POLITICS OF ECONOMIC SWINGS

Indonesia experienced a more tortuous trajectory of development than did South Korea. During the first four decades after independence, the Indonesian economy underwent two major pendulum swings. In the first seven years following independence, the Indonesian economy experienced moderate growth, estimated between 3 and 5.5 percent per year (Higgins 1957, 48; Paauw 1963, 189, 200–1; Mackie 1971, 19; Booth 1998, 61). Growth was highest in the first two years of this period, thanks to the Korean War that led to booming demands and favorable prices for Indonesia's primary exports. Although Indonesia faced a growing budget and foreign exchange crisis in late 1952, the economy continued to grow moderately because of government retrenchment policies, including import restrictions, export promotion, fiscal austerity, and foreign exchange controls (Higgins 1957, 1–39).

In 1957 ultranationalist politicians under Sukarno's leadership rose to power and decided to nationalize most foreign enterprises. Under conditions of poor Indonesian management and insufficient credit, the performance of these enterprises, which made up the backbone of the modern sector, worsened. An unrealistic exchange rate, government hostility to foreign capital, inflationary government spending, and large military expenditures were additional factors that devastated the economy (Dick 2002, 182–90). By 1965 the country was practically bankrupt with inflation rates surpassing 500 percent and budget deficits equal to 300 percent of receipts (Hill 2000, 1).

In this book I have been concerned with the origins of developmental states. The state is by far the most important of all political institutions, and its role in economic development has long been central in the study of modern politics. However, this book leaves aside policy explanations for rapid economic growth. Nor do I engage in the debate between neoclassical economists and many political economists concerning the appropriate economic roles for states. The literature on developmental states has produced excellent studies that address these issues (e.g., Evans 1995, esp. ch. 2). Rather, I am interested in the structures of these states. The puzzle is, what gives, or gave, successful developmental states their cohesive bureaucracies, centralized government organizations, progrowth class alliances, and firm ideological foundations? This question has rarely been asked in the political economics literature. Cohesive structures do not guarantee that state leaders at any point in time are committed to economic growth. Yet without cohesive state structures, growth-conducive policies are unlikely to generate the intended impact.

In this chapter, I revisit the assumptions underlying my conceptual framework of state formation politics. These assumptions are about elite alignment patterns, the role of foreign forces, and the ability of the framework to predict events. I also consider three implications of this study for understanding developmental states: the role of colonial legacies, the importance of ideologies, and the conditions under which state elites choose to launch developmental policies.

“BRINGING THE STATE BACK IN”: MODERN CHINESE HISTORIOGRAPHY

Until recently, Western scholarship on Chinese politics was thoroughly mesmerized by the revolutions that swept through China throughout the twentieth century (Young 2002, 1). China's modern state formation and state-building experiences have been either neglected or analyzed under the rubric of revolutions (e.g., Skocpol 1979). This tendency has compartmentalized modern Chinese history into “the abortive revolution” led by the Chinese Nationalist Party (Guomindang, or GMD) and the communist revolution under the leadership of the Chinese Communist Party (CCP) (Esherick 1995). The history of modern China became the history of (first nationalist, then communist) revolutionary movements: their leaderships, organizations, and strategies preoccupied scholarship, obscuring all other important topics.

Conceptually and empirically, another history of modern China, centered on states, has been largely overlooked. Until recently, only limited research had been done on the Republican state that ruled China from 1927 to 1937 (Edmonds 1997). Scholarship shows that it was a viable state that engineered important socioeconomic changes before its collapse on the mainland in 1949 (e.g., Kirby 1990; 2000b; Strauss 1998; Wakeman and Edmonds 2000). After relocating to Taiwan, the leaders of this state went on to develop the island into an industrial powerhouse.

The Maoist state has suffered the same neglect as its rival, even though as a revolutionary movement the CCP has attracted greater attention from scholars than the GMD. Yet Mao Zedong and his comrades did not just lead a radical revolution; they built a powerful state to realize their ambitions.

As a Comintern agent with decades of experience, Ho Chi Minh accumulated considerable organizing skills. Yet he did not simply organize people in the physical sense but also wrote and spoke to rally their support for the communist cause. Over his long career, he wrote for or edited numerous newspapers and journals under various names and in at least three languages (Nguyen T. 2005). Whether he was effective or not in mobilizing the masses, there is no doubt that he spent as much of his time writing as he did organizing. This point is clear from a brief excerpt in which Nguyen Ai Quoc (i.e., Ho Chi Minh) graphically described “colonial sadism”: “[After the raping, killing and burning by two colonial troops,] the three corpses lay on the flat ground…the eight year old girl naked, the young woman disemboweled, her stiffened left forearm raising a clenched fist to the indifferent sky, and the old man, horrible, naked, like the others, disfigured by the roasting with his fat which had run, melted and congealed with the skin of his belly, which was bloated, grilled and golden, like the skin of a roast pig.” Clearly Nguyen Ai Quoc displayed through this piece a great flair for constructing a discourse imbued with violent images. The quality of the work makes clear that he devoted significant energy to the job.

We have seen from Chapters 6 and 7 that accommodation was institutionalized in political organizations and government structures.

TRAUMATIC EVENTS AND A THEORETICAL LACUNA

On August 19, 2004, the leader of South Korea's ruling party, Shin Ki-nam, tearfully announced his resignation after his father's work decades before as a member of the military police force serving the Japanese colonial government became known. “I still find it shocking and difficult to believe the details of recent reports about my father,” he said. Shin was the first victim of an inquiry launched by President Roh Moo-hyun into South Korea's modern history, including the Japanese occupation from 1910 to 1945 and authoritarian rule until 1987. Just two years before, when President Roh himself was running for election, the news came out that his father-in-law had been a left-wing activist, was arrested during the Korean War, and died in prison when Roh's wife was a child. When a rival took issue with Roh's father-in-law's record during the heated presidential race, Roh shot back, “Should I leave my wife just because of her father, who I never even met?”

When these two recent episodes in Korean politics are placed next to each other, a great irony emerges. The two men now belong to the same ruling party, but one's father and the other's father-in-law used to be enemies. And the man who was not mentioned in the newspaper stories but who loomed large behind both was President Rhee Syngman (1948–60). Under his rule, Mr. Shin's father was protected and promoted, while Mrs. Roh's father languished in jail and died a premature death.

As explained in chapter 2, states had relatively little direct control over the inhabitants of the tropical rain-forests of Southeast Asia when compared with the great river systems of the temperate zone. For many peoples of the Southeast Asian uplands in particular, statelessness was not simply a negative absence or slowness to develop states, but a deliberate rejection of the manner in which trade-based coastal states had been experienced as a threat to their way of life. The highland populations of northern Sumatra, collectively known for several centuries as Bataks, will be our prime example of this category.

Like terms elsewhere in the region such as Toraja, Dayak, Dusun, Alfur or Karen, the term Batak was probably first used by coastal people as a generic descriptor of highlanders outside the boundaries of the civilisation defined by states and scriptural religions. These highlanders constituted the great majority of the population of Sumatra before 1870, and were themselves divided by a range of linguistic and cultural variations. They therefore defined themselves internally in terms of location, river-valley, dialect or descent. Yet when dealing with outsiders they appear to have accepted the broad label Batak, even including its ‘savage’ associations which served to intimidate potential intruders. The historical options for such peoples were either to be individually assimilated to the coastal states, or to forge new identities of sufficient breadth to demand a position of equality with the state-based identities of the coasts.

Melayu is an ancient term, which has served multiple roles in its long career. It entered European languages in the sixteenth and early seventeenth centuries as Malay (or French Malais; Portuguese Malayo), and the different European and Malay meanings of the term affected each other markedly thereafter. As the trade language of Srivijaya and later Melaka, the language eventually called Malay was used as a lingua franca in commercial centres over a wide area of maritime Southeast Asia and even beyond. It was therefore adopted by English speakers in particular as a broader racial or regional term. When researchers discovered the vast family of languages today known as Austronesian, and stretching halfway around the world from Madagascar to Easter Island, this too was first labelled ‘Malay’ from its best-known language. This broadening eventually played back into indigenous nationalist usage. The language was harnessed as the basis of the ‘core culture’ of Malaysia, Indonesia and Brunei, though differentially in the three countries, while a racial use of the term served to build Filipino nationalism. The term played other roles in the definition of minority ethnies in Singapore, Thailand, Cambodia, Sri Lanka and South Africa.

Together with the ‘China’ discussed in the previous chapter, this term is the most widespread, ambiguous and portentous of Southeast Asian labels.

Melayu origins

The term Melayu goes back at least as far as Ptolemy, the second-century (CE) Egyptian geographer.

The long history of states has played a large role, larger than is acknowledged in the literature, in the making of political identities. Those identities were fluid and multiple in equatorial Southeast Asia precisely because states had always held such limited leverage in that forest-and-water world. Modernity, however, cannot do without states. State-like formations and ideologies were brought to this region by successive waves of outsider traders. Prior to the years around 1900 these trade-based polities gradually became more like states, though the nineteenth century acknowledged only those ruled by Europeans (and eventually the Siamese with European advisors) as ‘civilised’ members of the globalising world order. In the twentieth century there was no further toleration of ambiguity or statelessness. World order required that all boundaries were demarcated, ‘slavery’, ‘piracy’ and an arms-bearing populace eliminated, and the status of all within those boundaries rendered unambiguous as subjects (Klein 1993; Tagliacozzo 2005).

Only the Siamese monarchy in Southeast Asia had been able to satisfy the demands of world powers sufficiently to survive this trauma. Kingdoms such as Aceh, Lombok and Sulu were incorporated into imperial states through wars short or long, while stateless peoples like the Batak and Kadazandusun for the first time confronted the standard package of state monopoly of force and law, finding the experience liberating as well as threatening. Malay sultans on the Peninsula and in Sumatra and Borneo continued their age-old roles of mediating between external powers and indigenous peoples, though their true powerlessness grew increasingly obvious to the dynamic worlds of identity formation in the cities.

At the end of 1995 the Malaysian government agreed that a fifth language could be taught in its schools, after Malay, Chinese and Tamil (long conceded to the three major communities in West Malaysia), and Iban (the largest of the Dayak languages of Sarawak, conceded shortly before). This language was called Kadazandusun, the latest mouthful to try to gain consensus among the indigenous peoples of Sabah (the northern corner of Borneo). At the last (2000) census the half a million people whose language this was or aspired to be were also listed as Kadazandusun. Going back through previous censuses, however, these were registered as two peoples, ‘Kadazan’ (104,924) and ‘Dusun’ (216,910) in 1991, merged into the larger Pribumi (indigenous people) category in 1980, all listed as Kadazans in 1970, and all as Dusuns in 1960 and previous censuses (seetable 7.1). I will refer to them as KD in this chapter.

Given the importance we have attached to censuses in the toolkit of identity creation, these differences suggest a troubled path to ethnie formation. By contrast with the Batak counterpart in the previous chapter, Sabah represents a case of even later politicisation and ethnie formation, well after the nation-state it was asked to join in 1963 had taken shape. Whereas Bataks had an equal share with other ethnie in building anti-imperial nationalism and its state nationalist successor, the Kadazandusun remain outside and in tension with the Malay ethno-nationalism which has the central place in Malaysia's state nationalist project.