In memoriam: Prof. Arndt, a great friend to Indonesia

In memoriam: Prof. Arndt, a great friend to Indonesia

Thee Kian Wie, Economic Historian, Economic Research Center,
Indonesian Institute of Sciences (P2E-LIPI), Jakarta,
theekw@cbn.net.id

On Monday morning, May 6, 2002, Heinz Arndt, one of
Australia's most eminent economists and Emeritus Professor of
Economics at The Australian National University (ANU) in
Canberra, died in a car accident on the campus where he had
worked for more than 50 years.

Born in Germany in 1915, Arndt's family left for England in
1933 after Hitler's rise to power.

Having completed high school in Germany, Arndt was able to
enroll on a course in Philosophy, Politics and Economics at
Oxford University where he obtained his Master's degree in 1942.

Arndt then worked as a research assistant, first at the London
School of Economics (LSE) and then at Chatham House (Royal
Institute of International Affairs) where he received his first
solid training in economics by writing a draft report for the
Committee on Postwar Economic Reconstruction on the economic
lessons of the 1930s.

This report was later published as Arndt's first book,The
Economic Lessons of the 1930s, and was used as a textbook on the
economic history of the interwar period at LSE.

Arndt subsequently took up a job as Assistant Lecturer in
Economics at the University of Manchester, before moving to
Australia in 1946 where he got a job as Senior Lecturer at Sydney
University, teaching macroeconomics.

In 1950, Arndt moved to Canberra where, on Jan. 1, 1951, he
took up the post of Professor of Economics at the Canberra
University College (which later became part of ANU).

In 1963, Arndt was invited to become the first Head and
Professor at the Department of Economics of the newly established
Research School of Pacific Studies (later renamed the Research
School of Pacific and Asian Studies) of ANU.

While Arndt's academic work during his first two decades in
Australia was mainly concerned with macroeconomic issues in
developed economies, particularly the Australian economy, his new
commission at the Economics Department of the Research School of
Pacific Studies led Arndt to focus on the economic problems of
developing countries, particularly Southeast Asia.

This focus led Arndt to embark on a new research project, the
Indonesia Project, to study the economy of Indonesia.

Despite the misgivings of many colleagues about the
feasibility and desirability of conducting research in a country,
which was at the time extremely hostile to the West, including
Australia, and which, moreover, was experiencing a severe
economic crisis, Arndt decided to push ahead.

To this end he recruited a few Australian and Indonesian
economists (the late David Penny, Kenneth Thomas and the late
Panglaykim) and two research assistants (first Lance Castles and
a few years later Boediono, currently Indonesia's Minister of
Finance).

Most of the output of this research was published in a journal
that Arndt founded and edited for its first 18 years, namely the
Bulletin of Indonesian Economic Studies (BIES), which was to
appear three times a year.

An exploratory visit to Indonesia, facilitated by Sir Keith
Shann, then Australian ambassador to Indonesia, during which
Arndt was able to establish contacts with various universities in
Java, Sumatra and Sulawesi, strengthened Arndt's confidence that
his planned research on the Indonesian economy was not only
important, but also feasible.

He very much enjoyed his first visit to Indonesia and found
the Indonesians he met very friendly, despite the Indonesian
government's hostile policy toward the West.

It was during this first visit that Arndt got acquainted with
and subsequently made lasting friendships with Indonesia's
leading economists -- Widjojo Nitisastro, M. Sadli, Ali Wardhana,
Emil Salim and Subroto (who together became known as the
'Berkeley Mafia' in the New Order government), Suhadi
Mangkusuwondo, Rachmat Saleh, Sarbini Sumawinata and Panglaykim.

Prospects for the Indonesia Project improved considerably
after the advent of the New Order government.

With its emphasis on economic recovery and development,
research on the Indonesian economy became more feasible and more
worthwhile.

In addition, the initial contacts that Arndt had made with
leading economists in Jakarta and other places became invaluable,
as many of these figures later became prominent policy-makers in
the new government.

The more favorable opportunities for conducting research on
the Indonesian economy greatly benefited ANU's Indonesia Project,
as they enabled Arndt to send more staff members to conduct field
research in Indonesia.

Arndt was also able to recruit a number of highly qualified
Ph.D. students to conduct pioneering research on various aspects
of the Indonesian economy, such as Peter McCawley's study on the
electricity industry, Anne Booth's study on the Ipeda Land Tax,
Howard Dick's study on the inter-island shipping industry, Hal
Hill's study on choice of technique in the weaving industry and
Chris Manning's study on wage differentials and labor market
segmentation in the manufacturing sector.

Like Arndt, these young economists kept a lifelong research
interest in and love for Indonesia, and over time became eminent
experts themselves on the Indonesian economy.

Through their continuing work on Indonesia, often in
cooperation with Indonesian colleagues, they further expanded and
strengthened their strong bonds with Indonesian scholars, which
has persisted, despite the volatile political relations between
Australia and Indonesia.

The better opportunities to conduct field research in
Indonesia and the greater availability of statistical data also
benefited BIES as it gained in analytical depth, scope,
circulation and stature.

Without doubt, the BIES is now the only internationally
recognized journal on the Indonesian economy.

From the outset, Arndt was determined the Indonesia Project
should not only benefit Indonesian economic studies in Australia,
but also the economics profession in Indonesia.

To this end Arndt invited, over the years, several Indonesian
economists to work for a specified period at ANU's Indonesia
Project to enable them to interact with their ANU colleagues.

As the New Order government grew more repressive and corrupt,
Arndt was sometimes criticized by some Australian and Indonesian
intellectuals for his overly positive judgment of the
achievements of the New Order, while overlooking the seamy side
of the regime.

It was only after the onset of the Asian economic crisis and
the subsequent fall of Soeharto that Arndt recognized his
judgment of the New Order had indeed been too optimistic.

However, Arndt's kindness and generosity, strong commitment to
promoting mutually fruitful working relationships and deep
empathy with Indonesia earned Arndt a lot of friends and admirers
in Indonesia.

Like Arndt's admirers all over the world, his many friends in
Indonesia are deeply saddened by his passing away.