I - Introduction

Summary

Indonesia's tumultuous political development and dramatic changes in its economic fortunes since its independence have been studied and interpreted by many scholars. Rarely, however, have their accounts been described through the eyes of the major policy-makers, senior government officials and actors. Personal accounts of these persons have, with a few exceptions, also been rare. Yet their accounts could offer interesting information and insights about the events that took place and the challenges and opportunities facing them at the time.

This volume, presenting in-depth interviews with a number of former economic policy-makers and senior government officials and private businessmen, is an attempt to fill this lacuna. The interviews were conducted by members of the Editorial Board of the Bulletin of Indonesian Economic Studies (BIES) over the period 1986–97. These interviews, most of them published under the title “Recollections of My Career” in BIES, can enhance our knowledge and understanding of Indonesia's modern economic history.

To have a better appreciation of their accounts, a short review is presented of the major economic challenges which policy-makers faced both during the early independence period and the Soeharto (New Order) era. To highlight several aspects of this review, observations of the persons interviewed on the problems they encountered will be interwoven into this account.

THE EARLY INDEPENDENCE AND THE LATE SUKARNO ERA (1950–65)

Economic Conditions in the Early 1950s

When the Indonesian Government on 27 December 1949 assumed effective control over the main territory of the former Netherlands Indies following the official transfer of sovereignty from the Netherlands to Indonesia, the country faced serious problems. The Japanese occupation and the ensuing armed struggle against the Dutch had greatly impoverished the Indonesian people. The government also faced armed insurrections in certain regions, including Aceh, West Java, South Sulawesi and the Moluccas, which it was able to suppress but at a considerable cost in lives and money.