National development and using social capital

By Aleksius Jemadu

BANDUNG (JP): Over the last three decades the Indonesian government has been focusing on economic development. Several traditional policy instruments like taxation, raising export revenues, and foreign debt have been employed. Very rarely, if ever, do we stop to think about the necessity of social capital in our national development.

But social capital is just as essential as economic capital. Social capital can be understood as "shared understanding and mutual trust" in any collective action such as developing the economy of a nation.

The notion of social capital was first used by Elinor Ostrom in her 1994 book, Neither Market Nor State: Governance of Common- pool Resources in the Twenty-first Century. Ostrom argued that many policy failures in development undertakings emanated from an overcentralization of control which tended to impose policy prescriptions upon all social members.

In her illustrations Ostrom made special reference to the rapid depletion of natural resources in many developing countries. Ostrom would have asked why centralization of control over Indonesian forest resources has not put an end to their rapid depletion.

In Francis Fukuyama's most recent book, Trust: The Social Virtues and the Creation of Prosperity, he develops a thesis which regards social capital as an essential precondition for economic prosperity. Fukuyama argues that the economic advancement of industrial nations such as the United States, Germany, and Japan is closely related to the extensive presence of social capital in their respective societies. There is much evidence of mutual trust between the government and the governed, between the government and business people, and among business people themselves.

In reflection we have to admit that mutual trust is quite lacking in our society. When Salim Group recently sold 50.1 percent of Indofood shares to a Singapore-based public company, suspicion was so strong that several ministers had to make a statement to restore public trust.

The relationship between the government and businesspeople is built on shaky ground. Business professionalism seems to be a secondary requirement to build a sustainable link with the ruling power. Politically well-connected businesspeople with less professionalism can perform a lot "better" than those who purely rely on legal and professional requirements.

In politics there are ample examples of incidents which show that mutual trust is lacking between the government and the people. Worst still is when the government occasionally gives conflicting statements regarding a critical issue. When political violence broke out throughout the country some time ago the government promised to announce the "intellectual actor" behind the unrest. But people are still waiting for the announcement.

Timely fulfillment of promises could strengthen mutual trust. The same applies to promises made during the election campaign to combat corruption and collusion.

There are also questions regarding the urgency of the government-sponsored legislative crash courses. Even though the government has explained the purpose of the upgrade there is still temptation to wonder how effective such an undertaking is in empowering the legislative body.

Skepticism is based on the fact that legislative members' weak position has less to do with their level of understanding about the constitution and state ideology than their fear of being recalled once they try to criticize executive policies.

On top of that, a democratic government can only be established if there is a strong commitment on the executive side to allow other branches of government to function independently.

Seeds of suspicion among different social and political groups in society could emerge from a corporatist strategy made by the ruling power. Through this strategy the government would provide a certain political group a monopoly of political representation at the expense of the others. From a realist perspective such a strategy could be effective in causing various political groups in society to seek favor and protection from a political leader. However, by nurturing political envy among different groups, such a strategy could hinder the establishment of social capital in our political development.

In theory, the more a executive power defends its hegemonic role in policy-making processes the more difficult it is to produce social capital in national development. In other words, overcentralization of political power can be counterproductive in the creation of social capital. The government cannot demand the participation of private groups in development undertakings without some sort of power sharing.

It is often argued that a good government is an interactive government. In essence, this is a government which would recognize interdependence and mutual trust between government and society in general.

There is an increasing demand that the government develop a more pluralistic strategy for guiding social and economic development by which diverse actors and structures in state and society interact in pursuit of development goals.

Economic capital alone may never lead to a prosperous future. Social capital is just as essential.

The writer is a lecturer at the School of Social and Political Sciences at the Catholic University of Parahyangan, Bandung.