'Sjafruddin's ideas are still relevant'<\/p>\n
JAKARTA (JP): The thought of the late Sjafruddin
\nPrawiranegara, a leading figure of modern Indonesian history,
\nremains relevant today, a seminar heard over the weekend.<\/p>\n
Dawam Rahardjo, director of the post-graduate program of the
\nMuhammadiyah University in Malang, East Java, told a seminar here
\non Saturday that, although Sjafruddin's thought was very
\ncontroversial in the 1950s, it is still relevant to economic
\npolicy under the New Order.<\/p>\n
Sjafruddin, who graduated from the law school of the
\nUniversity of Indonesia in 1929, was minister of finance between
\n1949 and 1951 and was the first governor of the central bank,
\nBank Indonesia, between 1951 and 1957.<\/p>\n
In 1948, when the provisional Indonesian capital of Yogyakarta
\nwas captured by the Dutch colonial troops and Indonesian leaders
\nwere arrested and exiled, Sjafruddin set up an emergency
\ngovernment in Bukittinggi, West Sumatra, to lead the nation's
\nguerrilla forces.<\/p>\n
As finance minister in the cabinet of Mohammad Hatta in 1950,
\nSjafruddin reorganized the Indonesian monetary system. His
\ndecision to cut the value of the rupiah by 50 percent sent shock
\nwaves through the young nation.<\/p>\n
According to Dawam, Sjafruddin's ideas were similar to those
\nof the so-called \"Berkeley Mafia,\" President Soeharto's first
\nteam of economists, which was led by Dr. Widjojo Nitisastro.<\/p>\n
As the group's pet name suggests, many members of the team
\nwere graduates of the University of California in Berkeley.<\/p>\n
Dawam told the seminar, which was sponsored by the Al Azhar
\nIslamic Youth Study Club, that \"if Sjafruddin were alive today,
\nhe would have supported the recent government policy of
\nderegulation and privatization and would be very enthusiastic
\nabout the trend towards globalization.\"<\/p>\n
Sjafruddin had spoken about globalization at the time of
\nglasnost and perestroika, in the former Soviet Union, and had
\npredicted that communism would be replaced by \"the market
\neconomic system,\" Dawam said.<\/p>\n
Sjafruddin disagreed with the policy of providing protection
\nand subsidies to state-owned companies, he added.<\/p>\n
\"According to Sjafruddin, if state-owned companies could not
\noperate like private ones, they should be managed by the private
\nones,\" he said.<\/p>\n
Dawam said that Sjafruddin had emphasized that the basis of
\neconomic growth was monetary stability.<\/p>\n
\"As governor of Bank Indonesia, he perceived that its main
\ntask was to keep the inflation rate as low as possible and
\nmaintained a strong rupiah exchange rate.\"<\/p>\n
According to Dawam, Sjafruddin opposed deficit spending and
\npushed the idea of a balanced budget. His ideas were similar to
\nthe policies of the New Order government many years later.<\/p>\n
Sjafruddin preferred foreign investment to foreign borrowing
\nas it put the risk on foreign companies.<\/p>\n
Dawam said that, in some policies, Sjafruddin clashed with Dr.
\nSumitro Djojohadikusmo, minister of trade and industry in
\nMohammad Natsir's cabinet.<\/p>\n
The two men were involved at one stage in a newspaper debate
\nabout economic policy, including questions of inflation and
\nagricultural and industrial development.<\/p>\n
\"The debate was so excellent and historical,\" Dawam said,
\nadding that Sumitro had recently told him that he had valued
\nSjafruddin's opinions.<\/p>\n
\"Sjafruddin was right in his concept then. It is impossible to
\nconduct industrialization without agricultural development as its
\nbase,\" Dawam quoted Sumitro as saying.<\/p>\n
The New Order government later implemented an
\nindustrialization program together with an agricultural
\ndevelopment, Dawam said.<\/p>\n
\"The latter was the priority,\" he added.<\/p>\n
Sjafruddin emphasized agricultural development as a means of
\nachieving two national targets: rice self-sufficiency and the
\nrehabilitation of cash crop plantations in order to increase
\nexports and foreign exchange earnings.<\/p>\n
Sjafruddin did not favor the nationalization of foreign
\ncompanies as a path to industrialization.<\/p>\n
As Bank Indonesia governor, Sjafruddin conducted a systematic
\ntransfer of knowledge from the Dutch to the Indonesian personnel
\nof the central bank, he said.<\/p>\n
\"By that time Sjafruddin had already come to realize that the
\nmain factor in Indonesian economic development was human
\nresources.\"<\/p>\n
Meanwhile, Sjahrir, a professor of economics at the University
\nof Indonesia's School of Economics and a managing director of an
\ninstitute for economic and financial research, told the seminar
\nthat Sjafruddin was opposed by his colleagues when he introduced
\nIndonesian banknotes to replace the Dutch currency.<\/p>\n
\"It was almost the same as the devaluation of the rupiah
\nagainst the U.S. dollar,\" Sjahrir said.<\/p>\n
He said that, already in the 1950s, Sjafruddin had talked
\nabout the role of Bank Indonesia as a commercial bank.<\/p>\n
Sjafruddin, who was born in 1911, died in 1989 and was buried
\nat a public cemetery in Jakarta.<\/p>\n
During president Sukarno's government he was arrested for
\nleading a revolutionary Indonesian government in Sumatra in the
\nlate 1950s and early 1960s, even though the government of the
\ntime had pardoned him and his colleagues.<\/p>\n
The revolutionary government in question, known in Indonesian
\nby the acronym PRRI, opposed Sukarno's left-leaning democratic
\npolicies. (05)<\/p>",
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