Juggling Money: Financial Self-help Organizations and Social Security in Yogyakarta (review)

The study focuses on two subjects that are somewhat related: financial self-help organizations (SHOs) and social security. The author took his inspiration from two sources: (a) a discussion that took place in Amsterdam in 1993, comparing financial SHOs in developing countries at the present time and mutual benefit societies in 19th century Europe, which dissolved around the turn to the 20th century but contributed to the development of the western welfare state; (b) the teachings of Frits Bouman and Otto Hospes at Wageningen Agricultural University on indigenous rotating and accumulating savings and credit associations (ROSCAs, ASCRAs), which seemed to perform so much better than state-owned subsidized credit programs and institutions. Comparisons are then made which suggest that in Indonesia, where the role of the state and the spread of commercial arrangements in social security are still very limited, "financial self-help organizations enjoy a relatively more advantageous position than did their Western counterparts at the beginning of the twentieth century" (p. 10).

Between 1997 and 1999, at the height of the Asian financial crisis, Lont spent some fourteen months of anthropological field work in Bujung, an urban community at the outskirts of Yogyakarta in central Java, where SHGs exist in large numbers, to examine "the social security function of financial self-help organizations" (p. 12). He used a variety of methods, from participatory observation and interviews to examining household expenditure records and the books of SHGs. The title of the book, Juggling Money, is indicative of his approach, says the author: in both juggling and financial SHOs, "entertainment plays an important role" (p. 13). The same applies to his style, to the pleasure of this reviewer, e.g., "Some manage to accomplish magic tricks, while others fail dramatically, often because they use more balls (or money) than they can handle" (p. 13); or a neighbour's (Pak Irwanto) assessment of his experience with arisan, the ubiquitous SHO, which Clifford Geertz had called in 1962 "a middle rung in development": "Wah… pusing, pusing!" (… headaches, headaches!) (p. 1).

As required of a dissertation, the study is comprehensive. It covers the socio-economic context; the history of social organizations in Bujung; the adversities confronting the Bujungese; the history and diversity of financial SHOs in Indonesia; a case study of UKK, a parastatal which has created large numbers of women's SHGs with quasi-compulsory membership; the research question how financial SHOs can contribute to people's coping strategies; the consequences of the Asian financial crisis (krismon); linkages between financial SHOs and banks; and a conclusion that summarizes the results and places them in a wider social-historical context — enough material for perhaps half a dozen dissertations, or follow-up projects.

The answer to his research question regarding the social security function of SHOs is brief and unequivocal: "Financial self-help organizations are directly and indirectly used as instruments for coping with economic insecurities, but … their social security function, in the sense that they are a platform for sharing risks, turns out to be negligible" (pp. 21, 241). And more specifically: "Disbursements from the funeral and illness funds of Bujung's financial self-help organizations represent a pure form of social security, but provide only limited financial relief" (p. 242).

Bad luck, the reader might be inclined to think. But he is reminded of Karl Raimund Popper's dictum, in The Logic of Scientific Discovery, that the progress of science is propelled by the falsification, not the verification, of theories; or of the asymmetry of a plethora of success stories, which get published, and a dearth of failures, which are less likely to attract donor support for publication.

Concerning the overall role of financial SHGs in Bujung, Lont concludes that they "certainly contribute to the ability of their participants to deal with the vagaries of social life, and to lessen vulnerability," though he adds a qualifier: "payments can be a real burden for participants" (p. 244). In Lont's amicable style...