Last night the third and final Ramadhan discussion was led by two Indonesian economists who discussed their recollections of the Indonesian economy under Suharto (they’re both really old). That’s right up my (TP) alley, of course. Thee Kian Wie is a famous economic historian and commentator with a Ph.D. from the University of Wisconsin, and Mohammad Sadli was a member of the famous “Berkeley Mafia” who had Ph.D.s from, yes, Berkeley and tried to advise Suharto from 1966 to 1998.
Despite the failings of Suharto’s New Order regime, we find it amazing to have the chance to talk to them. What immediately strikes you from the conversation is that, far from the normal view of third-world policy makers as hapless and inefficient, these two know their economics. They knew what they were doing, they knew what the implications of policy choices were, and they knew that Suharto’s corrupt regime was unsustainable. But how do you tell Suharto that? Furthermore, you get a glimpse of the true miracle that Indonesia is. Without forgetting the excesses of the New Order, its contradictions, its human rights abuses, and its total lack of participatory democracy, it is an empirical fact that Indonesia in 1965 was an absolute mess, and out of the whole world only China experienced more economic growth between 1966 and 1998. According to Pak Thee, “you youngsters have every right to criticize the regime, and should, but to forget what Suharto inherited is idiotic.”
We are going to attempt to go to Bandung this weekend. It’s either the third or fourth largest city in Indonesia, and is the capital of West Java, the province which surrounds Jakarta. It has a reputation as a university town, and also is the home to the textile industry. This might mean good deals on export-quality clothes. Look at the tag on your shirt: it probably says “Made in Indonesia.”
tompepinsky.com 
Josh October 29, 2004
Oh snap, my sweater was made in Singapore and the t-shirt under it is from Honduras. Don’t you ever get tired of being wrong, Thomas?
Re: Suharto and the economic development of Indonesia over his thirty years — is there a way in which you would be willing to ‘calculate’ whether a dictator was ‘worth it’? Is there a line where the economic reforms he imposes on the country end enough hunger and deprivation that the people he jails and kills to do it are offset? Or is there no line — liberal democracy or nothing?
Tom October 31, 2004
Fark, and my shirt was made in Bangladesh, and Julie’s was made in India. Maybe we have no idea what we’re talking about. I must be your dumbest friend.
Just hold on a second. You’re wearing a sweater? Ha.
Your question is interesting. I, unlike every policy maker you ever meet (on either side), will tell you the truth: I don’t know. Then again, you probably came to that conclusion yourself. Liberal democracies that suck at economic performance tend to get replaced by dictatorships anyway, so it’s more likely that both regime type and economic development cause one another. One famous book these days is called “Democracy and Development,” by Adam Przeworski, Michael Alvarez, Jose Cheibub, and Fernando Limongi. It’s worth a read. It concludes that democracy is neither good or bad for economic development as compared to dictatorships, and that the reason why most rich countries are democracies is not because dictatorships are bad, but only because rich democracies never get overthrown by dictatorships. Very very interesting.