Widjojo Nitisastro (23 September 1927 – 9 March 2012) was an Indonesian economist, who was known as the main architect of the Indonesian economy during the New Order regime of President Suharto, serving as Minister for National Development (1971–1983) and Coordinating Minister for Economy, Finance and Industry (1973–1983). He was one of Indonesia's best-known and most respected economic policy-makers, both within Indonesia and overseas. He joined the Indonesian Student Army during the Indonesian National Revolution and fought in Surabaya. After the end of the revolution, he taught at a junior high school, before, attending and later graduating from the University of Indonesia. He would go on to become a professor at the university. In the late 1960s, after the fall of President Sukarno, he became one of Indonesia's most important economic policy-makers under the New Order regime of President Suharto. He was generally considered to be the foremost member of the well-known 'Berkeley Mafia' group of economists.
Early life, military service, and education
Early life and military service Widjojo Nitisastro was born in Malang Residency, on 23 September 1927, and grew up in Surabaya. He came from a retired elementary school superintendent's family. His father was an activist with the Greater Indonesia Party (Parindra). In 1945, when the Indonesian National Revolution erupted, Widjojo joined the Indonesian Student Army (TRIP). In the Revolution, he almost died somewhere between the Ngaglik and Gunung Sari areas of Surabaya.
Education
University of Indonesia After the end of the revolution, Widjojo taught at a junior high school for 3 years. He then continued his higher education at the Faculty of Economics of the University of Indonesia (UI), specializing in the field of demography. While still a student, he, together with Canadian demographer Nathan Keyfiz, wrote a book entitled "The Problem of Indonesian Population and Development." The foreword was written by former Vice President Mohammad Hatta, who wrote, "An Indonesian son with his knowledge of the problems of his homeland, has been able to work with Canadian statisticians. Processing his solid thoughts and putting them into a weighty book." Widjojo eventually graduated with the Cum Laude predicate. He would later be appointed by the Dean of the Faculty of Economics (and future Minister of Research), Sumitro Djojohadikusumo, as the Director of the Institute for Economic and Community Research. Widjojo Nitisastro later became a full professor of economics at the University of Indonesia in Jakarta at the age of 34 in 1962.
University of California, Berkeley Shortly after, Widjojo continued his doctoral studies at the University of California, Berkeley. He worked on a dissertation entitled “Migration, Population Growth, and Economic Development: A Study of the Economic Consequences of Alternative Patterns of Inter-Island Migration.” There, Widjojo met several other economic students, including future ministers Mohammad Sadli, Subroto, Ali Wardhana, and Emil Salim. This group would later become known as the Berkeley Mafia, a group of technocrats who are considered to have instilled neoliberalism in economics for the sake of American interests in Indonesia. After completing his studies, Widjojo returned to Indonesia.
Career
Professor at the University of Indonesia When he returned, Indonesia was under the guided democracy period of President Sukarno. Under this policy, the Indonesian economy leaned towards economic socialism/communism. The economic situation in Indonesia at that time was chaotic, with high inflation rates and high prices. Widjojo expressed his opinion to the government to change the paradigm of the Indonesian economy. During his inauguration as a professor of economics at the University of Indonesia on August 10, 1963, Widjojo read a speech entitled "Economic Analysis and Development Planning." He suggested that economic analysis should be included in government policymaking, as well as a combination of market mechanisms and government intervention instead of allowing the market to be too free or otherwise making the government too powerful. However, his suggestions were not heard by the government.
"Berkeley Mafia" In 1966, General Suharto took over power in Indonesia from President Sukarno through the Supersemar order. Although he did not become president for the next two years, Suharto began to build the foundations of the government that would later be referred to as the New Order regime. In August 1966, Suharto held a military seminar, which was attended by Widjojo and a number of his colleagues. In the seminar, the economists presented their ideas and policy recommendations to Suharto. Suharto was impressed by their idea and asked them to work as a Team of Experts in Economics and Finance. This appointment marked the beginning of Widjojo's career. Other members of the group, all senior Indonesian economists, were generally regarded to include Professor Ali Wardhana, Professor Moh. Sadli, Professor Emil Salim, and Professor Subroto. Later, in 1970, he and several other economists who graduated from the University of California, Berkeley were accused of being the Berkeley Mafia formed by the CIA to instill economic liberalism in Indonesia.
Political career
Minister for National Development Planning In 1971, Widjojo was appointed State Minister for National Development Planning, a position he held until the early 1980s. As minister, he and his colleagues in the 'Berkeley mafia' used a neo-Keynesian approach to balance the state budget, control the money supply, re-establish the position of financial institutions, and open the door as wide as possible for foreign investors. While leading the ministry, Widjojo made an economic plan that was contained in the Five-Year Development Plan. Economist Mudrajad Kuncoro, who is a professor of Economics at Gadjah Mada University, in his column in the Gatra magazine, said that the focus of the Five-Year Development Plan was macroeconomics. In the New Order, the Minister for National Development Planning became a crucial institution because it held the key to development at both the central and regional levels. The system worked as it adheres to centralized planning, both in terms of policy and funding. With this flow, regional development is more prominent because both planning and implementation are “centralized.”
… excerpt ends here. Continue reading the full article.
