00074918.2013.772946

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Bulletin of Indonesian Economic Studies

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

Southeast Asia's Credit Revolution: From

Moneylenders to Microfinance

Russell Toth

To cite this article: Russell Toth (2013) Southeast Asia's Credit Revolution: From

Moneylenders to Microfinance, Bulletin of Indonesian Economic Studies, 49:1, 123-124, DOI: 10.1080/00074918.2013.772946

To link to this article: http://dx.doi.org/10.1080/00074918.2013.772946

Published online: 21 Mar 2013.

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Book reviews 123

interested in further employment analysis might consult this issue’s ‘Survey of recent developments’, by Cornwell and Anas.

The book closes nicely with Hill’s macro assessment. With two economic crises – the AFC and the global inancial crisis (GFC) – in the background, he draws a connection between global economic development and agriculture and poverty in Indonesia. He explains why the share of agriculture in output and employment increases in the aftermath of a crisis (as it did after the AFC and, less, after the GFC) while in normal times it declines: a combination of low income elasticity of food demand, high lexibility of agriculture labour coeficients, and rupiah depre-ciation boosts the competitiveness of food and cash crops. Hill warns, however, that this pattern is not sustainable, for it goes against structural change and long-run economic development.

Arianto Patunru

ANU

Aditya Goenka and David Henley (eds) (2011)

Southeast Asia’s Credit Revolution: From Moneylenders to Microinance, Routledge, New York, pp. xx + 212. Paper: £28.00; US$49.95.

Goenka and Henley draw on an eclectic mix of social science and historical per-spectives to paint a rich and nuanced picture of the past and present of credit in Southeast Asia. Readers looking for a detailed recounting of the development of the mass of credit institutions within most Southeast Asian nations might be disappointed: the breadth of scope of the various chapters is somewhat idiosyn-cratic. Indonesia is the major exception, receiving more detailed attention than any other country. For this reason, the book should be appreciated by anyone interested in topics such as microinance, rural and informal credit, or the complex and fascinating history of these in Indonesia. Its exposition is almost completely non-technical, yet it provides an economist’s critical attention to issues such as heterogeneity and extensive and intensive margin effects. Hence it can serve as a resource for both undergraduates and established researchers.

This volume can be divided into two sections. The irst three chapters intro-duce its main themes; provide a non-mathematical review of the well-developed theoretical literature in economics on microinance; and make the point (relative to the breathless recent discourse) that ‘microinance’ has in fact existed for cen-turies in Europe and elsewhere. Chapter 3 also traces the emergence of organised microinance in Southeast Asia back to these prior institutions, illustrating these connections by the examples of linkage banking in Indonesia and microinance in India. However, chapter 2 admits that the group-lending models it focuses on are relatively less relevant to the Southeast Asian experience (particularly Indonesia). This raises the question whether the chapter could have paid more attention to those models of lending that are more relevant to Southeast Asia, or whether this is simply a topic that is under-researched by economic theorists.

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124 Book reviews

The remaining nine chapters provide a series of snapshots of credit institutions around Southeast Asia, including a delightful chapter on pawnshops in Singa-pore; a chapter that applies the theoretical models of chapter 2 to the data for Thailand, where group lending is particularly relevant; and a timely inal chapter on microinance in Burma.

As noted, Indonesia receives a particularly deep treatment. In chapter 6, Stein-wald provides a useful discussion of the Indonesian People’s Credit Banks (Bank Perkreditan Rakyat, BPR), which will be appreciated by anyone who has drowned in a sea of acronyms and initialisms when trying to piece together the history of rural credit in Indonesia. He traces the BPR to 1895 and a Dutch translation of the German Raiffeisen model (irst discussed in chapter 3) and raises questions about whether credit access really was the all-encompassing constraint to the rural poor that it had been made out to be.

Chapter 11, by Henley, provides a history of microinance in Indonesia from 1900 to 2000. Hence it inevitably retreads some of the ground covered in earlier chapters. At the same time, it introduces fascinating discussions of pawnbrok-ing and its effectiveness in penetratpawnbrok-ing to the poorest of society. It also argues that the introduction of microsavings was ‘Indonesia’s real microinance revolu-tion’, and discusses the relationship between economic growth and microinance development: ‘it would be more correct to say that the decline in poverty caused the microinance revolution than to say that the microinance revolution caused poverty to decline’.

This volume adds value by juxtaposing historical and current policy tensions, drawing together evidence rarely found in one place – especially in such a suc-cinct and accessible form. A small number of appendix tables summarising key data would have enhanced the chapters. While some of the material feels ever so slightly dated, especially in light of the most recent empirical literature on micro-inance in economics, the book should become a much-appreciated resource.

Russell Toth

University of Sydney

Jehoon Park, T.J. Pempel, Geng Xiao (eds) (2012) Asian Responses to the Global Financial Crisis: The Impact of Regionalism and the Role of the G20, Edward Elgar,

Cheltenham, pp. ix + 275. Cloth: £80.00; publisher’s online price: £72.00.

This book uses the effects of regionalism and the G20 to explore Asia’s strate-gic and important role in the global milieu. Its multidisciplinary analysis of how Asian countries have dealt with the global inancial crisis (GFC) delivers a fruitful perspective for readers. Using China’s resilience to the GFC as its starting point, it argues that government intervention (the Keynesian approach) during a crisis is more effective than market clearance (the neoliberal approach).

Park (chapter 16) captures the book’s general conclusion: that a community-based model for regionalism is ideal for Asia, ahead of Weberian (state-led