Wed, 31 Aug 1994

Sumitro launches a new book

Perkembangan Pemikiran Ekonomi: Dasar Teori Ekonomi Pertumbuhan dan Ekonomi Pembangunan. By Sumitro Djojohadikusumo Publisher: LP3ES, 422 pages, 1994.

JAKARTA (JP): Indonesia's most senior and respected economist, 77-year old Sumitro Djojohadikusumo, is known as an outspoken analyst. He does not mince words when a particular situation or development requires him to prescribe caution.

But Sumitro deserves one more superlative term: the most productive writer of economics papers and books in Indonesia.

He just came out with a new book entitled Perkembangan Pemikiran Ekonomi: Dasar Teori Ekonomi Pertumbuhan dan Ekonomi Pembangunan( The Evolution of Economic Thoughts: Theoretical Premises of Growth Economics and Development Economics).

What makes the 422-page book much more interesting and broader in scope than simply a textbook is that it offers an unusual blend of theories, practices, historical perspectives and analyses in a societal framework and even prescribes major policy recommendations.

That combination makes the book highly valuable for students and everybody else interested in the paradigms of development economics and growth economics and how those thoughts were reflected in Indonesia's economic development over the past 25 years and how they will influence the next 25 years.

The ideas that formed development economics emerged in the 1940s and commanded both great intellectual excitement and prestige while attracting creative minds in the 1950s. But, as Sumitro asserts in his introduction, there has not been any general theory on development economics.

There have indeed been extensive works on the economics of developing countries-- since after all, development economics emphasizes the economics of underdevelopment. But though some of the problems studied or identified are essentially generic to all countries, there are many issues uniquely characteristic of poorer countries.

Sumitro himself discussed the thoughts on development economics in his Ekonomi Pembangunan (Development Economics) book which was published in 1950. His new book thus revisits development economics, pinpointing new thoughts nurtured by development theorists.

Quick journey

The first four chapters of the book provide a quick journey back to classical theories on economic evolution and various theoretical approaches to development economics.

These chapters feature almost all the noted development theorists and synthesize the paradigms that contributed to development economics and growth economics. Just to mention several of them: Roy F. Harrod and Evsey D. Domar, Nicholas- Kaldor, Simon Kuznets, Robert M.Solow, Rosenstein-Rodan with his Big-Push theory, Albert Hirschman,

Obviously all the theories and paradigms can not be covered with sufficient analytical clarity, so chapter two on growth theories is supplemented with an appendix featuring the Harrod, Domar, Solow and Kaldor-style growth models.

The theoretical approaches to development economics are analyzed against Indonesian economic development during the 1969- 1993 period, usually called the First Phase of Long-Term Development in chapter five. This chapter provides an in depth profile of the process, problems, achievements and challenges of Indonesian economic development. It is rich with tables on key economic indicators and is therefore a highly valuable reference.

What makes this chapter even more interesting is that it also projects the main challenges or agenda of economic development during the next 25 years (Second Phase of Long-Term Development) and provides policy recommendations which, according to Sumitro, are essential to achieve the targets.

This chapter once again amplifies Sumitro's great concern, expressed on various occasions through speeches or papers, with the factors of high cost economy, structural disparities and imbalances with regard to resource endowment, allocation of productive resources, the distribution of wealth and income and the prevailing institutional framework.

The discussion of development economics is made even more cohesive and coherent in the last four chapters by the analyses on human resources, science and technology, natural resources and the impact of development on the environment.

Sumitro humbly states in his introduction that the book was designed to be a basic guideline to help students and others gain deeper insight into the thoughts underlying the approaches to the problems of growth and development.

That is quite an understatement.

The book is so complete with economic thought, practices and policy recommendations that it could strongly influence the next generation of Indonesian economists.

Sumitro refuses to be called an architect of Indonesian economic policy despite his several tenures in the cabinet and his widely quoted analysis of economic issues.

He claims, though, to carry some of the building materials for the country's economic policy architects. His new book, I think, could become another building block for the architects of Indonesian economic development.

-- Vincent Lingga