The center-periphery problem

By S. Belen

JAKARTA (JP): Immanuel Wallerstein's theory about the main characteristics of gap-related problems between the center and the periphery also applies to the relationship among islands in Indonesia.

The main characteristics of gap-related problems, as discussed by A. Wisnuhardana in his "Social gaps: A ticking time bomb" article in this newspaper on Oct. 25, include the flows of capital and technology from the periphery to the center and the large-scale exploitation of natural and human resources mostly in the periphery. These problems often cause the widening gaps between the center and the periphery as well as between a small group of economic elite and the larger part of the population.

Wisnuhardana's article focused on the relationship between central and peripheral capitalist states, with advanced western countries acting as the center and developing regions as the periphery.

Within the Indonesian context, Java, during the Dutch colonial period, played a role as the center and the other islands as the periphery. Trade and business concentrated in Java, while the other islands supported it. On a larger scale, Indonesia, together with other colonized territories, supported and served the Netherlands, which acted as the center.

Although many colonized countries have already achieved independence, the pattern of imbalanced relationships between developed countries as the center and developing countries as the periphery still occurs. The pattern is replicated at the national level in many developing countries. In China, for example, the center is the eastern coast areas where industrialization is concentrated, while the periphery is the remaining parts of that country. In Malaysia, the center is the western coast of its peninsula, whereas the periphery is the other part of the peninsula and East Malaysia (Sarawak and Sabah).

In Indonesia, even after its independence, conditions during the colonial period have strengthened during its modern history.

How has this happened? On the national economic scale, there is a triangle relationship -- among multinational corporations (like the Dutch East Indies Company during the colonial period), the ruling elite of the government and the business elite of the private sector -- which collaborates for their mutual benefit. Here, collusion, corruption and monopolistic practices usually occur.

Industrialization, business and trade have been concentrated in Java as the center. Although mining and other industries also operate in Sumatra, Kalimantan, Sulawesi and Irian Jaya, they are not well dispersed, leaving Java as the main key linking many types of industries throughout the country.

In the rest of the country, mining and primary industries operate to produce raw materials and other products to be supplied for further processing or consumption in Java.

Statistical data show that the western part of Indonesia dominates about 83 percent of the country's gross domestic product (GDP), while the eastern part holds only 17 percent. Of the 83 percent, the major concentrated portions are in Java.

The central role of Java during the colonial period was further strengthened by multinational companies, supported by big domestic counterparts, mainly belonging to conglomerates. Since the beginning of national development in 1969, the ruling elite of the government has facilitated a number of companies through financial support, special privileges and monopolistic rights. These companies then grew bigger and bigger. Multinational companies and their partners prefer to invest in Java because its infrastructure -- such as roads, railway systems, shipping, aviation, telecommunication, electricity and gas network -- is better than on other islands. The quantity and quality of human resources in Java are higher than those outside of Java.

The main characteristics of gap-related problems between the center and the periphery at the international level -- as pointed out by Wallerstein -- also apply to the center-periphery relationship at the national level in Indonesia. Capital, for instance, always flows from the periphery to the center. People outside of Java are highly dependent on industrial products from that island. They have to buy the products at more expensive prices because of higher transportation costs. Money circulated outside of Java flows back to the island because many small-scale companies there, particularly those operating in the service sector such as banks, insurance companies, bookshops, newspapers and hotels, are in fact branches of big companies in Java.

The use of technology creates bigger gaps. In general, Java is better and quicker than the other islands in using advanced technology transferred from developed countries. Furthermore, the use of such technology in the industrial sector threatens the existence of local traditional industries. Many skills used in locally-developed technology tend to disappear sooner in Java, as compared to the other islands, due to the concentration of modern industries there. In the other islands, the rapid use of industrial products derived from Java threatens the existence of local home industries, such as the local production of food and drinks, traditional weaving, medicinal herbs, traditional woodwork and house building. The decrease of the local home industries means the extinction of certain traditional skills, which supported people's lives for centuries.

The peripheral areas tend to be more dependent on the central area. As a consequence, the more modern products are consumed, the less the production capacities outside Java are.

The exploitation of natural resources, such as minerals, forests, fish and plantation resources outside of Java tends to degrade the environment there, leading to the limitation of the use of natural resources by people for their subsistence. That limitation and the rapid decrease in production capacities accelerate the impoverishment process outside of Java.

In terms of human resources, the bigger the discrepancies between Java and the other islands tend to be, the more Java becomes urbanized as people flow to Java from the periphery. Additionally, the concentration of better universities and greater working opportunities in Java increase the "braindrain" from other islands to Java. The lack of quantity and quality of human resources outside of Java decreases the capacity to accelerate regional development there.

Ultimately, this gap between Java and the other islands, and between the western and eastern parts of the country, will generally threaten national unity. The gaps are another ticking time bomb. Therefore, the accentuation of development outside of Java (especially in eastern provinces), poverty eradication programs and the specialization of industries according to regional characteristics are examples of policies to be implemented more consistently in the future.

Separatist regional movements in the past will not be repeated if serious efforts are made to eliminate this time bomb. The imbalanced relationship between Indonesia as one of the peripheral countries with other developed countries as the center should not sacrifice its national unity.