Published by EH.Net (January 2017)

Anne Booth, Economic Change in Modern Indonesia: Colonial and Post-colonial Comparisons.  Cambridge: Cambridge University Press, 2016. x + 261 pp. $30 (paperback), ISBN: 978-1-107-52139-1.

Reviewed for EH.Net by Farabi Fakih, Department of History, Gadjah Mada University.

Anne Booth’s Economic Change in Modern Indonesia: Colonial and Post-colonial Comparisons is another masterful work by the School of Oriental and African Studies economic historian.  It deepens our understanding of Indonesia’s modern economy through a comparative historical perspective. Written by a towering figure in the field of Indonesian economic history, Booth’s study analyzes the legacies of Indonesian colonialism to the current day economy, looking at how colonial and postcolonial governments have dealt with issues concerning business, the role of the state, and poverty. It looks at the failure of Indonesia’s government in developing the economy in the 1950s and 1960s, the success of the New Order in the 1970s to 1990s, and the continuing problems the economy has faced in the post-Suharto period. The book consists of ten chapters, with the first six chapters giving an overview of Indonesia’s economic development and the problems hampering it from the nineteenth century up to the Yudhoyono Presidency (2004-2014). Chapters 7 to 9 are thematic in nature — chapter 7 discusses the history of Indonesian economic nationalism since the 1950s; chapter 8 examines poverty and welfare from the Suharto presidency until the present period; and chapter 9 covers the changing role of governance in the economy from the colonial era to the present. The book is an excellent introduction to Indonesian economic history, particularly on the various themes that have dominated the discussion among Indonesianists, such as the problem of poverty and the effect of economic nationalism on the Indonesian economy.

The book’s main contribution is perhaps most significant at two points. First, Booth’s wide-ranging knowledge of Indonesian economic history allows her to connect current developments and trajectories up to the end of the Yudhoyono Presidency. This is illuminating not just for economic historians, who often only deal with past events and thus forget the present situation, but also economists and other academics, who often lack that historical longue durée perspective. This focus on the present with a historical perspective gives the book a weighty contemporary presence; a clarion call to Indonesia’s problems and trumpet to its successes. Second, her vast knowledge on other East and Southeast Asian countries’ economic and political histories means that much of her analyses of Indonesia’s conditions are comparative in nature. Booth provides a great analytical contribution by placing Indonesia’s development in comparison to those of its ASEAN peers, the more developed East Asian economies and the less developed ASEAN ones, putting into perspective Indonesia’s current achievements using solid data from international organizations, noted academics or her own significant statistical analyses of the country. Her comparative discussion of poverty, the size of the middle class, Indonesia’s education system, and the country’s integration into the present day East Asian economy provides a sobering picture of the changes of post-Suharto Indonesian state and society and also a much clearer view of the nation in the current day.

Perhaps a major weakness of the book is stated by the author in her conclusions. Not wanting to frame the discussion on absolute questions of whether Indonesia has succeeded or failed in economic development, she notes that her study “has tried to avoid both extremes, but it might at times have appeared rather inconclusive” (p. 228). While there are problems, there are also significant achievements in every sector — the success of expanding education to the population, the decentralization and democratization process in the post-Suharto period, and the success in avoiding the 2008 crisis, among many others. Every success is made stark with a caveat or warning.  The volume also ends with a sobering warning to the nation. “Governments at both the centre and in the region together with civil society organisations will have to tackle these challenges in coming decades. If they can do so successfully, hundreds of millions of Indonesians can look forward to a better quality of life. But if they fail, the country faces a very uncertain political and economic future” (p. 235). This is somewhat different from the often-celebratory assessment made by many Indonesian experts in the past decade (for instance, Anthony Reid’s Indonesia Rising, Christopher Robert’s Indonesia’s Ascent and Amitav Acharya’s Indonesia Matters). No doubt all these books also include caveats about Indonesia’s potentially bright future, yet they place their perspective on an ideological assumption that Indonesia’s success in transitioning to democracy will bring continuous gains in its future. By not framing the book in such perspective or placing a central question or thesis that would purportedly explain Indonesia’s economic history in one go, Booth’s book does seem indecisive at times and often hard to place in the discussion. Such a work must be celebrated because its effort to maintain a level of neutrality is a rarity in a field that often uses comparative studies not as a means to understand the economies of the countries involved but as a test case to promote one particular school of thought. In this regard, the book is a refreshing read not only for newcomers to the field but also those already acquainted with Indonesia’s economic history.

Farabi Fakih is a lecturer in the History Department at Gadjah Mada University in Yogyakarta, Indonesia. He is currently working on a manuscript on the history of management during the Sukarno presidency of post-Independence Indonesia (1950-1965).

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