It is unfortunate that on occasion events unfold so rapidly as to make a choice of tenses anachronistic. The body of this thesis had been formulated long before the newspaper-reading public was greeted with headlines such as Indonesian Plan to Drop Democracy; More Power for Communists (Observer, February 17, 1957. Communists as Dr. Sukarno’s Allies; Political Confusion in Indonesia (Times, February 19, 1957). Much that seemed to need painful proof and demonstration at the time of writing is now – a few weeks before the time of reading – apparent.
However, it is in the nature of economic backwardness to endure amid volatile political changes. Indeed it would appear that the greater the political instability of a backward country the more we can be sure that the pace of its development bears little relation to the need for it. A study of the economics of immobilisme might be thus reasonably long-lived.
The following is an attempt at such a study. It does not pretend to prescribe – that would require a great deal more first-hand knowledge and personal experience of the area. It merely attempts to trace the causes for Indonesia’s present backwardness, the factors tending to perpetuate economic stagnation and the difficulties attendant on development along given, proposed lines. Thus, in Chapter I the factors limiting the supply of capital and skills in the different sectors of the economy – peasant, industrial, foreign, trade etc. – are reviewed. Chapter II analyses the causes for the lack of effective demand for capital and skills while Chapter III describes the population problems and the social and political insecurities to which the absence of economic progress gives rise. It is only after the basic features of the economy have been thus described through an analysis of its weaknesses that we proceed to a more detailed analysis of the methods suggested for initiating economic growth.
Methods for creating savings and mobilising capital out of current income and the problems associated therewith are considered in Chapter IV. There follows a chapter which deals with the problem of saving out of increasing incomes. Here we are especially interested to see whether Indonesia can derive any object lessons from either Japanese or Russian experience.
Chapter VI finally leads us to the theoretical consideration of a generalised balanced growth model of development; its implications, whether they have been realised in Indonesia (committed as she is to Balanced Growth) and indeed whether these implications are, in the context of a backward economy, as unambiguous as they might seem.
Chapter VII sums up the whole by showing what the prerequisites for balanced growth are and the consequences of unbalanced growth.
It will be seen that the approach is neither purely practical and descriptive nor purely theoretical and analytical. It is rather a synthesis of the two as befits the state of the branch of economics that deals with the underdeveloped countries. Nor is there any attempt to define terms for the sake of mere terminological purity. The precision of our language reflects the nature of the phenomena under discussion. Thus as we progress from the more or less descriptive first chapters to the more or less theoretical final chapters, the terms used become progressively more rigorous and formal in their connotations.
This text is the slightly abridged Preface (pp. 1–2) of Mike Kidron’s unpublished thesis:
Kidron, Michael. 1957. Problems and patterns of development in overpopulated backward countries with special reference to Indonesia. M.Litt. University of Oxford, Faculty of Social Studies, Balliol College, 289pp.
Last updated on 10 April 2020