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Bulletin of Indonesian Economic Studies

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

Indonesia Rising: The Repositioning of Asia’s Third

Giant

Maria Monica Wihardja

To cite this article: Maria Monica Wihardja (2013) Indonesia Rising: The Repositioning of Asia’s Third Giant, Bulletin of Indonesian Economic Studies, 49:3, 391-392, DOI: 10.1080/00074918.2013.850639

To link to this article: http://dx.doi.org/10.1080/00074918.2013.850639

Published online: 05 Dec 2013.

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Book reviews 391

In his foreword, Haruhiko Kuroda, governor of the Bank of Japan, suggests that the book will be a valuable reference for policymakers, academics and prac-titioners. That is probably correct – it appears to aim not at reaching a wide audi-ence or at appealing to students but at supporting specialists in designing new policies and investment plans.

Henry Sandee

World Bank, Indonesia Ofice

Anthony Reid (ed.) (2012) Indonesia Rising: The Repositioning of Asia’s Third Giant, Institute of Southeast Asian Studies, Singapore, pp. 200. Paper: $20.90.

The idea of Indonesia rising is not new. It rose as a trading and maritime empire during the Sriwijaya Kingdom, between the seventh and twelfth centuries, and

during the Majapahit Kingdom, between the thirteenth and ifteenth centuries.

More recently, it was one of Asia’s second-tier tiger economies in the 1980s and 1990s, along with Malaysia and Thailand. Its latest rise refers to its distinctive for-eign policy, as the government allows itself to be less preoccupied with domestic

affairs than it was in the aftermath of the 1997–98 Asian inancial crisis.

Many of the contributions to this edited book, which started as papers pre-sented at the 2011 Indonesia Update conference, at The Australian National Uni-versity, seem hesitant to discuss Indonesia’s latest rise. Indeed, Indonesia is not short of potential, but, as most chapters point out, it lacks a ‘demonstration effect’ (p. 84) or, in other words, it lacks leadership by example. Anthony Reid (chapter 1), for instance, notes that Indonesia often has relatively little to say for itself in

international forums, and R.E. Elson (chapter 9) admits that Indonesia’s inluence

on world affairs has been modest. M. Chatib Basri (chapter 3), too, states that ‘the country’s politicians, media and even academics are reluctant to openly embrace globalization and free trade’ (p. 28), and argues that Indonesia will remain reluc-tant to engage in trade agreements until it addresses its supply-side constraints.

This has been changing, however, led by Indonesia’s contributions to recent G20, APEC and ASEAN deliberations on infrastructure development, and so some authors are more sanguine. Donald K. Emmerson, in chapter 4, contends that ‘Indonesia’s acronymic success is thus more of a leading indicator than a trailing one’ (p. 57). He argues that Indonesia’s latest rise can be attributed partly to Presi-dent Yudhoyono’s contrasting approaches to foreign policy, especially during his second term, which has been marked by what Rizal Sukma (chapter 5) calls ‘post-ASEAN’ and ‘all directions’ foreign policy. The former has sought to give equal weight to ASEAN and the G20, for example; the latter to attract ‘a million friends and zero enemies’.

Ross Garnaut (chapter 2) reminds us of Indonesia’s obscure but important contribution to diplomacy. During the 1980s and 1990s, Indonesia’s techno-crats changed the political culture of ASEAN and APEC by taking a less formal

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392 Book reviews

approach to regional policy. Garnaut argues that this approach now applies not only to trade negotiations but also to those on climate change, for example, which

Frank Jotzo (chapter 6) believes Indonesia has the potential to inluence. Jotzo

provides as evidence Indonesia’s unilateral commitment at the G20 Summit to reduce greenhouse-gas emissions; but he cautions that ‘pledges do not equal action’ (p. 94), because Indonesia has many entrenched interests at home. Moreo-ver, he argues that in international climate negotiations Indonesia’s size is less than its weight – relative to countries like Brazil, South Africa, India and China, which have a much greater institutional capacity and a history of strong engage-ment – and that the governengage-ment must provide incentive structures or effective regulatory instruments to bring Indonesia’s local and national objectives into line. Perhaps the most central concern for Indonesia’s development comes in chap-ter 8, in which Scott Guggenheim argues that Indonesia’s knowledge sector must

lourish if it is to support most, if not all, of the reforms needed to sustain the

country’s rise. Fixing Indonesia’s weak knowledge institutions, Guggenheim asserts, involves not just improving the supply side but also addressing the lack of demand for policy-oriented knowledge.

Although this book covers many matters related to Indonesia’s latest, policy-led rise, it does not address problems of micro-level implementation (such as the local delivery of public goods and services) or other internal or external

hin-drances to Indonesia’s development. Nor does it offer a suficient geographical

and historical analysis. The trading network and maritime prowess of the great

empires of Sriwijaya and Majapahit relect Indonesia’s potential as a global trader

and the world’s greatest maritime nation. Yet Indonesia’s strength here seems to be fading, evidenced by its poor ocean connectivity and logistics, weak maritime

security, uncompetitive shipping and isheries industries, and obsolete marine

technology. The book is rather muted in saying that Indonesia has almost lost its

maritime identity, but without it rediscovering this identity it is dificult to envi -sion the country as an Asian giant.

Maria Monica Wihardja Jakarta

Thomas Sterner (ed.) (2011) Fuel Taxes and the Poor: The Distributional Effects of Gasoline Taxation and Their Implications for Climate Policy, Environment for

Development Series, RFF Press, Abingdon, pp. xix + 357. Cloth: £60.00.

The low real price of gasoline has helped fuel our ability to drive cheaply for the past century, although it has also contributed to climate change, pollution, congestion, and national-security concerns. Economists have long argued that taxes on gasoline and diesel can help decrease fuel consumption, stimulate the search for less polluting fuels and the vehicles that use them, and generate adap-tive behaviour that could reduce accidents and congestion associated with too much driving. However, opponents to taxation have often claimed that this adap-tive behaviour is less available to the poor, who end up bearing the burden of