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Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
IN THIS ISSUE
To cite this article: (2008) IN THIS ISSUE, Bulletin of Indonesian Economic Studies, 44:2, 181-182, DOI: 10.1080/00074910802304429
To link to this article: http://dx.doi.org/10.1080/00074910802304429
Published online: 31 Jul 2008.
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Bulletin of Indonesian Economic Studies, Vol. 44, No. 2, 2008: 181–2
ISSN 0007-4918 print/ISSN 1472-7234 online/08/020181-2 © 2008 Indonesia Project ANU DOI: 10.1080/00074910802304429
IN THIS ISSUE
Notes from the editor
The period covered by the ‘Survey of recent developments’ includes the 10th
anni-versary of Soeharto’s resignation. Ross McLeod reports a somewhat surprising mood of disappointment with the slow progress of reformasi,and of pessimism about the future. This sits oddly with the entrenchment of a reasonably high rate of economic growth and accelerating investment. There is general concern about the resilience of corruption and its proliferation at local government level, and about the government’s reluctance to confront organised religious intolerance. Adding to these concerns on the economic front are large increases in food prices— particularly for rice—over the last year or so, and the fuel price rises announced in late May. The latter have led to protests even though the government has re-introduced direct cash transfers to the poor in order to offset the higher costs of public transport and kerosene. Both share prices and the exchange rate have been relatively stable in recent times, but infl ation has accelerated to well above the tar-get range, prompting the author to ask whether a different approach to monetary policy is required.
There is certainly much remaining scope for reform of public sector institutions but, despite public concern about lack of progress, there are a few areas in which signifi cant efforts are being made, sometimes with very promising results. The survey focuses heavily on some of these pockets of progress: the Ministry of Finance, two local governments in Central Java, and a group of state-owned enterprises (SOEs). The fi nance ministry is serving as a pilot project for reform of the bureaucracy, and has embarked on an ambitious set of changes, most notably in relation to human resource management. At local government level, the introduction of direct elections for heads of government has resulted in the election of individuals with private sector experience and a much more imaginative, entrepreneurial approach to managing the business of government. Within the SOEs, there is also a shift to a management approach much more akin to common practice in the private corporate sector.
The fi fth paper in our series of comparative studies of Indonesia in regional perspective is contributed by Ian Coxhead and Muqun Li, who analyse Indo-nesia’s future growth prospects. Their fundamental concern is whether Indonesia might be facing a ‘middle income trap’, unable to continue its past growth success into the future on account of increasingly tough competition from countries such as China in the global market for low-skill labour-intensive manufactures, and of the limitations of Indonesia’s natural resource base. Their analysis is reminiscent of views earlier espoused by former Minister for Research and Technology (later President) Habibie about the desirability of getting away from reliance on the export of labour- and natural resource-intensive products. But the policy recom-mendations here are quite different. Whereas Habibie favoured a strategy of ‘pick-ing winners’ and rely‘pick-ing on state enterprise to boost output in high- technology
182 In this issue: notes from the editor
sectors, the authors call for investment in generalised rather than specialised capacity. Based on comparisons with Malaysia and Thailand, they argue in favour of greater emphasis on provision of infrastructure, on education policies directed to expanding the skilled labour force, and on more strenuous efforts to attract foreign direct investment.
This issue of BIES includes the latest in our series of papers on relatively recent economic legislation. More precisely, Simon Butt and Tim Lindsey focus on a recent interpretation by the new Constitutional Court of part of a law as old as Indonesia itself: the vaguely worded article 33 of the Constitution, which requires state ‘control’ of ‘important’ branches of production and the exploitation of natural resources. Butt and Lindsey’s paper is of particular interest on a number of grounds. First, it highlights the work of an institution established recently with a view to strengthening democracy in Indonesia, by constraining the scope of laws so as to conform with the Constitution. Second, it discusses problems that arise from judicial intervention in economic policy formation, and the response of the government to such intervention. Third, in the wake of a number of amendments to the Constitution in the post-Soeharto era it implicitly draws attention to a largely forgotten part of the Constitution that is seriously in need of clarifi cation.
Simon Vieira and Malcolm Tull present a detailed case study of artisanal fi sh-ing in Cilacap, focussh-ing in particular on sharks and rays. There is concern that, with the very rapid increase in the catch of these species since the early 1970s, the fi sheries may be over-exploited. But the impoverished nature of artisanal fi sh-ing communities poses a serious management dilemma: if there were to be an enforced reduction in the catch of shark and ray, this might have a serious impact on the already low incomes of fi shers, their families and their communities. The paper attempts to quantify the changes in the income levels of such communities that would be likely to result from catch restrictions.
Following our recent (April 2008) special issue on rice policy, Robin Bourgeois and Dian Kusumaningrum look into Indonesia’s future prospects for cereals self-suffi ciency, taking into account factors such as increasing urbanisation, rising per capita incomes, the westernisation of lifestyles, trends in planted area, and the impact of new technologies on consumption and production of rice, maize and wheat. They take issue with the government’s apparent continued commitment to rice self-suffi ciency—not least for its negative impact on the poor—and with its extension to other commodities such as maize, sugar and soybean, arguing that the pursuit of self-suffi ciency is no longer justifi ed from a macroeconomic perspective.
The book review section in this issue contains just two reviews that relate specifi cally to Indonesia. The fi rst deals with a long-term insider’s perspective on the conduct of macroeconomic policy, and the second with efforts by the current government to curb corruption. The remaining reviews have a more international fl avour, dealing with ASEAN’s relations with China, prospects for the creation of an ASEAN Economic Community, and the growing impact of China and India on the world economy.
Selamat membaca!
Ross H. McLeod
