Introduction

Summary

A short historical overview of Indonesia's economy since independence — Essays

This book contains a collection of papers on various aspects of Indonesia's economy and its industrial development since the early 1950s. This date is chosen because Indonesia only achieved effective sovereignty over the whole territory of the former Netherlands Indies, with the exception of Papua, after the official recognition of Indonesia's independence by the Netherlands government on 27 December 1949, even though on 17 August 1945 Sukarno and Hatta had officially proclaimed Indonesia's independence.

The Netherlands recognition of Indonesia's independence was only achieved after a bloody armed struggle by Indonesian freedom fighters against the returning Dutch army in late 1945. This armed struggle lasted until the delegations of the two contending parties (the Indonesian revolutionary government and the Netherlands government) under the auspices of the United Nations Commission on Indonesia (UNCI) at the Round Table Conference in The Hague in the autumn of 1949 agreed on the transfer of sovereignty from the Netherlands government to the government of the United States of Indonesia (Republik Indonesia Serikat, RIS) on 27 December 1949.

The Netherlands transfer of sovereignty to the federal Republic of the United States of Indonesia (RIS) was particularly galling to the revolutionary Republic of Indonesia based in Yogyakarta which had waged the armed struggle against the Dutch army. The reason was that it was forced to share power with 15 puppet states set up by the Dutch as a counterweight to the Republic. However, this federal structure proved to be fragile, as in the following months the puppet states one by one disbanded themselves to join the Republic. At the celebration of independence day on 17 August 1950, President Sukarno was able to proclaim the restoration of the unitary state of the Republic of Indonesia (Negara Kesatuan Republik Indonesia, NKRI).

Outline of the book

This book does not provide a thematic account of Indonesia's modern economic history, as contained in Anne Booth's pioneering book The Indonesian Economy in the Nineteenth and Twentieth Centuries: A History of Missed Opportunities(1998) or the chronological account provided in the book The Emergence of a National Economy: An Economic History of Indonesia, 1800–2000, written by Howard Dick, Vincent Houben, J. Thomas Lindblad and Thee Kian Wie (2002).