Economic Decolonization in Indonesia in Regional Perspective
Friday 18 November 2005
Sponsors: NIOD (Amsterdam) and IIAS (Leiden)
Date: 18-19 November 2005
Venue: Room (‘Tuinkamer’) of the Faculty Club, Rapenburg 6, Leiden
Convenors: J. Thomas Lindblad, Jasper van de Kerkhof
Information: IIAS Secretariat (iias@let.leidenuniv.nl, tel. + 31 71 527 2227)
CONFERENCE THEME
Decolonization was not only about the political retreat of the former colonizer, but also about putting an end to its economic domination. The workshop examines this process in Indonesia, where the economic emancipation of the indigenous population proved to be a particularly protracted and painful process. Dutch enterprise continued to play a major role in the economy until 1957/58, when Dutch firms were first taken over by local labor unions and eventually nationalized. The case of Indonesia thus illustrates the dilemma which confronted many newly independent nations: how to construct a viable 'national economy' while at the same time retain the input of foreign capital and technology.
This workshop aims to put the process of economic decolonization in Indonesia in regional comparative perspective by drawing parallels and highlighting differences with other decolonizing societies in Southeast Asia, examining the role of Japan in the economic decolonization process and investigating the alleged uniqueness of the Dutch experience in Indonesia in the 1950s.
The workshop is part of the ‘Indonesian Across Orders’ research program, which is sponsored by the Dutch ministery of Public health, Welfare and Sports and executed under auspices of the Netherlands Institute for War Documentation in Amsterdam. For more information, see http://www.indie-indonesie.nl/
PROVISIONAL PROGRAM
Friday 18 November
9.45 Registration and coffee
10.00 Opening by Prof. Wim Stokhof, director of the International Institute for Asian Studies, and Els Bogaerts, coordinator of the NIOD-research program ‘Indonesia Across Orders’.
10.15 First Session – ‘General issues of economic decolonization’.
Thee Kian Wie - ‘Indonesianisation: the economic aspects of decolonization in Indonesia’.
Dianne van Oosterhout - ‘Redefining a colonial past. Reformation and farmer empowerment in West-Java’.
11.45 Lunch break
14.00 Second Session – ‘The rise of indigenous entrepreneurship’
Didi Kwartanada - ‘“Kemadjoean Ekonomi Indonesia” (1941-1949?): Rise and fall of a pribumi-Muslim economic organization from Jogjakarta’.
Hersumpana - ‘Indigenous entrepreneurs in the wave of the free market: Transition from colonial to national economy, 1945 – 1967’.
15.30 Coffee/tea break
15.45 Third Session – ‘Economic decolonization in comparative perspective’
Anthony Reid - ‘”Decolonization” vs. Revolution: The comparative experience of Malaysia and Indonesia’.
Jasper van de Kerkhof - ‘”Colonial” enterprise and the indigenization of management in independent Indonesia and Malaysia’.
17.15 Drinks
Saturday 19 November
9.30 Coffee and tea
9.45 Fourth Session – ‘Regional case studies of economic decolonization’.
Chandra - ‘The decolonization process in Jember’.
Thomas Lindblad - ‘Economic decolonization in Sumatra’.
11.15 Coffee and tea
11.30 Session – ‘The role of Japan’.
Anne Booth – ‘Did it really help to be a Japanese colony?: East Asian economic performance in historical perspective’.
Peter Post - ‘Indonesianisasi or Japanisation?: Japanese business and the development of pribumi entrepreneurship’.
13.00 Lunch break
14.00 Sixth Session – Characteristics of economic decolonization in Indonesia’.
Bambang Purwanto – ‘On behalf of nation and generals: Economic decolonization and the rise of Indonesian military business’.
Daan Marks - ‘Decolonization and economic growth in Indonesia: the role of the service sector’.
15.30 Closing remarks and discussion
16.00 End of workshop
ABSTRACTS
Prof. Anne Booth – School of Oriental and African Studies, London
Did it really help to be a Japanese colony?: East Asian economic performance in historical perspective
Since the 1980s, a widespread view has arisen in the literature that the post-1950 economic successes of Taiwan and the Republic of Korea have been due, in part at least, to the legacy of Japanese colonialism. This paper challenges that view by comparing Japanese economic achievements in both Taiwan and Korea with those of the British, French, Dutch and Americans in their Southeast Asian colonies. The paper examines the record of economic growth and structural change across the various colonies, and also discusses policies relating to government revenue and expenditure and to trade, exchange rates and the balance of payments. The paper also looks at some non-monetary indicators relating to living standards, including mortality rates and educational enrolments. The main conclusion is that the facts do not wholly support the case for Japanese exceptionalism.
Chandra, MA - Universitas Jember
‘The decolonization process in Jember’
This paper discusses the nationalization process of Dutch corporate assets in 1957/58 and related policy issues in the Jember area (East Java) plantation industry. Nationalization of the important estates sector aimed to have these agricultural resources contribute more to the welfare of the Indonesian population, in particular indigenous (pribumi) Indonesians. In 1958, ownership of the plantations of various Dutch estate companies operating in the area, such as the Landbouwmaatschappij ‘Oud Djember’ (LMOD) and the Besoekische Tabaks Maatschappij (BTM), was transferred to indigenous Indonesians who continued their activities under the supervision of the Perusahaan Perkebunan Negara (PPN). The nationalization process, however, also involved stiff competition between various power blocks - including the military - for control over the spoils of Dutch enterprises. The result was a highly complex situation which needs to be studied in its specific local context.
Didi Kwartanada, MA – National University of Singapore
‘“Kemadjoean Ekonomi Indonesia” (1941-1949?): Rise and fall of a pribumi-Muslim economic organization from Jogjakarta’
Research has shown that in 1930s and 1940s a generation of pribumi-Muslim entrepreneurs in Indonesia was born. However, there is still lack of case studies about those entrepreneurs and economic groups. This paper will describe the rise and fall of Kemadjoean Ekonomi Indonesia (KEI), a pribumi-Muslim economic organization from Jogjakarta (1941-1949?)- the successor of the largest pribumi batik cooperative in prewar Jogjakarta. KEI was destined to become a big organization after the arrival of the Japanese in March 1942. Due to their anti-Chinese policy, the Japanese planned a new class of pribumi businessmen. KEI, which received both Japanese privileges and moral support from the traditional rulers of Jogjakarta, soon became a promising union of pribumi businessmen and professionals from all walks of life. KEI’s heyday, however, was short-lived. Mismanagement and internal conflict slowly made it into a dying and forgotten organization.
Hersumpana, MA – Action Research Group on Urban Development, Yogyakarta
‘Indigenous entrepreneurs in the wave of the free market: Transition from colonial to national economy, 1945 – 1967’
The rise of indigenous has attracted much attention in the debate on the decolonization process in Indonesia. This paper discusses the development of the Indonesian economy from the local perspective during the period 1945-1967. After the declaration of independence, the critical question arose how an Indonesian national economy was to be achieved since economic power was largely in the hands of the Dutch and ‘Vreemde Oosterlingen’ (Chinese, Indians and Arabs).This paper focuses on some cases of local manufacture development – for instance in batik and weaving – in the Yogyakarta area and thus turns away from the central but rather narrow debate of the 1950s whether a capitalist or a socialist system was most appropriate to Indonesia’s needs. This paper elaborates the complicated issues related to constructing the people's economy after independence and the coming age of new trade networks centered on the US and Japan.
Jasper van de Kerkhof, MA – International Institute for Asian Studies, Leiden
‘”Colonial” enterprise and the indigenization of management in independent Indonesia and Malaysia’
This paper examines the validity of the often expressed and counterfactual postulation that Dutch enterprise in Indonesia could have escaped expropriation in 1957/58 had it taken a more accommodating stance in its dealings with independent Indonesia. It does so by comparing the outlook of Dutch enterprise in Indonesia with that of British business in Malaysia. The focus is on a specific aspect of the relationship between ‘colonial’ firms and the decolonized countries; the recruitment, training and advancement of indigenous personnel to management and expert positions within ‘colonial’ enterprise. This ‘indigenization’ was a declared aim of virtually all newly independent nations in their efforts to create a national economy as well as a yardstick for the responsiveness of ‘colonial’ firms to the national aspirations of the decolonized peoples.
Dr J. Thomas Lindblad – IIAS/University of Leiden
‘Economic decolonization in Sumatra’
This contribution considers the economic aspects of decolonization in Sumatra, especially in the estate era of North Sumatra. The focus is on what happened in Dutch-owned tobacco and rubber estates during the 1950s, including immediately after the seizure and subsequent nationalization of Dutch corporate assets in 1957/58. The paper uses both statistics and qualitative information drawn from primary sources in Medan, in particular documentation found in the archive of the AVROS (Algemene Vereniging van Rubberplanters ter Oostkust van Sumatra) that later became the SPA (Sumatra Planters'Association) or GAPPERSU (Gabungan Pengusaha Perkebunan Sumatera). It is an exploration of available evidence in preparation of a forthcoming monograph on the process of economic decolonization at large in Indonesia.
Daan Marks, MA – International Institute of Social History, Amsterdam
‘Decolonization and economic growth in Indonesia: the role of the service sector’
The service sector – which is often considered tertiary and even parasitic - plays a more important role in the economic development of LDCs than is usually recognized. For example, trade opportunities are limited without a well-functioning transport system, which consequently discourages economic growth because of low levels of specialization and industrialization. This paper argues that in Indonesia the service sector played a crucial role in the economic decolonization process. Around 1940 the transport and the trade sector were of great importance for the economic well-being of Java and the Outer Islands. These sectors suffered heavily from the Japanese occupation and subsequent war of independence. Using the system of national accounts I hope to prove that the disruption in these sectors was a major cause of the underdevelopment of the Indonesian economy in the 1950s.
Dr Dianne van Oosterhout – Landbouwuniversiteit Wageningen
‘Redefining a colonial past. Reformation and farmer empowerment in West-Java’
The downfall of the New Order era was in part both staged and enacted on the remnants of a colonial heritage in the countryside by contesting the colonial basis of the design of rural space, and hence by defining the claims of the Indonesian government as illegal. This contributed to the undermining of Suharto’s regime and provided opposing parties with an opportunity to gain a foothold in Jakarta’s hinterlands. The farmers themselves appear to have some less straightforward difficulties to come to terms with this colonial heritage; local power relations and New Order sentiments are mixed with nostalgic feelings concerning colonial administration and a re-invention of agricultural history, resulting in competing definitions of resource management, land use, and ownership. This picture is further complicated by an actual decrease in local land ownership; empowerment of the local farmers at most led to a temporary use of land and the rise of new influential local leaders. In this paper I will explore some of the strategies employed by local farmers during the first stages of Reformation (Reformasi), and focus at some of the effects on local communities.
Dr Peter Post – Nederlands Instituut voor Oorlogsdocumentatie, Amsterdam
‘Indonesianisasi or Japanisation?: Japanese business and the development of pribumi entrepreneurship’
This paper deals with the interaction between Japanese and pribumi entrepreneurs in the decolonization process of the Indonesian economy (1930s-1960s). On the basis of case studies the paper shows how Japanese businesses and pribumi social networks created their own ‘Japan-oriented’ niche in the Dutch (and peranakan Chinese) controlled colonial economy of the 1930s and how these Japanese-pribumi alliances subsequently developed under Japanese military rule and in the Sukarno period. A distinction will be made between a first generation of pribumi entrepreneurs, e.g. those born before World War I who already had set up their own enterprises by the late 1930s, and those born on a later date who turned to capitalist undertakings during and after the Japanese occupation. This paper also addresses the question if the rise of the pribumi entrepreneurial elites during the period under scope can be analyzed in terms of Indonesianisasi only or if this process should be seen as part of larger shifts in the global economy of which the Japanisation of the Western controlled colonial economies of Southeast Asia was the most significant.
Prof. Bambang Purwanto – Universitas Gadjah Mada, Yogyakarta
Prof. Anthony Reid – National University of Singapore
‘”Decolonization” versus Revolution: The comparative experience of Malaysia and Indonesia’
The revolutionary path to national sovereignty, as followed by Indonesia in the 1940s, had many advantages. It swept away a great deal of anachronistic hierarchy and particularism, replacing them with rational principals of popular sovereignty and equality throughout the nation. In doing so it released the creative energies of a generation of largely western-educated youth to build new ‘Indonesian’ cultural and social forms. In comparison with a country such as Malaysia, which followed a cautiously evolutionary path of ‘decolonisation’, the costs as well as the benefits of this process become clear. The costs might be listed particularly as economic, but also include patterns of authoritarianism, intolerance and violence which, while not part of any revolution’s aims, tend to fall on the negative side of their outcomes. This paper will analyse some of these differences, and consider how far the colonial legacy of British and Dutch respectively may have been responsible for them.
Dr Thee Kian Wie – Asian Development Bank Institute, Tokyo
‘Indonesianisation: the economic aspects of decolonization in Indonesia’
This paper discusses the so-called ‘Indonesianisation’ policies which the Indonesian government pursued during the early independence period 1950s when economic nationalism was very strong. In first instance, the measures involved countering and reducing Dutch economic dominance, as under the terms of the Round Table Conference agreement, Dutch business could continue operating in Indonesia unhindered. However, all Dutch companies were subsequently taken over and then nationalised following the break in relations with the Netherlands because of the dispute about West Irian (West New Guinea). After the elimination of Dutch economic dominance, measures were taken to reduce Chinese economic dominance in the intermediate trade, rice mills, stevedoring, harbour transport, wharfage business and money lending.