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Indonesia has been the subject of hot economic discussion worldwide due to its economic rise as it has grown more than anyone expected, with an average of 6 percent GDP growth in the last few years.
This growth has put Indonesia not only as the only state representing Southeast Asia in the G-20, but also the third-fastest growing economy among G-20 member states after China and India.
This positive trend should not blind us to the fact that equality remains a core problem. In his lecture in Singapore early this month, Indonesian potential presidential candidate Prabowo Subianto revealed that only 0.17 percent of Indonesia’s population controls 45 percent of GDP. For this reason, we should “return to the state” as it is its responsibility to deal with this problem.
But what kind of “state” is Indonesia?
According to Stephen Krasner, the state can be regarded as bureaucratic apparatus. A strong foundation of economic development is in fact required for a capable bureaucratic apparatus to put the state’s goals ahead of individual goals.
However, look at the reality: We have little confidence in Indonesia’s bureaucracy given the fact that 17 out of 33 governors are either in jail or under investigation for corruption.
Moreover, Transparency International ranked Indonesia 126th out of 180 countries in its 2008 global corruption index, up from 143rd in the previous year. The improvement is not sufficient for a country with such a rapid economic growth.
Peter B Evans’ book Predatory, Development, and other Apparatuses: A comparative Political Economy Perspective on the Third World State (1989) compared political economic development in the third world. He divides states into three categories according to the way in which the bureaucracy within each government affects state development.
The first category is the predatory state, such as Zaire, now the Democratic Republic of Congo. The predatory situation is characterized by preoccupation of the political class within the system of government which thus turns the rest of society into prey.
Weak internal organization within the government, combined with strong external ties between individuals and the market, produces an incoherent absolutist domination of private elites that prevents the state from developing.
Evans believed that “klepto patrimonalism” has characterized this kind of state, a state plagued by corruption and nepotism.
The second category is a development state like Japan. A good system of bureaucracy allows the Japanese to enjoy a miracle of economic development. In this case, the state is characterized by embedded autonomy, which gives the state independence to formulate its goals, which can also be regarded as public goals.
In this case, the society counts on and trusts in the bureaucracy as the apparatuses perceive the state’s goals as more important than their own careers.
The last category made up of intermediate states such as Brazil. This category is a combination of Zaire’s “klepto patrimonalism” and Japan’s embedded autonomy, where the autonomy is only partial.
The question is which category does Indonesia belong to?
If we want to emulate Japan and join the ranks of development states, we should learn from what the Japanese have done. In this regard, Evans’ comparison of these states leads to some important conclusions.
First, he believed that an effective state bureaucracy is characterized by embedded autonomy as happened in Japan. Ineffective bureaucracy will create a combination of undisciplined internal structures and external ties that are ruled by private elites, and in which corruption is inevitable.
Second, Evans also stressed the importance to minimize the state by reducing the resources allocated to bureaucracy, because bureaucratic apparatuses are considered predatory.
In Indonesia’s current situation, it is obvious that predators are everywhere. They can be corrupt bureaucratic apparatuses or private elites who benefit from the system. As long as an effective government cannot be achieved, the predators will always control Indonesia’s outstanding economic growth. The rich become richer and the poor, in turn, become poorer.
Therefore, it is mandatory to first build a strong and clean state control the main drivers of Indonesia’s economy such as coal, mining and energy sectors with the hope that the state can distribute the wealth more equally to the poor. Secondly, full support for the Corruption Eradication Commission is crucial for whoever will lead Indonesia in 2014 and beyond. Third, there is a pressing need to trim the fat from the bureaucracy in order to shape an effective government.
Last but not least, Chalmers Johnson, president and co-founder of the Japan Policy Research Institute, argued that Japan utilized new capital for industrialization through its Ministry of International Trade and Industry (MITI). MITI’s role was to maximize induced decision-making, as Johnson put it, which meant it was in a central position to regulate, guide, and synchronize policies involving government-private sector relationships.
The central government needs to create a “hero” in the bureaucracy, like MITI, that has the capability to control and synchronize all economic-related matters.
All of these efforts will hopefully further Indonesia’s quest not only to become a proud nation of G-20 with high economic growth, but also to become a real development state with equal distribution of wealth to all citizens.
The writer is studying Asian Studies at S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore.