Liberalizing economic policies

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.