
across the notion of ‘Indonesia’. The point is underlined in the final chapter. After a brief account of the developments following the fall of Soeharto the story con-cludes before the elections of a new parliament and a new president in 2004. A final judgment is that political power is now more dispersed than ever before, that the presidency itself is weaker than it was and that, with major question marks over the future of Aceh and West Papua, the continued unity of Indonesia itself may be in doubt.
Any history taking the story up to the present is likely to be caught up by sub-sequent events. In this case, until the new President, Susilo Bambang Yudhoyono, establishes his own style and direction, the Megawati presidency is as good as any place to stop.
John Legge
Monash University, Melbourne
Yunita Triwardani Winarto (2004), Seeds of Knowledge: The Beginning of Integrated Pest Management in Java, Monograph 53/Yale Southeast Asia Studies,
New Haven CT, pp. xxi + 429. Paper: US$28.00; Cloth: US$39.00.
This book is the result of exhaustive research conducted on the north coast of West Java during the early 1990s, a watershed period in Indonesian agriculture with sweeping changes to the way the nation’s rice staple was produced. The Green Revolution of the late 1960s had resulted in a dramatic intensification of wet-rice cultivation, especially in Java and Bali. Double and triple cropping of new high-yielding varieties required massive inputs of chemical fertilisers, but was also accompanied by saturation spraying of pesticides. The disastrous envi-ronmental impact was soon apparent. During several growing seasons through-out the 1970s, resistant insect pests such as the brown plant hopper (wereng) devastated the rice crop in many areas. As a result, a presidential ban on the use of the most dangerous pesticides was announced in November 1986, along with the government’s decision to embrace the principles of integrated pest manage-ment (IPM) as recommended by FAO (Food and Agriculture Organization) scien-tists. Crash training programs for agricultural officials and field workers were conducted as a basis for the establishment of field schools for rice farmers— ‘schools without walls’—drawing on discovery-based learning techniques.
This is the setting for Yunita Winarto’s remarkable book, a landmark study that makes a major contribution to understanding how this difficult transition played out at the village level, as farmers were pressed to implement a dramatic shift in their agricultural practices, while struggling from one season to the next to secure healthy crops and achieve satisfactory yields. The fundamental issue that the book seeks to address is the extraordinarily complex process by which new knowledge is acquired.
Casual observers of the book’s title may be surprised to discover that the author is neither an agronomist nor a geographer but a social anthropologist. This was clearly no barrier to her capacity to master her field of inquiry, as the book ranges over many aspects of rice cultivation: the irrigation network, land
tenure arrangements, the seasonal tasks of cultivation, the selection of rice vari-eties, and the application of fertilisers and pest control measures. The physical and social setting of the particular villages that were the target area of her study is presented in considerable detail. Focus then shifts to the fortunes of one partic-ular group of 25 rice farmers from a single hamlet—almost all related by blood or marriage ties—who were selected to take part in an IPM field school that the author was able to observe.
Drawing on detailed records of the discussions that occurred during the school, and on the arguments and debates that continued outside the formal ses-sions, Winarto provides a graphic account of the entire process. During guided learning experiences based on field observation, the farmers began to identify those pests dangerous to their rice crops and to distinguish them from useful predator insects and animals that can actually assist farmers to achieve a natural balance but can be destroyed by the indiscriminate application of pesticides. The farmers gradually became aware of the problems associated with entrenched con-cepts such as regarding pesticides as ‘medicine’ (obat) instead of as ‘poison’ (racun). Consequently, they began to question accepted wisdom: the old slogan ‘have the umbrella ready before it rains’ (sedia payung sebelum hujan) was gradu-ally replaced with ‘if there is no illness, spraying medicine is old fashioned’ (kalau enggak ada penyakit, nyemprot obat itu kuno).
There is an absorbing account of events during the growing seasons after the IPM training concluded, as the farmer participants struggled to implement their own individual versions of the new knowledge. The entire process to acquire and then to apply such knowledge is neither easy nor straightforward. The author’s painstaking and meticulous study draws out the human frailties of all those involved, and the degree of difficulty faced by the farmers as they began to take responsibility for making hard decisions about their farming methods. Apart from their own doubts and confusion, these farmers had to face the scorn of neighbours who had not taken part in the IPM field school and who continued to apply pesticides liberally on adjacent rice paddies. There was also the problem of dealing with powerful bureaucratic forces, often with economic interests diver-gent from those of the rice farmers. One telling incident involves the attempts by some of the farmers to negotiate a partial version of the official credit package intended to support intensive rice cultivation. Armed with their new understand-ing of IPM principles, the farmers argued—unsuccessfully—that they should not be forced to accept the pesticide component of the package.
Winarto describes a visit by a group of the most persistent and committed farmers to a government agricultural research station where they were able to engage with the scientists and seek answers to some of their most pressing prob-lems. Ironically, although this facility is situated only a few kilometres from their village, it had never before been visited by any of these farmers.
Numerous maps and line drawings supplement the text, and several appen-dices with material translated from official documents provide additional explanatory details about the IPM program. The superb duotone photo on the front cover suggests that more of the author’s field photographs would have been a welcome addition to enhance the book’s themes. The glossary is rather perfunc-tory, given the long list of Indonesian language terms throughout the text, but a
more serious omission is the publisher’s failure to ensure that the volume is com-plemented by a proper index.
This sympathetic ethnographic account of the farmers’ struggles will be absorbing reading for anyone interested in the history of Indonesian agriculture. But the central themes about the process by which new knowledge is gained and then passed on to others at the micro level of the village will challenge and pro-voke anyone interested in issues of social change and development, especially in Indonesia. One final point: such a masterful study depends upon a lengthy and sustained period of fieldwork. As university managers, under pressure from funding agencies, adopt a factory mentality to the higher degree process and seek to apply strict time limits to candidature, it will become increasingly difficult to sustain such research conditions.
John Maxwell
ANU
François Ruf and Frederic Lançon (eds) (2004), From Slash and Burn to Replanting: Green Revolutions in the Indonesian Uplands,
World Bank Regional and Sectoral Studies, Washington DC, pp. xix + 341. Paper: US$25.00 from the World Bank.
This book is an interesting mixture. The editors state that it is based largely on three days fieldwork undertaken in 1996 in each of 40 small regions of Indonesia. However, in addition to chapters based on these brief case studies, carried out mainly in Java and the dry environments of West Timor and Flores (NTT), its core consists of detailed research by the CIRAD group (Centre du Coopération Inter-nationale en Recherche Agronomique pour le Développement, a French govern-ment agricultural developgovern-ment research institute) into smallholder coffee, rubber and cocoa in Sumatra, Kalimantan and Sulawesi. Short chapters on specific inno-vations in parts of those areas (such as ginger and vanilla in the coffee lands of Kepahiang, Bengkulu, and cocoa in Malinau, East Kalimantan) benefit from the authors’ deep understanding of the systems concerned.
A quite lengthy first chapter introduces the major themes, definitions and hypotheses. The leading theme is the ability of ‘upland’ agricultural smallholders to innovate, an ability said to be often overlooked by government authorities and project organisers. Like the ICRAF (World Agroforestry Centre) research of the same name, their innovations are characterised as ‘alternatives to slash and burn’, with a strong emphasis on the shift from the food-based swidden to perennial tree crops. This is seen as happening in two steps: the initial plantings benefit from the swidden’s fertile and disease-free environment, which the authors term ‘forest rent’. Once access to forest is no longer available, further innovations must take place, intensifying tree crop production by incorporating chemical inputs, new varieties, improved planting materials or a different agroforestry mix. Nat-ural resources may be ‘adjusted’, in terrace or hedgerow construction. These innovations, which often require some capital, are termed a ‘spontaneous Green
Revolution’ in the uplands (p. 5). Defining the ‘uplands’ is not simple: the authors’ working definition includes all agricultural systems that are not swamp-based or irrigated, specifically shifting cultivation, agroforests and non-irrigated dryland systems, with no regard to elevation. This leads to some illogical descrip-tions, with the rubber-growing peneplains of Sumatra and the cocoa and coconut plains in Sulawesi being considered ‘uplands’.
The next 10 chapters present short case studies, covering only 100 pages in all. The first four deal with livestock, on-farm reservoirs, upland food crops and spe-cialised vegetable production. These studies relate particularly to conditions in Java (plus a few in West Timor) and appear the least important, but are included to secure a more comprehensive picture. The following six studies include vari-ous innovations featuring perennial crops, especially coffee (three studies), cocoa, cashew and oranges.
The three chapters on coffee include two on ancillary crops introduced by par-ticular individuals and one on the adoption of a new variety. They may be read together with chapter 16 on replanting coffee. Farmers wanting to keep produc-ing coffee but without access to extra land must either shorten or lengthen the cultivation cycle. To lengthen the cycle they use shade trees and carefully prune their coffee bushes. Shortening the cycle means extra replanting costs and no crop for two years, but eventually higher yields. Difficult and costly access to land is one reason for replanting, with coffee yields doubling if forest ‘rent’ is available.
Chapter 12 is a long and useful discussion on rubber, and especially the prob-lems of improving the productivity of the biodiverse but low-yielding ‘jungle rubber’ forests. Unreliability in the clones of higher-yielding cloned rubber, even from government projects, has increased the difficulties, though the demand for improved seedlings is high. The author (Penot) suggests inter-planting of cloned rubber seedlings with useful trees to mimic the diversity of jungle rubber, but such rubber agroforestry systems are still experimental. Despite the expansion of oil palm into rubber areas, Penot suggests that rubber and oil palm should be seen as complementary, rather than competitive.
Chapters 13–15 and 17 are concerned with cocoa, predominantly in Sulawesi, but include short comparisons with Halmahera (Maluku) and Côte D’Ivoire. In these four chapters Ruf and Yoddang strongly urge the need for chemical inputs: pesticide is recommended to control the pod borer pest, which spread in Sulawesi at an accelerated rate after the 1997 drought; fertiliser is needed to ensure high yields and herbicide (Roundup) to eliminate Imperata (an aggressive grass that colonises cleared forest areas). Sulawesi farmers adopted a high frequency of har-vesting and more intense use of fertiliser and herbicides than other cocoa grow-ing countries, partly because fertiliser was cheap in the early years of the industry. Ruf concludes with a general model: ‘A basic tree crop, possibly inter-cropped with another tree or trees and combined with fertiliser, pesticides and herbicides, remains the key option towards a spontaneous Green Revolution in the uplands’ (p. 257).
The most important finding of the book’s conclusion is that real innovations owe more to smallholders and traders than to official projects. Smugglers will bring information, planting material and even pesticide across borders, while migrants are often leading innovators, as are influential individuals. Estates
1This book focuses on findings from the second and third rounds of IFLS conducted in
1997 (before the crisis) and 2000, covering some 8,000–10,000 households. A special round with a much smaller sample was conducted in 1998, and provides some information on how far incomes fell during the crisis. The first round of IFLS covering some 7,000 house-holds was conducted in 13 provinces in Indonesia in 1994. The first and second rounds represented a joint project between Rand and the Demographic Institute of the University of Indonesia, whereas the third round was conducted jointly by Rand and the Center for Population and Policy Studies at Gadjah Mada University.
unwilling to transfer their technology will unwittingly ensure its rapid dissemi-nation.
Most chapters contain information on prices, yields and profits, while annexes 2–4 have details of cocoa farm budgets on the Sulawesi hills and plains. Cultural aspects of the transitions discussed are hardly considered. On the environmental effects and sustainability of the high input ‘Green Revolution’ Ruf is cautious, suggesting that herbicide use could be decreased if Gliricidia sepium, a small tree with a particular ability to shade out Imperatagrass, was employed, while some chemical fertilisers (which have become very expensive in Indonesia) could be replaced by chicken manure. He is less cautious in strongly advocating pesticides (especially Malaysian pesticides) to eliminate the cocoa pod borer, despite vari-ous projects advocating alternative techniques, such as frequent harvesting, to break the life cycle of the pest.
While it is somewhat repetitive in putting over its ‘message’ and although some of the short research projects are quite limited (and dated), I nevertheless found this book to contain useful material. The ‘sustainability’ of the paperback volume itself is dubious, however, as my copy is already falling apart.
Lesley Potter
ANU
J. Strauss, K. Beegle, A. Dwiyanto, Y. Herawati, D. Pattinasarany, E. Satriawan, B. Sikoki, Sukamdi and F. Witoelar (2004), Indonesian Living Standards Before
and After the Financial Crisis: Evidence from the Indonesia Family Life Survey, Rand Corporation Center for the Study of the Family and Economic
Development and Institute of Southeast Asian Studies, Singapore, pp. xxii + 400. Paper: S$39.90/US$25.90.
This book is probably the most comprehensive collection of empirical analyses of the impact of the financial and economic crisis on living standards and poverty in Indonesia. Based on three rounds of the Indonesia Family Life Survey (IFLS) conducted in 1997, 1998 and 2000,1 the book reports on field research at the
household level conducted by several foreign researchers attached to the Rand Corporation, working in cooperation with Indonesian researchers in Jakarta and Yogyakarta. The authors (a remarkable nine in all!) conclude that, for the most part, household living standards, and the incidence of poverty, had recovered to pre-crisis levels or better by 2000. This finding is not new. But the book provides
information on a wider range of issues than most other studies. Besides examin-ing household expenditure and poverty status, it deals with subjective assess-ments of standards of living, health, education and family planning.
Almost half the book is devoted to discussion of health and family planning outcomes, input utilisation and service delivery. As with those on living stan-dards, the findings on health are ‘nuanced’. There was no significant drop in the health status of the population (although effects in some areas might have been delayed). But the researchers find that there was a substantial drop in the use of local health care centres (posyandu) for both health and family planning services. One valuable characteristic of the IFLS is that it covers many of the same households in successive rounds and hence addresses the issue of the transitory versus more permanent poverty status of the sample population. And, consis-tently with other studies, it finds that a high proportion (around half) of the pop-ulation in poverty in 1997 had moved out of poverty by 2000, while another half of those in poverty in 2000 were not in poverty three years earlier. Lack of educa-tion was found to be the most important predictor of whether an individual was poor and remained poor.
An interesting chapter is devoted to the impact of a variety of social safety net programs, which has been the subject of investigation in several other studies by the SMERU (Social Monitoring and Early Response Unit) Research Institute and other researchers. A wide range of support programs are discussed, including the subsidised rice program (OPK), public works (padat karya), scholarships and school subsidies, health subsidies and loans to poor households for income-generating projects. Two findings stand out. First, several of the programs such as OPK and scholarships did mainly reach the poor, despite some ‘leakage’ to non-poor households, although their scope was often too small to affect large numbers of poor people. For example, the scholarships program was targeted mainly to poor students, but missed many poor children who were not in school. Second, wastage was high in several of the programs. The public works pro-gram suffered from setting wages too high and hence providing employment for many people who were not poor or already had jobs. The income-generating pro-grams were poorly targeted, going to villagers who were not poor, and not nec-essarily providing jobs for the poor.
Although seemingly tacked on at the end, a final chapter (based on data col-lected in December 2000) provides a benchmark for later analysis of the impact of decentralisation on changes in decision-making processes and budget allocations in social expenditures, especially with regard to health and education.
The book will serve as a major reference on the impact of the economic crisis on living standards and poverty in Indonesia. For this reader, what seems remarkable from the analysis of these authors is the capacity of many poorer households to adapt to the substantial loss of purchasing power and, in some cases, employment. The book reminds us that the crisis was predominantly a modern sector financial crisis in which the poor got tangled up. It also serves to remind us that for all the criticism of the Indonesian government over corruption, inefficiency and wastage, public programs did and do work: they do get through to many of the poor and are important for their welfare. Of course, ‘leakage’ is a major problem, there are many shortcomings, and governance issues loom large in efforts to improve the social returns from public programs. But evidence from
this book suggests that the bureaucracy and institutions put in place by the Soe-harto government are not always as dysfunctional as some foreign and domestic critics would have it.
At the same time, potential readers should be warned that this book is not for researchers primarily interested in the qualitative aspects of poverty alleviation or indeed in broader relationships between Indonesian development and poverty. The authors have not presented their findings, many of them based on statistical and econometric (mainly regression) analysis, in a user-friendly way. Probably one-third to one-half of the book consists of figures and tables (some 40-odd figures and well over 100 tables, many stretching over several pages). There are very few references to other research in this field (for example, only one of the many SMERU studies is cited in the list of references), and hence the reader is not informed about the contribution of this research to vigorous debates on poverty issues in Indonesia. While readers will find the book a valuable reference on empirical analysis of the impact of the crisis, they will need to look elsewhere for stimulating discussions of how broader political, social and economic develop-ments and policies impacted on poverty during the crisis.
Chris Manning
ANU
Yasutami Shimomura (ed.) (2003), The Role of Governance in Asia, Institute of Southeast Asian Studies, Singapore, pp. 376.
Paper: S$39.90/US$28.50; Cloth: S$59.90/US$43.90.
Governance is a hot topic these days and is closely intertwined with the trend towards democratisation and decentralisation in various parts of the world. Mul-tilateral agencies such as the IMF and the World Bank can be seen as the promot-ers of better governance, which has quickly become a mantra in most developing countries, especially when it comes to explaining why certain countries are devel-oped while others are still developing or underdeveldevel-oped. This book, based on studies conducted by various researchers in East Asia, is an early attempt to define and analyse governance using case studies from different countries in the region.
The title of the book is somewhat misleading. Rather than providing a picture of governance in Asia more broadly, the book focuses heavily on the original five ASEAN countries, with four of the 10 chapters dealing with Indonesia. The only treatment of a non-Southeast Asian country is the South Korea story that forms part of chapter 1 (Shiroyama), which is more about decentralisation than gover-nance. Indeed, the book pays so much attention to decentralisation in some coun-tries that readers might at first glance conclude that decentralisation is a precondition of good governance. Of course, further reading makes it clear that it is rather a matter of good governance being one of the preconditions of successful decentralisation. The extensive discussion of decentralisation in certain countries could have been reduced and more prominence given to the debate on local gov-ernance itself.
It is extremely difficult to give a general definition of governance, as the editor shows, especially when those trying to define it have different backgounds. The majority of the book’s authors come from an economics-related background, so definitions of governance tend to describe the role of institutions in promoting sound economic development activities. For these authors, the outcome is meas-ured by economic indicators such as GDP and employment growth, and poverty reduction. Authors whose expertise is in political science place more emphasis on factors that contribute to a healthy democratic process, such as accountability, transparency and public participation. No single and general definition of gover-nance can readily be applied to every case. The book aims to use various case studies of governance practice to draw some conclusions about the kinds of gov-ernance that work in different contexts.
The last chapter, on Singapore (Iwasaki), may reflect the best governance prac-tice, in terms of outcome, in the region. It is an amazing story of how the Singa-pore bureaucracy became an asset to the country, rather than a liability as in other countries. There are still imperfections, however, as the chapter indicates, with the possibility of insider trading of information among the country’s government officials. And it is still difficult to assess whether Singapore is a good role model of governance, since the usual components of governance, such as transparency, accountability and other features of democracy, may not be too familiar to most Singaporeans. The story of Malaysia’s management of its macroeconomic affairs during the Asian crisis (Abidin) also demonstrates how capable and clean gov-ernment was able to minimise the impact of the crisis without too much reliance on the help of the IMF. This chapter shows that sustained national economic growth must be supported by good governance at both macro and micro levels. The editor’s own chapter on Thailand, ‘In Search of the Endogenous Elements of Good Governance’, shows how the Thai government, supported by capable officials, proved that multilateral agencies, in this case the World Bank, are not always right. A government proposal to build a new port to alleviate congestion in the existing seaports proved a better solution than the World Bank proposal to use the existing ports. This chapter argues that policy makers in a developing country are not necessarily inferior to advisers in international agencies, as long as the government is supported by clean and able bureaucrats who practise good governance. A similar point is made in the other chapter on Thailand (Kuwa-jima), concerning health service delivery at the local level. Without implementing drastic and massive decentralisation, as Indonesia has done, the Thai government has been able to decentralise its health service gradually through the intensive adoption of key components of good governance. The chapter on the Philippines (Tigno) places more emphasis on the history of political decentralisation. An important conclusion drawn from the Philippine case concerns the crucial role of political transparency and accountability, together with local economic viability through sustained generation of local revenue and reduced dependence on national transfers. This is the real reason why decentralisation is a must for most countries, making local governments more independent and accountable to the local people.
For Indonesianists, the book provides case studies of both public sector and corporate governance. Chapter 2 (Suryahadi and Arifianto) deals with quantita-tive investigations of the influence of governance on poverty at the local level. It
is obvious that good governance will lead to better poverty reduction programs, but the authors’ efforts to provide empirical evidence are valuable.
Chapter 3 (Legowo) examines the concept of democracy as a pillar of gover-nance at local government level. There is some scepticism about local govergover-nance in the decentralisation era owing to weaknesses in local capacity and local polit-ical systems. In fact, the first four years of Indonesian decentralisation may not have contributed much to improved local governance practices, but the recent amendment to the decentralisation provides for direct elections of local leaders could be a promising start.
Chapter 5 (Inada) deals with national economic policy decision making and the crucial role of key persons in shaping the Indonesian economy. The author asks some fundamental questions relating to the time dimension and the effec-tiveness of various components of governance, given the changing environment and political landscape in Indonesia.
Chapter 4 (Sato) tells a different story, about Indonesian corporate governance, comparing some major conglomerates. The conclusion to this chapter is a perti-nent comment on governance practices in Southeast Asia: ‘Self governance can work effectively on condition there is no other key stakeholder, no heavy depend-ence [on] others and no collusion’. The author mentions the importance of trans-parency in the sense of avoiding partial disclosure—revealing only the good side of the story, and hiding the bad.
Bambang Brodjonegoro
University of Indonesia, Jakarta
