Hostname: page-component-586b7cd67f-t7czq Total loading time: 0 Render date: 2024-11-25T06:04:24.577Z Has data issue: false hasContentIssue false

I. The Colonial Legacy and its Impact on Post-Independence Planning in India and Indonesia*

Published online by Cambridge University Press:  22 April 2010

Anne Booth
Affiliation:
Australian National University, Canberra

Extract

India and the island world of Southeast Asia were in close cultural andcommercial contact for many centuries before both came under the influence, and ultimately the domination, of the European colonial powers. In spite ofthe fact that the Indian subcontinent and the Indonesian archipelago were the chief colonial possessions of two of the most advanced and wealthiest countries in West Europe, both emerged into independence in the aftermath of the second world war as extremely poor, technologically backward countries.But in both countries an indigenous political leadership had assumed power, which was determined to accelerate the pace of economic progress, and achieve a high level of development, in the shortest possible time. It is thus interesting to make a pairwise comparison of these two countries, both in respect of the colonial legacy they inherited, and in respect of their post-independence economic policy-making, in order to indicate the specific contributions of two different colonial systems to subsequent economic policy efforts and achievements. We begin with a brief discussion of the economic legacy bequeathed by the two colonial powers to independent India and Indonesia.

Type
Articles
Copyright
Copyright © Research Institute for History, Leiden University 1986

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Notes

1 Heston, A., ‘National Income’, Cambridge Economic History of India vol. 2(1983)276462Google Scholar.

2 Ibidem, Table 4 5

3 Polak, J J, The National Income of the Netherlands Indies, 1921-39 (New York 1943)Google Scholar, reprinted in P. Creutzberg ed., Changing Economy m Indonesia vol. 5 (The Hague).

4 Ibidem, Table 16 4.

5 Leff, N., ‘A Technique for Estimating Income Trends from Currency Data, and an Application to Nineteenth Century Brazils’, Review of Income and Wealth 18, 4 (1972) 355369Google ScholarLaanen, Jan van, ‘Per Capita Income Growth Indonesia, 1850-1940’, (Paper presented to the Conference on Economic Growth and Social Change in Indonesia 1820-1940, Groningen, September 1984)Google Scholar.

6 Visaria, Leela and Pravin, ‘Population(1757-1947)’, Cambridge Economic History of India vol. 2(1983) 463532, Table 5 8Google Scholar

7 Nitisastro, Widjojo, Population Trends in Indonesia (Ithaca 1971) Table 1Google Scholar

8 A rather higher population growth rate figure is derived if the results of the Raffies's population count are used as the base. However most historians would now argue that the Raffies's estimate was too low, and that the growth rates calculated from it are thus too high.

9 Migration, both inwards and outwards, had a very important impact on population growth in particular regions of Indonesia, as indeed it did on some parts of India. But it cannot be said to have had much impact on population growth for either country as a whole.

10 Visaria and Visaria, 'Population', Table 5 11

11 Widjojo Nitisastro, Population Trends m Indonesia, Table 22

12 Visaria and Visaria, ‘Population’, 502

13 Blyn, George, Agricultural Trends in India, 1891-1947: Output, Availability and Productivity(Philadelphia 1966) 102Heston, ‘National Income’, Table 4 6CrossRefGoogle Scholar

14 Scheltema, A M P A., The Food Consumption of the Native Inhabitants of Java and Madura (Batavia 1936) Table 2Google Scholar

15 Polak, The National Income of the Netherlands Indies, Table 16 7

16 Tergast, G C W., ‘Indonesig's InheemseLandbouw’, Indonesia 5 (1951) 76Google Scholar.

17 Heston, ‘National Income’, Table 4 6

18 Tergast, ‘Indonesie's Inheemse Landbouw’, 75–76.

19 Anne Booth, ‘Exports and Growth in the Colonial Economy: 1830-1940’, (Paper presented to the Conference on Economic Growth and Social Change in Indonesia 1820-1940, Groningen, 09 1984) Table 7 2Google Scholar

20 A seminal discussion oflabour absorption in Asian agriculture, contrasting Northeast Asian and South and Southeast Asian evidence, is given in Shigeru Ishikawa, Essays on Technology, Employment. and Institutions in Economic Development (Tokyo 1981) Chapter 1. See also Anne Booth and R M Sundrum, Labour Absorption in Agriculture (Delhi 1984) Chapters 1 and 4

21 Morris, Morris D., ‘The Growth of Large-Scale Industry to 1947’, Cambridge Economic History of India vol. 2(1983)553676Google Scholar.

22 Kidron, Michael, Foreign Investments in India (London 1965) 13Google Scholar.

23 Ray, Rajat K., Industrialization in India (Delhi 1979) 16 Morris, ‘The Growth of Large-Scale Industry', Table 7 10Google ScholarPubMed

24 Sitsen, Peter H.W., Industrial Development ofthe Netherlands Indies (Batavia 1941)60Google Scholar.

25 Ibidem G M. van Eeghen, ‘The Beginnings of Industrialisation in Netherlands India’, Far Eastern Survey VI, 12 (1937) Jan Boeke, Economics and Economic Policy of Dual Societies and Exemplified by Indonesia (Haarlem 1953) Chapter 23.

26 Barber, Alvin, ‘Six Years of Economic Planning in Netherlands India’, Far Eastern SurveyVIII, 17(1939)200Google Scholar.

27 Oorschot, H J. van, De ontwikkeling van de Nijverheid in Indonesia (The Hague/Bandung 1956)93Google Scholar.

28 Kidron, Foreign Investments in India, 10-11.

29 Booth, Anne, ‘The Evolution of Fiscal Policy and the Role of Government in the Colonial Economy’, (Paper presented to the Conference on Indonesian Economic History in the Dutch Colonial Period, Australian National University, 12 1983) Table 8Google Scholar

30 Boeke, Economics and Economic Policy of Dual Societies, Chapter 23

31 Barber, ‘Six Years of Economic Planning’

32 Boeke, Economics and Economic Policy of Dual Societies, Chapter 20

33 Chaudhuri, K N., ‘Foreign Trade and Balance of Payments (1757-1947)’, Cambridge Economic History ofIndia vol. 2(1983)869Google Scholar.

34 Bousquet, G H, A French View of the Netherlands Indies (London 1940) 5152Google Scholar.

35 Bardhan, Pranab, The Political Economy of Development in India (Oxford 1984)37Google Scholar.

36 Hanson, A.H., The Process of Planning: A Study of India's Five-Year Plans, 1950-64 (London 1966)38Google Scholar.

37 Booth, ‘Exports and Growth’, Figure 1

38 The export data for British India, taken from Chaudhuri, ‘Foreign Trade and Balance of Payments’, Table 10 7 D, include Burma. As exports from Burma were substantial, the ratio for the rest of British India would have been rather lower.

39 Polak, The National Income of the Netherlands Indies, Table 16 4

40 Once again, allowance has to be made for the inclusion of exports from Burma in the Indian total. Indeed, once Burma has been excluded, it is probable that India had little or no export surplus in the inter-war years.

41 Balance of Payments data for Indonesia for 1925-39 are given in Polak, The National Income of the Netherlands Indies.

42 Thee, Kian-Wie, Plantation Agriculture and Export Growth: An Economic History of East Sumatra, 1863-1942(Jakana 1977)57Google Scholar

43 Callis, HelmutG., Foreign Capital m Southeast Asia (New York 1942) 2639Google Scholar.

44 Angus Maddison, ‘The Dutch Share of GDP and the Dutch Impact on Indonesian Development, 1820-1940’, (Paper presented to the Conference on Economic Growth and Social Change in Indonesia 1820-1940, Groningen, September 1984) 5

45 Ibidem, Tables 3 and 5

46 The Indian figures are taken from Mukerji, S N, History of Education in India (Baroda 1966)Google Scholar Table 4, and the Indonesian from Wai, S L. van der, Het Onderwijsbeleid in Nederlands-Indie, 1900-40 (Groningen 1963)691700Google Scholar

47 Furnivall, J.S., ColonialPolicy andPractice(Cambridge 1948)10Google Scholar

48 Maddison, Angus, Class Structure and Economic Growth: India and Pakistan since the Moghuls(London 1971)69Google Scholar

49 Sivasubramonian, S., National Income of India, 1900-10 to 1946-7 (Ph D. Dissertation, Delhi School of Economics 1965) 338 Heston, ‘National Income’, 399Google Scholar

50 Kidron, Foreign Investments in India, 21 Kumar, Dharma, ‘The Fiscal System’, Cambridge Economic History of India vol 2 (1983) 926Google Scholar

51 Vaidyanathan, A., ‘The Indian Economy since Independence’, Cambridge Economic History of India vol 2(1983)948Google Scholar

52 Kahm, GeorgeM., Nationalism and Revolution in Indonesia (Ithaca 1952)443Google Scholar

53 Thompson, Virginia, ‘Aspects of Planning in Indonesia’, Pacific Affairs 20 (1947) 178183Google Scholar

54 A detailed discussion of the influence of Marxist ideas and the Soviet experience with economic planning on Nehru in the 1930s is given in Gopal, Sarvepalli, Jawaharlal Nehru A Biography vol 2 (Delhi 1979) 245248Google Scholar According to Gopal, Nehru believed that India had much to learn from the Soviet example, but could persuade neither Gandhi nor the right wing of Congress of this

55 See eg Castles, Lance, ‘Socialism and Private Business The Latest Phase’, Bulletin of Indonesian Economic Studies 1(1965) 13Google Scholar

56 Higgins, Benjamin H., ‘Jan Boeke and the Doctrine of the Little Push’, Bulletin of Indonesian Economic Studies XX, 3 (1984) 67Google Scholar

57 Paauw, Douglas S, ‘Economic Progress in Southeast Asia’, in Robert O. Tilman ed., Man, State and Society in Contemporary Southeast Asia (London 1969) 560Google Scholar

58 Glassburner, Bruce, ‘Economic Policy-Making in Indonesia, 1950-57’ (1962),Google Scholar as reprinted in Bruce Glassburner, The Economy of Indonesia Selected Readings (Ithaca 1971) 94

59 Hanson, , The Process of Planning, 49Google Scholar

60 Frankel, Francine R., India's Political Economy, 1947-77 (Delhi 1978) 84Google Scholar

61 Hanson, , The Process of Planning, 452Google Scholar

62 Gopal, , Jawaharlal Nehru vol 2, 198Google Scholar

63 Ibidem, 200 Hanson, The Process of Planning, 460

64 Pauker, Guy J., ‘Indonesia's Eight-year Development Plan’, Pacific Affairs XXIV, 2 (1961)118Google Scholar

65 Mackie, J A C., ‘The Indonesian Economy, 1950-63’ (1964),Google Scholar reprinted in Glassburner, The Economy of Indonesia, 44

66 For a discussion of recent contributions to the Ekonomi Pancasila literature, see Liddle, R. William, ‘The Politics of Ekonomi Pancasila’, Bulletin of Indonesian Economic Studies XVIII, 1 (1982) 96101Google Scholar and Cawley, Peter Me, ‘The Economics of Ekonomi Pancasila’, Bulletin of Indonesian Economic Studies XVIII, 1 (1982) 102109Google Scholar A recent contribution to the literature by an Indonesian economist is Mubyarto, , ‘Social and Economic Justice’, Bulletin of Indonesian Economic Studies XX, 3 (1984) 3654Google Scholar

67 Bardhan, , The Political Economy of Development in India, 38Google Scholar

68 Balusubramanayam, V N., ‘Factor Proportions and Productive Efficiency of Foreign Owned Firms in the Indonesian Manufacturing Sector’, Bulletin of Indonesian Economic Studies XX, 3 (1984) 7094, Table 1Google ScholarBardhan, , The Political Economy of Development in India, Table 13Google Scholar

69 Djojohadikusumo, Sumitro, Persoalan Ekonomi di Indonesia (Jakarta 1953) 280281Google Scholar

70 For a full discussion of the five and eight-year plans, see Paauw, Douglas S., ‘From Colonial to Guided Economy’, in McVey, Ruth ed., Indonesia (New Haven 1963) 214231Google Scholar also Pond, D H., ‘Development Investment in Indonesia, 1956-63’, Malaysian Economic Review IX, 2 (1964) 92105Google Scholar and Mackie, , ‘The Indonesian Economy’, 4853Google Scholar

71 Pauker, , ‘Indonesia's Eight-year Development Plan’, 119Google Scholar

72 Pond, , ‘Development Investment in Indonesia’, 96Google Scholar

73 Ibidem, Pauker, ‘Indonesia's Eight-year Development Plan’, 122ff, Paauw, ‘From Colonial to Guided Economy’, 222ff

74 Sundrum, R M., ‘Money Supply and Prices a Reinterpretation’, Bulletin of Indonesian Economic Studies IX, 3 (1973) 7386CrossRefGoogle Scholar

75 Foreign aid accounted for 100 per cent of budgetory development expenditures in the 1968 budget, the proportion only fell below 50 per cent after 1973

76 Bardhan, , The Political Economy oj Development in India, 38Google Scholar

77 Glassburner, Bruce, ‘Problems of Economic Policy in Indonesia, 1950-7’, Ekonomi Dan Keuangan Indonesia 13 (1960) 311Google Scholar

78 Paauw, , ‘From Colonial to Guided Economy’, 215216Google Scholar

79 Prawiranegara, Sjafruddin, ‘The Causes of our Falling Production’, in Feith, H. and Castles, Lance eds., Indonesian Political Thinking, 1945-65 (Ithaca 1953)386Google Scholar

80 Glassburner, , ‘Economic Policy-Making in Indonesia’, 82Google Scholar

81 Pauker, , ‘Indonesia's Eight-year Development Plan’, 118Google Scholar

82 Mackie, , ‘The Indonesian Economy’, 45Google Scholar

83 Jha, L K, Economic Strategy for the 80s (New Delhi 1980)6Google Scholar

84 For a more detailed discussion of the nature of the links between government and the private sector in the context of New Order Indonesia, see in particular Robison, Richard, ‘Toward a Class Analysis of the Indonesian Military Bureaucratic State’, Indonesia 25 (1978) 1739CrossRefGoogle Scholar

85 Johnson, Chalmers, MITI and the Japanese Miracle (Stanford 1982) 18Google Scholar

86 Ibidem, 315–316

87 Hanson, , The Process of Planning, 290Google Scholar

88 Maddison, , Class Structure and Economic Growth, 99Google Scholar

89 Although many students of post-colonial Indonesia have tended to stress the enormous growth of the civil service (see eg Emmerson, Donald K., ‘The Bureaucracy in Political Context Weakness in Strength’, in Jackson, Karl D. and Pye, Lucian W. eds., Political Power and Communications in Indonesia (Berkeley 1978) 87),Google Scholar the available evidence would indicate that the ratio of civil servants to total population in Indonesia in 1968 was rather less than the average for LDC as a group, and about the same as for India (rather over two per hundred inhabitants)

90 Mackie, , ‘The Indonesian Economy’, 23Google Scholar

91 Ishikawa, , ‘Essays on Technology, Employment and Institutions’, 280Google Scholar

92 Hayami, Yujiro, ‘Agrarian Problems of India from an East and Southeast Asian Perspective’, Economic and Political Weekly 16, 16 (1981) 234Google Scholar

93 Ishikawa, , ‘Essays on Technology, Employment and Institutions’, 278Google Scholar

94 Golay, Frank H, ‘Southeast Asia The ‘Colonial Drain’ Revisited’, in Cowan, C D and Wolters, O W eds., Southeast Asian History and Historiography (Ithaca 1976) Table 2Google Scholar

95 Johnson, , MITI and the Japanese Miracle, VIIIGoogle Scholar