Promises and Predicaments: Trade and Entrepreneurship in Colonial and Independent Indonesia in the 19th and 20th Centuries ed. by Alicia Schrikker and Jeroen Touwen (review)

Indonesia’s economic history has been a fascinating area of research as it covers a large, heterogenous region with multiple ethnicities, a vibrant political economy and an erratic yet interesting structural change in the society. Indeed, there has been increased scholarly interest on the country’s modern economic history over recent decades. In view of this, Promises and Predicaments attempts to highlight key issues to better understand Indonesia’s economic history.

The book, edited by Alicia Schrikker and Jeroen Touwen, two scholars from Leiden University, presents a collection of academic essays exploring the economic development in the sprawling archipelago during the nineteenth and twentieth centuries. The contributors to this book consist of a mix of young scholars and senior academics who have helped build the field over the past thirty years. The book is dedicated to Thomas Lindblad, a well-known economic historian, whose works over the past thirty years have included ground-breaking studies about colonial and post-colonial Indonesia.

Putting together many essays, covering a wide range of themes and approaches regarding Indonesian economic history, is clearly not an easy task. The editors of this book have done excellent work organizing sixteen independent essays under three big themes: the impact of trade and investment; changes in entrepreneurship; and changing political regimes. To help readers understand connections between different themes and approaches, they provide some interesting insights in the introduction chapter.

The first part of the book focuses on the economic and socio-cultural effects of trade and investment. Anne Booth addresses the impact of changes in the patterns of trade and investment on regional development in Indonesia (Chapter 2). By using statistics, she shows that Indonesia’s exports have evolved since the nineteenth century and argues that this evolution has affected the economic balance between Java and the rest of Indonesia. In Chapter 3, Hal Hill examines the turning points in recent structural change in economies in Southeast Asian countries. He argues that turning points do not necessarily occur at particular development stages. This is because countries’ turning points vary with economic growth, resource endowments, policies and institutions. Chapter 4 (Pim de Zwart, Daan Marks, Alexandra de Pleijt, and Jan Luiten van Zanden) tests the statistical relationship between trade openness and development using a long-term time series analysis. Using a Granger-causality test, they find a long-term relationship between trade openness and total factor productivity (TFP). Nevertheless, they find the relationship between openness and improved living standard is not straightforward. The last chapter in this part (Chapter 5 by Alexander Claver) is rather different. It studies the role of the colonial coinage system to trade in the indigenous economy. The author argues that the monetary developments within the colony were highly erratic but, paradoxically, in Java the coinage system worked well.

The second part of the book is centred on the economic actors and entrepreneurship in the colonial and post-colonial economies. Chapter 6 (Leonard Blusse) focuses on Chinese sailors in the service of the Dutch East India Company’s (VOC). This chapter provides a rare angle of looking at the early division of economic role of the Chinese ethnic. Later, Chapter 7 (Freek Columbijn) studies the construction sector in Medan in the 1930s and early 1950s. The author describes the economic relationship between different ethnic groups as “complementarisasi”, in which each side occupied a niche and complemented the work of the other. In Chapter 8, Roger Knight studies the international sugar trade between Java and Japan between the 1880s and the mid-1940s. He examines cooperation between ethnic groups and different nationalities in the Java-Japan sugar trade nexus and highlights that the agencies involved in articulating the nexus were Asian rather than European. Bambang Purwanto in Chapter 9 examines the increasing economic role of the military in post-independence Indonesia. He finds...