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Learning from Indonesia

THE ARTICLE “Why Indonesia outperforms RP” (Talk of the Town, Inquirer 10/30/10) by Ed Tadem gushes as much over Indonesia as it bashes the Philippines. It is however so deeply flawed, and a sorry instance of national self-flagellation.

Still comparing the two countries is extremely useful in understanding the real strengths or weaknesses of our nation.

For starters, Tadem’s PH-bashing is so obvious when he says Indonesia’s growth rate of 4.5 percent is four times our country’s “measly 1.1 percent.” That growth rate is just for 2009, and a more competent analysis would cite trends: from 1998-2009 the PH average annual GDP growth of 4 percent was higher than Indonesia’s 3.3 percent. And we achieved it without Indonesia’s big advantage: oil.

It is indeed surprising that Tadem completely forgot that Indonesia is a petroleum economy, the only Asian country that was a member of OPEC. It left OPEC in 2008 and is now a net importer not because its oil has run out, but because its huge 238 million population—the fourth biggest in the world—is a big enough market. Oil and gas constitute one of the pillars of the Indonesian economy, accounting for as much as 70 percent of its exports and about 10 percent of its GDP in the 1970s and 1980s.

The course of Philippine economy would certainly have been different if it had Indonesia’s oil.

Tadem has been a firm believer in the existence of neocolonialism—or how the so-called Third World is poor because their economies were subjugated to produce mainly primary products and raw materials for the industrialized countries. It is then very strange why he didn’t notice that even as Indonesia has reduced its dependence on oil, its export structure has moved less towards manufactures and more towards primary products, particularly forest products, palm oil and tin.

Indonesia may be outperforming us because it is stripping its huge forests for exports, while we have imposed a total log ban. Palm oil is now one of Indonesia’s biggest exports because it undertook a massive replanting program in the 1980s. We instead aborted a similar program in the 1980s because it was led by Marcos ally Eduardo Cojuangco. Indonesian and foreign mining firms have made the country the world’s biggest tin exporter. In our case, parish priests and bishops routinely block mining firms’ operations.

The lesson for us here? Our strength is not in our natural resources, but in our human resources: our educated, English-speaking work force.

In his article, Tadem seconds enthusiastically Japanese economist Kosuke Mizuno’s claim that Indonesia is emerging as an “alternative model of economic development.”

Well, here’s the key feature of Indonesia’s economy: 150 mammoth and state-owned corporations dominate its business sector. Pertamina monopolizes the oil industry. Telekom accounts for 53 percent of the cellular phone market, and nearly 80 percent of fixed lines. (We can outperform Indonesia here only if government buys Smart and Globe and merges them.) State-owned banks account for 38 percent of the banking system’s assets. (We can outperform Indonesia in this department only if government buys BPI and BDO and merges them.) Two state-owned firms account for 46 percent of the cement market.

Just as Tadem totally forgot the role of petroleum in Indonesia’s economy, there is not a single word on the most important episode in that country’s history: the October 1965 massacres. In 1965, on the pretext that the Communist Party of Indonesia (PKI) was mounting a coup against President Sukarno, then Major Gen. Suharto mobilized military and paramilitary forces to take power, impose a dictatorship, and massacre the PKI. Suharto’s forces executed not only communist party leaders, said to be pinpointed by the US Central Intelligence Agency, but even their mass base. PKI, then the largest non-ruling communist party in the world with a membership of three million, was totally, physically, destroyed.

Worse, the murderous frenzy expanded to include ethnic Chinese, and some 200,000 of them were estimated to have been killed, especially in Java. Total killed in this darkest period of Indonesian nation-building is estimated to be between 500,000 and one million, with another million Indonesians jailed at one stage or another. Was this crucial in creating, as Tadem puts it, Indonesia’s “robust sense of nationalism”?

Two infamous Filipinos learned much from Indonesia: Ferdinand Marcos and Jose Ma. Sison. Suharto crushed democracy along with the communist party in 1965, calling his regime, which lasted 31 years ending only in 1998, “ The New Order.” Marcos mimicked Suharto, and followed suit in 1972 with his dictatorship called “The New Society” that lasted only 14 years.

Communist chief Sison, when he was in Indonesia in the 1960s, was recruited into communism by PKI head Nasuntara Aidit himself. Aidit’s book “Indonesian Society, Indonesian Revolution” would be cut-and-pasted by Sison as “Philippine Society and Revolution.” Sison vowed never to commit PKI’s fatal mistake of not building its own army.

A declassified CIA document quoted by noted historian Benedict Kierkvliet described the 1965 events: “In terms of the numbers killed, the anti-massacres in Indonesia rank as one of the worst mass murders of the twentieth century, along with the Soviet purges of the 1930s, the Nazi mass murders during the Second World War, and the Maoist bloodbath of the early 1950s.”

Over several rounds of beer in the past, my friends and I had often speculated that our problem as a nation—in contrast to Indonesia, Korea and Vietnam through its fierce internecine wars, and even the US through its civil war—is that we never really went through episodes when blood really flowed, which forces a citizen to cherish his nation.

That is a sad, tragic idea, and we obviously have to find a different path.

From the Philippine Daily Inquirer