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Until quite recently very little attention was paid to Indonesia’s economic history . During the New Order period of government under President Soeharto, economists focused their attention on economic development and, like policymakers , looked to a better future. There seemed to be nothing to learn from the economic failures of the Old Order under President Sukarno, while the Dutch colonial era had become so remote as to be of interest only to historians . The fact that few non-Dutch scholars, even Indonesians, could read Dutch-language sources was a further discouragement. Ignorance of economic history, however, did not mean that it was irrelevant. Policies do not arise out of thin air but are based on reasonings of the time. Statistics and trends have little meaning without baselines. Over the course of the 20th century, failure to pay heed to economic history gave rise to a sequence of poorly judged assessments of the Indonesian economy, alternatively too pessimistic and too optimistic. At the turn of the century, the preoccupation was with the diminishing welfare of the Javanese, but by the time the voluminous reports of the Welfare Commission came to be presented at the end of the first decade, the economy was booming and the crisis had passed. Even the severe 1930s Depression was followed by economic recovery and structural change in the form of nascent industrialisation. Yet despite ample colonial evidence to the contrary, by the 1960s economic development had come to be seen as almost unachievable: Indonesia was a poor, underdeveloped country trapped in a vicious cycle of poverty and held back by incompetent and ineffective government and bureaucracy. Lo and behold, after 30 years of the New Order, rapid economic growth was being hailed as a natural and self-sustaining process – the norm. Such optimism was supported by a proliferation of statistics which gave the comforting illusion that growth and development could be measured and controlled . There were vested interests in maintaining that illusion – ‘national 161 13 BRIEF REFLECTIONS ON INDONESIAN ECONOMIC HISTORY Howard Dick AA/Part3 23/3/01 6:26 PM Page 161 development’ justified authoritarian rule, rewarded policy advisors and returned well-connected businessmen a profit on their investments. Then suddenly in 1998, regardless of ‘economic fundamentals’, Indonesia fell into economic and political crisis. After the collapse of Soeharto’s authoritarian government, experts boldly criticised the New Order for its authoritarianism and corruption. As the prospects for sustained economic growth receded, the pessimism of the 1960s seemed to return. Objectively, however, these assessments were not based on well-grounded analysis but rationalisations of prevailing moods. Fortunately a new curiosity as to how the New Order sits in historical perspective coincides with the coming of age of the field of Indonesian economic history. As recently as a decade ago, very few English-language materials on 20th century Indonesian economic history existed – bar the magisterial study of Furnivall (1944) – and little recent work had appeared in Dutch. There were contemporary works, such as those of Higgins (1957) and McVey (1963) as well as the publication from 1965 of the Bulletin of Indonesian Economic Studies which, by passage of years, has now become a historical record. However , it was not until 1975 that there began to appear a valuable series of source publications – the Changing Economy of Indonesia series – that made edited and annotated colonial statistics available to a much wider audience. In the 1980s scholars began to revisit Indonesia’s economic history. A workshop convened at the Australian National University in 1982 on Indonesian economic history in the colonial era gave rise to the volume edited by Booth, O’Malley and Weidemann (1990) at almost the same time as that by Maddison and Prince (1989). In the 1990s economists and historians held conferences in Indonesia, the Netherlands and Australia to explore not only Dutch colonial economic history but also its relevance to Old Order and New Order economic development. Important issues have been debated, such as the origins of poverty, long-term trends in agricultural development, the origins of industrialisation, the economic content of the colonial Ethical Policy, the reasons for the failure of economic development after independence, and the nature of national integration. These debates have been brought together in several edited collections, such as Lindblad (1993, 1996). Publication of Booth’s (1998a) thematic economic history, The Indonesian Economy in the Nineteenth and Twentieth Centuries, was a milestone. It will soon be supplemented by a chronological account (Dick, Houben, Lindblad and Thee 2001). This collection of...

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