Liberalizing economic policies

Achmad Maulani, Contributor, Yogyakarta

Mendobrak Sentralisme Ekonomi: Indonesia 1986 - 1992 (Breaking through Economic Centralism: Indonesia 1986 - 1992); By Rizal Mallarangeng; KPG, Jakarta, 2002; xxv + 269 pp.

Economic liberalization is an old topic, but discussion on it has never ceased. A study on the policies of economic liberalization in Indonesia has usually come from the viewpoint of structuralism, in which the state is given a dominant role.

This book was originally a dissertation for a doctoral degree under the title of Liberalizing New Order Indonesia: Ideas, Epistemic Community and Economic Policy Change: 1986 to 1992.

In this book, Rizal Mallarangeng tries to describe how the process of the drawing up of political economic policies in Indonesia is more dynamic than what has always been perceived. In his opinion, although the political structure of the New Order was authoritarian, it was not monolithic. In this context, the role of ideas that stem from many elements also played a role in affecting the process of economic liberalization in Indonesia.

Mallarangeng can clearly map out the position of his approach in comparison with various other approaches, such as the theory of political coalition and economic interest, the theory of the state's autonomy and the theory of rational selection.

In his studies, he describes ideas as the biggest determinant in the determination and drawing up of public policies, particularly political and economic policies related to the process of liberalization.

In his opinion, he does not want to rely on structural factors, such as the logic of capitalism and the mobility of capital and global capitalism, to explain the changes of policies in political economic realms. However, he prefers to place intellectuals, writers, opinion shapers, activists and economists -- later termed liberal epistemists -- in a more determining position as agents that create a condition or give birth to pressure to generate policy changes (p. 32).

Mallarangeng's attempt to describe ideas as the main determinant that plays the biggest role in the drawing up and changing of public policies in economic liberalization may be construed as an answer to the rigidity in some Marxist approaches that have fanatically stuck to structural determinism.

His choice of the conclusion that the role of ideas as supported by liberal epistemists constitutes the main determinant in determining public policies in the area of political economic liberalization is something fundamental.

This is so because he sees that "the community of liberal epistemists" is a network of individuals that cross the borders of states, communities and social classes, the members of which can be found at government offices, universities, the mass media and also in policy research institutions. It is through this community that various ideas of economic liberalization are transmitted through the print and electronic media, seminars, discussions and other public meetings.

In addition, ideas also work in all major institutions that are government institutions. It is in this perspective that Mallarangeng sees how economic liberalization has taken place. It has come about not in a monolithic manner as is usually assumed.

This group has a common belief about the necessity and appropriateness of the application of liberal policies in Indonesia, and therefore it becomes a medium for the manifestation of liberal ideas into a policy.

In this respect, economic liberalization is more a step in economic policies to move away from the system of centralism, an idea dominant in developing countries from the 1950s to the 1970s, and toward a pro-market policy. Centralism is the marriage between various ideas on the purposes of development in developing countries and the best way to reach them.

However, the source of intellectual inspiration for centralism is not homogeneous, such as a certain interpretation of economic theories starting from democratic socialism, the theory of dependency, the rational selection and so forth.

However, in Mallarangeng's vision, without the negation of this intellectual diversity, we can still see various unique ideas that could be called the basis for the rejection of centralism, which is the rejection of classical economics.

That's why the role of the network of a community of liberal epistemists has assumed great significance. Members of this community become the only group that plays a role in discrediting the orientation of policies bequeathed by the earlier regime, debating centralism and explaining to the community various fundamental economic problems as well as the solution of liberal policies.

In other words, it is not industrialists, capitalists, bankers or the middle class in general that come forward to defend a new solution to various problems arising then. Their places are taken by economists, intellectuals, writers and reporters (page 158).

One of the weaknesses in this study is that Mallarangeng does not give quite a convincing argument about why an idea can become the main determinant. Even if we can understand that a community of liberal epistemists has a different vision from the existing economic and political interests, and therefore they will not be just puppets played by the state, it does not mean that an idea becomes the main determinant.

A good book always contains a message that its analysis is not complete. This is what Chatib Basri says in the foreword to this book to describe how important this study is as the other side of Indonesia's economic liberalization, which has so far been little touched upon. Undeniably, this book has begun an exploration of new thoughts about the role of ideas in the policies of liberalization in Indonesia.

In the context of Indonesia at present, it seems that this book has become very important, especially in a political situation, in which, according to William Liddle, many people do not understand what is needed for economic recovery. It is here that the biggest contribution of this book lies.