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Indonesian Exports, Peasant Agriculture and the World Economy, 1850-2000: Economic Structures in a Southeast Asian State

Author(s):Kano, Hiroyoshi
Reviewer(s):Eng, Pierre van der

Published by EH.NET (November 2009)

Hiroyoshi Kano, Indonesian Exports, Peasant Agriculture and the World Economy, 1850-2000: Economic Structures in a Southeast Asian State. Athens OH: Ohio University Press, 2009. xix + 421 pp. $27 (paperback), ISBN: 978-0-89680-268-1.

Reviewed for EH.NET by Pierre van der Eng, School of Management, Marketing and International Business, Australian National University.

Scholarship on Indonesia?s economic history published in Japanese unfortunately all too often escapes the attention of most people outside Japan. An example is the work of Hiroyoshi Kano, who is a longtime firsthand observer of social and economic change in Indonesia, as well as economic historian of Indonesia at the University of Tokyo. Kano has published on a variety of topics, but often in Japanese. This book was published in 2003 in Japanese. It is a compilation of several of Kano?s papers that were published in the 1980s and 1990s.

The book comprises twelve chapters, of which seven are translations and republications of work published earlier. Five chapters were written especially for this book. Together, the twelve chapters actually cover almost 200 years of economic change in Indonesia, rather than the 150 foreshadowed in the title. The first four chapters take a macro-economic perspective. They assess economic change through the prism of Indonesia?s foreign trade, particularly exports. The main argument of the book is that Indonesia?s involvement in international trade was the main factor that spurred economic and social change. Chapters 5 through 8 then zoom in and focus on the business organization of successively leading export commodities; respectively sugar, rubber, petroleum and ? since the 1980s ? labor-intensive manufactures. Zooming in further, chapters 9 through 12 analyze, with considerable attention to detail, the micro-level agrarian changes that took place in the rural villages of Java, the core island of the Indonesian archipelago.

Kano?s book can be read in conjunction with other textbooks on Indonesia?s economic history published in recent years, notably Booth (1998) and Dick et al. (2002). The book covers several topics that remain underexposed in those two studies, particularly business organization (chapters 5-8) and agrarian change in rural Java (chapters 9-12).

There are several aspects of Kano?s book that a reader may appreciate. Firstly, it draws on scholarship published in Japanese that is so difficult to access for non-Japanese speakers, such as the work of Kosuke Mizuno, Kensuke Miyamoto, Akira Oki and Yasuo Umemura. Kano alerts the reader to the main findings in these studies. In addition, Kano bases his findings on his meticulous study of oft-neglected relevant sources on colonial Indonesia published in Dutch. Thirdly, Kano takes the reader deftly from macro to micro issues, in particular business and social history in rural Java.

The main problem for anyone familiar with the study of Indonesia?s economic history is that the book?s chapters hardly take account of relevant studies that have been published since Kano?s original publications. For example, Kano?s chapters on foreign trade ignore the different degrees to which regional economies across Indonesia participated in it, something that Touwen (2001) studied in great detail. As a consequence, the text often appears to be rather dated.

Kano?s book is also dated in a sense that the analysis of foreign trade statistics stops around 2000. In some cases, such as the discussion of the role of conglomerates in labor-intensive manufacturing in chapter 8, it even stops around 1990. Despite its title, the book has hardly anything to say about the momentous 1997-98 crisis and its aftermath, and the role of the country?s conglomerate enterprises in that process.

The book?s main argument is that Indonesia?s engagement with distant markets through foreign trade has long driven economic change. Indonesia?s economic history was traditionally perceived in that way until the 1980s. This view contrasts with the argument presented by Dick et al. (2002) that the last two centuries saw the gradual emergence of a national economy with an increasing degree of economic integration across the country. Kano counters this argument briefly in the introduction (pp. 2-3). He argues that there long was no national economy, and that analysis of economic change with economic statistics for the whole of the country is not appropriate. But Kano defends his use of foreign trade statistics for Indonesia as a whole since the 1870s, because Indonesia?s economy was long typified by ?export industries at the top supported by the food processing capacity of a large agrarian population at the bottom.? He argues that this was the case throughout the country, despite the absence of spatial economic integration.

Actually, based on recent studies, Dick et al. were careful to underline that the development of domestic transport and communication facilities, as well as entrepreneurship, and the integration of product and factor markets across the country were all a gradual process that suffered set-backs. By contrast, Kano seems to insist that Indonesia?s economy has during the past 200 years been typified by a rather immutable dichotomy between big business and small farmers.

The book has no less than 120 tables. Many of them are very elaborate, contain extensive detail, and are difficult to read. Consequently, they don?t necessarily tell a clear story by themselves. Maybe the publisher should have helped Kano to cut the tables back to the most essential ones, and/or to summarize them, or present them as graphs to make the book more accessible. Another problem with the presented data in tables and graphs is that their discussion takes insufficient account of the discontinuities and discrepancies that they contain. For example, the extensive discussion of postwar trends in Indonesia?s exports in Chapter 3 takes no account of the extensive smuggling of goods until today.

References:

Anne Booth (1998), The Indonesian Economy in the Nineteenth and Twentieth Centuries: A History of Missed Opportunities. New York: St. Martin?s Press.

Howard Dick, Vincent Houben, Thomas Lindblad, and Thee Kian Wie (2002), Emergence of a National Economy: An Economic History of Indonesia 1800-2000. Honolulu: University of Hawai?i Press.

Jeroen Touwen (2001), Extremes in the Archipelago: Trade and Economic Development in the Outer Islands of Indonesia, 1900-1942. Leiden: KITLV Press.

Pierre van der Eng is the author of Agricultural Growth in Indonesia: Productivity Change and Policy Impact since 1880 (New York: St. Martin’s Press, 1996), as well as various articles on various aspects of the economic history, economy and business of Indonesia, including long-term economic growth. He recently published (with Andrew Leigh) ?Inequality in Indonesia: What Can We Learn from Top Incomes?,? Journal of Public Economics, 93 (2009): 209-12.

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):Asia
Time Period(s):20th Century: WWII and post-WWII