BOOK REVIEWS

The modern Indonesian economy, as readers of BIES will be acutely aware, is a curious beast: neither capitalist nor planned; once verging on Asian Tiger status, now rather moth-eaten; neither properly recovering from the 1997 crisis nor collapsing. This book does an excellent job of making sense of this beast. Starting at the turn of the 19th century, though with forays back as far as Srivijaya and Mataram, it traces the gradual emergence of an Indonesian economy out of a combination of indigenous, colonial and global economic factors. A crucial element in this emergence, it is argued, were the efforts made by colonial and Indonesian governments to re-direct Outer Islands trade from Singapore and Penang to Jakarta: to make trade flow uphill, as Dick puts it. A national economy, the authors argue, although emerging from the 1930s onwards, was not fully established until the Soeharto era, and then at least in part because of the capacity of the Soeharto government to enforce its policy decisions. But it is the quality of government as well as its strength that is important. Here Thee’s point that ‘good governance’—once, he says, ‘something dismissed by economists as irrelevant’ (p. 241)—is of major signifiHoward Dick, Vincent J.H. Houben, J. Thomas Lindblad and Thee Kian Wie (2002), The Emergence of a National Economy: An Economic History of Indonesia, 1800–2000, ASAA Southeast Asia Publications Series, Asian Studies Association of Australia, in association with Allen & Unwin, Sydney, and University of Hawai’i Press, Honolulu, pp. xvii + 286. Paper: A$35.00; Cloth: US$38.00.