There has been a sudden outburst of optimism about Indonesia’s economic performance in recent time. The Financial Times article here (http://www.ft.com/intl/cms/s/0/533f4db0-914c-11e0-b1ea-00144feab49a.html#) is an example of this celebratory media remark. In ‘Indonesia: Regional Economic Boom’, Deutsch and Sender echo many other journalists in praising Indonesia as ‘one of the world’s great unsung growth stories’. They applaud the expansion of this economic bonanza to the regional areas that previously were not part of the growth zones. Balikpapan in East Kalimantan, for example, has become a new epicentre of growth due to its booming coal mining industry. Despite their sanguine interpretation, Deutsch and Sender also, rightly, point out a few key issues that are still hampering Indonesia’s economic development. These issues are mainly internal problems such as corruption, weak institutions, uncompetitive manufacturing sector, infrastructures, and bureaucratic nightmares.
This, nonetheless, still presents us with an incomplete picture. The article, indeed, has a tendency to overemphasize internal problems while ignoring external problems such as inequalities within the global economic structure. Amplifying the concern of many dependency theorists, who believe that unfair politico-economic relationship takes place between the core and periphery, Sikka in ‘Accounting for Human Rights: the Challenge of Globalization and Foreign Investment Agreements’ contends that many multinational corporations in this neoliberal climate are more powerful than governments in the developing world. Since the global economic system is fluid and multinational companies with their economic prowess can transcend national borders, these companies can dictate states on their domestic policies, especially in relations to taxes, health and safety standards, labour rights, profit-sharing, and so on. The shift from serving the interests of its citizens to serving the interests of wealthy international corporations is a dangerous move, not only for the citizens of the country but also for the government whose legitimacy depends on the popular support of the public and the large businesses whose operation is contingent on sociopolitical stability.
To counterbalance the influence of these companies and fulfill its obligations to the Indonesian public, the government needs to play a more proactive role, especially in relations to domestic policies that affect the public in Indonesia. This means engaging with multinational corporations without joining the race to the bottom. This can be done by: building and enforcing solid legal frameworks to protect the people from potential and real development-related human rights abuses; capitalising on this commodity boom to create more sophisticated and diversified economic activities; building strong accountability within their own institutions to create clean and reliable governance; ensuring a more equitable resource distribution from the commodity boom and invest the money in the communities.
However, these can be difficult to realise. Just like the article by Deutsch and Sender above, many in the policy-making roles still simplistically equate growth with development and, therefore, justify a pro-big business, trickle-down development approach. This misconception reflects the power of buzzwords as described by Karen and Brock in their essay ‘Beyond Buzzwords: “Poverty Reduction”, “Participation” and “Empowerment” in Development Policy’. They have warned us about the political nature of every term in development discourse. Each term frames the problem in certain ways and, thus, influences the policy outcomes which tend to benefit some people more than others. The term economic growth and development are not exceptions. Although it is true that economic growth is crucial for development, the two terms are not synonymous.
Growth is about capital accumulation through the market. The market does not take externalities into account. The market only rewards those who have access to the means of production. The wealthy owners of the mining companies, the contractors, and bureaucrats who can approve the contracts are those who tend to benefit from commodities boom. Those with limited access to the means of production are only ‘incidentally’ benefiting from this economic boom if not becoming the victims. In the case of Mesuji in Sumatra, for instance, the economic interests of a powerful plantation company clashed with the interests of the local community. This resulted in vertical conflicts between state apparatus, which sided with the powerful business, and local people who were disenfranchised by this company. The result of this was a litany of human rights abuses. Gruesome stories of killings, torture, and riots spread like a wild fire. This is growth as far as it can go. It does not require us to question the existing power structure. Nor does it problematise poverty, inequalities, and power abuses by the powerful against the marginalised -- except when these problems eventually cancel all the benefits of growth in riots and social revolutions.
Development (especially one that is based on a human rights approach), on the other hand, is much more comprehensive and long-term. It is about progress in economic, social, political, and cultural sphere. The purpose of development is the empowerment, liberation, and emancipation of humanity instead of capital accumulation as the end in itself. Hence, it is not only about the outcome but also about the process. Under this premise, condoning or ignoring human rights abuse in the name of growth is no longer justifiable. Legal provisions which marginalise, discriminate, and alienate certain groups of people and preclude them from enjoying the benefits of development on an equal basis with others have to be removed. The community, through meaningful consultations led by the government, should be actively involved in the decision-making process that shapes their lives. In terms of outcomes, development should be about economic empowerment for the people through resources redistribution. Taxes from the commodity boom should be invested in the communities through education, healthcare, infrastructure, micro loans, social welfare program, and so on. The wider community should enjoy the fruits of economic growth without feeling alienated by the big businesses.
In summary, development is a process and a purpose. Growth is an indispensable element of development but should not be treated as the end goal in itself. Bringing this understanding into policy is, certainly, not an easy option. It requires a change in the way we think. Bureaucratic and economic elites have to resist short-term gratification that can be obtained through pro-big business approach. Also, at the global stage, governments from around the world need to work together to set up a minimum standard of operation for transnational economic entities. This standard should enable them to become more accountable and ethical. Although difficult, shifting to a human-rights approach of development is in the long-term interest of all parties. A proper development process produces a stable, prosperous, and productive society. Therefore, let us do what is right, not what is easy.
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