Emergence of a National Economy

History matters. At the beginning of a new century and amidst the turmoil of a new democracy. More than ever we need a historical perspective on modern Indonesia. This book connects Soeharto's New Order (1966-98) back to the colonial era and helps to explain why the transition from colonialism to Independence and from the New Order to Democracy has been difficult and sometimes traumatic.

This book identifies three grand themes in Indonesia's economic history: globalisation, state formation and economic integration. Globalisation affected the Indonesian archipelago even before the arrival of the Dutch: the New Order experience was only the most recent wave. Modern state formation began in the Napoleonic era with the despatch to Java of Governor-General Daendels (1808-11) and culminated in the centralised, military-bureaucratic state of the late New Order. A national economy emerged after the 1930s as the Outer Islands were reoriented towards an industrialising Java.

These three themes link chronological chapters from the pre-1800 period through the modern colonial era to the breakdown of the colonial system after 1930, the birth of modern Indonesia, and the remarkable economic transformation under the New Order. This overarching story gives a unity to Indonesia's modern history, while helping to explain why the future is likely to be different.