Commentary/Mani Shankar Aiyar

It was not political repression but the OPEC which gave the Indonesian economy its big push

Her emphasis on seperating economic decision-making from political decision-making is echoed by Mohammad Sadli, former Indonesian labour minister, an economist by training as formidably reputed in that country as Manmohan Singh is in India.

"The Opposition in Indonesia," he says, "has no say in policy-making; it can only suggest 'corrections in implementation.' So we had a free hand in taking hard decisions: raising administered prices; devaluation; introducing valued-added tax; favouring mill textiles even if it meant destroying the handloom industry; replacing the customs service with a Swiss inspection agency; banning strikes and all other forms of industrial action; pushing an exit policy..."

The outcome has been a spectacular economic growth. Growth, however, was not the immediate outcome of the tightening of the political screw. Indeed, for all of eight years, from the rise of Suharto in 1965 to the four-fold risen oil prices in late 1973, there was no growth of any significance in the economy.

It was not political repression but the Organisation of Petroleum Exporting Countries which gave the Indonesian economy its big push. Within an year -- 1973 to 1974 -- oil exports earnings jumped from US $ 641 million to over US $ 2,600 million. By 1981, Indonesia's foreign exchange earnings leaped to US $10,000 million. It is the fact that Indonesia is oil and gas rich -- the fourth largest producer of crude oil in the world -- that makes our endowments so incomparable with the Indonesians.

If, however, oil alone was the reason for Indonesia's growth, things might have come unstuck after the great Petramina scandal and the horrendous dip in international oil prices in the mid-eighties. It was the intelligent husbanding of oil revenues and the opening of the economy to market forces, domestic and international, which so diversified economic activity that Indonesia today has moved into the big league.

Where many authoritarians have used untrammelled economic power only for self-aggrandisement, the Suharto regime used its enormous military and political clout to bend the nation's will to economic development. In consequence, where per capita income even five years after the overthrow of Sukarno was a meagre US $ 70 -- considerably less than India's -- it is today above US $ 1,000, well over double ours.

"We set ourselves three objectives," says Dewi Anwar. "Political stability, economic growth, and equitable distribution." The first -- political stability -- has been attained, albeit through the politics of the morgue. The second -- high economic growth -- was achieved at the cost of democratic freedom.

It is, however, with respect to the third -- equitable distribution -- that the most serious reservations are expressed. "Absolute poverty, measured as nourishment in excess of 2,400 calories a day, has been," as Dr Anwar says, "virtually eradicated."

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