Institutions, culture and economy

Institutions, culture and economy

It is saddening to read the letter of Mirna Mutiara Govt must
protect all communities in The Jakarta Post of Aug. 24 in which
it is written that Indonesians of Chinese descent who are
oppressed are victims, instead of as a result of something and
that every effect has a cause.

And it is further suggested that the government, to protect both
Indonesians of Chinese descent and indigenous people, should
institute policies of having organizational structure with 50:50
ratio of indigenous and Chinese-Indonesian in business or whatever
organization involving the welfare of the community.

These sort of suggestions are very retrogressive and lack
merit. Just look what has happened to the Indonesian economy
after so many affirmative-action economic policies in the past,
and especially the rural economy more than four decades after
hundreds of thousands of well-integrated Indonesians of Chinese
descent were uprooted from their rural homes by Government
Regulation No. 10 of 1959.

Arguably, our Indonesian rural economy would be much better
off today with the ethnic Chinese there and, arguably, these
ethnic Chinese are the essential missing link between our urban
and rural economies.

Remember that the ethnic Chinese here in Indonesia are totally
powerless. Although they have adapted to many discriminatory
policies and have at times prospered, they are still essentially
outsiders as shown by the cases in the book by Chirot/Reid.

It would be more enlightening if Mirna would read the book and
papers by Professor Yoshihara Kunio of Kyoto University,
especially on the topic of institutions, culture and economic
growth, in which he propounds and elaborates on how institutions,
including both formal ones like the rule of law, and informal
ones like customs and culture, or the utility functions of
average people, such as savings, learning, the work-leisure
trade-off, risk taking and conceptions of what is right and wrong
and the responses to these, have influenced the economic growth
and wealth accumulation of people.

Mirna has drawn the wrong causal relationship here.

SIA KA-MOU, Jakarta