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.