the technocratic model of modernization: the case of ... · military regime with a progressive...

THE TECHNOCRATIC MODEL OF MODERNIZATION: THE CASE OF INDONESIA'S NEW ORDER

John James MacDougall

IN INDONESIA's NEW ORDER, economists-technocrats, as non-party, professionally-trained experts, have replaced politicians in policy making posts, most visibly as members of a team of academics that moved into government posts laterally, from the University of Indonesia (U. of I.). In a bureaucratic state, these technocrats have functioned as policy innovators, as courtiers of foreign investment, and as relatively systematic administrators. They have provided a repressive military regime with a progressive civilian image and initiated their military patrons into the mysteries of their science. In this paper, the views on modernization that the economists bring to their important tasks and impart to the military and to the nation are presented.

Prior to 1966 and their recruitment to high public positions, the team of professor-economists borrowed time from academic pursuits to serve on the Staff of the Army Command and General Staff School (SESKOAD) and of other military institutions in order to introduce their ideas to would-be military professionals of their new political generation. At SESKOAD, according to interviewers for a study in 1969-1970 by this writer, the youthful team successfully inserted its views on economic development into the curriculum, persuaded its peers in the military that national security depended on economic progress and helped write a new Army Doctrine reflecting its views.' In 1966, when General (President) Suharto and Sultan (Vice President) Hamengkubuwono suddenly replaced a regime headed by aging civilian populists contending with political and economic crises, they were per- sonally untrained in the science of economics. Needing such knowledge, they enlisted the expertise of the academic team that had, for years, been developing its ideas and imparting them at key military institu-

I Guy Pauker, "The Indonesian Doctrine of Territorial Warfare and Terri- torial Management," Menora-nildurm RM 3312 PR (Santa Monica, Cal.: The Rand Corporation, 1963), pp. V, VII, 3, 28. The role of the economists at SESKOD and the substance and functions of the new Army doctrine are discussed.

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INDONESIA'S TECHNOCRATIC MODEL 1167

tions. Discreetly, the team assumed posts on General Suharto's personal staff in 1966 and swiftly provided a New Economic Policy that has served as the fundamental article of the operational constitution of the New Order.

As presidential counselors, the educator-economists not only introduced a practical governmental strategy based on the quest for economic development, but simultaneously educated General Suharto in their science and initiated a "campaign of public education in economic affairs through a barrage of newspapers and magazine articles, public speeches and interviews."2 Benefiting by such tutelage, their prize student, General Suharto, converted to their views and became "so influenced by what he has come to believe is the right economic policy" that his dedication to economic development became an "ob- session."3 In 1970, a key member of the university team interviewed by the writer reflected on his mission in government and emphasized its educational character.

Our goal is to convey ideas and new rules of the game, to introduce the "dos" and "donts" of public policy and to educate the public at large. To get the New Economic Policy carried out by the machinery of government, we have to educate members of the administrative sector and of the private business sector, too.... It is the understanding of the economic policy among the elite that is crucial and somehow, we must communicate it.

To reveal the understanding of modernization of the economists of the New Order, the writer in 1969-1970 interviewed a sample of them, including members of the U. of I. team and other high and middle ranking colleagues in and out of government and in and out of Jakarta.4 The economists were asked to comment on 18 questions

2 J.A.C. Mackie, "Civil-Military Relations, 1971, Indonesian Elections," Aus- tralian Outlook, December 1970, 29:3, p. 251. Also see Bruce Glassburner, ed., The Economy of Indonesia, Selected Readings (Ithaca, N.Y.: Cornell University Press, 1971), p. 411.

3Alfian, "Suharto and the Question of Political Stability," Pacific Community, 1:3, April 1971, pp. 538-540.

4 Lacking reliable lists of economists from which to select an, accurate sample of New Order professionals and interested in selecting economists somewhat familiar with the experience of the leading economists of the U. of I. and the New Order, the author employed a "snowball" method of selecting his population of inter- viewees. Initially, an economist of the U. of I. faculty was interviewed, informed of the purposes of the study, and asked to name several or more colleagues who represented one or more groups of New Order economists. The researcher interviewed the individuals named and asked them to recommend additional such economists. This process continued, mainly in Jakarta, but also with trips to Jogjakarta and Bandung. Interviewing was halted when respondents named individuals from offices, faculties or small groups, one or more of whose leading members had already been interviewed. The sample includes 60 economists from the high and middle positions in government, academia, business, journalism, as well as several economists active in politics. It is biased toward higher-ranking economists located in Jakarta.

For a detailed examination of the origins of progress of the New Order Tech- nocrats, see John James MacDougall, "Technocrats as Modernizers. The Economists of Indonesia's New Order" (Unpublished Ph.D. dissertation, University of Michigan, 1975).

1168 JOHN JAMES MACDOUGALL

on modernization.6 Regarding presentation of the economists' views on this subject, they appear to fit under four general propositions: (1) modernization is rooted in practical, economic progress; (2) modernization involves a direct challenge to impractical, traditional values; (3) modernization involves the state's (and not the political parties' or business groups') promotion of the public interest (interest of all the people); and (4) modernization involves the state's clear expression of practical priorities for guiding society.6

In order to relate the private views of New Order economists to the public statements and policies implemented by the regime, each of the above propositions includes under it the following descriptive materials: first, the private views of the economists on modernization; second, relevant public policy expressions by General Suharto; and third, relevant policy implementations by the New Order. Taken to- gether, the four general propositions with their descriptive materials may be said to constitute a coherent, practical and authoritarian ideology or model of modernization that defines somewhat abstractly major aspects of the Indonesian case.7 The technocratic model of modernization, as a highly functional strategy of government, borne into an appropriate crisis by a mission-minded team of technocrats and imposed by the military and supported by its beneficiaries, may recommend itself to like-minded and organized elites confronting similar crises.

Proposition I. Modernization is Rooted in Practical Economic Progress

Relative to this proposition are the comments of the economists on the following questions. What is modernization? What are some

5 Warren F. Ilchman and Alice S. Ilchman and Philip K. Hastings, The NAew Men of Knowledge and the Developing Nations' Planners and the Polity. Studies in Comparative Administration (University of California, Berkeley: Institute of Gov- ernmental Studies), June 1, 1968. The questions were derived after preliminary interviews in Jakarata and are based on those employed in the Ilchman study. The questions were semi-structured, that is, placed without specific direction by the interviewer with the respondents allowed to comment at will. When a respondent concluded comment on one question, however, he was asked another. Detailed notes were transcribed during and/or following each interview. The notes on each question were typed on completion of field research, and their contents analyzed. The contents of each response were organized by themes. All topics mentioned on each item and falling under common themes were so organized. The themes are presented in teams the same as or synonymous with those employed by the respondents.

6 S. N. Eisenstadt, "Breakdowns of Modernization," in Jason L. Finkle and Richard W. Gable, eds., Political Development and Social Change (New York: John Wiley and Sons, Inc., 1966), pp. 573-591.

7 Clifford Geertz, "Ideology as a Cultural System," in David Apter, ed., Ideology and Discontent (New York: The Free Press, 1964), pp. 47-76. The economists views on modernization may be said to establish an overall frame of reference which provides a structure for giving meaning to human behavior. As an ideology, their views provide a world view, suggest means to attain a given end, and provide a map of existing social forces and how they might be manipulated. The functions of an ideology are discussed by Geertz.


indicators of modernization? On what basis should the government allocate its resources? What is an irrational public expenditure?

TABLE 1: What is Modernization? Response Themes Number of Respondents (60)

a. Rational thinking and/or value change accompanied by economic development and the adaption of new technology 54

b. Economic development and the application of new techniques 5

c. Emancipation-economic, cultural, and political 1

All but one of the economists represented modernization as rooted in material progress or economic development rather than in political change. Over 90% of those who discussed modernization as rooted in material progress associated such material change with practical improvements in the mental and/or cultural spheres. For example, a majority (70%) of the respondents who represented modernization as practical progress expected that it would be accompanied by the mental enlightenment of its beneficiaries. The minds of the materially "mod- ernized" are expected to become: modern, scientific rational, technical, efficient, calculating, problem-solving, commercial, realistic, and less emotional. Only five economists limited the impact of economically- based modernization to the economic-sector-i.e., described it as a process affecting only economic productivity and not mental or cultural attitudes. Only one economist, a political party activist, represented modernization as a politically liberating process rooted in political as well as economic development.

What are some indicators of modernization? In mentioning over 250 such indicators falling in four general categories, the respondents again portrayed modernization as a process based on practical-material progress accompanied by intellectual-cultural improvements. All respondents mentioned material indicators of modernization: 53 respondents mentioned improved "productivity" or roughly synonymous terms; 18 mentioned "improved material welfare." There were 51 mentions of intellectual indicators: 23 mentioned "less dependence on irrational (economically impractical) beliefs" and 28 mentioned "new (more practical) education." There were 69 mentions of cultural indicators: 24 mentioned the "replacement of traditional (unspecified) values"; 24 mentioned "adaptiveness to new ways/technologies"; 18 mentioned the "replacement of traditional status values"; and 13 mentioned "new modes (more open, tolerant, instrumental) of communication." Only two respondents volunteered such political indicators of modernization as "wider political freedoms." Only eight mentioned such social indicators as a fairer distribution of national income.


What is an irrational public expenditure? Each respondent who offered an example of such spending, equated the term irrational with such terms as impractical or economically-unproductive and cited examples from various public sectors. Of these examples of irrationality, 32 were in the field of general administration and included unneces- sary construction of public buildings, waste in administering the agricultural program, extravagant kickbacks, etc. Sixteen were from the military sector and included conspicuous consumption, corruption, and extravagant overstaffing. Six were from the political sector and included spending on Parliament, spending on foreign policy conferences, and spending on "rubber-stamp" elections. The respondents also cited similar irrational spending in the religious (corruption at the Ministry of Religion) sector and in the social (spending for National Sports Conferences, etc.) sector.

In defining modernization, the economists demonstrated a passion for the practical solution by representing modernization as a materially- based process rooted in economic development and accompanied by the mental and/or cultural transformation of its beneficiaries. The economists represented modernization as a practical educative experience that would produce more practical men of economic reason and productive values.

General Suharto, in terms compatible with but different from those of the economists, publicly represented practical New Order policies as born in crisis and rooted more in the sober realities of material scarcity than intoxicating dreams of political plenty.8 Lacking the political charisma of his magnetic predecessor, Suharto linked his regime's emphasis on economic priorities to the catastrophic economic legacy of impractical politicians and attributed his unprecedented pursuit of foreign investment to the primal need for economic survival.9 Gloomily focussing on the "bitter facts of economic collapse and in a spirit of economic determinism, Suharto concluded publicly that "under such economic considerations, we have not much choice," for the "government is compelled" by such practical realities to emphasize practical priorities. Directing politicians to recognize "frankly" that "capabilities are very limited" and that expectations must be "modest,"

8 Suharto, "Excerpt from Acting President Suharto's State of the Nation Address of August 16, 1967," Focus on Indonesia (Washington, D.C.: Indonesian Embassy), September 1967, pp. 5-12. In this speech, General Suharto indicates that the nation's economic plight left the government no choice other than to accommodate to existing realities and to court foreign capital investment for purposes of national survival.

9 Report by President Suharto to the People of Indonesia at the Close of 1968 (Dept. of Information, Republic of Indonesia, English Language, December 31, 1968), pp. 15, 21-22. Also see Suharto, Independence Day Speech (Dept. of Informa- tion, Republic of Indonesia, August 16, 1969), p. 19, and Suharto, Text of President Suharto's Januaiy 7 Budget Speech (Washington, D.C.: Joint Publications Research Service [JPRS], Commerce Dept., January 23, 1974), pp. 5, 9-10.


he described the emphasis on economic priorities as the only realistic policy option for his regime.'0

Less dismally, Suharto pointed out that a governing strategy rooted in economic desperation and aimed at economic prosperity served gratifying political functions since the new Economic Plan provided the "guidelines" for the nation and the "framework for communication and cooperation" between the leaders and people.11 Economic success also legitimated the regime at home by electing the "faith of the people in government." Overseas, it legitimated the regime by eliciting the confidence and investment capital of foreign agencies.12 Suharto also employed the promise of economic progress to justify the attraction of foreign material investors and the repression of domestic political opponents.'3 In his view, material progress functions as a goal for political reform, for it is expected not only to help unify and stabilize a divided and uncertain polity but also to free the masses from domina- tion by religious-political provocateurs by relieving the economic misery that supports their appeals.14

To implement an economically-based strategy of modernization, New Order policymakers shelved whatever political inhibitions they shared with their intensely nationalistic predecessors regarding en- tanglement in established international political arrangements in order to extract the foreign materials on which their strategy depended. To extract material support from established powers, the regime rejoined international economic and other agencies, returned foreign enterprises seized earlier from foreign investors, and halted costly political conflicts with their neighbors. With their curtailment of costly foreign policies and their introduction of revenue-saving domestic policies, the politically accommodating modernizers began to accumulate the materials needed for economic modernization. Permitted by international creditors to reschedule their debts on generous terms, the economic modernizers extracted over $4 billion in foreign aid between 1966 and 1973 and received $2.6 billion in approved and/or realized foreign investment capital.'5 New Order leaders, inheriting petroleum reserves that had been relatively protected from foreign exploiters by their less

10 Ibid. 11 Suharto, Close of 1968, pp. 14-16. Also see January 7 Budget Speech, 1974,

pp. 3, 33. 12 Ibid. Also see Independence Day 1969, p. 40, and Inauguration of Parliament,

October 28, 1971 (Washington, D.C.: Dept. of Commerce, JPRS, November 16, 1971), p. 5.

13 Suharto, Close of 1968, p. 15. 14 Ibid., p. 5. Also see Suharto, "President Suharto's Interview with Asian

Correspondents," (Washington, D.C.: Embassy of Indonesia), Indonesian News and Views, April 1, 1969, p. 3, and Harvey Stockwin, "Suharto Reviews Indonesia's Needs," Washington Post, March 14, 1973, p. A24.

15 Editors, "Total of Foreign and Domestic Capital Investments," JPRS, no. 444, December 27, 1973.


practical and more "political" predecessors, warmly welcomed foreign exploitation of their petroleum and other resources and benefited greatly by higher domestic production and higher domestic and world prices. Between 1968 and 1974, gross earnings from this material legacy soared from $235 million to an estimated $4.5 billion.16 This income financed national development.

While the practical modernizers accommodated internationally to established economic-political arrangements in order to extract needed material resources, they accommodated domestically in the countryside to established economic-political (landholding) arrangements for much the same purpose, that is, to collect revenue. To protect their new resources, however, the economic modernizers were sometimes most unaccommodating. They refused to accommodate politically in the cities, for example, by refusing to continue costly subsidies established by their populist predecessors on behalf of favored and powerful political groups. The practical modernizers reduced state subsidies of some in- efficient and politicized public urban-based enterprises, reduced state subsidies of interest rates for politically influential and profiteering urban businessmen, reduced state subsidies of kerosene and transporta- tion prices for urban consumers and thereby harvested additional material resources for their modernizing task.17 Following such revenue earning innovations, the economic modernizers turned the declining economic tide and, after 1968, engineered a growth rate of about 7%.18

Proposition 11. Modernization Involves the Direct Challenge of Impractical Traditional Values

Relative to this proposition, the economists, all of whom represented modernization as rooted in economic development, commented on the following questions. What are the greatest obstacles to development? Who supports these obstacles? Do bureaucrats understand the needs of development? Are the people aware of and supportive of development?

The economists overwhelmingly cited unproductive or impractical traditional-cultural attitudes among elites and masses as principal obstacles to development. They were quite general in their attribution of such traditionalistic attitudes.

16 Anthony Gladstone, "Planning. Doubts on Repelita," Far Eastern Economic Review (FEER), March 25, 1974. Also see Leon Howell and Michael Morrow, "In- donesia, Looking for a New Deal," FEER, February 11, 1974, p. 35.

17 Inorid Palmer and Lance Castles, "The Textile Industry," in the Economly of Indonesia, p. 333. Also see J. Panglaykim and K. D. Thomas, "Indonesia Devel- opment Cabinet Problems and the Five Year Plan," Asian Survey, IX:4 (April 1969), p. 224; Roshian Anwar, "Dead End in Indonesian Politics," Pacific Community, No. 3, (April 1970), p. 404; and Sukadji Ranuwihardjo, "Industry," in Asia, 19 (Autumn 1970), p. 44.

18 Winarno Zain, "Value Systems and Economic Development in Indonesia," Pacific Comimunity, 4:2, (January 1973), p. 294.

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TABLE 3: Who Supports These Traditional Obstacles? Responses

All sectors but especially the Javanese and the rural Islamic teachers 38 Military and civilian elites 7 Bureaucrats 7 Rural masses 4

The economists described only a tiny minority of Indonesians as relatively free of impractical traditional attitudes. As volunteered by only three respondents, this minority included the "foreign educated," "about 10 percent of the highly-educated," and some "private entrepreneurs."

TABLE 4: Do Bureaucrats Understand the Needs of Development? Responses

No. Only the top 2 or 3 echelons do so. 33 No. Below the highest echelons, their patrimonial environment

is one in which they are excluded from responsibility 10) and are economically desperate. 23

No. They are dominated by status values and distrust, they refuse to delegate authority. 12

No. They are feudalistic and preoccupied by greed and desire for personal advance. 6

No. They are too politicized. 6 No. There are too many of them. The bureaucracy is over-

staffed. 1

81

In an intensely bureaucraticized polity, the respondents identified the entire bureaucracy, below the highest-paid echelons, as a stubborn bastion of counterproductive traditionalism. The respondents portrayed the bureaucratic elite, below the highest rank of relatively com- manding and well-paid decision makers, as locked in a discouraging material environment in which they were further demoralized by their exclusion from meaningful bureaucratic participation by the paternal- istic seniors on whom they depended.

The economists represented the Indonesian masses as enslaved by poverty. In a society of over 125 million, a majority of whom derive their living from agriculture, they portrayed the agrarian and other masses as locked in a traditional material environment that made them unaware and unsupportive of development.

TABLE 5: Are the People Aware of and Supportive of Development? Response

No, not really. 46 Not until they see results. 7 Generally, yes. 4 Who knows? 2

59


The economists, commenting on the masses lack of understanding or support for development, volunteered 68 mentions of descriptive attributes falling under the five following themes. They described the masses as: confined in a subsistence environment that allows them little freedom to respond to anything but the demands of survival (14); apa- thetic or indifferent (22); ignorant, uneducated, unaware (13); weary of promises and sacrifices (6); and waiting to experience concrete evi- dence of development (13). The economists depicted the traditional passivity of the agrarian masses in an agrarian society, and the traditional unproductivity of the vast majority of bureaucrats in a bureau- cratized society, primarily as a function of their traditional material deprivation.

Speaking publicly, General Suharto has appealed to traditional symbols of unity and harmony and called for the replacement of traditionalistic attributes that obstruct development. Suharto has called for the replacement of traditional men by more practical men and for new Indonesians who will bear the ethos and capabilities of the disciplined proletariat of industralized societies. Suharto publicly urges Indonesian workers to work hard, be frugal, have civic responsibility, be task-oriented, open-minded, self-confident, rational thinking, disciplined, and so forth.19 Suharto admonishes Indonesians to work for a new environment that will help workers achieve "total rectification in the mental field" and that will free them from such unproductive "old values" as "wasteful spending."20 New Order leaders publicly hope that traditional "get rich quick," "easy come, easy go" values will be replaced by more "objectively calculating and assessing" values by their creation of a material environment in which the rules of economic reason will be respected.21 New Order leaders, publicly representing new economic programs as educational opportunities to "learn by doing" and positively representing foreign investors as bearers of educative technologies portray material modernization every- where as the means for shedding traditional unproductive ways.22

To implement their detraditionalizing program for the masses, New Order modernizers allocated the largest portion (one-third) of the development budget in the first 5-year Plan to the traditional agricultural sector where most people derive their livelihoods, with profits in other sectors emphasized only in so far as they contributed to rural

19 Suharto, Close of 1968, p. 23. Also see Suharto, Independence Day 1969, pp. 2, 11-17; Inauguration of Parliament 1971, p. 6; and January 7 Budget Speech 1974, pp. 1, 4-5, 33.

20 Suharto, January 7 Budget Speech 1974, pp. 4-5. 21 Suharto, "President Explains Economic Situation," Focus on Indonesia, Vol.

1, No. 3 (Washington, D.C.: Embassy of Indonesia), July 1968. Also see Emil Salim, "Towards Economic Development," in Indonesian Economic Review, June 1968, p. 10.

22 Suharto, Close of 1968, p. 23. Also see Suharto, Inanguration of Parliament 1971, p. 6; Salim, "Towards Economic Development," Indonesian Economic Review (June 1968); Salim, "The Search for a Place in the Sun," Indonesian Economic Re- view (July 1968), p. 15; Salim, "Debt and Aid: Foreign Capital and Development," Indonesian Economic Review (October 1968).


development. In a massive, state-directed, rural production program- publicized as an on-the-job training project-state managers extended their modernizing activities in the countryside. To transform the traditional rural environment, they delivered new technologies in the form of seeds, fertilizers, insecticides, and credit extension services.23 Be- tween 1965 and 1973, these and other investments in the rural sector improved the material environment by helping to increase annual rice production from 8.1 to 14.8 million metric tons.

While the rural masses were directed into new state programs, Suharto ordered his bureaucrats "to guide and educate" them.24 In his patrimonial style, he warned politicians sternly against distracting rural producers busy at their new tasks by attempting to mobilize them.25 To break the traditional grip of local politicians on contending elements of the rural masses and to secure the expanding authority of the production-minded bureaucracy, General Suharto pulverized the power of regionally-based, political parties and created a centrist-bureaucratic party promoting economic modernization.26

To detraditionalize the urban bureaucratic elite, New Order modernizers also acted to improve their bureaucratic environments by creating new opportunities for material security and mental/cultural progress. In the New Order, bureaucrats were allocated with new and critical responsibilities for development, recruitment to their over- staffed ranks was halted,27 management training courses were introduced, and various procedures introduced (new economic syndicates, a new administrative ministry, new pilot projects, elimination of onerous exchange regulations, the return of unproductive public enterprises to foreign owners) to relieve them of some of their burdens. In a stabler economic environment, bureaucratic salaries were dramatically esca- lated in 1967, 1970, 1971, 1973, and 1974 and special incentive bonuses were provided for selected functionaries. As busy bureaucrats received new material benefits from the modernizing central government in a stabler economic-political climate, the grip of contending politicians on segments of the bureaucracy was also broken. Politicians were discouraged from recruiting bureaucrats to their parties and party leaders were removed from command of lucrative bureaucratic fiefs. After such depoliticizing and practical innovations, observers claimed that the

23 Suharto, Close of 1968, pp. 15-16. Also see Suharto, Indepeniden-ce Day 1969, pp. 22-23, and Stockwin, "Suharto Reviews," p. 3.

24 Suharto, January 7 Budget Speech, 1970, p. 13. Also see Suharto, Close of 1968, p. 18, and Suharto, Inauguration of Parliament 1971, p. 13.

25 Suharto, Inauguration of Parliament 1971, p. 13. 26 Dick Wilson, "Can Non-Ideological Maoism Work?" FEER, January 22, 1972,

p. 40. Also see Bob Hawkins, "Indonesia, The Golkar Dream," FEER, April 10, 1971, p. 15.

27 Benedict R.O.G. Anderson, "Indonesia's Uncertain Future," Current History, December 1969, p. 355.


bureaucracy was finally beginning to lose its "image as a faction-torn, party-ridden, ramshackle structure, incapable of action."28

Proposition Ill. Modernization Involves the States' Promotion of the Public Interest Rather Than Political Groups' Promotions of Their Vested Interests

Relative to this proposition are the comments of the economists on the following questions. What must be the chief agencies for overcoming obstacles to development? What are your priorities for development? Are you optimistic regarding development? What country will serve as a useful model for development? Are there groups that try to secure advantages for their members from the government? Is this good or bad for development? Do politicians understand the problems or needs of development?

TABLE 6: What Must be the Chief Agencies for Overcoming Obstacles to Development? Intellectuals? Businessmen? Lawyers? Farmers? Government? Foreign Aid? Or -?

Agencies Respondents

Government 44 Government experts with military support 6 Government and private education 5 Government military leaders 2 Private Businessmen 3

(60)

The economists, despite their expressed recognition of the weak- nesses of the state bureaucracy, overwhelmingly identified the state as the motor powering Indonesian development. They identified the state, rather than the private business sector or political parties, as the most likely institution, in an institution-weak land, for effectively col- lecting and rationally allocating available material resources on behalf of the public interest-that is, the interests of all the people. The economists described the state's advantages as both political and economic and as derived from the following characteristics: the traditional reverence of the people for the inherited authority of the state bureaucracy (10); the concentration in the state of such scarce organizational resources as communications structures, statistical data, plans and control mechanisms (6); the concentration in the state of the most enlightened (highest educated) human resources (5); the concentration in the state of scarce financial resources (2); the representation by the

I28 Hans W. Arndt, "Economic Prospects for the 1980's," Australian Outlook, 25:3 (Dec. 1971), p. 327. Also see Harvey Stockwin, "An Ability to Lead," FEER, April 2, 1973, p. 26.


state of the public interest (interests of all the people) in a traditionally divided and politicized society (2); and the persisting legitimacy of the state apparatus in a legitimacy-scarce political climate (1).

Regarding the role of the private business sector in development, only three economists described it as a likely agency for powering development, while 15 respondents voluntarily denied it much of a role primarily because of its extreme weakness. They rejected the private business sector as an entrepreneurial force because of its dependence on the state and described the private business sector as "weak," "not representing the public interest," "alien or Chinese-dominated," "lacking development programs," and "lacking the capital" needed to over- come obstacles to development.

When asked to name their personal priorities for advancing development, the economists overwhelmingly described the process as state-directed and in need of stronger and more enlightened (rational) state leaders and more effective state programs. When asked if they were optimistic regarding development, all but one of the 59 respondents on this question (46 optimists; 13 pessimists) linked their evalua- tions directly to their perceptions of state managers and activities. Most optimists found satisfaction in the assumption of high state responsibilities by the team of U. of I. economists and elements among their military supporters; most pessimists were discouraged by the per- sistence among state leaders of corruption and economically irrational thinking.

When questioned regarding foreign countries that might serve as useful developmental models, the economists who volunteered such models overwhelmingly cited countries in which the state, firmly led by economics-minded elites, played decisive roles. The four modernizing models most cited were Japan (24), Malaysia (8), Thailand (8), and South Korea (8).

Regarding the modernizing roles of such non-state agencies as private interest groups and political parties, the economists were largely scornful, primarily because of their perceived failure to represent the public interest or interests of all the people. To this point, the economists were asked, "Which groups try to secure advantages for their numbers from the government? Is this good or bad for development?" Most (44) economists described the impact of private interest groups (formal and informal) on development as subversive and counterproductive while 13 volunteered that such groups might eventually play a positive developmental role under conditions not yet applying in Indonesia. The respondents identified the disorganized and uncon- trolled operations of informal cliques as the most critical political- economic problem and named a host of such cliques in the public and private sectors. The economists described and/or criticized such cliques as ubiquitous (18), acting only according to traditional survival norms (18), serving particularistic rather than public interests (24), parasiti-


cally consuming scarce material resources (19), acting outside formal controls (16), serving the narrow interests of individual personalities (2), and extremely weak and disorganized (8).

In criticizing the activities of such informal and elite interest groups, the economists ruefully depicted their impoverished society as preyed upon by a self-serving national elite whose potential governing power was dissipated among hosts of feeble and unaccommodating cliques scrambling desperately and without regulation to secure contending personal and/or sectoral interests. While the economists portrayed the government as weakened by the relentless contention of such weak and warring factions, they described only three such groups as strong enough-by virtue of their possession of sufficient cohesion, material-military-intellectual or other resources, and accommodative skills-to act positively for modernization. The trio of more-or-less resourceful modernizing and accommodating groups included: (1) Gen- eral Suharto and his elite associates; (2) the economist-technocrats and their associates; and (3) the ethnic-Chinese entrepreneurs.

The economists were also asked, "Do politicians or party leaders understand the problems or needs of development?" Their responses were generally negative: No, very inadequately (27); perhaps super- ficially, but only a few (19); Yes, some party members understand development but are unable to act (13). In rejecting politicians as part- ners in development, the economists characterized them as grossly in- competent and lacking the four essential requirements of a modernizing elite: (1) they were economically irrational or did not base their actions on the rules of economic reason; (2) they acted according to unproductive traditional norms; (3) they failed to act decisively on behalf of the public interest; and (4) they lacked the practical programs to guide development.

The economists described the politicians as economically irrational and as lacking economic knowledge, scientific learning, expertise, and education (28). The economists described them as traditional in that they were ignorant, immature, and feudal in their attitudes (28). Five other economists described political parties as bastions of tradition in that they were so paternalistically structured that the elders of a pre- development age retained power and refused to make room for a new generation. The economists described politicians as failing to represent the public interest because of their dominance by particularistic (re- gional, religious, etc.) loyalties (18). According to several economists, it is illusory to expect party leaders of particularistically-organized followings, whose very survival in power depends on the support of such followers, to put the general interests of all (the public interest) before the particularistic interests of their supporters. The economists also denied politicians a leading role in development because of their lack of the practical economic programs needed to solve practical problems (7). Eight economists volunteered 11 mentions of the names of


four Indonesian parties that had sometimes been relatively supportive of development: Communist Party (3); Socialist Party (3); Christian Parties (4) and Masjumi Party (1). In summary, economists identified the state as the best available representative of the public interest and as the motor of development that must somehow be guided by the handful of relatively resourceful and accommodative groups of development-minded civilian and military technocrats.

General Suharto has also identified the state program of economic development with the public interest and has described traditional political conflicts as serving vested interests and as subverting the social cooperation and political stability essential for national economic development.29 In defending their modernizing state on behalf of social order and economic development, New Order leaders have crushed traditional political parties. They decimated the Communist Party, banned the Socialist and Masjumi parties, consolidated the remaining parties, appointed loyalists to key party posts, firmly managed labor and the press, and fashioned a state party staffed mainly by state functionaries and calling for development on behalf of the state's interest. To manage military rivals in various factions, Suharto successfully employed time-honored tactics to immobilize them and to replace them by loyalists.

Artfully blending "carrot and stick" tactics, General Suharto and his aides demobilized and then restructured the traditional political arena, and finally subjected it to the authority of state managers.30 In the depoliticizing and bureaucratizing process, they shaped the long divided Army into a "more unified and coherent body-than at any time in post revolutionary history" and gave the state apparatus an unprecedented image of capacity.31

Proposition IV. Modernization Involves the State's Clear Expression of Practical Priorities for Guiding Society

Relative to this proposition, the economists commented on the following questions. How will development happen here? Is development possible without planning?

In response to "How Will Development Happen Here?," all respondents revealed their familiarity with the guidelines or economic priorities of the government plan with its strategic emphasis on

29 Suharto, Inauguration of Parliament 1971, pp. 4-13. Also see Suharto, January 7 Budget Speech 1974, pp. 6-8. President Suharto concludes that "cause and effect in the political, economic and social stability sectors are strongly interrelated" and that "turbulence" in one sector gives rise to "turbulence" in another.

30 Nono A. Makarim, "Indonesia's Next Nationalism," Pacific Communtnity, 4:2, pp. 280, 284. Also see Allen Sampson, "Indonesia 1972. The Solidification of Military Control," Asian Survey, XIII:2, (February 1973), pp. 127-129. The authors describe current politics as the domain of New Order bureaucrats.

31 R. William Liddle, "Evolution From Above: National Leadership and Local Development in Indonesia," Journal of Asian Studies, 32:2, (February 1973), p. 294.


agricultural development. All but five respondents expressed agTeement with the centrally guided strategy. Of these five, three criticized the government's current production targets in the agricultural sector as too modest while two called for greater strategic emphasis on administrative and educational reform.

Over 90% of those who expressed agreement with the well- publicized guidelines of the government volunteered that the agricul- turally-oriented strategy served vital political, economic, and social functions. Politically, the economists described state allocations to the agricultural sector as likely to win quick political support from the largest number of Indonesian citizens (8), to incorporate the rural masses in the state's expanding administrative network (4), and to generate a reliable food supply for the politically volatile cities. Socially, 14 respondents explained that state allocations to the agricultural sector, where most Indonesians derive their livelihood, would bring the greatest good to the greatest number of citizens; two economists also explained that the state's delivery of new agricultural technologies would help to enlighten the masses. Economically, the respondents described a strategy emphasizing agricultural development as a prerequisite for industrial progress (22) and as a generator of state revenues, by relieving the state of the need to import foodstuffs and by increasing national exports and exchange earnings (12).

The primarily Western-educated economists were asked if Indo- nesian development were possible without planning. All but one economist denied such a possibility and described "indicative" central planning as essential, primarily because of its functional utility in an environment of extreme material scarcity and political instability.

The economists volunteered several critical functions of the economic plan. In relation to the problem of material scarcity, 11 respondents described the central planning mechanism as essential for the best application of scarce capital to maximum economic advantage. In relation to political-economic functions of the Plan, 11 economists volunteered that the plan serves as an instrument helping development- minded decision makers to protect scarce resources since it allows them to allocate them publicly, thereby protecting them from the private pilferage of corrupt predators. According to the economists, the Plan also acts as a guiding mechanism for it helps development-minded state administrators to "coordinate and target" material resources, to bring the best scientific (economic) reason to bear on the disposition of such capital (4) and to educate the public in the state's strategy, thereby guiding and educating them and perhaps eliciting their support.

In his speeches, General Suharto regularly refers to the guidelines of the Economic Plan and appears to place great confidence in the planning mechanism. Describing the plan as the unifying framework for national action, New Order leaders have regularly lectured the public on the goals of the plan and on the practical and interrelated


programs enacted to achieve them.32 Suharto has explicitly described the Plan as a functional, centrally-operated design for guiding administrators in all regions, as a "coordinating mechanism" linking bureaucrats in all sections and at all levels, and as an instrument for materially unifying "the central government and regions."33

Upon implementation, the state's Economic Plan has been recommended by Suharto as an instrument for measuring the performance of the New Order. He has recommended that various of its economic indicators serve as factual "yardsticks" for measuring the progress of his government.34 In his reports to the nation, Suharto represents the plan as a practical design for action and defends his regime in reference to such quantitative indicators of positive progress as the rate of de- flation, of production, of inflow of foreign investment, and so forth.

In summary, the economists of the New Order seem impressively agreed upon a coherent and materially-based modernizing strategy that is a highly functional ideology in that it allows them to enjoy and to order a whole view of a complex economic political system in crisis. Their model of modernization invokes four general themes: (1) reli- ance on material progress as a means of modifying counterproductive mental-cultural ways; (2) direct attacks on non-material, non-productive (traditionalistic) values by public persuasion, by practical inducement and by practical example; (3) management of modernization by a central state apparatus that consolidates its power and extends its influence by materially rewarding its more productive supporters and depriving and punishing its less productive (politicians, etc.) opponents; and (4) guidance according to a central plan framed and controlled by technocrats and serving as a practical instrument for measuring performance.

General Suharto, having progressed in a relatively modern profes- sion and assumed occupancy of a traditional throne, presides over a strategy of modernization that relies on modern economic means to achieve traditional political goals, the unification of a powerful and stable state. On behalf of these traditional and modern concerns, Suharto wields both the rhetorical cultural symbols of the past and the modern economic jargon of the future. Traditionally and as a ruling Sultan, the Javanese Suharto appeals to such culturally unifying symbols as Panca Sila, Consultation and Consensus and Harmony.35 Mod-

32 Soedjatmako, "Problems and Prospects for Development," Asia, 19 (Autumn 1970), p. 14.

33 Suharto, Budget Speech of January 7, 1974, pp. 13, 17. Also see Suharto, Close of 1968, pp. 3-26; Independence Day 1969, pp. 21-24; Inauguration of Parlia- ment 1971, p. 4; and Stockwin, "Suharto Reviews," p. A24. Suharto expressly represents the economy as a functionally integrated unit whose different parts or sectors, especially the traditional rural sector, will be incorporated into the national economy and coordinated by the central bureaucracy under the aegis of an economic plan.

34 Suharto, Close of 1968, p. 4. 35 Suharto, Independence Day 1969. In this brief speech, terms promoting

"unity" appear about fifty times. Throughout most Suharto speeches, the traditionally accepted themes such as harmony, consultation consensus and so forth, are sprinkled throughout.


ernistically and as a military professional, General Suharto calls for productive values and work habits and presides over modern economic programs designed to unify regions and classes of society by increasing material productivity and income.

The four interacting themes reflected in the private statements of the economists, in the public statements of their leader, and in the policies of the New Order may also be discerned in other past and present strategies of modernization in an age of economic progress following, as in Indonesia, a disruptive threat of political disruption and economic collapse.36 As stated above, the views of the economists function as an ideology. As a model of modernization, it has been described as an optimal form of politics so long as it is able to satisfy the economic requirements of its participants and so long as "it occurs along with considerable coercion in connection with the achievement of modernization goals."37

36 Barrington Moore, Jr., Social Origins of Dictatorship and Democracy. Lord and Peasant in the Making of the Modern World. (Boston: Beacon Press, 1967). Also see David E. Apter, The Politics of Modernization (Chicago: The University of Chicago Press, 1965); Philippe C. Schmitter, Interest Conflict and Political Chonge in Brazil (Stanford, Calif.: Stanford University Press, 1971); James M. Malloy, "Peril Before and After the 1968 Coup," Journal of Inter-A merican, Studies anld World Affairs, 14:4 (November, 1972); and A.F.K. Organski, The Stages of Political De- velopsment (New York: Alfred A. Knopf, 1965).

These four themes, or a reasonable facsimile thereof, may be discerned in such differently labelled but similar modernizing models as Moore's "Asian Fascism," Apter's "neomercantilism," Schmitter's "corporatist authoritarian regimes," and Malloy's "national corporatist regimes." Organski and Apter point out that such economically-oriented regimes often emerge following a period of political tumult.

37Apter, Politics of AModernization, p. 411.

JOHN JAMES MACDOUGALL is Assistant Professor of Political Science at the University of Alabama, Huntsville.

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